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Buenaventura Announces Third Quarter 2012 Results

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LIMA, Peru--(BUSINESS WIRE)--

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 third 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 third quarter was US$185.6 million, 11% lower than the figure reported in 3Q11 (US$208.7 million). EBITDA from Buenaventura's Direct Operations was US$158.5 million, 37% lower than the figure reported in 3Q11 (US$252.3 million), while EBITDA including Affiliates decreased 14%, from US$446.5 million in 3Q11 to US$384.4 million in 3Q12.

These results were mainly explained by lower gold volume sold from Buenaventura's direct operations, as well as lower silver and base metal prices. Higher costs also impacted results due to an increase in contractor expenses as well as higher supply costs.

 

Financial Highlights (in millions of US$, except EPS figures):

 
      3Q12     3Q11    

Var%

    9M12     9M11    

Var%

Total Revenues     411.9     435.3     -5%     1,139.4     1,154.3     -1%
Operating Income     120.6     214.0     -44%     331.6     540.3     -39%

EBITDA

(BVN Direct Operations)

    158.5     252.3     -37%     439.7     643.3     -32%

EBITDA

(inc. Associates)

    384.4    

446.5

    -14%     1,137.5     1,237.8     -8%
Net Income     185.6     208.7     -11%     545.6     631.0     -14%

EPS*

    0.7     0.8     -11%    

2.1

    2.5     -14%
                       

(*) As of September 30, 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 Revenue

During 3Q12, net sales were US$394.0 million, 6% lower than the US$418.1 million reported in 3Q11. This was explained by lower metal prices and gold volume sold.

Royalty income increased 4% from US$17.1 million reported in 3Q11 to US$17.9 million in 3Q12 due to higher revenues at Yanacocha.

                       

Operating Highlights

  3Q12   3Q11   Var %   9M12   9M11   Var %

Net Sales (in millions of US$)

  394.0   418.1   -6%   1,084.7   1,108.9   -2%

Average Realized Gold Price Gold (US$/oz)*

  1,671   1,695   -1%   1,672   1,543   8%

Average Realized Gold Price (US$/oz) inc. Associates

  1,656   1,677   -1%   1,653   1,542   7%

Average Realized Silver Price (US$/oz)*

  29.68   38.99   -24%   29.93   37.33   -20%

Average Realized Lead Price (US$/MT)*

  2,030   2,378   -15%   1,973   2,441   -19%

Average Realized Zinc Price (US$/MT)*

  1,868   2,235   -16%   1,909   2,276   -16%

Average Realized Copper Price (US$/MT)*

  7,989   9,066   -12%   8,119   9,244   -12%

(*) Buenaventura's Direct Operations

         
 
                         
Sales Content
    3Q12   3Q11   Var %   9M12   9M11   Var %

Gold (in oz)*

  113,563   134,863   -16%   347,400   381,469   -9%

Gold (in oz) inc. Associates

  287,284   283,091   1%   631,544   765,476   -17%

Silver (in oz)*

  4,392,833   4,069,550   8%   11,882,677   10,427,079   14%

Lead (in MT)*

  8,391   8,217   2%   19,996   15,511   29%

Zinc (in MT)*

  15,613   12,114   29%   37,987   28,243   35%

Copper (in MT)*

  3,886   4,383   -11%   10,394   15,061   -31%

(*) Buenaventura Direct Operations

 

Accumulated net sales in the first nine-month period 2012 were US$1,084.7 million, 2% lower than the figure reported in the same period 2011 (US$1,108.9 million), while royalty income was US$54.6 million, a 20% increase when compared to the US$45.4 million reported in 2011.

Production and Operating Costs

Buenaventura's equity production1 in 3Q12 was 112,750 ounces of gold, 5% higher than the 107,157 ounces reported in 3Q11 mainly due to an increase in Orcopampa and Tantahuatay production. Silver production in 3Q12 was 4.7 million ounces, a 12% increase when compared to the figure reported in 3Q11 (4.2 million oz).

Equity production1 in the first nine-month period 2012 was 337,761 ounces of gold and 13.2 million ounces of silver. This represented a 2% decrease in gold production (344,751 ounces in 2011), and a 17% increase in silver production compared to 2011 (11.2 million ounces).

