6-K 1 bvnpr02032006.htm FORM 6-K

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 March 2006

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 March 2, 2006, announcing the Company's Fourth Quarter and cumulative 2005 results

 

 

FOR IMMEDIATE RELEASE

Compañía de Minas Buenaventura Announces

Fourth Quarter 2005 Results

 

Lima, Peru, March 02, 2006 - 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 fourth quarter of 2005. All figures have been prepared in Peruvian GAAP and are stated in current Peruvian Nuevos Soles (S/.) as of December 31, 2005. For the convenience of the reader, figures are stated in U.S. dollars (US$) at a rate of S/.3.431 per US$1.00 for 4Q05 and S/.3.283 per US$1.00 for 4Q04.

Comments from the Chief Executive Officer:

Mr. Roque Benavides, Chief Executive Officer of Buenaventura stated: "We are pleased to announce exceptional quarterly and annual results driven by record production at Yanacocha and the new equity accounting of Cerro Verde.

This quarter, Buenaventura's net income was US$96.1 million, or US$0.76 per ADS, which represents an increase of 73% when compared with 4Q04. This figure includes the negative effect of derivative instruments of US$15.4 million.

Due to a lower volume of gold sold during 4Q05, operating income was US$25.2 million, 20% lower than the figure recorded in 4Q04. Total EBITDA was US$206.4 million, which represented a 46% increase when compared to 4Q04. EBITDA from Buenaventura's direct operations was US$37.7 million, 9% higher than in 4Q04."

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

4Q05

4Q04

Var%

FY05

FY04

Var%

Total Revenues

103.9

100.2

4%

344.4

336.9

2%

Operating Income

25.2

31.7

-20%

96.0

106.1

-10%

EBITDA

(BVN Direct Operations)

37.7

34.7

9%

112.5

96.6

16%

EBITDA

(including Yanacocha and Cerro Verde)

206.4

141.6

46%

571.0

427.9

33%

Net Income

96.1

55.6

73%

274.3

208.8

31%

EPS

0.76

0.44

73%

2.16

1.6

31%

Net Income Adjusted

111.5

69.3

61%

292.8

204.4

43%

EPS Adjusted

0.88

0.54

61%

2.30

1.6

43%

 

 

 

OPERATING REVENUE

In 4Q05, net sales were US$80.2 million, a 3% decrease when compared to the US$82.5 million reported in 4Q04 due to a delay in gold delivery, which remained in inventory until January. Royalty income in during 4Q05 totaled US$15.7 million, a 41% increase when compared to the US$11.2 million reported in 4Q04. This was due to higher sales at Yanacocha.

Operating Highlights

4Q05

4Q04

Var.

FY05

FY04

Var.

Net Sales

(in millions of US$)

80.2

82.5

-3%

273

277

-1%

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

348

389

-11%

360

374

-4%

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

462

422

9%

431

403

7%

Average Realized Price Silver (US$/oz)

8.03

6.84

17%

7.38

6.51

13%

Average Realized Price Lead (US$/TM)

1,063

971

10%

973

909

7%

Average Realized Price Zinc (US$/TM)

1,429

1,049

36%

1,299

1,026

27%

(*) Does not include derivatives effect

 

Sales Content

4Q05

4Q04

Var.

FY05

FYM04

Var.

Gold (in oz) Direct Operations

89,957

124,721

-28%

348,634

353,317

-1%

Gold (in oz) including Yanacocha

553,901

495,343

12%

1,801,094

1,680,222

7%

Silver (in oz)

3,982,163

3,510,851

13%

14,517,024

14,252,144

2%

Lead (in MT)

9,107

8,997

1%

30,320

31,131

-3%

Zinc (in MT)

14,892

13,543

10%

52,086

53,001

-2%

Accumulated net sales for 2005 were US$273.0 million, a 1% decrease compared to the same period of 2004 (US$276.71 million). Royalty income for 2005 was US$44.4 million, a 13% increase when compared to US$39.3 million in 4Q04.

 

PRODUCTION AND OPERATING COSTS

 

Buenaventura's equity production during 4Q05 was 91,138 ounces of gold, 2% higher than the 89,525 ounces reported in 4Q04, and 3,478,239 ounces of silver, a 3% increase when compared to the 3,389,548 ounces reported in 4Q04.

Equity production1 for the accumulated twelve-month period was 359,968 ounces of gold and 13,482,293 ounces of silver. This represented an increase of 9% in gold production (330,850 ounces in 2004) and a 5% increase in silver production compared to 2004 (12,791,746 ounces).

 

Equity Production1

4Q05

4Q04

Var.

FY05

FY04

Var.

