Buenaventura Announces Fourth Quarter And Full Year 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 fourth 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 fourth quarter was US$139.1 million, 39% lower than the figure reported in 4Q11 (US$227.9 million). EBITDA from Buenaventura’s Direct Operations was US$130.2 million, 32% lower than the figure reported in 4Q11 (US$192.1 million), while EBITDA including Affiliates decreased 33%, from US$421.7 million in 4Q11 to US$281.5 million in 4Q12.

These results were mainly explained by lower volume of gold sold, higher operating costs, exploration efforts and decreased contributions from affiliates.

Financial Highlights (in millions of US$, except EPS figures):
        4Q12       4Q11       Var       FY 2012       FY 2011       Var
Total Revenues       424.2       402.3       5%       1,563.5       1,556.6       0%
Operating Income       86.7       164.0       -47%       418.2       704.4       -41%
EBITDA Direct Operations       130.2       192.1       -32%       569.9       835.4       -32%
EBITDA Including Affiliates       281.5       421.7       -33%       1,438.8       1,681.3       -14%
Net Income       139.1       227.9       -39%       684.7       858.9       -20%
EPS       0.55       0.90       -39%       2.69       3.38       -20%
                                   

(*) As of December 31, 2012, Buenaventura had 254,232,571 shares outstanding.

Within this release, Buenaventura presents financial measures in accordance with IFRS, as well as on a non-GAAP basis.

Operating Revenues

During 4Q12, net sales were US$411.6 million, a 7% increase compared to the US$385.0 million reported in 4Q11. This was explained by higher sales content of all metals, except gold.

Royalty income decreased 28% to US$12.6 million in 4Q12 from the US$17.4 million reported in 4Q11 due to lower revenues at Yanacocha.

 

Operating Highlights
      4Q12       4Q11       Var %       FY 2012       FY 2011       Var %
Net Sales (million of US$)       411.6       385.0       7%      

1,496.3
      1,493.9       0%
Average Gold Price (US$/oz.) Direct Operations       1,713       1,690       1%       1,679       1,574       7%
Average Gold Price (US$/oz.) inc Yanacocha & Coimolache       1,714       1,684       2%       1,669       1,577       6%
Average Silver Price (US$/oz.)       32.64       32.40       1%       31.25       35.40       -12%
Average Lead Price (US$/MT)       2,203       1,991       11%       2,065       2,262       -9%
Average Zinc Price (US$/MT)       1,947       1,905       2%       1,919       2,200       -13%
Average Copper Price (US$/MT)       7,899       7,524       5%       7,937       8,568       -7%

(*) Buenaventura’s Direct Operations
                                               
Sales Content
        4Q12       4Q11       Var %       FY 2012       FY 2011       Var %
Gold Oz Direct Operations       92,454       122,833       -25%       439,816       505,894       -13%
Gold Oz inc Yanacocha & Tantahuatay       212,469       270,728       -22%       1,078,826       1,145,603       -6%
Silver Oz       5,507,511       4,366,347       26%       17,474,113       14,843,193       18%
Lead MT       5,518       3,857       43%       25,589       18,192       41%
Zinc MT       5,267       4,041       30%       43,180       33,307       30%
Copper MT       12,028       7,516       60%       22,373       23,231       -4%

(*) Buenaventura’s Direct Operations
                                   

Accumulated net sales in 2012 were US$1,496.3 million, in-line with the figure reported in 2011, while royalty income was US$67.2 million, a 7% increase compared to the US$62.7 million reported in 2011.

Production and Operating Costs

Buenaventura’s equity production 1 in 4Q12 was 108,489 ounces of gold, 13% lower than the 124,504 ounces reported in 4Q11 mainly due to a decrease in Orcopampa production. Silver production, including affiliates, in 4Q12 was 4.6 million ounces, a 12% increase when compared to the figure reported in 4Q11 (4.1 million oz.).

Equity production 1 in 2012 was 446,443 ounces of gold and 18.3 million ounces of silver. This represented a 6% decrease in gold production (475,770 oz. in 2011), and a 12% increase in silver production compared to 2011 (16.2 million oz.).
 