 
Equity Production 1
    3Q12   3Q11   Var%   9M12   9M11   Var%
Gold (oz) Direct Operations   112,750   107,157   5%   337,761   344,751   -2%
Gold (oz) inc. Yanacocha   267,144   256,887   4%   822,327   769,089   7%
Silver (oz)   4,678,811   4,189,062   12%   13,203,863   11,244,038   17%
Lead ( MT)   7,942   5,698   39%   19,450   13,819   41%
Zinc ( MT)   13,073   9,971   31%   32,328   19,474   66%
Copper (MT) inc. Cerro Verde   15,648   16,297   -4%   44,683   52,779   -15%
           

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) total gold production in 3Q12 was 70,588 ounces, 17% higher than the 60,171 ounces reported in 3Q11. Production from the Chipmo mine in 3Q12 was 65,362 ounces, 25% higher compared to the 52,265 ounces reported in 3Q11 due to a 16% increase in tonnage treated and 6% higher ore grade (See Appendix 2). The old tailings treatment produced 5,226 gold ounces (compared to 7,906 ounces in 3Q11). Accumulated total gold production in the first nine-month period 2012 was 200,599 ounces, a 6% decrease when compared to 2011 (213,906 ounces).

Cash operating cost in 3Q12 was US$537/oz, 3% lower when compared to 3Q11 (US$554/oz). This was mainly explained by the 16% increase in gold ounces recovered due to higher tonnage treated and better ore grades.

At Uchucchacua (100% owned by Buenaventura), total silver production in 3Q12 was 2.79 million ounces, a 1% increase when compared to 2.75 million ounces in 3Q11 due to a 4% higher recovery rate (See Appendix). Zinc production in 3Q12 was 2,628 MT, 57% higher than the figure reported in 3Q11 (1,673 MT), while lead production increased 14% (2,259 MT in 3Q12 vs. 1,975 MT in 3Q11). In the first nine-month period 2012, silver production was 8.25 million ounces; zinc production was 6,879 MT, while lead production was 6,145 MT vs. 7.30 million ounces, 4,625 MT and 5,308 MT, respectively, in 2011.

Cash operating cost in 3Q12 was US$16.8/oz, in-line with the US$16.7/oz in 3Q11. It is important to note that efficiency improvements at Uchucchacua have permitted the Company to offset the increase in contractor, labor and supply costs, which have affected the entire industry.

At Julcani (100% owned by Buenaventura), total production in 3Q12 was 589,838 ounces of silver, 3% lower compared to 3Q11 (605,346 ounces). In the first nine-month period 2012, silver production was 1.82 million ounces, 0.5% higher than in 3Q11 (1.82 million ounces).

Silver cash operating cost in 3Q12 was US$14.6/oz, 15% higher than the 3Q11 cash cost (US$12.52/oz). This was mainly due to:

1. A 9% increase in labor costs

2. Contractor costs rose 25% due to higher labor costs, which impacted unit prices, as well as a 39% increase of DDHH work.

La Zanja (53.06% owned by Buenaventura) total production in 3Q12 was 29,702 ounces of gold, a 24% decrease when compared to 3Q11 (39,262 ounces). This was in-line with the 2012 mining plan. Accumulated gold production in the first nine-month period 2012 was 83,718 ounces, 17% lower when compared to first nine-month period 2011 (101,333 ounces). Cash operating cost in 3Q12 was US$620/oz, 72% higher than 3Q11 (US$360/oz) due to a higher stripping as well as an increase in supply costs (mainly explained by an increase of reagent consumption and prices). These costs were in-line with the 2012 budget.

Tantahuatay (40.04% owned by Buenaventura) total production in 3Q12 was 39,194 ounces of gold (15,678 ounces attributable to Buenaventura). In the first nine-month period 2012, gold production was 105,929 ounces (42,372 attributable to Buenaventura). Cash operating cost in 3Q12 was US$326/oz.

At El Brocal (53.76% owned by Buenaventura), Zinc production in 3Q12 was 13,298 MT, a 5% decrease when compared to 3Q11 (14,025 MT). Silver production increased 22% from 1.0 million ounces in 3Q11 to 1.2 million ounces in 3Q12. Lead production was 4,816 MT, 3% higher than 4,693 MT reported in 2011. During the first nine-month period 2012, total zinc production was 34,949 MT, a 48% increase when compared to the 23,675 MT reported in 2011. In the case of silver, total production increased 16%, from 2.5 million ounces in 2011 to 2.9 million ounces in the first nine-month period 2012. Lead production in the first nine-month period 2012 was 12,329 MT, 30% higher than 2011 (9,504 MT).