Gold (in oz)

91,138

89,525

2%

359,968

330,850

9%

Silver (in oz)

3,478,239

3,389,548

3%

13,482,293

12,791,746

5%

Lead (in MT)

4,312

4,430

-3%

16,446

16,120

2%

Zinc (in MT)

6,961

6,604

5%

24,993

25,651

-3%

 

At Orcopampa (100%), total gold production in 4Q05 was 58,948 ounces, a 2% increase when compared to 58,061 ounces in 4Q04. For 2005, total gold production was 233,182 ounces, a 10% increase when compared to the full year 2004 (211,388 ounces).

Cash operating costs increased 12%, from US$128/oz in 4Q04 to US$143/oz in 4Q05, best explained by royalties paid to the government totaling US$0.6 million, which represented US$9.40/oz of gold.

At Uchucchacua (100%), total silver production induring 4Q05 was 2,513,737 ounces, a 1% increase when compared to 2,481,501 ounces in 4Q04. For 2005, total silver production was 10,213,933 ounces, a 4% increase when compared to 2004 (9,832,393 ounces).

Cash operating cost in 4Q05 increased 26% from $2.89/oz in 4Q04 to US$3.65/oz. This was mainly explained by:

1. The purchase of energy from the National Grid to replace Buenaventura's generating capacity due to maintenance at the Paton hydroelectric plant maintenance: US$0.27/oz.

2. A higher impact of silver content deductions due to higher silver prices: US$0.21/oz.

3. Total royalties of US$0.2 million paid to the government: US$0.06/oz

At Antapite (78.04%), total production during 4Q05 was 25,787 ounces of gold, in-line with the 25,707 ounces produced in 4Q04. For 2005, total gold production was 103,931 ounces, a 7% increase when compared to 97,137 ounces in 2004.

Gold cash operating cost in 4Q05 was US$216/oz, a 16% increase when compared to US$187/oz in 4Q04. This was due to exploration and mine development costs. Total royalties paid to the government at Antapite in 4Q05 were US$0.1 million.

At Colquijirca (34.29%), total zinc production was 16,147 MT in 4Q05, a 12% increase when compared to 14,418 MT in 4Q04 due to higher volume of ore produced. Total silver production during 4Q05 was 1,565,409 ounces, a 66% increase when compared to the 942,812 ounces in 4Q04.

For 2005, total zinc production was 57,151 MT, a 1% decrease when compared to 2004 production (57,560 MT). In the case of silver, total production increased 29%, from 3,399,130 ounces in 2004 to 4,394,940 ounces in 2005.

Zinc cash operating costs decreased 52% from US$430 per MT in 4Q04 to US$205 per MT in 4Q05. This was due to a significant silver by-product credit contribution.

Total royalties paid to the government at Colquijirca in 4Q05 were US$0.2 million.

 

RESERVES

As of December 31, 2005 equity gold reserves (including Yanacocha) increased 2% from 15.0 million ounces in 2004 to 15.2 million ounces in 2005. Equity silver reserves at the end of 2005 were 107.9 million ounces, which represented an increase of 32% when compared to 81.8 million ounces in 2004. Equity copper reserves (including Yanacocha and Cerro Verde) increased 75% from 1.3 million ST in 2004 to 2.3 million ST in 2005. See Appendix 3 for mine reserves detail.

OPERATING EXPENSES

 

 

General and administrative expenses for 4Q05 were US$11.4 million, a 90% increase compared to US$6.0 million in 4Q04. This increase was mainly due to a US$3.6 million provision for the Company's long-term compensation, which does not represent a cash disbursement. Accumulated general and administrative expenses for the twelve-month period were US$32.8 million, a 40% increase when compared to the US$23.4 million reported in thefor the same period of 2004.

Exploration costs in non-operating areas during 4Q05 were US$8.4 million a 48% increase compared to US$5.6 million during 4Q04. For In 2005 exploration costs in non-operating areas were US$26.8 million in-line with the 2004 figure (US$26.9 million).

 

 

OPERATING INCOME

Operating income in 4Q05 was US$25.2 million a 20% decrease compared to US$31.7 million in 4Q04. This reduction was mainly due to a lower volume of gold sold, higher general and administrative expenses and exploration costs in non-operating areas.

For 2005, operating income was US$96.0 million a 10% decrease when compared with the US$106.1 million reported in 2004.

 

INCOME FROM NON-CONSOLIDATED AFFILIATES

Buenaventura's income from non-consolidated affiliates was US$124.1 million during 4Q05, an increase of 115% when compared to the US$57.8 million reported in 4Q04. This increase is explained by higher results obtained at Yanacocha (US$89.4 million) and the new contribution of Cerro Verde (US$36.6 million). For 2005, income from non-consolidated affiliates was US$253.8 million, an increase of 45% when compared to the US$175.4 million reported in 2004.

At Yanacocha (43.65%), 4Q05 gold production was 1,064,371 ounces of gold, an increase of 26% when compared to 4Q04 production (847,279 ounces). Gold production for 2005 was 3,333,088 ounces, an increase of 10% when compared to 3,017,303 ounces in 2004.

