Buenaventura Announces Fourth Quarter 2011 Results

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 fourth quarter 2011. All figures have been prepared in accordance with Peruvian GAAP 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 fourth quarter reached US$230.9 million, which was similar to the figure reported in 4Q10 (US$228.1 million). EBITDA from Buenaventura’s Direct Operations was US$198.3 million, 15% lower than the figure reported in 4Q10 (US$232.8 million), while EBITDA including Yanacocha and Cerro Verde decreased 9%, from US$457.0 million in 4Q10 to US$415.6 million in 4Q11.

The lower gold, zinc and copper volume sold were offset by the increase in silver volume sold, as well as higher precious metal prices.”

Financial Highlights (in millions of US$, except EPS figures):
 
                                       
      4Q11     4Q10     Var%    

FY

2011
   

FY

2010
    Var%  
Total Revenues     402.3     396.8     1%     1,556.6     1,103.8     41%  
Operating Income     170.7     208.5     -18%     705.2     417.0     69%  

EBITDA (BVN Direct Operations)†
    198.3     232.8     -15%     834.3     538.6     55%  

EBITDA (inc. Yanacocha and Cerro Verde)†
    415.6     457.0     -9%     1,662.1     1,322.8     26%  
Net Income     230.9     228.1     1%     861.4     670.4     29%  
EPS*     0.91     0.90     1%     3.4     2.6     29%  

(*) As of December 31, 2011, Buenaventura had 254,442,328 shares outstanding.

Within this release, Buenaventura presents financial measures in accordance with Peruvian GAAP, as well as on a non-GAAP basis. EBITDA (Buenaventura Direct Operations) and EBITDA (including Yanacocha and Cerro Verde) included in this release are non-GAAP financial measures. Please see the consolidated financial information below for information reconciling non-GAAP financial measures with Peruvian GAAP financial measures.

Operating Revenue

During 4Q11, net sales were US$385.0 million, similar to the US$382.3 million reported in 4Q10. This was explained by an increase in silver volume sold, as well as higher gold and silver realized prices, which offset lower gold volume sold.

Royalty income increased 20% from US$14.4 million reported in 4Q10 to US$17.4 million in 4Q11 due to higher revenues at Yanacocha.
                                                   
Operating Highlights       4Q11       4Q10       Var%       FY 2011       FY 2010       Var%  

Net Sales (in millions of US$)
      385.0       382.3       1%       1,493.9       1,047.9       43%  
Average Realized Gold Price Gold (US$/oz)*       1,690       1,380       22%       1,574       1,253       26%  
Average Realized Gold Price (US$/oz) inc. Yanacocha       1,569       1,234       27%       1,575       1,181       33%  
Average Realized Silver Price (US$/oz)*       32.45       26.50       22%       35.36       20.86       70%  
Average Realized Lead Price (US$/MT)*       1,991       2,364       -16%       2,262       2,106       7%  

Average Realized Zinc Price (US$/MT)*
      1,905       2,268       -16%       2,200       2,136       3%  
Average Realized Copper Price (US$/MT)*       7,524       8,758       -14%       8,568       8,114       6%  

(*) Buenaventura’s Direct Operations
     
Sales Content  
        4Q11       4Q10       Var       FY 2011       FY 2010       Var  
Gold (in oz)*       122,833       145,466       -16%       505,894       461,817       10%  
Gold (in oz) inc. Yanacocha       273,281       293,361       -7%       1,070,810       1,101,526       -3%  
Silver (in oz)*       4,366,347       3,481,657       25%       14,843,193       13,176,383       13%  
Lead (in MT)*       3,857       3,279       18%       18,192       22,970       -21%  
Zinc (in MT)*       4,041       8,545       -53%       33,307       43,562       -24%  
Copper (in MT)*       7,516       9,471       -21%       23,231       15,946       46%  

(*) Buenaventura Direct Operations

Accumulated net sales in 2011 were US$1,493.9 million, a 43% increase compared to the same period in 2010 (US$1,047.9 million), while royalty income was US$62.7 million, a 12% increase when compared to the US$55.9 million reported in 2010.

Production and Operating Costs

Buenaventura’s equity production 1 in 4Q11 was 124,504 ounces of gold, 6% lower than the 132,437 ounces reported in 4Q10 mainly due a decrease in Orcopampa and Poracota production. Silver production in 4Q11 was 4.0 million ounces, a 16% increase when compared to the figure reported in 4Q10 (3.5 million oz) due to higher production from Uchucchacua and El Brocal.

Equity production 1 in 2011 was 475,770 ounces of gold and 15.3 million ounces of silver. This represented a 4% increase in gold production (458,765 ounces in 2010), and a 14% increase in silver production compared to 2010 (13.5 million ounces).
     
