6-K 1 bvnpr220704.htm For Immediate Release

FORM 6-K

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

For the month of June 2004

BUENAVENTURA MINING COMPANY INC.

(Translation of Registrant's Name into English)

 

CARLOS VILLARAN 790

SANTA CATALINA, LIMA 13, PERU

(Address of Principal Executive Offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F X Form 40-F ___

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ___ No X

 

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-________________.

 

 

This report consists of consolidated Financial Statements issued by Compañía de Minas Buenaventura S.A.A. and subsidiaries on July 22, 2004, announcing the Company's Second Quarter and cumulative period ended on June 30, 2004 results

For Immediate Release

Compañía de Minas Buenaventura Announces

Second Quarter 2004 Results

 

Lima, Peru, July 22, 2004 - Compañía 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 its results for the second quarter and first six months of 2004. All figures have been prepared in Peruvian GAAP and are stated in Peruvian nuevos soles (S/.) and in U.S. dollars (US$) at a rate of S/3.472 per US$1 for the convenience of the reader.

Comments from the Chief Executive Officer:

Roque Benavides, Chief Executive Officer of Buenaventura stated: "This quarter, Buenaventura's net income was US$66.1 million, an increase of 141% over the 2Q03. This figure includes a gain in derivative instruments of US$28.2 million.

Our operating income this quarter was US$22.8 million, 102% higher than 2Q03, while total EBITDA was US$88.1 million, which represents a 10% increase when compared to 2Q03.

This growth was due to a higher contribution of Buenaventura's direct operations, driven by higher production, sales and lower cash cost in Orcopampa, Uchucchacua and El Brocal. As a result, EBITDA from Buenaventura's direct operations rose 53%".

 

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

  

2Q04

2Q03

Var
%

6M04

6M03

Var

%

Operating Revenues

74.2

60.5

23%

143.2

115.6

24%

Operating Income

22.8

11.3

102%

45.9

27.4

68%

EBITDA

(BVN Direct Operations)

29.3

19.1

53%

44.3

39.1

14%

EBITDA

(including Yanacocha)

88.1

79.8

10%

192.7

145.5

32%

Net Income

66.1

27.4

141%

117.0

84.1

39%

Net Income (without mark to market effect)

32.7

36.9

-11%

77.1

65.7

17%

EPS

0.52

0.22

141%

0.92

0.66

39%

EPS (without Mark to market effect)

0.26

0.29

-11%

0.61

0.52

17%

 

Operating Highlights:

 

2Q04

2Q03

Var

%

6M04

6M03

Var

%

Total Sales

(in millions of US$)

66,768

52,897

26%

125,847

100,685

25%

Average Realized Price Gold (US$/oz.)

365.70

348.96

5%

365.69

348.70

5%

Average Realized Price Silver (US$/oz.)

6.31

4.63

36%

6.26

4.64

35%

Average Realized Price Lead (US$/TM.)

857.90

464.62

85%

856.07

461.07

86%

Average Realized Price Zinc (US$/TM.)

1,046.63

774.23

35%

1,037.57

778.97

33%

 

Operating revenue

 

In 2Q04, operating revenue was S/.257.7 million, or US$74.2 million, an increase of 23% when compared to 2Q03 (S/.209.9 million). This was mainly a result of a 26% increase in net sales due to higher realized metal prices along with increasing sales contents, as follows:

Contribution to sales by metal and variations

Contribution to sales 2Q04

Sales Variation over 2Q03

Sold Contents Variation over 2Q03

Realized Prices Variation over 2Q03

Gold

41%

19%

13%

5%

Silver

32%

61%

18%

36%

Lead

8%

70%

-7%

85%

Zinc

19%

52%

12%

35%

 

Accumulated operating revenue for the six-month period of 2004 was S/.497.2 million, or US$143.2 million, a 24% increase compared to 2003 (S/.401.4 million), due to a 25% increase in net sales and a 16% increase in royalty income.

 

Sales Content

2Q04

2Q03

Var%

6M04

6M03

Var%

Gold (in oz)

85,669

75,613

13%

153,886

152,281

1%

Silver (in oz)

3,957,056

3,347,139

18%

7,405,529

5,409,203

37%

Lead (in MT)

6,992

7,534

-7%

14,472

12,099

20%

Zinc (in MT)

14,026

12,477

12%

25,860

26,081

-1%

 

 

Production and Operating Costs

 

Buenaventura's equity production in 2Q04 was 77,328 ounces of gold, 11% higher than 2Q03 (69,660 ounces) and 3,159,804 ounces of silver, an increase of 9% compared to 2Q03 (2,889,622 ounces).

Equity production1 for the six-month period of 2004 was 152,716 ounces of gold and 6,152,500 oz of silver. This represents an increase of 11% in gold production and a 6% increase in silver production compared to 2003.

 Equity Production1

2Q04

2Q03

Var%

6M04

6M03

Var%

Gold (in oz)

77,328

69,660

11%

152,716

137,335

11%

Silver (in oz)

3,159,804

2,889,622

9%

6,152,500

5,801,409

6%

Lead (in MT)

3,797

3,263

16%

7,636

6,701

14%

Zinc (in MT)

6,525

6,236

5%

12,363

12,597

-2%

 

In Orcopampa (100%), total gold production for 2Q04 was 49,593 ounces, a 14% increase when compared to 2Q03 (43,394 ounces). For the six-month period of 2004, total gold production was 96,881 ounces, an 11% increase when compared to the same period of 2003 (87,016 ounces).