Gold cash cost at Yanacocha during 4Q05 was US$149/oz, which represented a 10% increase when compared to a gold cash cost of US$136/oz in 4Q04.

Net income at Yanacocha during 4Q05, was US$204.8 million, a 54% increase when compared to 4Q04 figures (US$132.6 million) due to higher sales. For 2005, net income was US$525.5 million, an increase of 35% when compared to the US$390.3 million reported in 2004.

In 4Q05, EBITDA was US$349.5 million, an increase of 43% compared to 4Q04 (US$245.0 million). This increase was due to the higher sales content and realized gold price increasing from US$433/oz in 4Q04 to US$484/oz in 4Q05. For 2005, EBITDA was US$948.8 million, an increase of 25% when compared to the US$759.1 million reported in 2004.

At Cerro Verde (18.3%), 4Q05 copper production was 24,072 MT a 14% increase when compared to the 4Q04 (21,228 MT). For 2005 copper production totaled 93,550 MT.

Net sales at Cerro Verde increased 84% from US$64.7 million in 4Q04 to US$118.9 million in 4Q05 mainly due to an increase in the average price of copper from US$1.40/lb to US$1.95/lb as well as higher copper sales delivery. For 2005, net sales were US$358.9 million, which represented an increase of 38% when compared to 2004 (US$260.8 million).

In 4Q05, net income wasreached US$113.6 million, a 381% increase when compared to 4Q04 (US$23.6 million). For 2005 net income was US$233.4 million, a 166% increase compared to 2004 (US$87.7 million).

Capital expenditures for 2005 were US$314.6 million (US$16.8 million in 2004) of which US$294.4 million was expended for the construction of the Primary Sulfide Project and US$9.7 million for the Pillones Dam.

 

NET INCOME

This quarter, Buenaventura's net income was US$96.1 million, representing US$0.76 per ADS, a 73% increase compared to 4Q04. This figure includes a loss of US$15.4 million, from "change in the fair value of derivative instruments" (in accordance with IAS39 for derivative instruments). Without considering this effect, net income for the quarter was US$115.1 million, or US$0.88 per ADS.

For 2005 net income was US$274.3 million (US$2.16 per ADS), an increase of 31% when compared to US$208.9 million (US$1.6 per ADS) in 2004.

 

HEDGING OPERATIONS

The total hedge book mark-to-market value as of December 31, 2005 was a negative US$450.7 million. The mark-to-market value for derivative instruments was a negative US$66.2 million, while the mark-to-market value of physical delivery contracts was a negative US$384.5 million.

During 4Q05, the Company executed 15,000 ounces of gold and 334,616 ounces of silver in derivative instruments.

 

EXPLORATIONS

PORACOTA

In the Huamanihuayta sector, we advanced the adits drifting and diamond drilling in order to delineate high grade reserves in Manto Aguila and Manto Dorado. We expect to deliver a reserve report by April and complete a scoping study to be developed with Teck Cominco by the end of July. However, we plan to start a pilot operation in the second half of 2006.

Today Buenaventura holds a 75% stake of Minas Poracota S.A., after exercising its option to purchase 50% from Minera del Suroeste and another 25% from Teck-Cominco Peru.

MARCAPUNTA

The main objective in 2005 was to systematically assay and reshape copper, silver and gold distribution. We found interesting extensions in the Smelter North sector with 3200m of diamond drills in 19 holes, reporting 2,020,000 MT with 1.90 % Cu. In Marcapunta North we also drilled 16 holes accumulating 3636m.

The exploration program at Marcapunta West will consist of 146 drill holes, combining air reverse and diamond drilling. To accomplish this goal, we have already obtained the Huaracaya Community permits.

LA ZANJA

We drilled 1600m in section 13 of the Cerro La Zanja prospect finding a large and relatively deep body (100m to 300m from the surface) with disseminate copper sulfides and gold. The most representative sections of this mineralization assayed between 0.3% and 0.8% Cu with 0.3 to 0.4 g/t of gold for sections between 40m and 200m.

At the present time we are drilling the first two holes in Cerro La Cueva, which has a higher indication of a disseminated mineralization in the surface, and stays open in the deepness.

 

PROJECT DEVELOPMENT

UCHUCCHACUA

  • The construction of the cyanidation plant is 85% completed. The plant is expected to be completed during the second quarter of 2006, with an estimated total investment of US$8.8 million.

MARCAPUNTA

At the end of this quarter4Q05, the advance of the main decline was 233m (64%), and the exploration decline was 131m (36%). We expect an advance of 352m in the main ramp in the next quarter. Total investment was US$ 1.14 million for the period and US$ 4.07 for 2005. In addition, in Marcapunta North, a pilot plant to treat 1000 MT/day is expected to begin full operations in 3Q06.