Equity Production 1
        4Q12       4Q11       Var%       FY 2012       FY 2011       Var%
Gold (oz) Direct Operations       108,489       124,504       -13%       446,443       475,770       -6%
Gold (oz) inc. Affiliates       211,448       270,659       -22%       1,033,969       1,040,218       -1%
Silver (oz) inc. Affiliates       4,593,711       4,107,467       12%       18,262,156       16,243,279       12%
Lead ( MT)       5,844       3,475       68%       25,345       17,444       45%
Zinc ( MT)       6,787       3,151       115%       39,139       22,621       73%
Copper (MT) inc. Affiliates       20,670       16,980       22%       66,221       69,873       -5%
                                   

Orcopampa’s (100% owned by Buenaventura) total gold production in 4Q12 was 59,779 ounces, 16% lower than the 71,296 ounces reported in 4Q11. Production from the Chipmo mine during 4Q12 was 55,652 ounces, 15% lower compared to the 65,788 ounces reported in 4Q11 due to a 9-day strike in October (See Appendix 2). The old tailings treatment produced 4,128 ounces of gold (compared to 5,508 oz. in 4Q11). Accumulated total gold production in 2012 was 260,378 ounces, a 9% decrease when compared to 2011 (285,201 oz.).

Cash operating cost in 4Q12 was US$714/oz., 51% higher when compared to 4Q11 (US$472/oz.). This was mainly explained by lower gold production and higher contractor expenses due to greater exploration efforts. Cash cost during 2012 was US$559/oz.

At Uchucchacua (100% owned by Buenaventura), total silver production in 4Q12 was 3.01 million ounces, 8% higher when compared to 2.79 million ounces in 4Q11 due to a 5% increase in the recovery rate (See Appendix 2). Zinc production in 4Q12 was 2,931 MT, 43% higher than the figure reported in 4Q11 (2,047 MT), while lead production increased 25% (2,556 MT in 4Q12 vs. 2,051 MT in 4Q11). During 2012, silver production was 11.3 million ounces; zinc production was 9,820 MT, while lead production was 8,742 MT vs. 10.1 million ounces, 6,668 MT and 7,546 MT, respectively, in 2011.

Cash operating cost in 4Q12 was US$16.57/oz., in-line with the figure reported in 4Q11 (US$16.35/oz.). Cash cost during 2012 was US$16.97/oz. (US$16.27/oz. in 2011).

At Julcani (100% owned by Buenaventura), total production in 4Q12 was 615,712 ounces of silver, 1% higher compared to 4Q11 (611,711 ounces). During 2012, silver production was 2.4 million ounces, similar to the figure reported in 2011.

Silver cash operating cost in 4Q12 was US$14.38/oz., 15% higher than 4Q11 (US$12.52/oz.), mainly due to an increase in energy supply expenses. Cash cost during 2012 was US$13.5/oz.

Breapampa (100% owned by Buenaventura) commenced operations in November. Total production in 4Q12 was 8,817 ounces of gold.

La Zanja (53.06% owned by Buenaventura) total production in 4Q12 was 28,670 ounces of gold, a 13% decrease when compared to 4Q11 (32,857 oz.). Accumulated gold production in 2012 was 112,387 ounces, 16% lower than 2011 (134,190 oz.), but in-line with La Zanja’s mining plan.

Cash operating cost in 4Q12 was US$753/oz., 63% higher than 4Q11 (US$463/oz.) due to an increase in supply costs (mainly explained by an increase of reagent consumption and prices). Cash cost during 2012 was US$622/oz.

Tantahuatay (40.04% owned by Buenaventura) total production in 4Q12 was 35,340 ounces of gold (14,150 oz. attributable to Buenaventura). During 2012, gold production was 141,268 ounces (56,564 oz. attributable to Buenaventura). Cash operating cost in 4Q12 was US$393/oz and US$402/oz for 2012.

At El Brocal (53.76% owned by Buenaventura), total plant capacity was devoted to treat copper ores during 4Q12.

Copper production was 13,166 MT, 68% higher than the 7,852 MT reported in 4Q11. For 2012, copper production increased 2% (24,218 MT in 4Q12 versus 23,796 MT in 4Q11). Copper cash cost was US$5,198/MT, 26% higher than 4Q11 (US$4,135/MT).

