Buenaventura Announces Second Quarter 2012 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 second quarter 2012. All figures have been prepared in accordance with IFRS 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 second quarter was US$152.6 million, which was 23% lower than the figure reported in 2Q11 (US$197.6 million). EBITDA from Buenaventura’s Direct Operations was US$112.9 million, 38% lower than the figure reported in 2Q11 (US$182.5 million), while EBITDA including Affiliates decreased 16%, from US$406.3 million in 2Q11 to US$341.9 million in 2Q12.

These results were mainly explained by the higher cost of and exploration costs at non-operating mining sites.

Financial Highlights (in millions of US$, except EPS figures):
                                     
      2Q12     2Q11     Var%     6M12     6M11     Var%
Total Revenues     350.5     343.3     2%     727.5     719.0     1%
Operating Income     79.4     147.9     -46%     210.9     326.3     -35%
EBITDA

(BVN Direct Operations)†
    112.9     182.5     -38%     284.0     390.9     -27%
EBITDA

(inc. Affiliates) †
    341.9     406.3     -16%     755.0     804.3     -6%
Net Income     152.6     197.6     -23%     360.0     422.3     -15%
EPS*     0.60     0.78     -23%     1.41     1.66     -15%

(*) As of June 30, 2012, 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 Affiliates) 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 2Q12, net sales were US$331.8 million, similar to the US$327.3 million reported in 2Q11. Higher silver, zinc and lead volume sold positively offset lower silver and base metal prices, as well as the decline in gold sales.

Royalty income increased 17%, from US$16.0 million reported in 2Q11 to US18.7 million in 2Q12 due to higher revenues at Yanacocha.
                                     
Operating Highlights     2Q12     2Q11     Var%     6M12     6M11     Var%
Net Sales

(in millions of US$)
    331.8     327.3     1%     690.7     690.8     0%
Average Realized Gold Price Gold (US$/oz)*     1,619     1,514     7%     1,673     1,457     15%
Average Realized Gold Price (US$/oz) inc. Yanacocha     1,616     1,508     7%     1,657     1,234     34%
Average Realized Silver Price (US$/oz)*     29.41     37.01     -21%     30.50     35.70     -15%
Average Realized Lead Price (US$/MT)*     1,929     2,494     -23%     1,957     2,519     -22%
Average Realized

Zinc Price (US$/MT)*
    1,922     2,260     -15%     1,963     2,320     -15%
Average Realized Copper Price (US$/MT)*     7,828     9,103     -14%     8,253     9,334     -12%

(*) Buenaventura’s Direct Operations
 
Sales Content
      2Q12     2Q11     Var     6M12     6M11     Var
Gold (in oz)*     107,661     126,273     -15%     234,241     246,876     -5%
Gold (in oz) inc. Yanacocha     274,290     275,387     0%     554,571     519,413     7%
Silver (in oz)*     4,695,060     2,761,715     70%     7,491,711     6,372,936     18%
Lead (in MT)*     9,471     4,560     108%     11,589     7,307     59%
Zinc (in MT)*     14,449     8,198     76%     22,381     16,133     39%
Copper (in MT)*     830     3,703     -78%     6,542     10,759     -39%

(*) Buenaventura Direct Operations

Accumulated net sales in the first six-month period 2012 were US$690.7 million, in-line with the figure reported in the same period in 2011 (US$690.8 million), while royalty income was US$36.8 million, a 30% increase when compared to the US$28.2 million reported in 2011.

Production and Operating Costs

Buenaventura’s equity production 1 in 2Q12 was 107,168 ounces of gold, 11% lower than the 120,641 ounces reported in 2Q11 mainly due to a decrease in Orcopampa and Poracota production. Silver production in 2Q12 was 4.5 million ounces, a 32% increase when compared to the figure reported in 2Q11 (3.4 million oz).

Equity production 1 in the first six-month period 2012 was 225,022 ounces of gold and 8.5 million ounces of silver. This represented a 5% decrease in gold production (237,259 ounces in 2011), and 13% higher silver production compared to 2011 (7.5 million ounces).
 