Equity Production 1  
        4Q11       4Q10       Var%       FY 2011       FY 2010       Var%  
Gold (oz)       124,504       132,437       -6%       475,770       458,765       4%  
Gold (oz) inc. Yanacocha       270,659       276,969       -2%       1,040,218       1,096,762       -5%  
Silver (oz)       4,036,760       3,468,729       16%       15,316,326       13,470,186       14%  
Lead ( MT)       3,475       3,351       4%       17,444       18,380       -5%  
Zinc ( MT)       3,151       2,243       40%       22,621       25,535       -11%  
Copper (MT) inc. Cerro Verde       16,980       19,611       -13%       69,873       66,133       6%  
                                     

Orcopampa’s (100% owned by Buenaventura) production from the Chipmo mine in 4Q11 was 65,788 ounces, 17% lower than the 79,408 ounces reported in 4Q10 due to lower ore grade and a decrease in the recovery rate (See Appendix 2). The old tailings treatment produced 5,508 gold ounces (compared to 5,857 ounces in 4Q10). As a consequence, total gold production in 4Q11 was 71,296 ounces, 16% lower than the 85,265 ounces reported in 4Q10. Accumulated total gold production in 2011 was 285,201 ounces, an 11% decrease when compared to 2010 (319,694 ounces).

Cash operating cost in 4Q11 was US$472/oz, 30% higher when compared to 4Q10 (US$363/oz). This was mainly explained by:
        1.   The 17% decrease in gold ounces produced due to a 16% decline in ore grade
2. An increase in supply expenses: reagents (cyanide) and diesel fuel
3. Contractor costs increased approximately 70% due to the increase of drilling (8% higher 4Q11 vs. 4Q10) and drifting work (29% higher 4Q11 vs. 4Q10), as well as a 50% increase in contractor prices.
4. These factors were partially offset by an increase in the by-product credit contribution explained by higher silver production and prices.
 

Gold cash cost in 2011 was US$454/oz, 28% higher than 2010 (US$356/oz).

At Poracota, gold production in 4Q11 was 11,089 ounces, a 24% decrease when compared to 4Q10 (14,676 ounces) due to lower ore grade and a decrease in the recovery rate (See Appendix 2). Accumulated gold production in 2011 was 49,201 ounces, 18% lower than the figure reported in 2010 (59,803 ounces). Cash operating cost was US$1,218/oz, 24% higher than the figure reported in 4Q10 (US$983/oz), mainly explained by the 24% decrease in gold ounces produced.

Gold cash cost in 2011 was US$1,048/oz, 14% higher than 2010 (US$923/oz).

____________________________
1 Production includes 100% of Buenaventura’s operating units, 100% of CEDIMIN, 53.06% of La Zanja and 53.78% of El Brocal.
 

At Uchucchacua (100% owned by Buenaventura), total silver production in 4Q11 was 2.8 million ounces, a 16% increase when compared to 2.4 million ounces in 4Q10 due to higher tonnage treated and higher silver grade (See Appendix). Zinc production in 4Q11 was 2,047 MT, 26% higher than the figure reported in 4Q10 (1,620 MT), while lead production increased 6% (2,051 MT in 4Q11 vs. 1,930 MT in 4Q10). In 2011, silver production was 10,090,936 million ounces, zinc production was 6,668 MT and lead production was 7,546 MT vs. 9.3 million ounces, 6,988 MT and 7,881 MT, respectively, in 2010.

Cash operating cost in 4Q11 was US$16.35/oz, a 14% increase compared to US$14.28/oz in 4Q10. This increase was primarily due to higher contractor expenses explained by a 25% increase in diamond drilling, as well as 17% increase in contractor prices.

Silver cash cost for 2011 was US$16.27/oz, 29% higher than in 2010 (US$12.65/oz).

At Antapite (100% owned by Buenaventura), total production in 4Q11 was 6,118 ounces of gold, a decrease of 37% compared to 4Q10 (9,777 ounces), mainly due to a decrease in ore grade (See Appendix 2). Accumulated gold production was 28,588 ounces, a 20% decrease when compared to 2010 (35,803 oz).

Gold cash operating cost in 4Q11 was US$1,472/oz, 77% higher than in 4Q10 (US$830/oz), mainly explained by the aforementioned decrease in gold production. Gold cash cost in 2011 was US$1,158/oz, 46% higher than in 2010 (US$794/oz).

La Zanja (53.06% owned by Buenaventura) total production in 4Q11 was 32,857 ounces of gold, a 3% decrease when compared to 4Q10 (34,046 ounces). Accumulated gold production in 2011 was 134,190 ounces (44,706 ounces in 2010). Cash operating cost in 4Q11 was US$463/oz, 27% higher than 4Q10 (US$364/oz) due to higher contractor and labor expenses, partially offset by higher silver by-product contribution. Gold cash cost in 2011 was US$367/oz, 8% higher than in 2010 (US$339/oz).

Tantahuatay (40% owned by Buenaventura) Total production in 4Q11 was 29,895 ounces of gold (11,958 ounces attributable to Buenaventura). In 2011, gold production was 46,164 ounces (18,466 attributable to Buenaventura). Cash operating cost in 4Q11 was US$466/oz and US$465/oz for the full year period.

During 4Q11, the entire plant capacity at El Brocal (53.78% owned by Buenaventura) was devoted to treat copper ore.

