Buenaventura Announces First Quarter 2013 Results

30.04.2013  |  Business Wire

Compañia de Minas Buenaventura S.A.A. ('Buenaventura? or 'the
Company?) (NYSE: BVN; BVL: BUE.LM), Peru′s largest, publicly-traded
precious metals mining company, announced today results for the first
quarter 2013 (1Q13) ended March 31, 2013. All figures have been prepared
in accordance with International Financial Reporting Standards (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 for the first quarter 2013 was US$102.7 million, 51% lower
than the figure reported in 1Q12 (US$208.1 million). EBITDA from
Buenaventura′s direct operations was US$93.8 million, 45% lower than the
figure reported in 1Q12 (US$171.5 million), while EBITDA, including
affiliates, decreased 36%, from US$418.1 million in 1Q12 to US$267.9
million in 1Q13.

These results were mainly due to lower metal prices, higher operating
costs and lower contributions from both affiliates: Yanacocha and Cerro
Verde.

Financial Highlights (in millions of US$, except EPS figures):

(*) 254,232,571 shares outstanding, as of March 31, 2013.

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

Operating Revenues

During 1Q13, net sales were US$340.9 million, a 5% decrease compared to
the US$359.0 million reported in 1Q12, due to lower metal prices (except
lead) and a decline in gold and copper volume sold.

Royalty income decreased 24% from US$18.1 million in 1Q12, to US$13.8
million reported in 1Q13 and was due to lower revenues at Yanacocha.

(*) Buenaventura′s Direct Operations

(*) Buenaventura′s Direct Operations

Production and Operating Costs

Equity production¹ in 1Q13 was 119,201 ounces of gold, 1%
higher than the 117,852 ounces reported in 1Q12, mainly due to higher
production in La Zanja and Tantahuatay despite the temporary stop
production at Poracota and Antapite, while we continue developing
additional resources. Silver production during 1Q13, including
affiliates, was 4.7 million ounces, a 14% increase compared to the
figure reported in 1Q12 (4.2 million oz.).

Orcopampa′s² total gold production in 1Q13 was 62,480
ounces, 10% lower than the 69,265 ounces reported in 1Q12. Production
from the Chipmo mine in 1Q13 was 58,369 ounces, 6% lower compared to the
62,358 ounces reported in 1Q12, due to a 8% decrease in ore grade (see
Appendix 2). The old tailings′ treatment produced 4,112 gold ounces
(compared to 6,907 oz. in 1Q12).

Cash operating cost in 1Q13 was US$639/oz., 38% higher when compared to
1Q12 (US$463/oz.). This was a result of lower gold production and higher
labor and supply expenses due to greater exploration efforts.

At Uchucchacua,³ total silver production in
1Q13 was 2.93 million ounces, 7% higher when compared to 2.74 million
ounces in 1Q12. This was due to an 11% increase in the recovery rate
(see Appendix 2). Zinc production in 1Q13 was 1,998 MT, 10% lower than
the figure reported in 1Q12 (2,215 MT), while lead production increased
13% (2,205 MT in 1Q13 vs. 1,952 MT in 1Q12).

Cash operating cost in 1Q13 was US$17.73/oz, 1% lower than the figure
reported in 1Q12 (US$17.89/oz) and mainly due to the higher production,
lower treatment charges and higher by-product contributions that were
partially offset by higher expenses for labor and contractors due to
productivity bonuses that were paid in March.

At Julcani⁴, total production in 1Q13 was
612,034 ounces of silver, 3% lower compared to 1Q12 (631,627 ounces).

Silver cash operating cost in 1Q13 was US$14.49/oz, 13% higher than 1Q12
(US$12.77/oz), mainly due to an increase in labor and contractor
expenses in preparation for the plant expansion from 400 TPD to 500 TPC.

Breapampa⁵commenced operations in
November 2012. Total production in 1Q13 was 20,484 ounces of gold and a
cash cost of US$501/oz.

La Zanja⁶total production in 1Q13 was
31,206 ounces of gold (16,558 oz attributable to Buenaventura), a 19%
increase when compared to 1Q12 (26,329 oz or 13,970 oz attributable to
Buenaventura).

Cash operating cost in 1Q13 was US$645/oz., 30% higher than 1Q12
(US$495/oz.) due to higher contractor costs due to an increase in ore
mined as well as supply costs increases (mainly the result by an
increase of reagent consumption and prices).

Tantahuatay⁷total production in 1Q13
was 34,307 ounces of gold (13,737 oz. attributable to Buenaventura) vs
26,329 oz reported in 1Q12 (11,053 oz attributable to Buenaventura).
Cash operating cost in 1Q13 was US$341/oz, 32% lower than the US$497/oz
in 1Q12.

At El Brocal⁸(53.76% owned by
Buenaventura), silver, zinc and lead production in 1Q13 was 484,914
oz, 6,950 MT and 2,892 MT, respectively. This represented a 9% increase
in silver (443,942 oz in 1Q12), a 9% decrease in zinc (7,607 MT in 1Q12)
and a 27% increase in lead (2,279 MT). Zinc cash cost decreased 45% from
US$1,346/MT to US$742/MT, due to lower treatment charges and higher
silver by-product contribution.