Equity Production 1
      2Q12     2Q11     Var%     6M12     6M11     Var%
Gold (oz)     107,168     120,641     -11%     225,022     237,259     -5%
Gold (oz) inc. Yanacocha     277,394     269,778     3%     555,191     512,202     8%
Silver (oz)     4,509,259     3,404,689     32%     8,523,034     7,549,314     13%
Lead ( MT)     6,910     4,617     50%     11,625     7,757     50%
Zinc ( MT)     11,842     6,164     92%     19,245     8,772     119%
Copper (MT) inc. Cerro Verde     13,629     17,134     -20%     29,044     35,985     -19%

1 Production includes 100% of Buenaventura’s operating units, 100% of CEDIMIN, 53.06% of La Zanja, 40.04% of Tantahuatay and 53.76% of El Brocal.

Orcopampa’s (100% owned by Buenaventura) production from the Chipmo mine in 2Q12 was 56,762 ounces, 18% lower than the 69,335 ounces reported in 2Q11 due to a 15-day strike and 15% lower ore grade (See Appendix 2). The old tailings treatment produced 3,984 gold ounces (compared to 5,876 ounces in 2Q11). As a consequence, total gold production in 2Q12 was 60,745 ounces, 19% lower than the 75,211 ounces reported in 2Q11. Accumulated total gold production in the first six-month period 2012 was 130,010 ounces, a 15% decrease when compared to 2011 (153,736 ounces).

Cash operating cost in 2Q12 was US$541.6/oz, 23% higher when compared to 2Q11 (US$441/oz). This was mainly explained by:
      1.   A 18% decrease in gold ounces produced
2. A 12% increase in reagents, basically explained by an increase in cyanide and sulfuric acid prices
3. Contractor costs increased 32% due to an increase in waste moved from areas with narrow veins

At Poracota, gold production in 2Q12 was 6,231 ounces, a 54% decrease when compared to 2Q11 (13,427 ounces) due to the aforementioned 15-day strike, lower ore grade and a decrease in the recovery rate (See Appendix 2). Accumulated gold production in the first six-month period 2012 was 17,551 ounces, 31% lower than the figure reported in 2011 (25,528 ounces). Cash operating cost was US$1,851/oz, 98% higher than the figure reported in 2Q11 (US$936/oz), mainly explained by the 54% decrease in gold ounces produced.

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.

General and Administrative Expenses

General and administrative expenses in 2Q12 were US$25.0 million, 28% higher than the figure reported in 2Q11 (US$19.5 million) due to a provision for early retirement contingencies and metallurgical research studies. For the first six-month period 2012, general and administrative expenses were US$54.8 million versus US$36.5 million in 2011 (50% increase).

Exploration Costs in Non-Operational Mining Sites

Exploration costs at non-operational mining sites, which include care and maintenance in 2Q12 were US$26.4 million, a 118% increase compared to the US$12.1 million reported in 2Q11. Buenaventura’s main exploration efforts were focused at the Trapiche (US$3.9 million), Tambomayo (US$3.8 million), San Gregorio (US$3.6 million), Chancas (US$3.3 million) and Breapampa (US$2.2 million) projects.

Exploration costs at non-operational mining sites in the first six-month period 2012 were US$45.8 million, 102% higher than 2011 (US$22.7 million).

Operating Income

Operating income in 2Q12 was US$79.4 million, a 46% decrease compared to the US$147.9 million reported in 2Q11. This decrease was mainly due to a 32% increase in operating costs, while revenues increased 2%.

Accumulated in the first six-month period 2012, operating income was US$210.9 million versus US$326.3 million in 2011 (decrease of 35%).

Share in Associated Companies

During 2Q12, Buenaventura’s share in associated companies was US$122.0 million, in-line with the US$123.2 million figure reported in 2Q11. Yanacocha’s contribution to these results increased 33%, from US$64.9 million in 2Q11 to US$86.6 million in 2Q12, while Cerro Verde’s contribution decreased 49% from US$65.9 million in 2Q11 to US$33.9 million in 2Q12.

For the first six-month period 2012, Buenaventura’s share in associated companies was US$258.0 million, 9% higher than the US$236.2 million reported in 2011.

YANACOCHA

At Yanacocha (43.65% owned by Buenaventura), 2Q12 gold production was 389,979 ounces of gold, 14% higher than 2Q11 production (341,665 oz). Accumulated gold production in the first six-month period 2012 was 756,407 ounces, 20% higher than in 2011 (629,880 oz).