Cash operating cost decreased 34% from US$178/oz in 2Q03 to US$118/oz during this quarter, primarily due to the full operation of the new cyanidation plant. This allowed:

  1. An increase of 7% in gold recovery.

  2. The avoidance of charges for concentrate treatment, deductions and penalties as well as a reduction in sales expenses, basically from concentrate transportation.

In Uchucchacua (100%), total silver production for 2Q04 increased 4% when compared with 2Q03, from 2,374,295 ounces to 2,474,516 ounces.

For the six-month period of 2004, total silver production was 4,822,243 ounces, a 2% increase when compared to 2003 (4,742,435 ounces).

Cash operating cost in 2Q04 decreased 4% compared to 2Q03, from US$2.99/oz to US$2.87/oz of silver. This reduction was due to:

  1. A reduction in energy consumption provided by the lower water pumping and mine ventilation allowed by the Paton tunnel.

  2. A reorganization and simplification of contractors work allowed increased efficiencies and cost-cutting.

  3. A significant by-product credit contribution of lead and zinc.

In Antapite (78.04%), total production for 2Q04 was 22,926 ounces of gold, a 21% increase when compared with 18,929 ounces in 2Q03.

For the six-month period of 2004, total gold production was 46,493 ounces, a 26% increase when compared to 2003 (36,901 ounces).

Cash operating cost in 2Q04 increased 3% from US$167/oz of gold in 2Q03 to US$172/oz in 2Q04. This increase was mainly attributed to higher mine preparation expenses to feed the new expanded plant capacity.

In Ishihuinca (78.04%), total gold production for 2Q04 was 5,918 ounces. A 8% decrease when compared with 2Q03 (6,433 ounces)

For the six-month period of 2004, total gold production was 11,878 ounces, a 5% decrease when compared to 2003 (12,477 ounces).

Cash operating cost in 2Q04 was US$326/oz of gold, an increase of 29% when compared with 2Q03 (US$253/oz), due to exploration efforts to increase gold reserves and an increase in mine preparation costs.

In Colquijirca (32.78%), total zinc production was 16,395 MT in 2Q04, a decrease of 2% when compared to 16,785 MT in 2Q03. Total silver production in 2Q04 was 825,386 MT, a 22% increase when compared with 2Q03 (674,219 MT).

For the six-month period 2004, total zinc production was 30,997 MT, a 7% decrease when compared to 2003 (33,182). In the case of silver, total production increased 5% from 1,482,219 MT in 2Q03 to 1,549,779 MT in 2Q04.

Zinc cash operating cost decreased 17% from US$803 per MT in 2Q03 to US$667 per MT in 2Q04. This was due to:

  1. A lower stripping ratio in 2Q04 (9.86:1) versus 2Q03 (11.13:1)

  2. Despite higher treatment charges, deductions and penalties due to higher metal prices, the by-product contribution from higher lead and silver to the concentrate value allowed a significant reduction in the cash cost.

 

Operating Expenses

General and administrative expenses in 2Q04 were S/.17.6 million, or US$5.1 million, a 23% decrease compared to 2Q03 (S/.23.0 million) due to a lower Long-Term Management Compensation Program provision. For the six-month period of 2004, accumulated general and administrative expenses were S/.38.6 million, or US$11.1 million, a 5% decrease compared with 2003 (S/.40.7 million).

Exploration costs in non-operational mining areas in 2Q04 were S/.20.7 million, or US$6.0 million, an increase of 36% when compared to 2Q03 (S/.15.2 million) due to higher expenses in the construction of the Poracota-Orcopampa road and in La Zanja preconstruction expenses.

 

Operating Income

Operating income was S/.79.3 million, or US$22.8 million, a 102% increase compared to 2Q03 (S/.39.2 million) due to higher revenues and lower operating costs.

For the six-month period of 2004, operating income was S/.159.5 million, or US$45.9 million, which represents a 68% increase compared to 2Q03 (S/.95.1 million).

 

Income from Non-Consolidated Affiliates

Buenaventura's income from Non-Consolidated Affiliates in 2Q04 was S/.94.3 million, or US$27.2 million, a 17% decrease when compared to 2Q03 (S/.114.2 million), mainly attributed to a decrease in Yanacocha's net income, as explained below. For the six-month period of 2004, income from Non-Consolidated Affiliates was S/.265.0 million, or US$76.3 million, a 45% increase compared to the same period of 2003 (S/.182.9 million).

In Yanacocha (43.65%), 2Q04 gold production was 611,993 ounces of gold, a decrease of 10% when compared to 2Q03 (682,105 ounces). This reduction is explained by a 27% lower grade during this quarter (0.72 gr/MT) compared with 2Q03 (0.99 gr/MT).

Gold production for the six-month period of 2004 was 1,415,552 ounces, an increase of 7% compared with 2Q03 (1,321,464 ounces).