Silver production decreased 56% from 420,329 ounces in 4Q11 to 185,231 ounces in 4Q12.

During 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 5%, from 2.9 million ounces in 2011 to 3.1 million ounces in 2012. Lead production was 12,329 MT in 2012, 30% higher than 2011 (9,504 MT).

General and Administrative Expenses

General and administrative expenses in 4Q12 were US$21.6 million, 32% higher than the figure reported in 4Q11 (US$16.3 million). This figure included US$6.0 million in metallurgical research studies. For 2012, general and administrative expenses were US$99.3 million versus US$75.2 million in 2012 (an increase of 32%).

Operating Income

Operating income in 4Q12 was US$86.7 million, a 47% decrease compared to the US$164.0 million reported in 4Q11. This decrease was mainly due to a 53% increase in operating costs and exploration expenses, while revenues increased 5%. It is important to mention that during 4Q12, El Brocal purchased US$18.0 million in copper concentrates to blend with Marcapunta copper concentrates, which negatively impacted operational costs and margins.

For 2012, operating income was US$418.2 million versus US$704.4 million in 2012 (a decrease of 41%).

Share in Associated Companies

During 4Q12, Buenaventura’s share in associated companies was US$89.9 million, 28% lower than the US$124.5 million reported in 4Q11. Yanacocha’s contribution to these results decreased 63%, from US$86.8 million in 4Q11 to US$32.4 million in 4Q12, while Cerro Verde’s contribution decreased 28% from US$40.0 million in 4Q11 to US$28.6 million in 4Q12. Coimolache (Tantahuatay mine) results partially offset this decrease with a 44% higher contribution (US$8.8 million in 4Q12 vs. US$6.1 million in 4Q11).

For 2012, Buenaventura’s share in associated companies was US$464.2 million, in-line with the figure reported in 2012.

YANACOCHA

At Yanacocha (43.65% owned by Buenaventura), 4Q12 gold production was 235,875 ounces of gold, 30% lower than 4Q11 production (334,833 oz.). Accumulated gold production in 2012 was 1,345,992 ounces, 4% higher than 2012 (1,293,123 oz.).

Costs applicable to sales (CAS) at Yanacocha in 4Q12 were US$635/oz., 19% higher than the figure reported in 4Q11 (US$533/oz.) due to lower production. Net income at Yanacocha in 4Q12 was US$75.7 million, 62% lower compared to 4Q11 (US$199.2 million). Accumulated net income in 2012 was US$626.5 million, 2% lower than 2011 (US$642.4 million).

During 4Q12, EBITDA totaled US$186.0 million, a 49% decrease compared to 4Q11 (US$362.0 million). This decrease was mainly due to a 29% decrease in sales. Accumulated EBITDA in 2012 was US$1,241.8 million, 6% higher than 2012 (US$1,167.4 million).

Capital expenditures at Yanacocha were US$172.5 million in 4Q12 and US$995.0 in 2012.

CERRO VERDE

At Cerro Verde (19.58% owned by Buenaventura), 4Q12 copper production was 68,874 MT, a 4% increase compared to 4Q11 (65,958 MT). Accumulated total copper production in 2012 was 269,649 MT, 8% lower than 293,581 MT in 2012.

During 4Q12, Cerro Verde reported net income of US$146.2 million, a 28% decrease compared to US$202.6 million in 4Q11. This was mainly due to an 11% decrease in sales revenues (US$501.0 million in 4Q12 versus US$565.0 million in 4Q11). Accumulated net income in 2012 was US$772.1 million, 28% lower than US$1,078.4 million in 2012.

Capital expenditures at Cerro Verde in 4Q12 totaled US$200.0 million and US$600.8 in 2012.

COIMOLACHE (Tantahuatay operation)

At Coimolache (40.04% owned by Buenaventura), attributable contribution was US$8.8 million (US$6.1 million in 4Q11). For 2012, attributable contribution was US$40.2 million (US$9.6 million in 2012).

CANTERAS DEL HALLAZGO (Chucapaca project)

At the Chucapaca Project (49% owned by Buenaventura), a value-engineering phase was initiated to improve the project’s economic returns of after the completion of a Feasibility Study. Additional studies will be directed towards evaluating potential options, including underground and combined open-pit and underground mining scenarios, a review of capital costs and capital efficiencies, along with re-commencement of an exploration phase at the Chucapaca Area of Interest (AOI).