Costs applicable to sales (CAS) at Yanacocha in 2Q12 were US$488/oz, 13% lower than the figure reported in 2Q11 (US$564/oz) due to higher production and lower mining costs, partially offset by higher workers' participation costs and lower by-product credits. Net income at Yanacocha in 2Q12 was US$198.3 million, a 33% increase compared to the 2Q11 figure (US$149.1 million). Accumulated net income in the first six-month period 2012 was US$400.3 million, 54% higher than in 2011 (US$259.8 million).

During 2Q12, EBITDA totaled US$375.3 million, a 32% increase compared to 2Q11 (US$284.0 million). This increase was mainly due to an 18% increase in revenues (US$615.4 million in 2Q12 vs. US$520.2 million in 2Q11). Accumulated EBITDA in the first six-month period 2012 was US$739.2 million, 55% higher than 2011 (US$477.7 million).

Capital expenditures at Yanacocha were US$332.9 million in 2Q12 and US$560.3 for the first six-month period 2012.

CERRO VERDE

At Cerro Verde (19.41% owned by Buenaventura), 2Q12 copper production was 68,329 MT, an 11% decrease compared to the figure reported in 2Q11 (76,905 MT). Accumulated total copper production in the first six-month period 2012 was 131,625 MT, 16% lower than 156,368 MT in 2011.

During 2Q12, Cerro Verde reported net income of US$173.9 million, a 49% decrease when compared to US$343.3 million in 2Q11. This was mainly due to a 35% decrease in sales revenues (US$482.2 million in 2Q12 versus US$744.0 million in 2Q11). Accumulated net income in the first six-month period 2012 was US$406.1 million, 43% lower than US$710.9 million in 2011.

Capital expenditures at Cerro Verde in 2Q12 totaled US$169.8 million and US$252.0 in the first six-month 2012 period.

CANTERAS DEL HALLAZGO (Chucapaca project)

At Canteras del Hallazgo (49% owned by Buenaventura), expenses attributable for Buenaventura totaled US$8.1 million due to the execution of the exploration program (US$7.1 million in 2Q11). For the six-month period 2012, attributable expenses were US$13.4 million (US$13.1 million in 2011).

COIMOLACHE (Tantahuatay operation)

At Coimolache (40.04% owned by Buenaventura), attributable contribution was US$9.6 million (negative US$0.5 million in 2Q11). For the six-month period 2012, attributable contribution was US$17.9 million (negative US$0.8 million in 2011)

Net Income

Buenaventura’s 2Q12 net income was US$152.6 million (US$0.60 per share), a 23% decrease compared to the US$197.6 million (US$0.90 per share) reported in 2Q11. Accumulated net income in the first six-month period 2012 was US$360.0 million, 15% lower when compared to 2011 (US$422.3 million).

Project Development

LA ZANJA DEVELOPMENT PROGRAM
  • The Pampa Verde Project will include the development of a new open pit, expansion of the current leach pad and improvements to the operation’s road access. Construction began in 2Q11. As of June 30, 2012, total project expenditures were US$39.02 million (total investment is US$70.4 million). Completion is expected in 1Q13.
       
      Progress as of June 30, 2012
San Pedro Sur Leach Pad Stage II     85.34%
San Pedro Sur Leach Pad Stage III     15.64%
San Pedro Sur Waste Rock Deposit     100%
Pampa Verde Pit     8.50%
Pampa Verde Top Soil Deposit     0%
Pampa Verde Waste Soil Deposit     45%
Pampa Verde Acid Water Plant     8.40%
Pampa Verde Auxiliary Access     80%
Pampa Verde Waste Rock Deposit     14%
Pampa Verde Haul Road to SPS     20%

TANTAHUATAY DEVELOPMENT PROGRAM
  • The 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 totaled US$20 million. Project construction will begin as soon as the environmental impact assessment is approved.

