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Buenaventura Announces Third Quarter 2012 Results

Stocks in this article: BVN

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.

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