In 2012, Buenaventura’s total disbursement at the Chucapaca project was US$32.4 million.

Net Income

Buenaventura’s 4Q12 net income was US$139.1 million (US$0.54 per share), a 39% decrease compared to the US$227.9 million (US$0.90 per share) reported in 4Q11. Accumulated net income in 2012 was US$684.7 million (US$2.69 per share), 20% lower compared to 2012 (US$858.9 million).

Project Development

LA ZANJA DEVELOPMENT PROGRAM
  • The Pampa Verde Project will allow the development of a new open pit, an expansion of the current leach pad and improvements to the operation’s road access. Construction began in 2Q11. The project’s total investment is US$74.2 million. Completion is expected in 3Q13.
  • Engineering for slope stability was developed during 4Q12.

RIO SECO MANGANESE SULFATE PLANT
  • Buenaventura continued with the construction of the manganese sulfate plant. The project’s total budget is US$ 90.0 million.
  • The project includes an acid leaching facility, a sulfuric acid production plant and a manganese sulfate crystallization plant.
  • The Company has started the commissioning process for the project’s main equipment.

HUANZA HYDROELECTRICAL PLANT
  • Construction progress at the Huanza Project included:
              1.   Water Conduction Tunnel: 10,074 meters of excavation is 100% complete
2. Power plant: civil work is 100% complete
3. Pallca Dam: 100% complete
4. Construction of electromechanical equipment is nearly complete
5. Commissioning of the Pallca Dam began February 26, 2013 and will continue on different sections on a progressive basis

Other Information

At the Board of Directors meeting held February 28, 2013, the following resolutions were passed:

To call for the Annual Shareholders Meeting to be held March 26, 2013 to:

• Approve the financial statements as of December 31, 2012

• Approve the 2012 Annual Report

• Approve a cash dividend of US$0.30 per share or ADS to be paid in U.S. currency.

• Approve a simplification of corporate structure by absorbing wholly-owned subsidiaries CEDIMIN SAC and Inversiones Colquijirca S.A.

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*, Breapampa*, Mallay*, 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; 19.58% 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

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, 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 **       19.58       Cerro Verde
 

(*)Consolidates

(**) Equity Accounting

APPENDIX 2
                                                                       
GOLD PRODUCTION
Three Months Ended December 31     Full Year
Orcopampa     Orcopampa Old Tailings Orcopampa     Orcopampa Old Tailings
2012     2011     % 2012     2011     % 2012     2011     % 2012     2011     %
Ore Milled DST 122,177     130,685     -7%         508,646     499,728     2%        
Ore Grade OZ/ST 0.48 0.53 -11% 0.49 0.55 -11%
Recovery Rate % 95.6% 94.3% 1% 95.9% 94.7% 1%
Ounces Produced 55,652     65,788     -15% 4,128     5,508     -25% 240,134     260,958     -8% 20,245     24,243     -16%
 
Orcopampa Total Production

4Q12
59,780 4Q11 71,296 FY2012 260,379 FY2011 285,201
                                                               
LA ZANJA Tantahuatay
4Q12     4Q11     % FY2012     FY2011     % 4Q12     4Q11     % FY2012     FY2011     %
Ounces Produced 28,670     32,857     -13% 112,387     134,190     -16% 35,340     29,895     18% 141,268     46,164     206%
                                                                   
SILVER PRODUCTION
Three Months Ended December 31 Full Year
Uchucchacua Colquijirca Uchucchacua Colquijirca
2012     2011     % 2012     2011     % 2012     2011     % 2012     2011     %
Ore Milled DST 292,481 294,754 -1% 1,156,655 1,086,123 6% 2,177,003 929,032 134%
Ore Grade OZ/ST 12.70 13.07 -3% 13.00 13.00 0% 2.16 2.67 -19%
Recovery Rate % 81.1% 71.6% 13% 74.9% 71.2% 5% 56.5% 76.1% -26%
Ounces Produced 3,012,187     2,788,798     8%               11,263,322     10,090,936     12% 2,655,961     1,876,503     42%
                                                                   