Copper production was 4,536 MT, 22% lower than the 5,614 MT reported in
1Q12. Copper cash cost was US$6,230/MT, 25% higher than 1Q12
(US$4,984/MT).

General and Administrative Expenses

General and administrative expenses in 1Q13 reached US$16.0 million, 46%
lower than the figure reported in 1Q12 (US$29.8 million).

Exploration in non-operating areas

Exploration in non-operating areas during 1Q13 reached US$21.8 million,
12% higher than the figure reported in 1Q12 (US$19.4 million). During
the period, Buenaventura′s main exploration efforts were focused at the
projects of Tambomayo (US$6.3 million), Trapiche (US$4.7 million) and
Chancas (US$2.8 million).

Operating Income

Operating income in 1Q13 was US$59.4 million, a 55% decrease compared to
the US$131.9 million reported in 1Q12. This decrease was mainly due to a
30% rise in operating costs as well as 12% higher exploration expenses,
despite 46% lower General and Administrative expenses, while revenues
also decreased 6%.

Share in Associated Companies

During 1Q13, Buenaventura′s share in associated companies was US$84.2
million, 38% lower than the US$136.2 million reported in 1Q12.
Yanacocha′s contribution to these results declined 42%, from US$88.2
million in 1Q12 to US$51.0 million in 1Q13, while Cerro Verde′s
contribution decreased 40% from US$45.1 million in 1Q12 to US$27.2
million in 1Q13.

YANACOCHA

At Yanacocha⁹, 1Q13 gold production was 285,475 ounces of
gold, 22% lower than 1Q12 production (366,428 oz.) higher than budget.

Costs applicable to sales (CAS) at Yanacocha in 1Q13 were US$607/oz.,
26% higher than the figure reported in 1Q12 (US$481/oz.) due to lower
production. Net income at Yanacocha in 1Q13 was US$116.8 million, 42%
lower compared to 1Q12 (US$202.0 million).

During 1Q13, EBITDA totaled US$260.9 million, a 28% decrease compared to
1Q12 (US$364.0 million). This decrease was mainly due to a 23% decrease
in sales.

Capital expenditures at Yanacocha were US$97.7 million in 1Q13 compared
to US$227.4 million in 2Q12.

CERRO VERDE

At Cerro Verde¹⁰ 1Q13 copper production was 55,214 MT, a 13%
decrease compared to 1Q12 (63,295 MT).

During 1Q13, Cerro Verde reported net income of US$138.8 million, a 40%
decrease compared to US$232.3 million in 1Q12. This was mainly due to a
31% decrease in sales revenues (US$393.6 million in 1Q13 versus US$568.8
million in 1Q12).

Capital expenditures at Cerro Verde in 1Q13 totaled US$170.0 million
versus US$82.1 million in 1Q12.

COIMOLACHE (Tantahuatay operation)

Coimolache′s¹¹, attributable contribution decreased by 2%
(US$8.1 million in 1Q13 vs. US$8.3 million in 1Q12).

CANTERAS DEL HALLAZGO (Chucapaca project)

At the Chucapaca Project¹², a value-engineering phase was
initiated to improve the project′s financial returns after the
completion of a Feasibility Study. Additional studies will be directed
towards evaluating potential options, especially an underground mining
scenario, a review of capital expenditures, along with re-commencement
of an exploration phase at the Chucapaca Area of Interest (AOI).

In 1Q13, Buenaventura′s total disbursement at the Chucapaca project was
US$2.1 million.

Net Income

Buenaventura′s 1Q13 net income was US$102.7 million (US$0.40 per share),
a 51% decrease compared to the US$208.1 million (US$0.82 per share)
reported in 1Q12.

Project Development

LA ZANJA DEVELOPMENT PROGRAM

• The 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. Total
  investment in this project is US$78 million. Completion is expected
  for 3Q13.
  
• 
  Additional geotechnical study for slope stability was developed during
  1Q13.
  

RIO SECO MANGANESE SULFATE PLANT

• 
  Buenaventura continued the construction of the manganese sulphate
  plant. Total budget for the project is US$ 90.0 million. As of the end
  of 1Q13, total expenditures reached US$ 82.0 million.
  
• 
  The project includes an acid leaching plant, a sulphuric acid plant
  and a manganese sulphate crystallization plant. Additionally, it
  includes a warehouse for storing low manganese Ag-Pb concentrate and
  the finished manganese sulphate crystals.
  
• 
  As of 1Q13, electrical and automation installations were completed.
  Mechanical assembly, electrical and automation installations for the
  sulphuric acid and crystallization plants are expected to be completed
  during 2Q13.
  
• 
  The project is expected to begin operations during 2Q13.
  

HUANZA HYDROELECTRICAL PLANT

• 
  Construction progress at the Huanza Project during the quarter
  included:
  

* * *

About the Company

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, 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*, Breapampa*, Mallay*, 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 2012 Form 20-F, please contact th
investor relations contacts located on the first page of this report or
download the from the Company′s web site at www.buenaventura.pe.

(*) 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.

APPENDIX 1

APPENDIX 2

APPENDIX 3: EBITDA RECONCILIATION (in thousand US$)

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). 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