Cash operating cost in Yanacocha was US$159/oz of gold, which represents an increase of 25% compared with US$127/oz in 2Q03 due to an increase in the stripping ratio and the lower grade mentioned above.

It is important to mention that production and cash costs are in line with the six-month period budget and that the significant difference year over year was due to an exceptional 2Q03 period.

Net income for 2Q04 was US$ 63.7 million, a 12% decrease when compared with US$72.6 million in 2Q03. For the six-month period of 2004, net income was US$174.3 million, an increase of 50% when compared to to US$116.2 million for the same period of 2003.

This quarter, EBITDA was US$134.7 million, a decrease of 3% compared to 2Q03 (US$138.9 million). For the six-month period of 2004, EBITDA was US$339.9 million, an increase of 39% when compared to US$243.9 million in the similar period of 2003.

Yanacocha's capital expenditures for 2Q04 were US$95.5 million, compared to US$60.6 million in 2Q03. For the six-month 2004 period, CAPEX was US$140.2 million versus US$96.0 million for the 2003 period. This was mainly due to higher investments in mine trucks; the leach pads expansion and treatment plant facilities.

 

Net Income

This quarter Buenaventura's net income was S/.229.4 million, or US$66.1 million, representing a 141% increase as compared to 2Q03 (S/.95.2 million). This includes a credit of S/.97.9 million, or US$28.2 million, related to the change in the hedge book value (in accordance with IAS39 for derivative instruments).

 

Net Income without Mark to Market Variation

2Q04

2Q03

Var

6M04

6M03

Var

Net Income

66.1

27.4

141%

117.0

84.1

39%

EPS

0.52

0.22

141%

0.92

0.66

39%

Realized deferred (revenue) from future sale

(5.2)

0.0

(9.2)

0.0

(Gain) / Loss from change in the fair value of derivative instruments

(28.2)

9.5

(30.7)

(18.4)

Net Income (without Mark to Market effect)

32.7

36.9

-11%

77.1

65.7

17%

EPS (without M2M effect)

0.26

0.29

-11%

0.61

0.52

17%

 

Hedging Operations

During 2Q04, the Company reported a net loss of S/.6.5 million, or US$1.9 million in derivative instruments, as a result of the execution of 41,000 ounces of gold and 328,505 ounces of silver.

Explorations

At Chipmo - Orcopampa, diamond drill holes HD-115-04 and HD-116-04 were drilled downwards from the deepest mine level at 3540 meters with multiple and high-grade of gold intercepts:

 

HD-115-04

Ore-shoot

Thickness

Grade

Height

(m)

oz/t Au

(m)

Prosperidad

4.98

5.99

3480

Lucy Piso

1.01

0.227

3415

HD-116-04

Ore-shoot

Thickness

Grade

Height

(m)

oz/t Au

(m)

Nazareno W

2.7

1.298

3482

 

These intercepts have prompted construction of the 3540 to 3440 decline to access and develop new reserves in the order of 108,000 DST @ 1.069 oz/ DST of gold.

 

In La Zanja, current diamond drilling south of the Pampa Verde prospect has found covered extensions below an argilically altered, barren lava dome. Pampa Verde oxide reserves (260 K ounces of gold and 1,195 K ounces of silver) will likely grow an additional 20 to 30%. New prospects at Cerro Campana and Turmalina have been mapped and sampled with encouraging surface indications of oxide gold. Both are in the process of being drilled. La Zanja's environmental impact study has been filed and permitting process is under way for exploitation of 18,850,000 DST @ 0.03 oz/DST (563 K ounces of gold) currently in ore reserves at San Pedro Sur and Pampa Verde. Geosystems International is performing an independent audit of the project's ore reserves and resources.

 

Marcapunta: Sociedad Minera El Brocal S.A.A. has completed the design, permitting and selection of contractor to start the Marcapunta 800 meters long west decline to access copper and gold sulfide resources. Underground development has been initiated for the purpose of reaching the ore body and do bulk sampling, to finalize metallurgical test work and to undertake feasibility studies and start generating reserves. The driving of the decline is expected to take no less than six months. Therefore, we expect to have this work done by the first quarter of 2005.

 

At Poracota, diamond drilling was reinitiated to prove extensions south of the known high grade of gold resource. Simultaneously, two adits are being opened at levels of 4720 and 4780 m to access the drill-indicated ore shoots towards the end of 2004 and the 30 km road from Orcopampa is being upgraded.

 

Buenaventura's 2004 exploration budget has reached expenditures of US$ 6.52 million as of June 30, 2004. In addition, our partners Newmont, Barrick Gold and Gold Fields invested, all together, a total of US$2.03 million in La Zanja, Minasnioc and the Puquio JV respectively.

Project Development

UCHUCCHACUA

  • Engineering study for the cyanidation plant construction to treat the waste from the flotation plant is in progress.

  • Continuing explorations at the areas of Huantajalla and Pozo Rico.

  • Deepen the master shaft to the level 3950

ORCOPAMPA

  • The construction of the Rampa Mario, to connect the Nazareno and Prometida mines, was completed with a total investment of US$6.6MM.

  • In May, deepening the declines of Nazareno and Prometida mines began in order to gain access to 700,000 ounces of gold in reserves. The estimated total investment is US$10.3 million.