BOARD RESOLUTIONS

 

At the Board of Director's meeting, held on March 02, 2006, the Board passed the following resolutions:

  1. Approval of the financial statements ended December 31, 2005.

  2. A proposal of a cash dividend of US$0.xx 22 per share to be approved in at the Shareholder mMeeting to be held on March 30, 2006.

 

 

* * *

 

 

 

 

 

 

 

 

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, social 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.

**Tables to follow**

 

 

Appendix 1.

Equity Participation in

Affiliates and Subsidiaries

BVN

Operating

Equity %

Mines

Minera Yanacocha

43.65

Yanacocha

Sociedad Minera El Brocal*

34.29

Colquijirca

Inversiones Mineras Del Sur*

78.04

Antapite / Ishihuinca

Sociedad Minera Cerro Verde

18.30

Cerro Verde

Cedimin*

100.00

Shila / Paula

Minera Minasnioc*

60.00

Minasnioc Project

Minera La Zanja *

53.06

La Zanja Project

Buenaventura Ingenieros*

100.00

-

Consorcio Energetico de Huancavelica*

100.00

-

*Consolidates

Appendix 2

RESERVES AS OF DECEMBER 31, 2005

PROVEN AND PROBABLE RESERVES

 

GOLD

BVN %

BVN

Participation

DST (000)

Oz / DST

Ounces (000)

Ounces (000)

Orcopampa

100.00

1,137

0.68

773

773

Shila - Paula

100.00

101

0.464

47

47

Antapite

78.04

541

0.362

196

153

Ishihuinca

78.04

51

0.397

20

16

Yanacocha

43.65

640,928

0.032

20,780

9,070

Yanacocha (Minas Conga)

43.65

617,790

0.020

11,840

5,168

Layo

100.00

21

0.334

7

7

Jatun Orcco

100.00

24

0.433

11

11

Total Gold Reserves

1,260,594

0.027

33,674

15,245

SILVER

BVN %

BVN

Participation

DST (000)

Oz / DST

Ounces (000)

Ounces (000)

Orcopampa

100.00

1,137

0.27

307

307

Uchucchacua (Silver-Sulfides)

100.00

5,144

16.50

84,870

84,870

Uchucchacua (Zinc - Sulfides)

100.00

105

1.80

190

190

Uchucchacua (Silver - Oxides)

100.00

175

21.70

3,791

3,791

Julcani

100.00

169

21.95

3,700

3,700

Recuperada

100.00

238

8.71

2,074

2,074

Antapite

78.04

541

0.520

281

220

Shila - Paula

100.00

101

2.90

292

292

Pozo Rico

100.00

266

16.64

4,424

4,424

El Brocal

34.29

9,245

2.49

23,020

7,894

Layo

100.00

21

2.47

52

52

Jatun Orcco

100.00

24

4.95

120

120

Total Silver Reserves

17,166

7.17

123,122

107,933

ZINC

BVN %

BVN

Participation

DST (000)

% Zn

DST (000)

DST (000)

Uchucchacua (Silver-Sulfides)

100.00

5,144

2.00

103

103

Uchucchacua (Zinc - Sulfides)

100.00

105

9.20

10

10

Recuperada

100.00

238

4.93

12

12

Pozo Rico

100.00

266

0.90

2

2

El Brocal

34.29

9,245

5.88

544

186

Total Zinc Reserves

14,998

4.47

670

313

LEAD

BVN %

BVN

Participation

DST (000)

% Zn

DST (000)

DST (000)

Uchucchacua (Silver-Sulfides)

100.00

5,144

1.60

82

82

Uchucchacua (Zinc - Sulfides)

100.00

105

2.10

2

2

Julcani

100.00

169

1.60

3

3

Recuperada

100.00

238

4.37

10

10

Pozo Rico

100.00

266

0.52

1

1

El Brocal

34.29

9,245

2.01

186

64

Total Lead Reserves

15,167

1.88

285

163

COPPER

BVN %

BVN

Participation

DST (000)

% Zn

DST (000)

DST (000)

Cerro Verde (Sulfides)

18.30

1,392,060

0.49

6,821

1,248

Cerro Verde (Oxides)

18.30

365,225

0.45

1,644

301

Yanacocha (Minas Conga)

43.65

617,790

0.30

1,615

705

Total Copper Reserves

2,375,075

0.42

10,080

2,254

 

Appendix 3

Total Gold Commitments

As of 01/01/06

2006

2007

2008

2009

2010

2011

2012

Total

285

Oz

368,000

388,000

308,000

383,000

390,000

376,500

60,000

2,273,500

 

$/oz

317.36

316.91

314.51

305.05

289.62

288.59

285.00

304.45

290

Oz

368,000

388,000

308,000

383,000

390,000

376,500

60,000

2,273,500

 

$/oz

328.78

327.86

328.15

317.39

303.08

302.45

290.00

316.83

300

Oz

448,000

468,000

388,000

423,000

390,000

376,500

60,000

2,553,500

 