Copper production in 4Q11 was 7,852 MT, 22% lower than 4Q10 (10,108 MT). Copper cash cost in 4Q11 was US$4,135/MT, 46% higher when compared to the US$2,836/MT reported in 4Q10 due to higher commercial deductions and lower copper content in ore. Accumulated copper production in 2011 was 23,796 MT, 40% higher than 2010 (16,971 MT).

For 2011, total zinc production was 23,675 MT, a 33% decrease when compared to the 35,340 MT reported in 2010. In the case of silver, total production increased 16%, from 2,509,536 ounces in 2010 to 2,917,624 ounces in 2011. Lead production in 2011 was 9,504 MT, 18% lower than 2010 (11,583 MT).

Zinc cash cost in 2011 was a negative US$322 vs. US$994/MT in 2010. This was due to a higher silver by-product contribution due to an increase in silver production and prices.

General and Administrative Expenses

General and administrative expenses in 4Q11 were US$16.3 million, 43% lower than the figure reported in 4Q10 (US$28.5 million) due to a reduction in the long-term compensation provision (US$6.0 million). For 2011, general and administrative expenses were US$75.2 million versus US$98.2 million in FY 2010 (23% decrease).

Exploration Costs in Non-Operational Mining Sites

Exploration costs at non-operational mining sites, which include care and maintenance in 4Q11 were US$14.1 million, a 38% increase compared to the US$10.2 million reported in 4Q10. Buenaventura’s main exploration efforts were focused at the Trapiche (US$2.9 million), Marcapunta (US$1.5 million), San Gregorio (US$1.8 million), Colquemayo (US$1.2 million) and Mallay (US$4.8 million) projects.

Exploration costs at non-operational mining sites in 2011 were US$49.6 million, 37% higher than 2010 (US$36.1 million).

Operating Income

Operating income in 4Q11 was US$170.7 million, an 18% decrease compared to the US$208.5 million reported in 4Q10. This decrease was mainly due to the 20% increase in cost of operations, while revenues increased 1%.

Accumulated 2011 operating income was US$705.2 million versus US$417.0 million in 2010 (increase of 69%).

Share in Associated Companies

During 4Q11, Buenaventura’s share in associated companies was US$125.6 million, 10% higher than the US$114.1 million reported in 4Q10. Yanacocha’s contribution to these results increased 42%, from US$61.0 million in 4Q10 to US$86.9 million in 4Q11, while Cerro Verde’s contribution decreased 46% from US$73.6 million in 4Q10 to US$40.0 million in 4Q11.

For 2011, Buenaventura’s share in associated companies was US$467.3 million, 8% higher than the US$431.0 million reported in 2010.

YANACOCHA

At Yanacocha (43.65% owned by Buenaventura), 4Q11 gold production was 334,833 ounces of gold, in-line with production in 4Q10. Accumulated gold production in 2011 was 1.3 million ounces, 12% lower than 2010 (1.5 million).

Costs applicable to sales (CAS) at Yanacocha in 4Q11 were US$533/oz, 8% lower than the figure reported in 4Q10 (US$577/oz) due lower operating costs and higher silver by-product credits. CAS for 2011 was US$581/oz, 30% higher than 2010 (US$448/oz).

Net income at Yanacocha in 4Q11 was US$199.2 million, a 43% increase compared to the 4Q10 figure (US$139.4 million). Accumulated net income in 2011 was US$642.4 million, 9% higher than 2010 (US$589.9 million).

During 4Q11, EBITDA totaled US$362.0 million, a 50% increase compared to 4Q10 (US$241.7 million). This increase was mainly due to a 26% increase in revenues (US$577.4 million in 4Q11 vs. US$459.9 million in 4Q10). Accumulated EBITDA in 2011 was US$1,167.4 million, 14% higher than 2010 (US$1,023.1 million).

Capital expenditures at Yanacocha were US$452.1 million in 4Q11 and US$1,113.9 for 2011.

CERRO VERDE

At Cerro Verde (19.35% owned by Buenaventura), 4Q11 copper production was 65,958 MT, a 15% decrease when compared to 4Q10 (77,603 MT). Accumulated total copper production in 2011 was 293,581 MT, 3% lower than 302,711 in 2010.

During 4Q11, Cerro Verde reported net income of US$202.6 million, a 46% decrease when compared to US$374.9 million in 4Q10. This was mainly due to a 28% decrease in sales revenues (US$565.0 million in 4Q11 versus US$783.3 million in 4Q10). Accumulated net income in 2011 was US$1,078.4 million, 2% higher than US$1,054.4 million in 2010.

Capital expenditures at Cerro Verde in 4Q11 totaled US$75.3 million and US$195.2 in 2011.

Net Income

Buenaventura’s 4Q11 net income was US$230.9 million (US$0.91 per share), a 1% increase compared to the US$228.1 million (US$0.90 per share) reported in 4Q10. Accumulated net income in 2011 was US$861.4 million, 29% higher when compared to 2010 (US$670.4 million).