ZINC PRODUCTION
Three Months Ended December 31 Full Year
Uchucchacua Colquijirca Uchucchacua Colquijirca
2012     2011     % 2012     2011     % 2012     2011     % 2012     2011     %
Ore Milled DST 292,481 294,754 -1% 1,156,655 1,086,123 6% 2,177,003 929,032 134%
Ore Grade % 1.63 1.46 12% 1.51 1.31 15% 2.73 3.89 -30%
Recovery Rate % 67.8% 52.3% 30% 62.0% 51.7% 20% 64.8% 71.9% -10%
ST Produced 3,231     2,257     43%               10,825     7,350     47% 38,525     25,968     48%
 

APPENDIX 3: EBITDA RECONCILIATION (in thousand US$)
                               
        4Q12       4Q11       FY 2012       FY 2011
Net Income       148,451       251,591       742,790       960,478

Add / Subtract:
      -18,262       -59,502       -172,892       -125,113
Provision for income tax, net       28,252       35,467       142,594       211,589
Share in associated companies by the equity method, net       -89,935       -124,510       -464,239       -468,363
Interest income       -1,725       -4,575       -9,486       -11,827
Interest expense       3,608       6,740       8,290       11,823
Loss on currency exchange difference       -1,969       -677       -1,715       675
Long Term Compensation provision       -5,592       -5,982       1,720       -5,982
Depreciation and Amortization       38,803       27,206       123,043       96,381
Workers´ participation provision       6,679       6,829       23,284       40,591
Impairment of Long-Lived Assets       3,617       0       3,617       0
EBITDA Buenaventura Direct Operations       130,189       192,089       569,898       835,365
EBITDA Yanacocha (43.65%)       81,185       158,028       542,067       509,554
EBITDA Cerro Verde (19.58%)       53,276       59,018       256,050       316,756
EBITDA Coimolache (40%)       16,836       12,606       70,793       19,618
EBITDA Buenaventura + All Associates       281,486       421,741       1,438,808       1,681,293
                 

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). 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 IFRS, 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 IFRS, as an indicator of Buenaventura’s, affiliates operating performance, or as an alternative to cash flows from operating activities, determined in accordance with IFRS, as an indicator of cash flows or as a measure of liquidity.

APPENDIX 4: PROVEN AND PROBABLE RESERVES
                             
GOLD
% Ownership       DST (000)       Grade (Oz/TCS)       Oz (000)       Attributable
Orcopampa 100.00 1,091 0.421 459 459
Julcani 100.00 425 0.017 7 7
Shila - Paula 100.00 8 0.397 3 3
Antapite 100.00 48 0.300 14 14
Ishihuinca 100.00 13 0.334 4 4
Poracota 100.00 36 0.332 12 12
Yanacocha 43.65 220,778 0.027 5,907 2,578
Yanacocha (Conga) 43.65 590,855 0.021 12,582 5,492
El Brocal Marcapunta (Sulphides) 53.76 20,016 0.010 204 110
La Zanja 53.06 24,795 0.018 437 232
La Zanja (on Pads) 53.06 40 21
Tantahuatay (Oxides) 40.00 24,428 0.019 464 185
Tantahuatay (Oxides on Leach Pad) 40.00 14,845 0.004 64 26
Breapampa 100.00 5,133 0.038 197 197
Mallay 100.00       288       0.026       8       8
Total 902,759 0.023 20,402 9,348
 
SILVER
% Ownership       DST (000)       Grade (Oz/TCS)       Oz (000)       Attributable
Orcopampa 100.00 1,091 0.54 589 589
Poracota 100.00 36 0.08 3 3
Uchucchacua (Silver - Sulphides) 100.00 4,661 13.45 62,682 62,682
Uchucchacua (Zinc -Sulphides) 100.00 670 5.09 3,409 3,409
Uchucchacua (Silver - Oxides) 100.00 355 16.93 6,008 6,008
Julcani 100.00 425 18.56 7,879 7,879
Recuperada 100.00 114 8.80 1,007 1,007
Antapite 100.00 48 0.22 11 11
Shila - Paula 100.00 8 0.92 8 8
El Brocal (Tajo Norte - La Llave) 53.76 63,333 0.76 48,262 25,946
El Brocal Marcapunta (Sulphides) 53.76 20,016 0.47 9,442 5,076
Breapampa 100.00 5,133 0.73 3,750 3,750
La Zanja 53.06 24,795 0.21 5,156 2,736
La Zanja (on Pads) 53.06 3,267 1,734
Tantahuatay (Oxides) 40.00 24,428 0.24 5,762 2,305
Tantahuatay (Oxides on Leach Pad) 40.00 14,845 0.44 6,517 2,607
Yanacocha (Conga) 43.65 590,855 0.06 37,784 16,493
Mallay 100.00       288       10.87       3,133       3,133
Total 751,101 0.27 204,669 145,376
 