$/oz

333.33

332.59

333.53

324.42

310.77

310.26

300.00

324.12

345

Oz

388,000

408,000

328,000

363,000

360,000

354,000

60,000

2,261,000

 

$/oz

338.94

338.60

342.59

345.19

345.42

345.42

345.00

342.62

350

Oz

388,000

408,000

328,000

363,000

360,000

354,000

60,000

2,261,000

 

$/oz

338.94

338.60

342.59

347.05

348.75

348.09

345.00

343.87

385

Oz

388,000

408,000

328,000

363,000

360,000

354,000

60,000

2,261,000

 

$/oz

338.94

338.60

342.59

360.07

372.08

366.78

345.00

352.60

420

Oz

388,000

408,000

328,000

363,000

360,000

354,000

60,000

2,261,000

 

$/oz

338.94

338.60

342.59

371.23

395.42

394.11

404.00

363.95

436

Oz

388,000

408,000

388,000

363,000

360,000

354,000

60,000

2,321,000

 

$/oz

338.94

338.60

354.56

371.23

406.08

402.65

404.00

368.35

451

Oz

388,000

408,000

388,000

363,000

360,000

354,000

60,000

2,321,000

 

$/oz

338.94

338.60

354.56

371.23

406.08

410.66

404.00

369.58

Physical Gold Delivery

As of 01/01/06

2006

2007

2008

2009

2010

2011

2012

Total

285

Oz

308,000

328,000

248,000

323,000

360,000

354,000

60,000

1,981,000

 

$/oz

311.98

311.77

307.14

297.63

285.00

285.00

285.00

298.46

290

Oz

308,000

328,000

248,000

323,000

360,000

354,000

60,000

1,981,000

 

$/oz

325.62

324.73

324.07

312.26

299.58

299.75

290.00

312.67

300

Oz

308,000

328,000

248,000

323,000

360,000

354,000

60,000

1,981,000

 

$/oz

328.54

327.77

327.70

318.30

307.92

308.05

300.00

318.36

345

Oz

308,000

328,000

248,000

323,000

360,000

354,000

60,000

1,981,000

 

$/oz

337.89

337.53

342.46

345.46

345.42

345.42

345.00

342.57

350

Oz

308,000

328,000

248,000

323,000

360,000

354,000

60,000

1,981,000

 

$/oz

337.89

337.53

342.46

347.55

348.75

348.09

345.00

343.99

385

Oz

308,000

328,000

248,000

323,000

360,000

354,000

60,000

1,981,000

 

$/oz

337.89

337.53

342.46

362.18

372.08

366.78

345.00

353.95

420

Oz

308,000

328,000

248,000

323,000

360,000

354,000

60,000

1,981,000

 

$/oz

337.89

337.53

342.46

374.72

395.42

394.11

404.00

366.91

436

Oz

308,000

328,000

248,000

323,000

360,000

354,000

60,000

1,981,000

 

$/oz

337.89

337.53

342.46

374.72

406.08

402.65

404.00

370.37

451

Oz

308,000

328,000

248,000

323,000

360,000

354,000

60,000

1,981,000

 

$/oz

337.89

337.53

342.46

374.72

406.08

410.66

404.00

371.81

 

Gold Derivatives

 

As of 01/01/06

 

2006

2007

2008

2009

2010

2011

2012

Total

285

Oz

60,000

60,000

60,000

60,000

30,000

22,500

 

292,500

 

$/oz

345.00

345.00

345.00

345.00

345.00

345.00

 

345.00

290

Oz

60,000

60,000

60,000

60,000

30,000

22,500

 

292,500

 

$/oz

345.00

345.00

345.00

345.00

345.00

345.00

 

345.00

300

Oz

140,000

140,000

140,000

100,000

30,000

22,500

 

572,500

 

$/oz

343.86

343.86

343.86

344.20

345.00

345.00

 

344.02

345

Oz

80,000

80,000

80,000

40,000

 

 

 

280,000

 

$/oz

343.00

343.00

343.00

343.00

 

 

 

343.00

350

Oz

80,000

80,000

80,000

40,000

 

 

 

280,000

 

$/oz

343.00

343.00

343.00

343.00

 

 

 

343.00

385

Oz

80,000

80,000

80,000

40,000

 

 

 

280,000

 

$/oz

343.00

343.00

343.00

343.00

 

 

 

343.00

420

Oz

80,000

80,000

80,000

40,000

 

 

 

280,000

 

$/oz

343.00

343.00

343.00

343.00

 

 

 

343.00

436

Oz

80,000

80,000

140,000

40,000

 

 

 

340,000

 

$/oz

343.00

343.00

376.00

343.00

 

 

 

356.59

451

Oz

80,000

80,000

140,000

40,000

 

 

 

340,000

 

$/oz

343.00

343.00

376.00

343.00

 

 

 