Zinc cash costs was US$975/MT in 3Q11 compared to a negative US$458/MT in 3Q12. This was explained by a decrease in silver by-product contribution due to lower prices.

At Marcapunta, copper production was 3,754 MT, 17% lower than the 4,549 MT reported in 3Q11. For the first nine-month period 2012, copper production decreased 41% (15,944 MT in 3Q11 versus 9,438 MT in 3Q12). Cash cost at Marcapunta was US$6,754/MT in 3Q12 (vs. US$3,922/MT in 3Q11).

General and Administrative Expenses

General and administrative expenses in 3Q12 were US$22.9 million, 2% higher than the figure reported in 3Q11 (US$22.3 million). This figure included US$4.0 million in metallurgical research studies. For the first nine-month period 2012, general and administrative expenses were US$77.7 million versus US$58.8 million in 2011 (a 32% increase).

Exploration Costs at Non-Operational Mining Sites

Exploration costs at non-operational mining sites, which include care and maintenance, in 3Q12 were US$27.4 million, a 114% increase compared to the US$12.8 million reported in 3Q11. Buenaventura's main exploration efforts were focused at the Trapiche (US$5.1 million), Tambomayo (US$4.4 million), San Gregorio (US$4.0 million), Chancas/Focus (US$2.8 million) and Breapampa (US$2.1 million) projects.

Exploration costs at non-operational mining sites in the first nine-month period 2012 reached US$73.2 million, 106% higher than 2011 (US$35.5 million).

Operating Income

Operating income in 3Q12 was US$120.6 million, a 44% decrease compared to the US$214.0 million reported in 3Q11. This decrease was mainly due to a 27% increase in operating costs, while revenues decreased 5%.

For the accumulated first nine-month period 2012, operating income was US$331.6 million versus US$540.3 million in 2011 (a decrease of 39%).

Share in Associated Companies

During 3Q12, Buenaventura's share in associated companies was US$116.3 million, 8% higher than the US$107.7 million figure reported in 3Q11. Yanacocha's contribution to these results decreased 18%, from US$79.8 million in 3Q11 to US$65.1 million in 3Q12, while Cerro Verde's contribution increased 38% from US$31.8 million in 3Q11 to US$43.7 million in 3Q12.

For the first nine-month period 2012, Buenaventura's share in associated companies was US$374.3 million, 9% higher than the US$343.9 million reported in 2011.

YANACOCHA

At Yanacocha (43.65% owned by Buenaventura), 3Q12 gold production was 353,710 ounces of gold, 8% higher than 3Q11 production (328,411 oz). Accumulated gold production in the first nine-month period 2012 was 1,110,117 ounces, 16% higher than in 2011 (958,290 oz).

Costs applicable to sales (CAS) at Yanacocha in 3Q12 were US$539/oz, 15% lower than the figure reported in 3Q11 (US$633/oz) due to higher production and lower mining costs. Net income at Yanacocha in 3Q12 was US$150.5 million, 18% lower compared to the 3Q11 figure (US$183.3 million). Accumulated net income in the first nine-month period 2012 was US$550.8 million, 24% higher than in 2011 (US$443.1 million).

During 3Q12, EBITDA totaled US$316.1 million, a 3% decrease compared to 3Q11 (US$327.2 million). This decrease was mainly due to an increase in other expenses related to unexpected employee terminations. Accumulated EBITDA in the first nine-month period 2012 was US$1,055.9 million, 31% higher than 2011 (US$805.3 million).

Capital expenditures at Yanacocha were US$262.6 million in 3Q12 and US$822.9 for the first nine-month period 2012.

CERRO VERDE

At Cerro Verde (19.58% owned by Buenaventura), 3Q12 copper production was 69,150 MT, a 3% decrease compared to the figure reported in 3Q11 (71,255 MT). Accumulated total copper production in the first nine-month period 2012 was 200,775 MT, 12% lower than 227,622 MT in 2011.

During 3Q12, Cerro Verde reported net income of US$219.7 million, a 33% increase when compared to US$164.9 million in 3Q11. This was mainly due to a 22% decrease in sales revenues (US$575.0 million in 3Q12 versus US$470.1 million in 3Q11). Accumulated net income in the first nine-month period 2012 was US$625.9 million, 29% lower than US$875.8 million in 2011.

Capital expenditures at Cerro Verde in 3Q12 totaled US$148.8 million and US$400.8 in the first nine-month 2012 period.