ZINC
% Ownership       DST (000)       Grade %       ST (000)       Attributable
Mallay 100.00 288 7.09 20 20
Uchucchacua (Silver - Sulphides) 100.00 4,661 1.35 63 63
Uchucchacua (Zinc - Sulphides) 100.00 670 5.57 37 37
Recuperada 100.00 114 7.05 8 8
El Brocal (Tajo Norte - La Llave) 53.76       63,333       2.40       1,520       817
Total 69,066 2.39 1,648 945
 
LEAD
% Ownership       DST (000)       Grade %       ST (000)       Attributable
Julcani 100.00 425 1.88 8 8
Uchucchacua (Silver - Sulphides) 100.00 4,661 0.97 45 45
Uchucchacua (Zinc -Sulphides) 100.00 670 3.87 26 26
Mallay 100.00 288 6.24 18 18
Recuperada 100.00 114 4.04 5 5
El Brocal (Tajo Norte - La Llave) 53.76       63,333       0.80       507       272
Total 69,491 0.88 609 374
 
COPPER
% Ownership       DST (000)       Grade %       ST (000)       Attributable
Julcani 100.00 425 0.50 2 2
Cerro Verde (Sulphides) 19.58 4,194,537 0.37 15,520 3,039
Cerro Verde (Oxides) 19.58 530,850 0.50 2,654 520
Yanacocha (Conga) 43.65 590,855 0.28 1,648 719
El Brocal Marcapunta (Sulphides) 53.76       20,016       1.99       398       214
Total 5,336,683 0.38 20,222 4,493
 
MOLYBDENUM
% Ownership       DST (000)       Grade %       ST (000)       Attributable
Cerro Verde (Sulphides) 19.58       4,194,537       0.01       587       115
Total 4,194,537 0.01 587 115
 
Prices used for Reserves Calculation:
Gold US$1,400 /Oz - Silver US$30 /Oz - Zinc US$2,028 /MT - Lead US$2,000 /MT Copper - US$6,600 /MT
 

APPENDIX 5
           
Compañía de Minas Buenaventura S.A.A. and subsidiaries
Consolidated Statement of Financial Position
As of December 31, 2012 and 2011
 
2012 2011
Assets US$(000) US$(000)
Current assets
Cash and cash equivalents 186,712 480,968
Financial assets at fair value through profit or loss 54,509 52,178
Trade accounts receivable, net 256,431 172,569
Other accounts receivable 108,568 48,521
Accounts receivable from associates 22,534 47,425
Derivative financial instruments - 1,283
Inventory, net 163,067 149,108
Prepaid expenses 11,837       16,234
Total current assets 803,658 968,286
 
Other accounts receivable 6,702 5,570
Other accounts receivable from associates 33,377 32,262
Long-term inventory 55,937 48,845
Investment in associates 2,436,237 1,935,004
Mining concessions, development cost and property, plant and equipment, net 1,134,276 830,997
Deferred income tax asset, net 113,343 125,538
Other assets 5,123       7,047
Total assets 4,588,653       3,953,549
 
Liabilities and shareholders’ equity, net
Current liabilities
Trade accounts payable 199,551 142,375
Income tax payable 7,935 36,423
Other accounts payable 59,096 41,150
Provisions 71,780 91,287
Other accounts payable to associates 890 883
Embedded derivatives for concentrates sales, net 4,939 7,306
Financial obligations 5,815       1,042
Total current liabilities 350,006 320,466
 
