Share in Associated CompaniesDuring 1Q12, Buenaventura’s share in associated companies was US$136.0 million, 20% higher than the US$112.9 million reported in 1Q11. Yanacocha’s contribution to these results increased 83%, from US$48.2 million in 1Q11 to US$88.2 million in 1Q12, while Cerro Verde’s contribution decreased 37% from US$71.0 million in 1Q11 to US$44.9 million in 1Q12. YANACOCHA At Yanacocha (43.65% owned by Buenaventura), 1Q12 gold production was 366,428 ounces of gold, 27% higher than the figure reported in 1Q11 (288,214 ounces). Costs applicable to sales (CAS) at Yanacocha in 1Q12 were US$481/oz, 20% lower than the figure reported in 1Q11 (US$603/oz) due to lower operating costs, partially offset by higher worker´s participation. Net income at Yanacocha in 1Q12 was US$202.0 million, a 82% increase compared to the 1Q11 figure (US$110.7 million). Capital expenditures at Yanacocha were US$227.4 million in 1Q12. CERRO VERDE At Cerro Verde (19.35% owned by Buenaventura), 1Q12 copper production was 63,295 MT, a 20% decrease when compared to 1Q11 (79,463 MT). During 1Q12, Cerro Verde reported net income of US$232.3 million, a 37% decrease when compared to US$367.7 million in 1Q11. This was mainly due to a 23% decrease in sales revenues (US$568.8 million in 1Q12 versus US$740.9 million in 1Q11). Capital expenditures at Cerro Verde in 1Q12 totaled US$82.2 million. CANTERAS DEL HALLAZGO (Chucapaca project) At Canteras del Hallazgo (49% owned by Buenaventura), there was a net loss reported in 1Q12 totaling US$5.4 million due to the execution of the project’s exploration program. Net Income Buenaventura’s 1Q12 net income was US$207.5 million (US$0.82 per share), an 8% decrease compared to the US$224.8 million (US$0.88 per share) reported in 1Q11. This was mainly due to a 26% decline in operating income. Project Development LA ZANJA DEVELOPMENT PROGRAM
|•||Pampa Verde Project will allow the development of a new open pit, an expansion of the current leach pad and improvements in the operation’s road access. Construction began in 2Q11. As of March 31, 2012, total project expenditures were US$25.5 million (total investment is US$32.5 million). Completion is expected in 3Q12.|
|Progress as of March 31, 2012|
|San Pedro Sur Leach Pad Stage II||51.88%|
|San Pedro Sur Waste Rock Deposit||100%|
|Pampa Verde Pit||0%|
|Pampa Verde Top Soil Deposit||0%|
|Pampa Verde Waste Soil Deposit||45%|
|Pampa Verde Acid Water Plant||8.40%|
|Pampa Verde Auxiliary Access||40%|
|Pampa Verde Waste Rock Deposit||12%|
|Pampa Verde Haul Road to SPS||14%|
- Cienaga Norte project includes the Leach Pad’s Stage II (additional 10.5 Ha), development of the Cienaga Norte Pit and an access road between the leach pad and the open pit. Total CAPEX totals US$30 million. Project construction will begin in 3Q12, after the approval of the environmental impact assessment.
- Mallay mine construction was completed in 1Q12. The project has already received the mine operating license, which allows the mine to begin production. Total CAPEX was US$60 million.
- During the first year of operation, silver production from Mallay is expected to be approximately 900k oz of silver.
- Currently, Mallay holds Brownfield exploration investments in the Chancas–Chiptaj area.
- Buenaventura continued with the construction of the manganese sulfate plant with a total budget of US$76.0 million. As of March 31, 2012, total expenditures were US$44.5 million. The project includes an acid leaching facility, a sulfuric acid production plant and a manganese sulfate crystallization plant.
- The leaching processing facilities are expected to be completed at the end of 2Q12. The construction of the Sulfuric Acid and the Manganese Sulfate Plant is expected to be ready in 2Q12. Construction and start-up tests at both plants are scheduled at the end of 2012.
- As of March 31, 2012, Buenaventura’s total investment at the Breapampa Project was US$30.1 million, representing 62% of the entire budget (US$48.0 million).
- Construction progress includes:
|Progress as of March 31, 2012|
|Leach Pad Stage I||98%|
|Internal Electric System||96%|
|Waste Soil Deposit||71%|
|Top Soil Deposit||90%|
- This project should be completed by the end of 2Q12. Production will begin at the beginning of 3Q12.
- Expected gold production in 2012 is approximately 22,000 ounces.
- As of March, 2012, Buenaventura’s total disbursement at the Huanza Project was US$146.4 million (which included US$14.5 million in advanced payments), representing 92% of the entire budget. US$116 million of the total amount invested was financed via a leasing agreement totaling US$119.0 million.
- Construction progress at the Huanza Project included:
|1.||Water Conduction Tunnel: 9,760 meters of excavation was 97% completed.|
|2.||Powerplant: civil work was 75% completed.|
|3.||Pallca Dam: 30.1% was completed.|
|4.||Electromechanical equipment is nearly complete, and will be delivered on schedule. Equipment assembly is 7% complete.|