CANTERAS DEL HALLAZGO (Chucapaca project)

At Canteras del Hallazgo (49% owned by Buenaventura), expenses attributable to Buenaventura totaled US$6.7 million, mainly due to social expenses (US$8.2 million in 3Q11). For the first nine-month period 2012, attributable expenses were US$20.1 million (US$21.3 million in 2011).

COIMOLACHE (Tantahuatay operation)

At Coimolache (40.04% owned by Buenaventura), attributable contribution was US$13.5 million (US$4.4 million in 3Q11). For the first nine-month period 2012, attributable contribution was US$31.4 million (US$3.5 million in 2011)

Net Income

Buenaventura's 3Q12 net income was US$185.6 million (US$0.73 per share), an 11% decrease compared to the US$208.7 million (US$0.82 per share) reported in 3Q11. Accumulated net income in the first nine-month period 2012 was US$545.6 million, 14% lower when compared to 2011 (US$631.0 million).

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 to the operation's road access. Construction began in 2Q11. The project's total investment is US$70.4 million. Completion is expected in 1Q13.
           
          Progress as of September 30, 2012
San Pedro Sur Leach Pad Stage II         100%
San Pedro Sur Leach Pad Stage III         22.34%
San Pedro Sur Waste Rock Deposit         100%
Pampa Verde Pit         60.00%
Pampa Verde Top Soil Deposit         30.00%
Pampa Verde Waste Soil Deposit         60.00%
Pampa Verde Acid Water Plant         75.00%
Pampa Verde Auxiliary Access         87.00%
Pampa Verde Waste Rock Deposit         70.00%
Pampa Verde Haul Road to SPS         70.00%
       

TANTAHUATAY DEVELOPMENT PROGRAM

  • The acid water dam was completed
  • Cienaga Norte project: The Environmental Impact Assessment approval is expected by the end of 4Q12.

PORACOTA – ULTRAFINE MILLING

  • The Poracota Ultrafine Milling project began in 1Q12. The project's total investment is US$4.5 million.
  • The objective of this project is to process material from Manto Aguila. Project completion is expected by the end of 1Q13.
           
          Progress as of September 30, 2012
Civil Work         58%
Structure Fabrication         100%
Plant Construction         0%
       

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.
  • Pilot tests for the leaching processing facilities are expected in 4Q12. The operation of the sulfuric acid and the manganese sulfate plant is expected in 1Q13.

BREAPAMPA

  • As of September 30, 2012, construction at the Breapampa Project was completed for a total budget of US$48.0 million.
  • Currently, the Company is waiting for water and operating permits.

HUANZA HYDROELECTRICAL PLANT

  • Construction progress at the Huanza Project included:

1. Water Conduction Tunnel: 10,074 meters of excavation was completed, representing 100%.

2. Powerplant: civil work was 90% complete.

3. Pallca Dam: 97% was complete (48,500m3 of concrete).

4. The construction of electromechanical equipment is nearly complete, and will be delivered on schedule. Equipment construction is 20% complete.

Other Information

At the Board of Directors meeting held October 30, 2012, the following resolutions were passed:

Declaration of a cash dividend of US$0.20 per share, or ADS, to be paid in U.S. dollars on November 30, 2012 to shareholders of record as of November 16, 2012.

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; 19.58% 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

(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 nine-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 nine-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 nine-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 **         19.58     Cerro Verde

(*)Consolidates

(**) Equity Accounting

APPENDIX 2                        

 

GOLD PRODUCTION
Three Months Ended September 30   Nine Months Ended September 30
Orcopampa Orcopampa Old Tailings Orcopampa Orcopampa Old Tailings
2012   2011   %   2012   2011   %   2012   2011   %   2012   2011   %
Ore Milled MT 125,551 108,689 16% 350,563 334,790 5%
Ore Grade gr/MT 16.87 15.87 6% 17.04 19.10 -11%
Recovery Rate % 95.9% 94.1% 2% 96.0% 94.9% 1%
Ounces Produced 65,362   52,265   25%   5,226   7,906   -34%   184,482   195,170   -5%   16,117   18,736   -14%
 