MALLAY
  • Mallay mine construction was completed in March 2012. The project has already received the mine operating license. Production began April 2012.
  • During 2Q12, Mallay production included 138,000 Ag Oz, 800MT Pb and 1050MT Zn.
  • Currently, Mallay holds Brownfield exploration 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 June 30, 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 by the end of 4Q12. The construction of the Sulfuric Acid and the Manganese Sulfate Plant is expected to be ready 4Q12. Construction and start-up tests at both plants are scheduled at the end of 2012.

BREAPAMPA
  • As of June 30, 2012, Buenaventura’s total investment at the Breapampa Project was US$40.3 million, representing 84% of the entire budget (US$48.0 million).
  • Construction progress includes:
       
      Progress as of June 30, 2012
Leach Pad Stage I     99.2%
Process Plant     100%
Dam Facilities     98.5%
Internal Electric System     99%
Waste Soil Deposit     87.2%
Top Soil Deposit     100%
  • This project should be completed by the end of 3Q12. Production will also begin at end of 3Q12
  • Expected gold production in 2012 is approximately 22,000 ounces

HUANZA HYDROELECTRICAL PLANT
  • As of June 30, 2012, construction progress at the Huanza Project included:
      1.   Water Conduction Tunnel: 10,074 meters of excavation was 100% completed
2. Powerplant: Civil works was 85% completed
3. Pallca Dam: 78.2 % (39,907 m3 concrete) of work was completed
4. Electromechanical equipment is nearly complete, and will be delivered on schedule. Equipment assembly is 13% complete

Other Information

At the Board of Directors meeting held July, 31, 2012, the following resolutions were passed:
      1.   Acceptance of Mr. Luis Coleridge’s resignation as a member of the Company’s Board of Directors who retired at the age of 75 after 12 years on the Board and President of the Audit Committee, in accordance with Buenaventura’s policy,
2. Appointment of Mr. Jose Miguel Morales as a new member of the Board of Directors
3. Appointment of Mr. German Suarez as President of the Audit Committee
4. Appointment of Mr. Carlos del Solar as member of the Audit Committee
5. Appointment of Ms. Gulnara la Rosa as General Council

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; 19.41% 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 2011 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, 2011, through Resolution N°102-2011-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 The first six-month period 2012.

For periods up to and including the year ended December 31, 2011, 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, The first six-month period 2012, 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, 2011, 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, The first six-month period 2012)
    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*     53.76     Colquijirca and Marcapunta
Canteras del Hallazgo S.A **     49.00     Chucapaca Project
Compañía Minera Coimolache S.A **     40.04     Tantahuatay
Minera Yanacocha S.R.L **     43.65     Yanacocha
Sociedad Minera Cerro Verde S.A.A **     19.41     Cerro Verde

(*)Consolidates

(**) Equity Accounting

APPENDIX 2
   

 
                                       
GOLD PRODUCTION
Three Months Ended June 30 Six Months Ended June 30
Orcopampa Orcopampa Old Tailings Orcopampa Orcopampa Old Tailings
2012     2011     % 2012     2011     % 2012     2011     % 2012     2011     %
Ore Milled MT 107,622     112,279 -4% 102,022 89,179 14% 225,100 226,101 0% 228,807 171,293 34%
Ore Grade gr/MT 17.00 20.19 -16% 1.37 2.70 -49% 17.13 20.64 -17% 1.71 2.61 -34%
Recovery Rate % 96.5% 95.2% 1% 84.8% 75.8% 12% 96.1% 95.3% 1% 86.7% 75.4% 15%
Ounces Produced 56,762     69,335     -18% 3,984     5,876     -32% 119,120     142,906     -17% 10,891     10,830     1%
 
Orcopampa Total Production 2Q12 60,745 2Q11 75,211 6M12 130,010 6M11 153,736
                                                                   
Three Months Ended June 30 Six Months Ended June 30
Antapite Poracota Antapite Poracota
2012     2011     % 2012     2011     % 2012     2011     % 2012     2011     %
Ore Milled MT 28,136 34,099 -17% 46,030 55,862 -18% 62,418 66,591 -6% 104,251 110,678 -6%
Ore Grade gr/MT 4.34 7.37 -41% 5.55 8.71 -36% 4.30 7.81 -45% 6.64 8.54 -22%
Recovery Rate % 95.2% 96.9% -2% 73.1% 85.8% -15% 95.2% 96.2% -1% 76.8% 84.0% -9%
Ounces Produced 3,739     7,824     -52% 6,231     13,427     -54% 8,222     16,078     -49% 17,551     25,528     -31%
                                                                   