Project Development

LA ZANJA EXPANSION
  • Pampa Verde Project will allow the development of a new open pit, expand the current leach pad and improve the road access to the operation. Construction began in 2Q11. As of December 31, 2011, total project expenditures were US$24 million (total investment is US$32.5 million). Completion is expected by 3Q12.
                           
          Progress as of December 31, 2011
San Pedro Sur Leach Pad Stage II         77.1%
San Pedro Sur Waste Rock Deposit         100%
Pampa Verde Pit         0%
Pampa Verde Top Soil Deposit         38.5%
Pampa Verde Waste Soil Deposit         73.9%
Pampa Verde Acid Water Plant         8.4%
Pampa Verde Auxiliary Access         100%
Pampa Verde Waste Rock Deposit         14.5%
Pampa Verde Haul Road to SPS         54.2%
       

Overall, the Pampa Verde Project (including work in San Pedro Sur) is 60% complete.

TANTAHUATAY EXPANSION

  • Cienaga Norte project includes Stage II of the Leach Pad, development of the Cienaga Norte Pit and road access. Total CAPEX totals US$30 million. Project construction will begin in 2Q12, after the approval of the environmental impact assessment.

MALLAY
  • During the first year of operation, silver production from Mallay is expected to be approximately 900k oz of silver.
  • Currently, Mallay holds Brownfield explorations investments in the Chancas – Chiptaj area.

RIO SECO MANGANESE SULFATE PLANT
  • Buenaventura continued with the construction of the manganese sulfate plant with a total budget of US$76.0 million. As of December 31, 2011 total expenditures were US$33 million. The project includes a leaching facility, a sulfuric acid plant and a manganese sulfate plant.
  • The leaching processing facilities are expected to be completed at the end of 2Q12. The detailed engineering for the Sulfuric Acid and Manganese Sulfate Plant is expected to be ready in 2Q12. Erection and start-up tests at both plants are scheduled at the end of 2012.

BREAPAMPA
  • As of December 31, 2011, Buenaventura’s total investment at the Breapampa Project was US$23.4 million, representing 48% of the entire budget (US$48 million).
  • Construction progress includes:
                         
        Progress as of December 31, 2011
Leach Pad Stage I       89.8%
Process Plant       64%
Adm Facilities       94%
Internal Electric System       92%
Waste Soil Deposit       60%
Top Soil Deposit       60%
  • This project should be completed by the end of 2Q12. Production will begin at the beginning of 3Q12.
  • Expected gold production is 2012 is approximately 25,000 ounces.

HUANZA HYDROELECTRICAL PLANT
  • As of December, 2011, Buenaventura’s total disbursement at the Huanza Project was US$131.8 million (which includes US$18.7 million in advanced payments), representing 90% of the entire budget. US$105 million of the total amount invested was financed via a leasing agreement totaling US$119.0 million.
  • Construction progress at the Huanza Project includes:
            1.   Water Conduction Tunnel: 9,506 meters of excavation was completed, representing 87.4%
2. Powerplant: civil work was 70% completed, electromechanical equipment 5% completed.
3. Pallca Dam: 22% has been completed.

Other Information

At the Board of Directors meeting held February 28, 2012, the Board of Directors passed the following Resolutions:

To call for the Annual Shareholders Meeting to be held March 26, 2012 to:

• Approve the financial statements as of December 31, 2011

• Approve the 2011 Annual Report

• Approve a cash dividend of US$0.40 per share or ADS to be paid in U.S. currency.

The Company has completed the IFRS financial statements (1) for the year end 2011 which is showed in Appendix 6.

For a complete version of this release, please visit www.buenaventura.com.pe .

* * *

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; 19.35% 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 2010 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, 2010, through Resolution N°102-2010-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 2011.
 
For periods up to and including the year ended December 31, 2010, 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, 2011, 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, 2010, 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
   
Equity Participation in

Subsidiaries and Affiliates (as of December 31, 2011)
 
      BVN       Operating
        Equity %       Mines / Business  
Cedimin S.A.C*       100.00       Shila / Paula  
Consorcio Energetico de Huancavelica S.A*       100.00       Energy – Huanza Hydroelectrical Project  
Buenaventura Ingenieros S.A*       100.00       Engineering Consultant  
Minera La Zanja S.A*       53.06       La Zanja  
Sociedad Minera El Brocal S.A.A*       53.78       Colquijirca and Marcapunta  
Canteras del Hallazgo S.A **       49.00       Chucapaca Project  
Compañía Minera Coimolache S.A **       40.09       Tantahuatay  
Minera Yanacocha S.R.L **       43.65       Yanacocha  
Sociedad Minera Cerro Verde S.A.A **       19.35       Cerro Verde  
 

(*)Consolidates

(**) Equity Accounting
 
 

APPENDIX 2
   

 
 