Orcopampa Total Production 3Q12 70,588 3Q11 60,171 9M12% 200,599 9M11 213,906
                                             
Three Months Ended September 30   Nine Months Ended September 30
Antapite Poracota Antapite Poracota
2012   2011   %   2012   2011   %   2012   2011   %   2012   2011   %
Ore Milled MT 10,112 36,200 -72% 18,114 59,774 -70% 72,530 105,631 -31% 122,366 170,452 -28%
Ore Grade gr/MT 6.72 5.66 19% 4.22 8.13 -48% 4.63 6.86 -33% 6.27 8.40 -25%
Recovery Rate % 95.7% 96.9% -1% 68.5% 80.5% -15% 95.3% 96.5% -1% 75.6% 82.8% -9%
Ounces Produced 2,093   6,392   -67%   1,687   12,584   -87%   10,315   22,470   -54%   19,238   38,111   -50%
                                             
LA ZANJA   TANTAHUATAY
3Q12   3Q11   %   9M12   9M11   %   3Q12   3Q11   %   9M12   9M11   %
Ounces Produced 29,702   39,262   -24%   83,718   101,333   -17%   39,194   16,269   141%   105,929   16,269   551%
                                             
SILVER PRODUCTION
Three Months Ended September 30   Nine Months Ended September 30
Uchucchacua Colquijirca Uchucchacua Colquijirca
2012   2011   %   2012   2011   %   2012   2011   %   2012   2011   %
Ore Milled MT 263,454 268,377 -2% 695,800 416,986 67% 783,967 717,919 9% 1,689,846 842,805 101%
Ore Grade gr/MT 445.71 447.77 0% 36.70 81.49 -55% 449.14 446.83 1% 41.06 74.65 -45%
Recovery Rate % 73.8% 71.2% 4% 66.0% 74.1% -11% 72.8% 70.8% 3% 63.2% 76.1% -17%
Ounces Produced 2,785,910   2,751,532   1%   536,167   891,672   -40%   8,247,266   7,302,138   13%   1,410,027   1,882,307   -25%
                                             
ZINC PRODUCTION
Three Months Ended September 30   Nine Months Ended September 30
Uchucchacua Colquijirca Uchucchacua Colquijirca
2012   2011   %   2012   2011   %   2012   2011   %   2012   2011   %
Ore Milled MT 263,454 268,377 -2% 695,800 416,986 67% 783,967 717,919 9% 1,689,846 842,805 101%
Ore Grade % 1.57% 1.23% 28% 2.69% 4.06% -34% 1.47% 1.25% 18% 2.93% 3.90% -25%
Recovery Rate % 63.6% 50.8% 25% 65.4% 74.8% -13% 59.6% 50.8% 17% 67.1% 72.0% -7%
MT Produced 2,628   1,673   57%   12,332   14,025   -12%   6,879   4,625   49%   33,268   23,674   41%
 

APPENDIX 3

EBITDA RECONCILIATION (in thousand US$)
               
    3Q12   3Q11   9M12   9M11
Net Income   203,358   239,535   594,339   708,887

Add / Subtract:

  -44,826   12,799   -154,630   -65,611
Provision for income tax, net   35,069   81,893   114,342   176,122
Share in associated companies by the equity method, net   -116,298   -107,696   -374,304   -343,853
Interest income   -2,470   -1,875   -7,761   -7,252
Interest expense   1,502   1,656   4,682   5,083
Loss on currency exchange difference   -527   529   254   1,352
Depreciation and Amortization   32,445   23,241   84,240   69,175
Workers´ participation provision   5,453   15,051   16,605   33,762
Long Term Compensation provision   0   0   7,312   0
EBITDA Buenaventura Direct Operations   158,532   252,334   439,709   643,276
EBITDA Yanacocha (43.65%)   137,997   142,840   460,891   351,526
EBITDA Cerro Verde (19.58%)   71,823   52,946   202,775   257,738
EBITDA Coimolache (40%)   22,721   6,635   54,270   6,635
EBITDA Canteras del Hallazgo (49%)   -6,669   -8,249   -20,110   -21,333
EBITDA Buenaventura + All Associates   384,404   446,505   1,137,534   1,237,842
     

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 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

Compañía de Minas Buenaventura S.A.A. and subsidiaries
Consolidated Balance sheet
As of September, 30 2012 and December, 31 2011
   
2012 2011
Assets US$(000) US$(000)
Current assets
Cash and cash equivalents 280,702 470,847
Financial asset at fair value through profit and loss 55,029 62,299
Trade accounts receivable, net 187,129 172,569
Other accounts receivable 82,523 48,521
Accounts receivable from associates 29,916 47,425
Derivative financial instruments - 1,283
Embedded derivatives for concentrates sales 5,774 -
Inventory, net 171,951 149,108
Prepaid expenses 11,694   16,234
Total current assets 824,718 968,286
 