LA ZANJA TANTAHUATAY
2Q12     2Q11     % 6M12     6M11     % 2Q12     2Q11     % 6M12     6M11     %
Ounces Produced 27,687     36,920     -25% 54,016     62,071     -13% 39,129     0       66,735     0      
                                                                   
SILVER PRODUCTION
Three Months Ended June 30 Six Months Ended June 30
Uchucchacua Colquijirca Uchucchacua Colquijirca
2012     2011     % 2012     2011     % 2012     2011     % 2012     2011     %
Ore Milled MT 261,173 196,457 33% 828,012 383,157 116% 520,514 449,541 16% 1,159,349 383,157 203%
Ore Grade gr/MT 448.52 462.86 -3% 87.97 103.26 -15% 451.74 446.18 1% 74.21 103.20 -28%
Recovery Rate % 72.1% 70.0% 3% 58.9% 77.9% -24% 72.2% 70.6% 2% 60.3% 77.9% -23%
Ounces Produced 2,715,552     2,048,524     33% 1,271,694     990,635     28% 5,460,195     4,550,337     20% 1,542,232     990,635     56%
                                                                   
ZINC PRODUCTION
Three Months Ended June 30 Six Months Ended June 30
Uchucchacua Colquijirca Uchucchacua Colquijirca
2012     2011     % 2012     2011     % 2012     2011     % 2012     2011     %
Ore Milled MT 261,173 196,457 33% 662,709 383,157 73% 520,514 449,541 16% 994,046 383,157 159%
Ore Grade % 1.34% 1.18% 14% 3.04% 3.71% -18% 1.40% 1.27% 10% 3.11% 3.71% -16%
Recovery Rate % 58.1% 45.1% 29% 66.3% 68.0% -2% 57.5% 51.2% 12% 67.8% 68.0% 0%
MT Produced 2,036     1,050     94% 13,330     9,650     38% 4,247     2,952     44% 20,936     9,650     117%
 

APPENDIX 3
               
EBITDA RECONCILIATION (in thousand US$)
                   
      2Q12     2Q11     6M12     6M11
Net Income     169,995     223,208     390,981     469,352

Add / Subtract:
    -49,817     -40,704     -106,988     -78,410
Provision for income tax, net     31,598     48,690     79,273     94,229
Share in associated companies by the equity method, net     -122,020     -123,238     -258,006     -236,157
Interest income     -2,542     -2,042     -5,291     -5,377
Interest expense     1,884     1,282     3,180     3,427
Loss on currency exchange difference     496     25     781     823
Depreciation and Amortization     28,391     24,431     51,795     45,934
Provision for long term officers´ compensation     7,315     0     7,315     0
Workers´ participation provision     5,061     10,148     13,965     18,711
EBITDA Buenaventura Direct Operations     120,178     182,504     283,993     390,942
EBITDA Yanacocha (43.65%)     163,837     123,954     322,661     208,517
EBITDA Cerro Verde (19.40%)     56,458     99,883     130,255     204,793
EBITDA Coimolache (40%) + Canteras del Hallazgo (49%)     8,761     0     18,109     0
EBITDA Buenaventura inc Yanacocha + Cerro Verde + Coimolache + Canteras del Hallazgo     349,234     406,340     755,017     804,252

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 Affiliates) consists of EBITDA (Buenaventura Direct Operations), plus (1) Buenaventura’s equity share of EBITDA (Yanacocha) (2) Buenaventura’s equity share of EBITDA (Cerro Verde), plus (3) Buenaventura’s equity share of EBITDA (Coimolache) plus (4) Buenaventura’s equity share of EBITDA (Canteras del Hallazgo). All EBITDA mentioned were similarly calculated using financial information provided to Buenaventura by the affiliated companies.