356.59

Appendix 4

Silver Derivatives

As of 01/01/06

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

Oz

$ / oz

Oz

$ / oz

Oz

$ / oz

Oz

$ / oz

Oz

$ / oz

Oz

$ / oz

2006

200,000

6.00

200,000

6.0

240,000

6.0

266,000

6.00

300,000

6.00

400,000

6.00

200,000

6.00

200,000

6.0

240,000

6.0

266,000

6.00

300,000

6.00

400,000

6.00

Appendix 5

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

Consolidated Balance Sheets

As of December 31, 2004 (audited) and December 31, 2005 (audited)

2004

2005

2005

S/(000)

S/(000)

US$(000)

Assets

Current assets

Cash and cash equivalents

614,862

332,102

96,795

Investment funds

86,971

52,884

15,414

Trade accounts receivable

97,061

93,354

27,209

Other accounts receivable, net

12,248

19,089

5,563

Accounts receivable from affiliates

46,078

66,038

19,247

Inventories, net

69,353

94,377

27,507

Current portion of prepaid tax and expenses

40,471

43,182

12,586

 

 

 

Total current assets

967,044

701,026

204,321

Long - term other accounts receivable

4,574

5,044

1,470

Prepaid tax and expenses

14,059

12,405

3,616

Investments in shares

1,531,347

2,502,267

729,311

Property, plant and equipment, net

603,559

583,281

170,003

Development costs, net

143,258

163,924

47,778

Deferred stripping costs

56,056

-

-

Goodwill, net

6,199

5,303

1,546

Deferred income tax and workers' profit sharing asset, net

245,299

308,091

89,796

 

 

 

Total assets

3,571,395

4,281,341

1,247,841

 

 

 

2004

2005

2005

S/(000)

S/(000)

US$(000)

Liabilities and shareholders' equity, net

Current liabilities

Bank loans

13,150

26,229

7,645

Trade accounts payable

61,188

53,089

15,473

Other current liabilities

133,261

204,597

59,633

Derivative instruments

70,927

59,138

17,236

Deferred income from sale of future production

74,937

107,079

31,209

Current portion of long-term debt

36,332

1,631

475

 

 

 

Total current liabilities

389,795

451,763

131,671

Long-term other liabilities

83,465

96,852

28,229

Derivative instruments

267,852

168,017

48,970

Long-term debt

15,031

1,367

398

Deferred income from sale of future production

568,772

613,791

178,896

 

 

 

Total liabilities

1,324,915

1,331,790

388,164

 

 

 

Minority interest

66,347

80,247

23,389

 

 

 

Shareholders' equity, net

Capital stock, net of treasury shares by S/49,659,000 in 2004 and 2005

596,755

596,755

173,930

Investment shares, net of treasury shares by S/66,000 in 2004 and S/127,000 in 2005

1,683

1,622

473

Additional paid-in capital

610,659

609,734

177,713

Legal reserve

129,276

129,276

37,679

Others reserves

923

923

269

Retained earnings

734,059

1,598,716

465,962

Cumulative translation loss

(148,513)

(67,962)

(19,808)

Cumulative unrealized gain on investments in shares carried at fair value

256,331

240

70

Cumulative unrealized loss on derivative financial instruments

(1,040)

-

-

 

 

 

Total shareholders' equity, net

2,180,133

2,869,304

836,288

 

 

 

Total liabilities and shareholders' equity, net

3,571,395

4,281,341

1,247,841

 

 

 

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

Consolidated Statements Statements of Income

For the three-month

For the twelve-month

periods ended December 31

periods ended December 31

___________________________________

___________________________________

2004

2005

2005

2004

2005

2005

S/(000)

S/(000)

US$(000)

S/(000)

S/(000)

US$(000)

Operating revenues

Net sales

270,816

275,120

80,187

908,441

936,595

272,980

Royalties income

36,633

53,796

15,679

128,889

152,342

44,402

Realized income from sale of future production

21,545

27,470

8,006

68,837

92,753

27,034

___________

___________

___________

___________

___________

___________

Total revenues

328,994

356,386

103,872

1,106,167

1,181,690

344,416

___________

___________

___________

___________

___________

___________

Costs of operation

Operating costs

92,939

90,531

26,386

340,697

343,327

100,066

Exploration and development costs in operational mining sites

45,598

41,421

12,073

127,435

136,053

39,654

Depreciation and amortization

27,648

51,875

15,119

74,077

111,177

32,404

___________

___________

___________

___________

___________

___________

Total costs of operation

166,185

183,827

53,578

542,209

590,557

172,124

___________

___________

___________

___________

___________

___________

Gross margin

162,809

172,559

50,294

563,958

591,133

172,292

___________

___________

___________

___________

___________

___________

Operating expenses

General and administrative

19,775

39,196

11,424

76,866

112,630

32,827

Exploration costs in non-operational mining sites

18,542

28,760

8,382

88,241

91,919

26,792

Royalties

15,192

13,344

3,889

31,557

40,350

11,760

Selling

4,993

4,557

1,328

17,839

15,864

4,624

Amortization of goodwill

315

151

44

994

896

261

___________

___________

___________

___________

___________

___________

Total operating expenses

58,817

86,008

25,067

215,497

261,659

76,264

___________

___________

___________

___________

___________

___________

Operating income

103,992

86,551

25,227

348,461

329,474

96,028

___________

___________

___________

___________

___________

___________

Other income (expenses), net

Share in affiliated companies, net

189,753

425,913

124,137

575,858

870,748

253,788

Loss from change in the fair value of derivative instruments

(57,223)