Other accounts receivable 14,664 5,570
Accounts receivable from associates 37,852 32,262
Long-term Inventory 42,939 48,845
Prepaid expenses 253
Investment in associates 2,350,797 1,935,004
Mining concessions, development cost and 1,058,390 830,997
property, plant and equipment, net
Deferred income tax asset 107,927 125,538
Other assets 5,209   7,047
Total assets 4,442,749   3,953,549
 
Liabilities and shareholders' equity, net
Current liabilities
Trade accounts payable 173,799 142,375
Income tax payable 8,393 36,423
Dividends payable 865 1,052
Other accounts payable 61,757 40,098
Provisions 52,791 91,287
Accounts payable from associates 870 883
Embedded derivatives for concentrates sales, net - 7,306
Hedge derivative financial instruments 177 -
Financial obligations 40,227   1,042
Total current liabilities 338,879 320,466
 
Other non-current provisions 106,850 86,528
Other accounts payable to associates 799 1,004
Financial obligations 119,181 105,072
Other accounts payable 4,694   -
Total liabilities 570,403   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 2,478,607 2,034,768
Cumulative unrealized, gain (loss) 753   2,068
3,613,688   3,178,281
Non-controlling interest 258,658   262,198
Total shareholders' equity, net 3,872,346   3,440,479
     
Total liabilities and shareholders' equity, net 4,442,749   3,953,549
 
 
Compañía de Minas Buenaventura S.A.A. and subsidiaries
Consolidated Statements of income
For the nine month period ended September 30, 2012 and September 30, 2011
       

For the three month period
ended September, 30

For the nine month period
ended September, 30

2012 2011 2012 2011
US$(000) US$(000) US$(000) US$(000)
Operating income
Net sales 393,987 418,130 1,084,736 1,108,912
Royalty income 17,868     17,126     54,621     45,375  
Total income 411,855 435,256 1,139,357 1,154,287
 
Operating costs
Cost of sales, without considering depreciation and amortization (164,106 ) (114,165 ) (434,961 ) (322,219 )
Exploration in units in operation (30,341 ) (29,047 ) (97,153 ) (75,371 )
Depreciation and amortization (32,445 ) (23,241 ) (84,240 ) (69,175 )
Royalties (10,963 )   (20,629 )   (30,120 )   (51,939 )
Total operating costs (237,855 )   (187,082 )   (646,474 )   (518,704 )
Gross income 174,000     248,174     492,883     635,583  
 
Operating expenses
Administrative (22,856 ) (22,343 ) (77,652 ) (58,825 )
Exploring in non-operating areas (27,400 ) (12,827 ) (73,229 ) (35,527 )
Selling (5,204 ) (3,285 ) (12,281 ) (8,138 )
Other operating income, net 2,094     4,323     1,831     7,246  
Total operating expenses (53,366 )   (34,132 )   (161,331 )   (95,244 )
Operating income 120,634     214,042     331,552     540,339  
 
Other income (expenses), net
Share in the results of associates 116,298 107,696 374,304 343,853
Interest income 2,470 1,875 7,761 7,252
Interest expense (1,502 ) (1,656 ) (4,682 ) (5,083 )
Loss from currency exchange difference, net 527     (529 )   (254 )   (1,352 )
Total other income, net 117,793 107,386 377,129 344,670
 
Income before income tax and non-controlling interest 238,427 321,428 708,681 885,009
Income tax (35,069 )   (81,893 )   (114,342 )   (176,122 )
Net income 203,358     239,535     594,339     708,887  
Net income attributable to non-controlling interest (17,773 )   (30,862 )   (48,721 )   (77,890 )
Net income attributable to Owners of the parent 185,585     208,673     545,618     630,997  
 

Basic and diluted earnings per share attributable to Buenaventura, stated in U.S. dollars

0.73     0.82     2.15     2.48
 
 
Compañía de Minas Buenaventura S.A.A. and subsidiaries
Consolidated Statements of cash flows
For the nine month period ended September 30, 2012 and September 30, 2011
       
 