ANTAPITE

  • Expansion of the tailing dam. The estimated investment is US$3million and is expected to be completed in September 2004.

CONSORCIO ENERGETICO DE HUANCAVELICA

  • The construction of the Callalli- Ares Power Line began in March 2004 and is currently in progress. We expect this project to be completed in November 2004 to assure power to Orcopampa, Shila, Paula and Poracota mines. The estimated investment is US$7.5 million.

 

Board Resolutions

During today's meeting, July 22nd, 2004 the Board of Directors passed the following resolutions:

  1. To approve the financial statements as of June 30th, 2004.

  2. In this meeting, Mr. Jorge Benavides informed the Board his retirement. Mr. Jorge Benavides has been a Board member for 45 years and during this time has contributed to the development and growth of the Company. The Board of Directors agreed to accept the retirement of Mr. Jorge Benavides thanking him for all his efforts and hard work for the benefit of the Company, and appointed Mr. Roque Benavides, currently President and CEO of the Company.

* * *

 

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 three mines in Peru and also has controlling interests in four mining companies as well as a minority interest in several other mining companies in Peru. The Company owns 43.65% in Minera Yanacocha S.R.L. (a partnership with Newmont Mining Corporation) and is one of the most important precious metal producers in the world.

 

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 and Yanacocha's costs and expenses, results of exploration, the continued improving efficiency of operations, prevailing market prices of gold, silver 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 and legal developments. These forward-looking statements reflect the Company's view with respect to the Company and Yanacocha'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.

Appendix 1.

Equity Participation in

Affiliates and Subsidiaries

BVN

Operating

Equity %

Mines

Minera Yanacocha

43.65

Yanacocha

Sociedad Minera El Brocal*

32.78

Colquijirca

Inversiones Mineras Del Sur*

78.04

Antapite / Ishihuinca

Cedimin*

100.00

Shila / Paula

Buenaventura Ingenieros*

100.00

-

Consorcio Energetico de Huancavelica*

100.00

-

Consolidates

 

 Appendix 2.

BVN PRODUCTION SUMMARY

GOLD PRODUCTION

Three Months Ended June 30th

Six Months Ended June 30th

Orco pampa

Antapite

Orco pampa

Anta pite

2004

2003

%

2004

2003

%

2004

2003

%

2004

2003

%

Ore Milled DST

104,791

96,543

8.54%

44,853

35,059

27.94%

207,551

187,951

10.43%

89,727

65,446

37.10%

Average Ore Grade OZ/ST

0.51

0.52

-2.76%

0.54

0.59

-8.42%

0.50

0.54

-7.31%

0.55

0.62

-10.51%

Average Recovery Rate %

93.61%

86.45%

7.16%

93.90%

90.83%

3.07%

93.55%

86.00%

7.55%

93.64%

91.19%

2.45%

Ounces Produced

49,593

43,394

14.28%

22,926

18,929

21.12%

96,881

87,016

11.34%

46,493

36,901

25.99%

SILVER PRODUCTION

Three Months Ended June 30th

Six Months Ended June 30th

Uchucchacua

Colqui jirca

Uchuccha cua

Colquijirca

2004

2003

%

2004

2003

%

2004

2003

%

2004

2003

%

Ore Milled DST

200,100

184,199

8.63%

376,347

360,838

4.30%

389,000

366,487

6.14%

746,500

698,866

6.82%

Average Ore Grade OZ/ST

16.76

17.16

-2.32%

3.21

2.80

14.56%

16.85

17.38

-3.06%

3.04

3.02

0.80%

Average Recovery Rate %

73.78%

75.11%

-1.34%

68.40%

66.76%

1.64%

73.59%

74.47%

-0.88%

68.28%

70.34%

-2.06%

Ounces Produced

2,474,516

2,374,295

4.22%

825,386

674,219

22.42%

4,822,243

4,742,435

1.68%

1,549,779

1,482,819

4.52%

ZINC PRODUCTION

Three Months Ended June 30th

Six Months Ended June 30th

Uchuc chacua

Colqui jirca

Uchuc chacua

Colqui jirca

2004

2003

%

2004

2003

%

2004

2003

%

2004

2003

%

Ore Milled DST

200,100

184,199

8.63%

376,347

360,838

4.30%

389,000

366,487

6.14%

746,500

698,866

6.82%

Average Ore Grade %

1.53%

1.39%

10.47%

5.77%

5.84%

-1.22%

1.46%

1.47%

-0.81%

5.65%

5.99%

-5.59%

Average Recovery Rate %

59.38%

56.08%

3.30%

75.45%

79.59%

-4.14%

61.14%

58.06%

3.07%

73.46%

79.30%

-5.84%

ST Produced

1,820

1,432

27.06%

16,395

16,785

-2.33%

3,468

3,128

10.86%

30,997

33,182

-6.58%

 

 

 Appendix 3.