GOLD PRODUCTION  
Three Months Ended December 31     Full Year  
Orcopampa     Orcopampa Old Tailings     Orcopampa     Orcopampa Old Tailings
2011   2010   %     2011   2010   %     2011   2010   %     2011   2010   %  
Ore Milled DST 130,685   137,996   -5% 137,996   66,532   107% 499,728   484,767   3% 466,441   289,475   61%
Ore Grade OZ/ST 0.53 0.64 -16% 0.05 0.08 -34% 0.55 0.64 -13% 0.06 0.08 -21%
Recovery Rate % 94.3% 96.1% -2% 78.2% 81.1% -4% 94.7% 95.9% -1% 81.4% 81.2% 0%
Ounces Produced 65,788   79,408   -17%     5,508   5,857   -6%     260,958   295,616   -12%     24,243   24,078   1%  
 

Orcopampa Total Production
4Q11 71,296 4Q10 85,265 FY 2011 285,201 FY 2010 319,694
   
Three Months Ended December 31     Full Year  
Antapite Poracota Antapite Poracota
2011   2010   %     2011   2010   %     2011   2010   %     2011   2010   %  
Ore Milled DST 39,404 39,509 0% 66,584 64,099 4% 155,842 145,915 7% 254,475 245,041 4%
Ore Grade OZ/ST 0.16 0.26 -37% 0.21 0.27 -23% 0.19 0.25 -24% 0.24 0.29 -19%
Recovery Rate % 96.6% 97.2% -1% 79.1% 83.6% -5% 96.5% 96.8% 0% 81.8% 84.2% -3%
Ounces Produced 6,118   9,777   -37%     11,089   14,676   -24%     28,588   35,803   -20%     49,201   59,803   -18%  
   
LA ZANJA     Tantahuatay  
4Q11   4Q10   %     FY 2011   FY 2010   %     4Q11   4Q10   %     FY 2011   FY 2010   %  
Ounces Produced 32,857   34,046   -3%     134,190   44,706   200%     29,895   0         46,164   0      
   
SILVER PRODUCTION  
Three Months Ended December 31     Full Year  
Uchucchacua Colquijirca Uchucchacua Colquijirca
2011   2010   %     2011   2010   %     2011   2010   %     2011   2010   %  
Ore Milled DST 294,754 267,652 10% - - 1,086,123 1,016,172 7% 929,032 1,911,661 -51%
Ore Grade OZ/ST 13.07 12.70 3% - - 13.00 12.90 1% 2.67 2.48 8%
Recovery Rate % 71.6% 70.4% 2% - - 71.2% 72.1% -1% 76.1% 69.1% 10%
Ounces Produced 2,788,798   2,395,512   16%     -   494,227         10,090,936   9,269,718   9%     1,882,307   2,509,536   -25%  
   
ZINC PRODUCTION  
Three Months Ended December 31     Full Year  
Uchucchacua Colquijirca Uchucchacua Colquijirca
2011   2010   %     2011   2010   %     2011   2010   %     2011   2010   %  
Ore Milled DST 294,754 267,652 10% 0 0 1,086,123 1,016,172 7% 929,032 1,150,525 -19%
Ore Grade % 1.46 0.01 10877% 0.00 0.00 0.01 0.01 -11% 3.89 0.05 8194%
Recovery Rate % 52.3% 50.4% 4% 0.0% 0.0% 51.7% 51.3% 1% 71.9% 72.2% 0%
ST Produced 2,047   1,786   15%     0   0         6,668   7,702   -13%     25,968   38,956   -33%  
                         
 

APPENDIX 3
 
EBITDA RECONCILIATION (in thousand US$)
                             
              4Q11     4Q10     FY 2011     FY 2010  
Net Income             255,331     267,287     963,684     738,534  

Add / Subtract:
            -57,029     -34,438     -129,356     -199,965  
Provision for income tax, net             36,719     61,759     212,841     118,598  
Share in associated companies by the equity method, net             -125,557     -114,147     -467,321     -430,974  
Interest income             -4,575     -1,847     -11,827     -8,203  
Interest expense             6,740     6,054     11,823     12,271  
Loss on currency exchange difference             -677     390     675     750  
Other, net             2,759     -11,045     -4,651     -14,014  
Depreciation and Amortization             26,715     17,810     94,495     71,694  
Impairment             0     -13,135     0     -13,135  
Provision for long term officers´ compensation             (5,982)     9,434     (5,982)     42,425  
Workers´ participation provision             6,829     10,289     40,591     20,623  
EBITDA Buenaventura Direct Operations             198,302     232,849     834,328     538,569  
EBITDA Yanacocha (43.65%)             158,028     105,496     509,554     446,561  
EBITDA Cerro Verde (19.35%)             59,294     118,647     318,236     337,650  
EBITDA Buenaventura inc Yanacocha and Cerro Verde             415,623     456,992     1,662,118     1,322,780  
 

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 Yanacocha and Cerro Verde) consists of EBITDA (Buenaventura Direct Operations), plus (1) Buenaventura’s equity share of EBITDA (Yanacocha) and (2) Buenaventura’s equity share of EBITDA (Cerro Verde). EBITDA (Yanacocha) and EBITDA (Cerro Verde) were similarly calculated using financial information provided to Buenaventura by Yanachocha and Cerro Verde, respectively.
 