Buenaventura presents EBITDA (Buenaventura Direct Operations) and EBITDA (including affiliates) to provide further information with respect to its operating performance and the operating performance of its equity investees, the affiliates. EBITDA (Buenaventura Direct Operations) and EBITDA (including affiliates) 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 affiliates) as alternatives to operating income or net income determined in accordance with Peruvian GAAP, as an indicator of Buenaventura’s, affiliates 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
   
Compañía de Minas Buenaventura S.A.A. and subsidiaries
Consolidated Balance sheet    
As of June, 30 2012 and December, 31 2011
2012 2011
Assets US$(000) US$(000)
Current assets
Cash and cash equivalents 309,441 470,847
Financial asset at fair value through profit and loss 56,662 62,299
Trade accounts receivable, net 169,323 172,569
Other accounts receivable 65,767 48,521
Accounts receivable from associates 31,912 47,425
Derivative financial instruments 538 1,283
Inventory, net 168,289 149,108
Prepaid expenses 14,911     16,234
Total current assets 816,843 968,286
 
Other accounts receivable 10,150 5,570
Accounts receivable from associates 42,326 32,262
Long-term Inventory 42,872 48,845
Prepaid expenses 73
Investment in associates 2,203,045 1,935,004
Mining concessions, development cost and property, plant and equipment, net 942,258 830,997
Deferred income tax asset 112,759 125,538
Other assets 5,301     7,047
Total assets 4,175,627     3,953,549
 
Liabilities and shareholders’ equity, net
Current liabilities
Trade accounts payable 150,178 142,375
Income tax payable 8,585 36,423
Dividends payable 872 1,052
Other accounts payable 72,134 40,098
Provisions 55,590 91,287
Accounts payable from associates 800 883
Embedded derivatives for concentrates sales, net 6,894 7,306
Financial obligations 197     1,042
Total current liabilities 295,250 320,466
 
Other non-current provisions 86,219 86,528
Other accounts payable to associates 868 1,004
Financial obligations 119,184     105,072
Total liabilities 501,521     513,070
 
Shareholders’ equity net
 
Capital stock, net of treasury shares of US$62,622,000 750,540 750,540
Investments shares, net of treasury shares of US$762,000 1,399 2,019
Additional paid-in capital 219,471 225,978
Legal reserve 162,649 162,639
Other reserves 269 269
Retained earnings 2,293,022 2,034,768
Cumulative unrealized, gain (loss) 703     2,068
3,428,053 3,178,281
Non-controlling interest 246,053     262,198
Total shareholders’ equity, net 3,674,106     3,440,479
       
Total liabilities and shareholders’ equity, net 4,175,627     3,953,549

 

 
Compañía de Minas Buenaventura S.A.A. and subsidiaries            
Consolidated Statements of income    
For the six month period ended June 30, 2012 and June 30, 2011
 
For the three month For the six month

period ended June, 30
    period ended June, 30
2012 2011 2012 2011
US$(000) US$(000) US$(000) US$(000)
Operating income
Net sales 331,768 327,302 690,749 690,782
Royalty income 18,696     15,982     36,753     28,249
Total income 350,464 343,284 727,502 719,031
 
Operating costs
Cost of sales, without considering depreciation and amortization (137,514) (96,546) (270,855) (208,054)
Exploration in units in operation (38,143) (24,065) (66,812) (46,324)
Depreciation and amortization (28,391) (24,431) (51,795) (45,934)
Royalties (9,279)     (16,987)     (19,157)     (31,310)
Total operating costs (213,327)     (162,029)     (408,619)     (331,622)
Gross income 137,137     181,255     318,883     387,409
 
Operating expenses
Administrative (24,978) (19,500) (54,796) (36,482)
Exploring in non-operating areas (26,402) (12,096) (45,829) (22,700)
Selling (4,304) (2,648) (7,077) (4,853)
Other operating income, net (2,042)     914     (263)     2,923
Total operating expenses (57,726)     (33,330)     (107,965)     (61,112)
 
Operating income 79,411     147,925     210,918     326,297
 
Other income (expenses), net
Share in the results of associates 122,020 123,238 258,006 236,157
Interest income 2,542 2,042 5,291 5,377
Interest expense (1,884) (1,282) (3,180) (3,427)
Loss from currency exchange difference, net (496)     (25)     (781)     (823)
Total other income, net 122,182 123,973 259,336 237,284
 
 
Income before income tax and non-controlling interest 201,593 271,898 470,254 563,581
 