Other non-current provisions 100,041 86,528
Other accounts payable to associates 731 1,004
Financial obligations 173,489       105,072
Total liabilities 624,267       513,070
 
Shareholders’ equity net
 
Capital stock, net of treasury shares of US$(000) 62,622 750,540 750,540
Investments shares, net of treasury shares of (000) US$762 1,399 2,019
Additional paid-in capital 219,471 225,978
Legal reserve 162,663 162,639
Other reserves 269 269
Retained earnings 2,566,787 2,034,768
Cumulative unrealized, gain (loss) 925       2,068
3,702,054 3,178,281
Non-controlling interest 262,332       262,198
Total shareholders’ equity, net 3,964,386       3,440,479
         
Total liabilities and shareholders’ equity, net 4,588,653       3,953,549
 
                 
Compañía de Minas Buenaventura S.A.A. and subsidiaries
Consolidated Income Statements
For the three and twelve month periods ended December 31, 2012 and 2011
     
For the three month period For the twelve month
ended December, 31 period ended December,31
2012 2011 2012 2011
US$(000) US$(000) US$(000) US$(000)
Operating income
Net sales 411,613 384,970 1,496,349 1,493,882
Royalty income 12,557         17,367   67,178         62,742  
Total income 424,170 402,337 1,563,527 1,556,624
 
Operating costs
Cost of sales, without considering depreciation and amortization (194,531 ) (123,944 ) (629,492 ) (446,163 )
Exploration in units in operation (55,865 ) (33,984 ) (153,018 ) (109,355 )
Depreciation and amortization (38,803 ) (27,206 ) (123,043 ) (96,381 )
Royalties (7,547 )       (8,323 ) (37,667 )       (60,262 )
Total operating costs (296,746 )       (193,457 ) (943,220 )       (712,161 )
Gross income 127,424         208,880   620,307         844,463  
 
Operating expenses
Administrative (21,643 ) (16,345 ) (99,295 ) (75,170 )
Exploring in non-operating areas (22,262 ) (14,066 ) (95,491 ) (49,593 )
Selling (5,809 ) (3,479 ) (18,090 ) (11,617 )
Impairment of long-lived assets (3,617 ) - (3,617 ) -
Excess of workers’ profit sharing (2,164 ) (6,221 ) (2,164 ) (6,221 )
Other operating income (expense), net 14,753         (4,733 ) 16,584         2,513  
Total operating expenses (40,742 )       (44,844 ) (202,073 )       (140,088 )
 
Operating income 86,682         164,036   418,234         704,375  
 
Other income (expenses), net
Share in the results of associates 89,935 124,510 464,239 468,363
Interest income 1,725 4,575 9,486 11,827
Interest expense (3,608 ) (6,740 ) (8,290 ) (11,823 )
Gain (loss) from currency exchange difference, net 1,969         677   1,715         (675 )
Total other income, net 90,021 123,022 467,150 467,692
 
 
Income before income tax and non-controlling interest 176,703 287,058 885,384 1,172,067
 
Income tax (28,252 ) (35,467 ) (142,594 ) (211,589 )
                   
Net income 148,451         251,591   742,790         960,478  
 
Attributable to:
Non-controlling interest 9,384 23,661 58,105 101,551
Owners of the parent 139,067         227,930   684,685         858,927  
148,451         251,591   742,790         960,478  
 
Basic and diluted earnings per share attributable to
Buenaventura, stated in U.S. dollars 0.54         0.90   2.69         3.38  
 

Weighted average number of shares outstanding
(common and investment), in units 254,232,571         254,442,328   254,232,571         254,442,328  
 
                       
Compañía de Minas Buenaventura S.A.A. and subsidiaries
Consolidated Statements of cash flows
For the three and twelve month periods ended December 31, 2012 and 2011
 
 