Buenaventura presents EBITDA (Buenaventura Direct Operations) and EBITDA (including Yanacocha and Cerro Verde) to provide further information with respect to its operating performance and the operating performance of its equity investees, Yanachoca and Cerro Verde. EBITDA (Buenaventura Direct Operations) and EBITDA (including Yanacocha and Cerro Verde) are not a measure of financial performance under Peruvian GAAP, and may not be comparable to similarly titled measures of other companies. You should not consider EBITDA (Buenaventura Direct Operations) and EBITDA (including Yanacocha and Cerro Verde) as alternatives to operating income or net income determined in accordance with Peruvian GAAP, as an indicator of Buenaventura’s, Yanacocha’s or Cerro Verde’s operating performance, or as an alternative to cash flows from operating activities, determined in accordance with Peruvian GAAP, as an indicator of cash flows or as a measure of liquidity.
 
 

APPENDIX 4
RESERVES AS OF DECEMBER 31, 2011
                     
PROVEN AND PROBABLE RESERVES  
 
GOLD BVN (%) BVN
  Ownership     DST (000)     Oz / DST     Oz (000)     Oz (000)  
 
Orcopampa 100.00 1,020 0.456 465 465
Julcani 100.00 400 0.023 9 9
Shila - Paula 100.00 27 0.466 13 13
Antapite 100.00 29 0.255 8 8
Ishihuinca 100.00 18 0.336 6 6
Poracota 100.00 44 0.435 19 19
Yanacocha 43.65 263,127 0.029 7,713 3,367
Yanacocha (Conga) 43.65 590,855 0.021 12,582 5,492
El Brocal Marcapunta (Sulphides) 53.76 6,174 0.012 74 40
La Zanja 53.06 44,183 0.015 680 361
Tantahuatay Oxides 40.00 24,790 0.024 600 240
Breapampa 100.00 5,645 0.035 201 201
Mallay   100.00     691     0.015     10     10  
Total Gold Reserves 937,003 0.024 22,380 10,231
 
SILVER BVN (%) BVN
  Ownership     DST (000)     Oz / DST     Oz (000)     Oz (000)  
 
Orcopampa 100.00 1,020 0.50 510 510
Poracota 100.00 44 0.18 8 8
Uchucchacua (Plata - Sulphides) 100.00 3,920 14.15 55,467 55,467
Uchucchacua (Zinc - Sulphides) 100.00 461 5.95 2,746 2,746
Uchucchacua (Plata - Oxides) 100.00 325 19.63 6,387 6,387
Julcani 100.00 400 18.60 7,440 7,440
Recuperada 100.00 115 7.79 894 894
Antapite 100.00 29 0.30 9 9
Shila - Paula 100.00 27 1.40 38 38
Pozo Rico 100.00 6 7.00 43 43
El Brocal Tajo Norte - La Llave 53.76 75,516 0.81 60,974 32,780
El Brocal Marcapunta (Sulphides) 53.76 6,174 0.48 2,968 1,596
La Zanja 53.06 44,183 0.20 8,696 4,614
Tantahuatay Oxides 40.00 24,790 0.24 5,835 2,334
Breapampa 100.00 5,645 0.63 3,543 3,543
Mallay 100.00 691 8.27 5,714 5,714
Yanacocha (Conga) 43.65   590,855     0.06     37,784     16,493  
Total Silver Reserves 754,201 0.26 199,056 140,616
 
ZINC BVN (%) BVN
  Ownership     DST (000)     % Zn     DST (000)     DST (000)  
 
Uchucchacua (Plata - Sulphides) 100.00 3,920 1.59 62 62
Uchucchacua (Zinc - Sulphides) 100.00 461 5.74 26 26
Recuperada 100.00 115 8.11 9 9
Pozo Rico 100.00 6 5.11 0 0
El Brocal Tajo Norte - La Llave 53.76 75,516 2.23 1,684 905
Mallay   100.00     691     7.05     49     49  
Total Zinc Reserves 80,709 2.27 1,830 1,051
 
LEAD BVN (%) BVN
  Ownership     DST (000)     % Pb     DST (000)     DST (000)  
 
Uchucchacua (Plata - Sulphides) 100.00 3,920 1.12 44 44
Uchucchacua (Zinc - Sulphides) 100.00 461 4.60 21 21
Julcani 100.00 400 2.04 8 8
Recuperada 100.00 115 5.20 6 6
Pozo Rico 100.00 6 3.41 0 0
El Brocal Tajo Norte - La Llave 53.76 75,516 0.73 551 296
Mallay   100.00     691     4.86     34     34  
Total Lead Reserves 81,109 0.82 664 409
 
COPPER BVN (%) BVN
  Ownership     DST (000)     % Cu     DST (000)     DST (000)  
 
Julcani 100.00 400 0.48 2 2
Cerro Verde (Sulphides) 19.35 3,937,416 0.39 15,356 2,971
Cerro Verde (Oxides) 19.35 248,018 0.40 992 192
Yanacocha (Conga) 43.65 590,855 0.28 1,648 719
El Brocal Marcapunta (Sulphides) 53.76 6,174 1.95 120 65
                             
