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Buenaventura Announces Second Quarter 2012 Results

Stocks in this article: BVN

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.

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