(59,499)

(17,342)

(58,774)

(87,872)

(25,611)

Interest income

5,534

644

188

12,132

11,646

3,394

Gain (loss) from exposure to inflation

(277)

-

-

(9,847)

-

-

Exchange difference gain (loss)

(355)

1,444

421

(12,636)

1,483

432

Interest expense

(667)

(1,375)

(401)

(7,515)

(5,797)

(1,689)

Other, net

(5,733)

(45,217)

(13,179)

(13,505)

(18,305)

(5,334)

___________

___________

___________

___________

___________

___________

Total other income (expenses), net

131,032

321,910

93,824

485,713

771,903

224,980

___________

___________

___________

___________

___________

___________

Income before workers' profit sharing, income tax, minority interest and cumulative effect of changes in accounting principle

235,024

408,461

119,051

834,174

1,101,377

321,008

Provision for workers' profit sharing

(7,068)

(6,545)

(1,908)

(18,356)

(8,569)

(2,498)

Provision for income tax

(38,376)

(38,622)

(11,257)

(101,997)

(75,406)

(21,978)

_________

_________

_________

_________

_________

_________

Income before minority interest and cumulative effect of changes in accounting principle

189,580

363,294

105,886

713,821

1,017,402

296,532

Minority interest

(6,986)

(33,735)

(9,832)

(28,171)

(66,003)

(19,237)

___________

___________

___________

___________

___________

___________

Income before cumulative effect of changes in accounting principle

182,594

329,559

96,054

685,650

951,399

277,295

Cumulative effect of changes in accounting principle due to mine closing

-

-

-

-

(10,416)

(3,036)

_________

_________

_________

_________

_________

_________

Net income

182,594

329,559

96,054

685,650

940,983

274,259

___________

___________

___________

___________

___________

___________

Basic and diluted earnings per share, before cumulative effect of changes in accounting principle, stated in Peruvian Nuevos Soles and U.S. dollars

1.44

2.59

0.76

5.39

7.48

2.18

Cumulative effect of changes in accounting principle due to mine closing

-

-

-

-

(0.08)

(0.02)

___________

___________

___________

___________

___________

___________

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

1.44

2.59

0.76

5.39

7.40

2.16

___________

___________

___________

___________

___________

___________

Weighted average number of shares outstanding

127,236,219

127,229,844

127,229,844

127,236,219

127,229,844

127,229,844

___________

___________

___________

___________

___________

___________

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

Consolidated Statements of Cash Flows

For the three-month

For the twelve-month

periods ended December 31

periods ended December 31

_____________________________

_____________________________

2004

2005

2005

2004

2005

2005

S/(000)

S/(000)

US$(000)

S/(000)

S/(000)

US$(000)

Operating activities

Collection from customers

219,609

249,126

72,610

885,646

940,302

274,061

Collection of dividends

157,409

135,101

39,377

419,782

307,926

89,748

Collection of royalties

31,085

30,861

8,995

120,136

131,816

38,419

Collection of interest

4,117

1,071

312

11,909

10,627

3,097

Payments to suppliers and third parties

(73,002)

(74,696)

(21,771)

(355,188)

(365,353)

(106,485)

Payments of exploration expenditures

(45,412)

(54,050)

(15,753)

(172,215)

(181,921)

(53,023)

Payments to employees

(21,226)

(26,937)

(7,851)

(119,594)

(147,048)

(42,859)

Payments of income tax

(10,900)

(22,233)

(6,480)

(44,478)

(84,750)

(24,701)

Payments of royalties

(8,355)

(12,324)

(3,592)

(27,248)

(42,803)

(12,475)

Payments of interest

(478)

(1,375)

(401)

(5,170)

(5,797)

(1,690)

_________

_________

_________

_________

_________

_________

Net cash provided by operating activities

252,847

224,544

65,446

713,580

562,999

164,092

_________

_________

_________

_________

_________

_________

Investing activities

Payments by purchase of investments in shares

(6,821)

3,269

953

(8,084)

(509,163)

(148,401)

Purchase of plant and equipment

(29,204)

(33,000)

(9,618)

(96,507)

(70,253)

(20,476)

Development cost expenditures

(9,337)

(19,769)

(5,762)

(38,611)