Total Copper Reserves 4,782,862 0.38 18,118 3,949
 
Price used to calculate Reserves: Gold (US$ / Oz) Silver (US$ / Oz) Zinc (US$ /MT) Lead (US$ / MT) Copper (US$ / MT)
1,200 22 1920 1,830 6,600
                 
 

APPENDIX 5
 
Compañía de Minas Buenaventura S.A.A. and subsidiaries
Consolidated Balance sheet
As of December, 31 2011 and December, 31 2010
2011 2010
Assets US$(000) US$(000)
Current assets
Cash and cash equivalents 480,968 600,796
Financial asset at fair value through profit and loss 52,178 50,154
Trade accounts receivable, net 172,569 160,928
Other accounts receivable 48,521 42,218
Accounts receivable from related parties 47,425 18,903
Hedge derivative financial instruments 1,283
Embedded derivatives for concentrates sales 213 13,645
Inventory, net 150,429 82,025
Prepaid expenses   15,805     2,990  
Total current assets 969,391 971,659
 
Other accounts receivable 5,570 14,425
Accounts receivable from related parties 32,262 20,736
Inventory 48,845 27,160
Prepaid expenses 429
Hedge derivative financial instruments
Investment in associates 1,926,981 1,412,414
Mining concessions and property, plant and equipment, net 743,317 532,577
Development costs, net 74,425 86,340
Deferred income tax asset 145,741 201,454
Other assets   7,048     6,095  
Total assets   3,954,009     3,272,860  
 
Liabilities and shareholders’ equity, net
Current liabilities
Trade accounts payable 142,375 91,374
Income tax payable 36,408 26,538
Other liabilities 132,431 115,838
Accounts payable from related parties 883 1,584
Embedded derivatives for concentrates sales 7,519 -
Hedge derivative financial instruments - 16,291
Financial obligations   1,042     2,018  
Total current liabilities 320,658 253,643
 
Other long-term liabilities 86,528 116,214
Accounts payable from related parties 1,004 1,370
Financial obligations 105,072 55,134
Hedge derivative financial instruments - 6,897
Deferred income tax liabilities   17,658     21,152  
Total liabilities   530,920     454,410  
 
Shareholders’ equity net
 
Capital stock, net of treasury shares of US$62,622,000 in the year 2011 y 2010 750,540 750,540
Investments shares, net of treasury shares of US$142,000 in the year 2011 y 2010 2,019 2,019
Additional paid-in capital 225,978 225,978
Legal reserve 162,639 162,633
Other reserves 269 269
 
Retained earnings 2,055,957 1,483,233
Cumulative translation loss (34,075 ) (34,075 )
Unrealized (loss) gain on valuation of hedge derivative financial instruments, net
Cumulative unrealized, loss   921     (6,875 )
3,164,248 2,583,722
Minority interest   258,841     234,728  
Total shareholders’ equity, net   3,423,089     2,818,450  
       
Total liabilities and shareholders’ equity, net   3,954,009     3,272,860  
 
 
Compañía de Minas Buenaventura S.A.A. and subsidiaries
Consolidated Statements of income
For the three and twelve month period ended December 31, 2011 and December 31, 2010
                     

For the three month period

ended December, 31

For the twelve month period

ended December, 31
2011 2010 2011 2010
US$(000) US$(000) US$(000) US$(000)
Operating income
Net sales 384,970 382,336 1,493,882 1,047,885
Royalty income 17,367   14,414   62,742   55,883  
Total income 402,337 396,750 1,556,624 1,103,768
 
Operating costs
Cost of sales, excluding depreciation and amortization (128,686 ) (115,103 ) (450,909 ) (355,895 )
Exploration in units in operation (33,984 ) (25,192 ) (109,355 ) (91,441 )
Depreciation and amortization (26,715 ) (17,810 ) (94,495 ) (71,694 )
Total operating costs (189,385 ) (158,105 ) (654,759 ) (519,030 )
Gross income 212,952   238,645   901,865   584,738  
 
Operating expenses
Administrative expenses (16,344 ) (28,546 ) (75,169 ) (98,174 )
Royalties (8,323 ) (17,062 ) (60,262 ) (52,270 )
Exploration in non-operating areas (14,066 ) (10,181 ) (49,593 ) (36,105 )
Sales expenses (3,479 ) (2,553 ) (11,617 ) (9,375 )
Recover of explorations proyects expenses 15,013 15,013
Reversal (provision) of impairment of long-lived assets   13,135     13,135  
Total operating expenses (42,212 ) (30,194 ) (196,641 ) (167,776 )
 
Operating income 170,740   208,451   705,224   416,962  
 
Other income (expenses), net
Share in associates companies by the equity method, net 125,557 114,147 467,321 430,974
Interest incomes 4,575 1,847 11,827 8,203
Interest expenses (6,740 ) (6,054 ) (11,823 ) (12,271 )
Loss (income) from currency exchange difference, net 677 (390 ) (675 ) (750 )
Other, net (2,759 ) 11,045   4,651   14,014  
Total other income, net 121,310 120,595 471,301 440,170
 