For the three month period

For the nine month period

ended September, 30

 

ended September, 30

2012 2011 2012 2011
US$(000) US$(000) US$(000) US$(000)
Operating activities
Proceeds from sales 363,513 368,652 1,057,157 1,087,941
Royalties received 19,818 13,837 55,071 37,482
Value Added Tax recovered 16,884 6,920 30,161 19,360
Dividends received 3,846 - 10,854 -
Interest received 1,528 1,802 6,906 6,003
Payments to suppliers and third parties (212,513 ) (182,485 ) (607,692 ) (533,215 )
Payments to employees (33,694 ) (20,153 ) (155,521 ) (106,296 )
Income tax paid (31,238 ) (24,914 ) (107,057 ) (86,431 )
Payment of royalties (9,738 ) (20,829 ) (29,798 ) (55,638 )
Payments of interest (514 )   (235 )   (1,279 )   (911 )
 
Net cash and cash equivalents provided by operating activities 117,892     142,595     258,802     368,295  
 
Investment activities
Decrease (increase) in time deposits 2,736 (1,442 ) 9,582 16,493
Proceeds from sales of mining concessions, property, plant and equipment 98 7,792 119 7,792
Proceeds from sales of investments shares - 60,379 - 60,379

Acquisitions of mining concessions, development activities,

(140,213 ) (69,330 ) (308,920 ) (178,496 )
property, plant and equipment
Payments for purchase of investments shares (23,273 ) (1,930 ) (32,184 ) (1,930 )
Contributions to associates (13,083 )   (238,176 )   (21,961 )   (255,195 )

Net cash and cash equivalents used in investment activities

(173,735 )   (242,707 )   (353,364 )   (350,957 )
 
Financing activities
Increase in financial obligations 40,026 8,922 54,313 34,437

Dividends paid

- - (101,779 ) (83,967 )

Dividends paid to non-controlling interest

(4,942 ) (22,867 ) (39,117 ) (48,418 )
Payments for capital stock reduction to non-controlling interest (7,980 ) - (7,980 ) -
Payments of financial obligation -     (493 )   (1,020 )   (1,500 )
Net cash and cash equivalents provided by (used in) financing activities 27,104     (14,438 )   (95,583 )   (99,448 )
 
Decrease in cash and cash equivalents during the period, net (28,739 ) (114,550 ) (190,145 ) (82,110 )
Cash and cash equivalents at beginning of period 309,441     615,301     470,847     582,861  
Cash and cash equivalents at period-end 280,702     500,751     280,702     500,751  
 
 
For the three month period For the nine month period
ended September, 30   ended September, 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 185,585 208,673 545,618 630,997
Add (less)
Depreciation and amortization 32,445 23,241 84,240 69,175
Net income attributable to non-controlling interest 17,773 30,862 48,721 77,890
Deferred income tax 4,396 23,269 17,175 48,065
Accretion expense of the provision for closure of mining units 988 1,417 3,405 4,169
Loss from currency exchange differences (527 ) 529 254 1,352
Share in the results of associates, net of dividends received in cash (112,452 ) (107,696 ) (363,450 ) (343,853 )
Provisions (17,846 ) 16,811 (137,589 ) (21,473 )

Provision for estimated fair value of embedded derivatives related of concentrates sales and adjustments on open liquidations

(21,983 ) 35,099 (32,076 ) 44,610
 
Net changes in operating assets and liabilities accounts
 
Decrease (increase) in operating assets
Trade accounts receivable (17,806 ) (75,278 ) (14,560 ) (55,912 )
Other accounts receivable (9,298 ) 26,536 (23,304 ) 31,842
Other accounts receivable from associates 14,205 (20,727 ) 7,225 (33,277 )
Inventory (3,723 ) (20,165 ) (16,937 ) (79,643 )
Prepaid expenses (21,512 ) 11,704 (26,747 ) 14,120
 
Increase (decrease) of operating liabilities
Trade accounts payable 23,621 15,703 31,424 10,274
Other accounts payable 44,218 (46,357 ) 163,433 (47,761 )
Income tax payable (192 ) 18,974 (28,030 ) 17,720
             
 
Net cash and cash equivalents provided by operating activities 117,892     142,595     258,802     368,295  
 

Lima:
Compañia de Minas Buenaventura S.A.A.
Roque Benavides, 511-419-2538
Carlos Galvez, 511-419-2540
or
Investor Relations:
Daniel Dominguez, 511-419-2591
daniel.dominguez@buenaventura.pe
or
New York:
i-advize Corporate Communications, Inc.
Peter Majeski, 212-406-3694
buenaventura@i-advize.com
Visit our website:
http://www.buenaventura.com

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