For the three month period

For the twelve month period

ended December, 31

ended December, 31
2012 2011 2012 2011
US$(000) US$(000) US$(000) US$(000)
Operating activities
Proceeds from sales 352,963 417,535 1,410,120 1,505,476
Royalties received 21,035 18,671 76,106 56,153
Value Added Tax (VAT) recovered 10,779 3,225 40,940 22,585
Dividends received 5,613 - 16,467 -
Interest received 1,700 2,525 8,606 8,528
Payments to suppliers and third parties (230,558 ) (139,264 ) (838,250 ) (672,479 )
Payments to employees (45,973 ) (58,381 ) (201,494 ) (164,677 )
Income tax paid (29,279 ) (25,371 ) (136,336 ) (111,802 )
Payment of royalties (9,187 ) (18,138 ) (38,985 ) (73,776 )
Payments of interest (206 )       (1,632 ) (1,485 )       (2,543 )
 
Net cash and cash equivalents provided by operating activities 76,887         199,170   335,689         567,465  
 
Investment activities
Decrease (increase) in time deposits 539 (8,679 ) 10,121 7,814
Proceeds from sale of mining concessions, development cost, property, plant and equipment 136 99 255 7,891
Proceeds from sales of investments shares 3,658 - 3,658 -
Additions of mining concessions, development cost, property, plant and equipment (134,007 ) (139,320 ) (442,927 ) (317,816 )

Payments for purchase of investments shares and contribution to associates
(4,449 )       204,943   (58,594 )       (52,182 )
 

Net cash and cash equivalents provided by (used in) investment activities
(134,123 )       57,043   (487,487 )       (354,293 )
 
Financing activities
Increase in financial obligations 19,945 16,525 74,258 50,962

Dividend paid
(50,887 ) (58,521 ) (152,666 ) (142,488 )

Dividend paid to non-controlling interest
(5,764 ) (18,318 ) (44,881 ) (66,736 )
Capital stock reduction paid to non-controlling interest - - (7,980 ) -
Proceeds from sales of investments shares - - - 60,379
Payments for purchase of investments shares to non-controlling interest - (225,303 ) - (225,303 )
Payments of financial obligation (48 )       (500 ) (1,068 )       (2,000 )
 
Net cash and cash equivalents used in financing activities (36,754 )       (286,117 ) (132,337 )       (325,186 )
 
Decrease in cash and cash equivalents for the period, net (93,990 ) (29,904 ) (284,135 ) (112,014 )
Cash and cash equivalents at beginning of period 280,702 500,751 470,847 582,861
                   
Cash and cash equivalents at period-end 186,712         470,847   186,712         470,847  
 
 

For the three month period

For the twelve month period

ended December, 31

ended December, 31
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 139,067 227,930 684,685 858,927
Add (less)
Depreciation and amortization 63,209 49,147 147,449 118,322
Net income attributable to non-controlling interest 9,384 23,661 58,105 101,551
Deferred income tax (6,366 ) (5,696 ) 10,809 42,369
Accretion expense of the provision for closure of mining units and units in exploration 3,407 4,931 6,812 9,100
Net cost of plant and equipment retired and sold 4,120 1,858 4,120 1,858
Impairment of long-lived assets 3,617 - 3,617 -
Loss (gain) from currency exchange differences (1,969 ) (677 ) (1,715 ) 675
Share in the results of associates, net of dividends received in cash (84,322 ) (124,510 ) (447,772 ) (468,363 )
Provisions 131,389 9,199 (6,200 ) (12,274 )
Provision for estimated fair value of embedded derivatives related of concentrates
sales and adjustments on open liquidations 15,484 (10,721 ) (16,592 ) 33,889
 
Net changes in operating assets and liabilities accounts
 
Decrease (increase) in operating assets
Trade accounts receivable, net (69,302 ) 44,271 (83,862 ) (11,641 )
Other accounts receivable (36,743 ) (29,290 ) (60,047 ) 2,552
Other accounts receivable from associates 16,551 (6,771 ) 23,776 (40,048 )
Inventory, net (4,114 ) (8,818 ) (21,051 ) (88,461 )
Prepaid expenses 22,350 (27,364 ) (4,397 ) (13,244 )
 
Increase (decrease) of operating liabilities
Trade accounts payable 25,752 40,727 57,176 51,001
Other accounts payable (154,169 ) 19,715 9,264 (28,046 )
Income tax payable (458 ) (8,422 ) (28,488 ) 9,298
                   
 
Net cash and cash equivalents provided by operating activities 76,887         199,170   335,689         567,465  
 

1 Production from Direct Operations 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.

Copyright Business Wire 2010

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