Total Gold Commitments

As of 01/07/04

2004

2005

2006

2007

2008

2009

2010

2011

Total

285

Ounces

169,000

208,000

338,000

350,500

428,000

452,000

60,000

60,000

2,065,500

$/oz

306.57

313.65

314.91

313.90

297.83

294.03

285.00

285.00

304.08

290

Ounces

169,000

208,000

338,000

350,500

428,000

452,000

60,000

60,000

2,065,500

$/oz

323.75

332.64

327.34

326.03

309.74

305.91

347.50

347.50

320.19

300

Ounces

149,000

288,000

418,000

430,500

508,000

492,000

60,000

60,000

2,405,500

$/oz

339.49

336.91

332.49

331.50

320.30

315.51

347.50

347.50

327.98

340

Ounces

149,000

288,000

418,000

438,000

538,000

522,000

90,000

82,500

2,525,500

$/oz

342.71

341.35

339.38

339.04

341.30

342.03

346.67

346.82

341.20

345

Ounces

149,000

288,000

418,000

438,000

538,000

522,000

90,000

82,500

2,525,500

$/oz

342.71

341.35

339.38

339.04

343.53

345.13

346.67

346.82

342.32

350

Ounces

161,000

312,000

448,000

468,000

568,000

552,000

120,000

105,000

2,734,000

$/oz

343.25

342.02

340.42

339.90

345.72

348.06

346.25

346.43

343.81

385

Ounces

191,000

372,000

448,000

468,000

568,000

552,000

120,000

105,000

2,824,000

$/oz

349.81

348.95

340.42

339.90

360.51

368.61

346.25

346.43

352.11

400

Ounces

191,000

372,000

448,000

468,000

568,000

552,000

120,000

105,000

2,824,000

$/oz

349.81

348.95

340.42

339.90

366.85

377.41

346.25

346.43

355.11

420

Ounces

191,000

372,000

448,000

468,000

628,000

552,000

120,000

105,000

2,884,000

$/oz

349.81

348.95

340.42

339.90

371.93

386.21

346.25

346.43

358.14

 

Physical Gold Delivery

As of 01/07/04

2004

2005

2006

2007

2008

2009

2010

2011

Total

285

Ounces

109,000

208,000

308,000

328,000

428,000

452,000

60,000

60,000

1,953,000

$/oz

310.18

313.65

311.98

311.77

297.83

294.03

285.00

285.00

303.11

290

Ounces

109,000

208,000

308,000

328,000

428,000

452,000

60,000

60,000

1,953,000

$/oz

336.82

332.64

325.62

324.73

309.74

305.91

347.50

347.50

320.15

300

Ounces

109,000

208,000

308,000

328,000

428,000

452,000

60,000

60,000

1,953,000

$/oz

338.20

334.57

328.54

327.77

316.05

313.08

347.50

347.50

324.44

340

Ounces

109,000

208,000

308,000

328,000

428,000

452,000

60,000

60,000

1,953,000

$/oz

342.60

340.72

337.89

337.53

340.72

341.75

347.50

347.50

340.50

345

Ounces

109,000

208,000

308,000

328,000

428,000

452,000

60,000

60,000

1,953,000

$/oz

342.60

340.72

337.89

337.53

343.53

345.33

347.50

347.50

341.94

350

Ounces

109,000

208,000

308,000

328,000

428,000

452,000

60,000

60,000

1,953,000

$/oz

342.60

340.72

337.89

337.53

346.33

348.92

347.50

347.50

343.39

385

Ounces

109,000

208,000

308,000

328,000

428,000

452,000

60,000

60,000

1,953,000

$/oz

342.60

340.72

337.89

337.53

365.96

374.00

347.50

347.50

353.49

400

Ounces

109,000

208,000

308,000

328,000

428,000

452,000

60,000

60,000

1,953,000

$/oz

342.60

340.72

337.89

337.53

374.37

384.76

347.50

347.50

357.83

420

Ounces

109,000

208,000

308,000

328,000

428,000

452,000

60,000

60,000

1,953,000

$/oz

342.60

340.72

337.89

337.53

374.37

395.51

347.50

347.50

360.31

 

Gold Derivatives

As of 01/07/04

2004

2005

2006

2007

2008

2009

2010

2011

Total

285

Ounces

60,000

30,000

22,500

112,500

$/oz

300.00

345.00

345.00

321.00

290

Ounces

60,000

30,000

22,500

112,500

$/oz

300.00

345.00

345.00

321.00

300

Ounces

40,000

80,000

110,000

102,500

80,000

40,000

452,500

$/oz

343.00

343.00

343.55

343.44

343.00

343.00

343.23

340

Ounces

40,000

80,000

110,000

110,000

110,000

70,000

30,000

22,500

572,500

$/oz

343.00

343.00

343.55

343.55

343.55

343.86

345.00

345.00

343.61

345

Ounces

40,000

80,000

110,000

110,000

110,000

70,000

30,000

22,500

572,500

$/oz

343.00

343.00

343.55

343.55

343.55

343.86

345.00

345.00

343.61

350

Ounces

52,000

104,000

140,000

140,000

140,000

100,000

60,000

45,000

781,000

$/oz

344.62

344.62

346.00

345.46

343.86

344.20

345.00

345.00

344.88

385

Ounces

82,000

164,000

140,000

140,000

140,000

100,000

60,000

45,000

871,000

$/oz

359.39

359.39

346.00

345.46

343.86

344.20

345.00

345.00

349.02

400

Ounces

82,000

164,000

140,000

140,000

140,000

100,000

60,000

45,000

871,000

$/oz

359.39

359.39

346.00

345.46

343.86

344.20

345.00

345.00

349.02

420

Ounces

82,000

164,000

140,000

140,000

200,000

100,000

60,000

45,000

931,000

$/oz

359.39

359.39

346.00

345.46

366.70

344.20

345.00

345.00

353.60

 

 Appendix 4.