Income tax (31,598) (48,690) (79,273) (94,229)
                   
Net income 169,995     223,208     390,981     469,352
 
Net income attributable to non-controlling interest (17,434) (25,654) (30,948) (47,028)
                   
Net income attributable to Owners of the parent 152,561     197,554     360,033     422,324
 
Basic and diluted earnings per share attributable to
Buenaventura, stated in U.S. dollars 0.60     0.78     1.42     1.66
 
Compañía de Minas Buenaventura S.A.A. and subsidiaries            
Consolidated Statements of cash flows    
For the six month period ended June 30, 2012 and June 30, 2011
 
For the three month For the six month
period ended June, 30     period ended June, 30
2012 2011 2012 2011
US$(000) US$(000) US$(000) US$(000)
Operating activities
Proceeds from sales 299,871 322,494 693,644 719,289
Dividends received 4,602 - 7,008 -
Royalties received 20,845 9,495 35,253 23,645
Value Added Tax recovered 4,505 8,405 13,277 12,440
Interest received 3,333 1,721 5,378 4,201
Payments to suppliers and third parties (239,961) (164,473) (395,179) (350,730)
Payments to employees (23,031) (27,689) (121,827) (86,143)
Income tax paid (54,343) (31,285) (75,819) (61,517)
Payment of royalties (10,377) (19,236) (20,060) (34,809)
Payments of interest (523)     (100)     (765)     (676)
 
Net cash and cash equivalents provided by operating activities 4,921     99,332     140,910     225,700
 
Investment activities

Additions to mining concessions, development activities, property, plant and equipment
(92,215) (66,032) (168,686) (109,166)
Contributions to associates (13,047) (7,940) (17,789) (17,019)
Decrease in time deposits (750)     3,102     6,846     17,935
 

Net cash and cash equivalents used in investment activities
(106,012)     (70,870)     (179,629)     (108,250)
 
Financing activities
Increase in financial obligations 4,192 14,128 14,287 25,515
Payments of financial obligation (1,020) (1,007) (1,020) (1,007)

Dividends paid
(101,779) (83,967) (101,779) (83,967)

Dividends paid to non-controlling interest
(4,953)     (2,433)     (34,175)     (25,551)
 
Net cash and cash equivalents used in financing activities (103,560)     (73,279)     (122,687)     (85,010)
 
Decrease in cash and cash equivalents during the period, net (204,651) (44,817) (161,406) 32,440
Cash and cash equivalents at beginning of period 514,092 660,118 470,847 582,861
                   
Cash and cash equivalents at period-end 309,441     615,301     309,441     615,301
 
 
For the three month

For the six month
period ended June, 30    

period ended June, 30
2012 2011 2012 2011
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 owners of the parent 152,561 197,554 360,033 422,324
Add (less)
Depreciation and amortization 28,391 24,431 51,795 45,934
Deferred income tax (1,534) 7,265 12,779 24,796
Net income attributable to non-controlling interest 17,434 25,654 30,948 47,028
Accretion expense of the provision for closure of mining units 1,363 1,184 2,417 2,752
Loss from currency exchange differences 496 25 781 823
Share in the results of associates, net of dividends received in cash (117,418) (123,238) (250,998) (236,157)
Provisions 25,937 19,431 (13,542) (38,284)
Provision for estimated fair value of embedded derivatives related of concentrates
sales and adjustments on open liquidations 9,256 16,468 (10,093) 9,511
 
Net changes in operating assets and liabilities accounts
 
Decrease (increase) in operating assets
Trade accounts receivable (39,773) (20,629) 3,246 19,366
Other accounts receivable 2,979 27,080 (14,006) 5,306
Other accounts receivable from associates (4,254) (20,706) (6,980) (12,550)
Inventory 3,499 (32,650) (13,214) (59,478)
Prepaid expenses (20,558) 3,291 (5,235) 2,416
 
Increase (decrease) of operating liabilities
Trade accounts payable 16,787 11,661 7,803 (5,429)
Income tax payable (25,135) (27) (27,838) (1,254)
Other accounts payable (45,110)     (37,462)     13,014     (1,404)
 
Net cash and cash equivalents provided by operating activities 4,921     99,332     140,910     225,700
 

Copyright Business Wire 2010

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