(57,586)

(16,783)

Payments from derivative instruments settled, net

(12,454)

(6,578)

(1,917)

(73,403)

(24,157)

(7,041)

Proceeds from sale of plant and equipment

93

-

-

1,595

663

193

Decrease on time deposits in local currency

24,255

-

-

(24,255)

24,255

7,069

Decrease (increase) of investment fund

-

-

-

(34,735)

38,869

11,329

Proceeds from sale of shares

-

-

-

330

-

-

_________

_________

_________

_________

_________

_________

Net cash used in investing activities

(33,468)

(56,078)

(16,344)

(273,670)

(597,372)

(174,110)

_________

_________

_________

_________

_________

_________

Financing activities

Payments of dividends

(67,598)

(77,618)

(22,623)

(139,464)

(152,006)

(44,304)

Decrease on long-term debt

(70,225)

(16,001)

(4,664)

(76,705)

(50,354)

(14,675)

Payments of dividends to minority interest shareholders

(9,057)

(10,000)

(2,915)

(33,521)

(36,840)

(10,737)

Increase of long term debt

12,147

1,989

580

12,147

1,989

580

Increase (decrease) on bank loans, net

33,841

(5,970)

(1,740)

(10,311)

13,079

3,811

_________

_________

_________

_________

_________

_________

Net cash used in financing activities

(100,892)

(107,600)

(247,854)

(224,132)

(31,362)

(65,325)

_________

_________

_________

_________

_________

_________

Net increase (decrease) in cash during the period

118,487

60,866

17,740

192,056

(258,505)

(75,343)

Cash at beginning of period

472,120

271,236

79,055

398,551

590,607

172,138

_________

_________

_________

_________

_________

_________

Cash at period-end

590,607

332,102

96,795

590,607

332,102

96,795

_________

_________

_________

_________

_________

_________

For the three-month

For the twelve-month

periods ended December 31

periods ended December 31

_______________________________

_______________________________

2004

2005

2005

2004

2005

2005

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

182,594

329,559

96,054

685,650

940,983

274,259

Add (deduct)

Amortization and depreciation

27,815

52,367

15,263

75,481

112,465

32,779

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

57,223

59,499

17,342

21,937

87,872

25,611

Minority interest

6,986

33,735

9,832

28,171

66,003

19,237

Amortization of development costs in operating mining units

15,915

12,029

3,506

33,265

34,090

9,936

Long-term officers' compensation

40

12,503

3,644

2,135

26,883

7,835

Cumulative effect of changes in accounting principle

-

-

-

-

10,416

3,036

Obsolescence inventory reserve

2,889

5,202

1,516

2,889

9,382

2,735

Accretion Expenses

3,539

3,521

1,026

7,056

7,621

2,221

Net cost of retired plant and equipment

-

2,596

756

754

3,598

1,049

Amortization of mining concessions and goodwill

315

151

44

994

896

261

Income from sale of plant and equipment

991

137

40

(157)

137

40

Allowance for doubtful accounts

1,146

76

22

1,146

76

22

Loss from exposure to inflation

277

-

-

9,847

-

-

Gain from sale of shares

-

-

-

(51)

-

-

Share in affiliated companies, net of dividends received

(32,344)

(246,920)

(71,967)

(160,947)

(562,822)

(164,040)

Realized income from sale of future production

(21,545)

(27,470)

(8,006)

(68,837)

(92,753)

(27,034)

Loss (gain) for deferred income tax and workers' profit sharing expenses

10,835

1,725

503

37,840

(42,836)

(12,485)

Los (gain) from change in the fair value of investment fund

(148)

472

138

(5,022)

(2,503)

(730)

Exchange difference gain

355

(1,444)

(421)

12,636

(1,483)

(432)

Net changes in assets and liabilities accounts

Decrease (increase) of operating assets -

Trade and other accounts receivable

(51,414)

(56,517)

(16,471)

(22,259)

(23,665)

(6,897)

Inventories

20,502

(12,894)

(3,758)

5,097

(29,278)

(8,533)

Prepaid tax and expenses

(26,861)

(93,313)

(27,197)

(48,952)

(97,515)

(28,422)

Increase (decrease) of operating liabilities -

Trade accounts payable and other liabilities

53,737

149,530

43,580

94,907

115,432

33,644

_________

_________

_________

_________

_________

_________

Net cash provided by operating activities

252,847

224,544

65,446

713,580

562,999

164,092

_________

_________

_________

_________

_________

_________

-

-

-

-

-

-

Transaction that do not affect cash flows

Transfer from derivative instruments liabilitie to deferred income from sale of future production

-

-

-

-

172,540

50,289

Increase of the book value of long-lived assets

-

-

-

24,842

27,967

8,151

(*) This provision corresponds to a long term compensation (10 year program) granted to the

Company to certain officers, as further explained in the note 17(b) to the annual audited report

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: March 2, 2006