Silver Derivatives

As of 01/07/2004

At US $ 4.00

At US $ 4.15

At US $ 6.20

At US $ 6.33

At US $ 6.50

At US $ 7.00

Year

Ounces

$ / oz

Ounces

$ / oz

Ounces

$ / oz

Ounces

$ / oz

Ounces

$ / oz

Ounces

$ / oz

2004

150,000

6.00

750,000

5.84

780,000

6.15

897,000

6.16

1,050,000

6.16

1,500,000

6.16

2005

300,000

6.00

1,400,000

5.84

1,460,000

6.15

1,677,750

6.15

1,962,500

6.15

2,800,000

6.16

2006

200,000

6.00

200,000

6.00

240,000

6.00

266,000

6.00

300,000

6.00

400,000

6.00

650,000

6.00

2,350,000

5.86

2,480,000

6.14

2,840,750

6.14

3,312,500

6.14

4,700,000

6.14

 

 Appendix 5.

Compañía de Minas Buenaventura S.A.A. and subsidiaries

Consolidated Balance Sheets

As of December 31, 2003 (audited) and June 30, 2004 (unaudited)

 

 

2003

2004

2004

 

 

S/(000)

S/(000)

US$(000)

 

 

 

 

 

Assets

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

398,171

448,699

129,234

 

 

 

 

 

Investment funds

 

54,828

84,065

24,212

 

 

 

 

 

Trade accounts receivable

 

74,195

87,416

25,177

 

 

 

 

 

Other accounts receivable

 

26,951

19,783

5,698

 

 

 

 

 

Accounts receivable from affiliates

 

37,662

38,989

11,230

 

 

 

 

 

Inventories, net

 

77,158

79,152

22,797

 

 

 

 

 

Income tax prepayments

 

28,960

32,462

9,350

 

 

 

 

 

Current portion of prepaid value added tax and expenses

 

18,307

31,436

9,054

 

 

__________

__________

__________

Total current assets

 

716,232

822,002

236,752

 

 

 

 

 

Long - term accounts receivable

 

959

694

200

 

 

 

 

 

Value added tax and prepaid expenses

 

5,779

2,671

769

 

 

 

 

 

Investments in shares

 

1,441,667

1,455,323

419,160

 

 

 

 

 

Property, plant and equipment, net

 

394,601

403,120

116,106

 

 

 

 

 

Development costs and mineral lands, net

 

137,655

148,845

42,870

 

 

 

 

 

Deferred stripping costs

 

56,002

56,002

16,130

 

 

 

 

 

Mining concessions and goodwill, net

 

167,938

161,861

46,619

 

 

 

 

 

Deferred income tax and workers' profit sharing, net

 

297,157

265,796

76,554

 

 

__________

__________

__________

 

 

 

 

 

Total assets

 

3,217,990

3,316,314

955,160

 

 

___________

___________

___________

Consolidated Balance Sheets (Continued)

 

 

 

 

2003

2004

2004

 

 

S/(000)

S/(000)

US$(000)

 

 

 

 

 

Liabilities and shareholders' equity, net

 

 

 

 

Current liabilities

 

 

 

 

Bank loans

 

23,439

22,618

6,514

Trade accounts payable

 

52,648

48,467

13,959

Other current liabilities

 

86,098

104,933

30,223

Liability on derivative instruments

 

99,798

30,947

8,913

Current portion of long-term debt

 

70,386

65,322

18,814

Deferred revenue from sale of future production

 

68,775

73,572

21,190

 

 

__________

__________

__________

Total current liabilities

 

401,144

345,859

99,613

 

 

__________

__________

__________

Other long-term liabilities

 

76,780

65,049

18,735

Liability on derivative instruments

 

307,532

237,519

68,410

Long-term debt

 

45,425

21,817

6,284

Deferred revenue from sale of future production

 

640,510

609,470

175,539

 

 

__________

__________

__________

Total liabilities

 

1,471,391

1,279,714

368,581

 

 

__________

__________

__________

Minority interest

 

48,382

69,137

19,913

 

 

__________

__________

__________

Shareholders' equity, net

 

 

 

 

Capital stock, net of treasury shares by S/49,611,000 in 2003 and 2004

 

596,186

596,186

171,713

Investment shares, net of treasury shares by S/66,000 in 2003 and 2004

 

1,681

1,681

484

Additional paid-in capital

 

610,076

610,076

175,713

Legal reserve

 

99,178

129,136

37,194

Retained earnings

 

217,891

522,429

150,469

Cumulative translation loss

 

(29,363)

(81,564)

(23,492)

Cumulative unrealized gain on investments in shares carried at fair value

 

208,904

193,175

55,638

Cumulative unrealized gain (loss) on derivative instruments

 