 
Income before income tax and minority interest 292,050 329,046 1,176,525 857,132
 
 
Provision for income tax (36,719 ) (61,759 ) (212,841 ) (118,598 )
       
Net income 255,331   267,287   963,684   738,534  
 
Net income attributable to minority interest (24,421 ) (39,183 ) (102,252 ) (68,166 )
       
Net income attributable to Buenaventura 230,910   228,104   861,432   670,368  
 
Basic and diluted earnings per share attributable to
Buenaventura, stated in U.S. dollars 0.91   0.90   3.39   2.63  
 
 
Compañía de Minas Buenaventura S.A.A. and subsidiaries
Consolidated Statements of cash flows
For the three and twelve month period ended December 31, 2011 and December 31, 2010
                     
 

For the three month period ended

December, 31
     

For the twelve month period

ended December, 31
2011 2010 2011 2010
US$(000) US$(000) US$(000) US$(000)
Operating activities
Proceeds from sales 417,535 319,133 1,505,476 997,829
Dividends received - 105,922 - 182,955
Royalties received 18,671 13,591 56,153 58,825
Value Added Tax recovered 3,225 3,047 22,585 7,480
Interest received 2,525 4,404 8,528 8,098
Payments to suppliers and third parties (168,513) (115,749) (701,728) (473,630)
Payments to employees (29,132) (49,925) (135,428) (126,042)
Income tax paid (25,371) (19,244) (111,802) (56,251)
Payment of royalties (18,138) (11,717) (73,776) (55,265)
Payments of interest (1,632) (3,093) (2,543) (6,377)
 
Net cash and cash equivalents provided by operating activities 199,170 246,369 567,465 537,622
 
Investment activities
Proceeds from sales of investments shares - 60,379 -
Proceeds from sales of mining concessions, property, plant and equipment 99 8 7,891 694
Additions to mining concessions, property, plant and equipment (134,031) (60,075) (304,614) (240,053)
Payments for purchase of investments shares (20,360) (8,922) (277,485) (19,625)
Decrease (increase) in time deposits (8,679) (6,888) 7,814 (17,935)
Disbursements for development activities (5,289) (7,874) (13,202) (13,222)
Additions of financial asset at fair value through profit and loss   (50,000)   (50,000)
 

Net cash and cash equivalents used in investment activities
(168,260) (133,751) (519,217) (340,141)
 
Financing activities
Increase in financial obligations 16,525 15,163 50,962 53,262
Payments of long-term debt (500) (506) (2,000) (226,117)

Dividends paid
(58,521) (34,353) (142,488) (117,043)

Dividends paid to minority shareholders of subsidiary
(18,318) (23,146) (66,736) (39,176)
 
Net cash and cash equivalents used in financing activities (60,814) (42,842) (160,262) (329,074)
 
(Decrease) increase in cash and cash equivalents during the period, net (29,904) 69,776 (112,014) (131,593)
Cash and cash equivalents at beginning of period 500,751 513,085 582,861 714,454
       
Cash and cash equivalents at period-end 470,847 582,861 470,847 582,861
 
 
 

For the three month period ended

December, 31
     

For the twelve month period

ended December, 31
2011 2010 2011 2010
US$(000) US$(000) US$(000) US$(000)
 
Reconciliation of net income to cash and cash equivalents provided by operating activities
 
Net income attributable to Buenaventura 230,910 228,104 861,432 670,368
Add (less)
Depreciation and amortization 26,715 17,810 94,495 71,694
Provision for long term officers’ compensation (5,982) 9,434 (5,982) 42,425
Net income attributable to minority interest 24,421 39,183 102,252 68,166
Deferred income tax (4,423) 23,459 43,642 30,016
Provision for estimated fair value of embedded derivatives related of concentrates

Sales and adjustments on open liquidations
(10,721) (9,868) 33,889 (20,500)
Loss (gain) on currency exchange differences (677) 390 675 750
Net cost of plant and equipment sold 312 704 1,858 3,136
 
Share in associates companies by the equity method, net of dividends received in cash (125,557) (8,225) (467,321) (248,019)
Adjustment to present value of mining-units closure provision 4,931 5,534 9,100 6,392
Decrease of allowance for impairment of inventories
Others
 
Net changes in operating assets and liabilities accounts
 
Decrease (increase) of operating assets
Trade accounts receivable 44,271 (62,858) (11,641) (37,978)
Other accounts receivable (29,570) (9,493) 2,552 (23,921)
Accounts receivable from related parties (6,771) (19,680) (40,048) (17,773)
Inventory (10,446) (19,241) (90,089) (64,198)
Prepaid expenses (27,084) 5,072 (12,964) (9,347)
 
Increase (decrease) of operating liabilities
Trade accounts payable 40,727 10,177 51,001 33,141
Income tax payable (7,850) 13,447 9,870 6,010
Other liabilities 55,964 22,420 (15,256) 27,260
       
 
Net cash and cash equivalents provided by operating activities 199,170 246,369 567,465 537,622
 

Copyright Business Wire 2010

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