The recent decreases in the price of gold have confused markets to no end, and the attendant uncertainties regarding precious metals have placed a premium on miners, such as Peruvian miner Buenaventura (BVN - commentary - Cramer's Take), which has a stake in five metals -- two precious and three base.

The two precious metals, of course, are gold and silver. But BVN also mines lead, zinc and copper. As the following graphs show, although volatility in all five metals has been high, mining in all five simultaneously, as BVN does, provides a great commodities hedge.

Metals Spot Prices

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Source: Kitco

The above graphs show that while gold has seen a lot of volatility, the ascension of silver prices has been smoother, and lead and especially copper have been doing quite well recently.

Not a Pure Play

BVN, with a market cap of $8.9 billion, is a small-cap player compared to a competitor like Newmont Mining (NEM - commentary - Cramer's Take), a Denver-based company that is almost a pure play on gold (it has a minor interest in copper) with a market cap of $20.2 billion. The 51% increase in the price of gold in 2007 did wonders for the bottom line of Newmont, whose earnings increased by 440% over the first quarter of 2008. But BVN's earnings increased by 617% over the same period if the detrimental effect of unwinding a hedge were to be adjusted for and which reduced earnings by $2.08 a share. Including the effects of the hedge led to a loss of 49 cents a share for BVN.

BVN vs. NEM

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Source: Yahoo! Finance