(6,336)

(3,656)

(1,053)

 

 

__________

__________

__________

 

 

 

 

 

Total shareholders' equity

 

1,698,217

1,967,463

566,666

 

 

__________

__________

__________

Total liabilities and shareholders' equity, net

 

3,217,990

3,316,314

955,160

 

 

__________

__________

__________

Compañía de Minas Buenaventura S.A.A. and subsidiaries

Consolidated Statements of Income (unaudited)

For the three-month
periods ended June 30

For the six-month
periods ended June 30

_______________________________

_______________________________

2003

2004

2004

2003

2004

2004

S/(000)

S/(000)

US$(000)

S/(000)

S/(000)

US$(000)

Operating revenues

Net sales

183,658

231,819

66,768

349,578

436,942

125,847

Royalty income

26,242

25,844

7,444

51,818

60,238

17,350

__________

__________

__________

__________

__________

__________

Total revenues

209,900

257,663

74,212

401,396

497,180

143,197

__________

__________

__________

__________

__________

__________

Costs of operation

Operating costs

85,777

87,536

25,212

160,008

170,293

49,048

Exploration and development costs in operational mining sites

22,548

28,199

8,122

38,215

52,109

15,008

Depreciation

11,527

14,011

4,035

20,309

25,709

7,405

__________

__________

__________

__________

__________

__________

Total costs of operation

119,852

129,746

37,369

218,532

248,111

71,461

__________

__________

__________

__________

__________

__________

Gross margin

90,048

127,917

36,843

182,864

249,069

71,736

__________

__________

__________

__________

__________

__________

Operating expenses

General and administrative

22,973

17,579

5,063

40,685

38,580

11,112

Exploration costs in non-operational mining areas

15,245

20,725

5,969

24,406

31,034

8,938

Selling

6,615

3,629

1,045

11,801

8,744

2,518

Royalties

6,058

6,691

1,927

10,894

11,222

3,232

__________

__________

__________

__________

__________

__________

Total operating expenses

50,891

48,624

14,004

87,786

89,580

25,800

__________

__________

__________

__________

__________

__________

Operating income

39,157

79,293

22,839

95,078

159,489

45,936

__________

__________

__________

__________

__________

__________

Other income (expenses)

Share in affiliated companies

114,244

94,265

27,150

182,852

265,006

76,327

Realized revenue from sale of future production

-

17,921

5,162

-

32,105

9,247

Gain (loss) from change in the fair value of derivative instruments

(33,000)

97,894

28,195

63,843

106,613

30,707

Realized gain (loss) in derivative instruments

3,711

(6,511)

(1,875)

2,358

(53,093)

(15,292)

Interest income

1,653

1,937

558

2,907

4,840

1,394

Loss from exposure to inflation

(3,459)

(9,419)

(2,713)

(2,555)

(14,332)

(4,128)

Interest expense

(2,034)

(7,100)

(2,045)

(4,476)

(8,948)

(2,577)

Amortization of mining concessions and goodwill

(4,200)

(3,038)

(875)

(8,401)

(6,077)

(1,750)

Other, net

(1,239)

(5,668)

(1,632)

1,006

(6,772)

(1,950)

__________

__________

__________

__________

__________

__________

Total other income, net

75,676

180,281

51,925

237,534

319,342

91,978

__________

__________

__________

__________

__________

__________

Income before worker's profit sharing, income tax and minority interest

114,833

259,574

74,764

332,612

478,831

137,914

Workers' profit sharing

(364)

(3,518)

(1,013)

(404)

(7,394)

(2,130)

Income tax

(7,980)

(16,138)

(4,648)

(14,748)

(38,772)

(11,167)

__________

__________

__________

__________

__________

__________

Income before minority interest

106,489

239,918

69,103

317,460

432,665

124,617

Minority interest

(11,332)

(10,510)

(3,027)

(25,421)

(26,378)

(7,597)

__________

__________

__________

__________

__________

__________

Net income

95,157

229,408

66,076

292,039

406,287

117,020

___________

___________

___________

___________

___________

___________

Basic and diluted earnings per share, stated in Peruvian Nuevos Soles and U.S. dollars

0.75

1.80

0.52

2.30

3.19

0.92

___________

___________

___________

___________

___________

___________

Weighted average number of shares outstanding

127,236,219

127,236,219

127,236,219

127,236,219

127,236,219

127,236,219

___________

___________

___________

___________

___________

___________

Compañía de Minas Buenaventura S.A.A. and subsidiaries

Consolidated Statements of Cash Flows (unaudited)

For the three-month
periods ended June 30

For the six-month
periods ended June 30

___________________________________

___________________________________

2003

2004

2004

2003

2004

2004

S/(000)

S/(000)

US$(000)

S/(000)

S/(000)

US$(000)

Operating activities

Collection from customers

153,733

203,490

58,609

340,204

423,722

122,040

Collection of dividends

96,298

91,668

26,402

96,298

188,846

54,391

Collection of royalties

24,965

35,573

10,245

50,421

64,226

18,498

Collection of interest

1,556

794

229

4,135

3,697

1,065

Payments to suppliers and third parties

(67,357)

(108,062)

(31,123)

(149,212)

(199,190)

(57,372)

Payments of exploration expenditures

(33,221)

(34,717)

(9,999)

(53,447)

(64,442)

(18,560)

Payments to employees

(30,067)

(28,234)

(8,132)

(63,990)

(61,614)

(17,746)

Payments of income tax

(9,339)

(11,288)

(3,251)

(20,792)

(26,061)

(7,506)

Payments of royalties

(9,612)

(7,913)

(2,279)

(16,341)

(13,729)

(3,954)

Payments of interest

(3,022)

(1,939)

(558)

(7,064)

(3,485)

(1,004)

________

________

________

________

________

________

Net cash provided by operating activities

123,934

139,372

40,143

180,212

311,970

89,852

________

________

________

________

________

________

Investing activities

Proceeds (payments) from derivative instruments settled, net

3,711

(6,511)

(1,875)

2,358

(53,093)

(15,292)

Purchase of plant and equipment

(11,143)

(21,225)

(6,113)

(22,576)

(36,332)

(10,464)

Increase of investment fund

-

(34,700)

(9,994)

-

(34,700)

(9,994)

Development expenditures

(7,684)

(20,928)

(6,028)

(14,069)

(30,848)

(8,885)

Increase of accounts receivable from affiliates

-

(2,613)

(753)

-

(5,315)

(1,531)

Payments by investments in shares

-

-

-

(1,585)

(1,262)

(363)

Proceeds from sale of plant and equipment

651

142

41

1,065

1,062

306

Proceeds from sale of investments in shares

-

330

95

-

330

95

________

________

________

________

________

________

Net cash used in investing activities

(14,465)

(85,505)

(24,627)

(34,807)

(160,158)

(46,128)

________

________

________

________

________

________

Net cash used in financing activities

(43,965)

(87,152)

(25,102)

(60,114)

(101,284)

(29,171)

________

________

________

________

________

________

Net increase (decrease) in cash during the period

65,504

(33,285)

(9,586)

85,291

50,528

14,553

Cash at beginning of period

115,597

481,984

138,820

95,810

398,171

114,681

________

________

________

________

________

________

Cash at period-end

181,101

448,699

129,234

181,101

448,699

129,234

________

________

________

________

________

________

 

 

For the three-month
periods ended June 30

For the six-month
periods ended June 30

 

___________________________________

___________________________________

 

2003

2004

2004

2003

2004

2004

 

S/(000)

S/(000)

US$(000)

S/(000)

S/(000)

US$(000)

Reconciliation of net income to net cash provided by operating activities

Net income

95,157

229,408

66,076

292,039

406,287

117,020

Add (deduct)

 

 

 

 

 

 

Minority interest

11,332

10,510

3,027

25,421

26,378

7,597

Depreciation

11,890

14,027

4,040

21,182

26,161

7,535

Amortization of development costs in operative mining sites

4,905

15,028

4,328

8,996

19,310

5,562

Expense from deferred income tax and workers' profit sharing

1,484

6,284

1,810

1,655

16,395

4,722

Loss from exposure to inflation

3,459

9,419

2,713

2,555

14,332

4,128

Amortization of mining concessions and goodwill

4,200

3,038

875

8,401

6,077

1,750

Decrease in the fair value of investment fund

-

5,160

1,486

-

5,463

1,573

Accretion expense

-

1,882

542

-

2,887

832

Long-term officers' compensation (*)

6,790

-

-

8,017

2,093

603

Net cost of retired plant and equipment

1,143

182

52

2,499

182

52

Loss (gain) from change in the fair value of derivative instruments

33,000

(97,894)

(28,195)

(63,843)

(106,613)

(30,707)

Share in affiliated companies, net of dividends received

(17,946)

(2,597)

(748)

(86,554)

(81,025)

(23,337)

Gain on sale of plant and equipment

(1,080)

(338)

(97)

(963)

(974)

(281)

Gain in sale of investment in shares

-

(51)

(15)

-

(51)

(15)

Net changes in assets and liabilities accounts

 

 

 

 

 

 

Decrease (increase) of operating assets -

 

 

 

 

 

 

Trade and other accounts receivable

(11,642)

(26,882)

(7,743)

(2,943)

(6,279)

(1,808)

Inventories

1,536

1,672

482

(2,262)

(1,994)

(574)

Income tax credit and value added tax and expenses

(7,754)

(4,706)

(1,355)

(9,567)

(13,523)

(3,895)

Deferred stripping costs

(5,033)

-

-

(6,501)

-

-

Decrease of operating liabilities -

 

 

 

 

 

 

Accounts payable

(7,507)

(24,770)

(7,135)

(17,920)

(3,136)

(905)

 

________

________

________

________

________

________

Net cash provided by operating activities

123,934

139,372

40,143

180,212

311,970

89,852

 

________

________

________

________

________

________

(*) This provision, which covers until the year 2013, corresponds to a long-term compensation program granted by the Company to certain officers, as further explained in Note 17 to the 2003 consolidated financial statements.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Compañía de Minas Buenaventura S.A.A.

 

/s/ CARLOS E. GALVEZ PINILLOS

Carlos E. Gálvez Pinillos

Chief Financial Officer

 

Date: July 22, 2004