Finance costs and finance revenues

12 Months Ended

Dec. 31, 2018

Finance costs and revenues [Line Items]

Disclosure of finance income (cost) [text block]

27.

Finance costs and finance revenues

(a)

Finance costs and finance revenues:

	2018		2017		2016
	US$(000)		US$(000)		US$(000)

Finance revenues:
Interest on time deposits		5,176		1,050		358
Interests on tax claims		1,701		153		487
Interests on third parties loans		561		813		489
Interests on loans to associates, note 30(a)		92		1,685		4,164
Dividends income		-		-		589
Income from financial instruments		-		-		743
Other finance revenues		341		43		-

		7,871		3,744		6,830
Unrealized variation of the fair value related to contingent consideration liability (b)		1,815		1,773		-

Total finance revenues		9,686		5,517		6,830

Finance costs:
Interest on borrowings		31,538		27,052		18,668
Banking expenses		729		552		319
Tax on financial transactions		173		180		159
Interest on loans		2		1,056		4,643
Increase in debt issuance costs, note 16(f)		-		480		-
Interest on commercial obligations		-		5		496
Other finance costs		8		7		830
		32,450		29,332		25,115
Accrual of the present value for mine closure, note 15(b)		4,982		4,382		4,116
Accrual of debt issuance costs, note 16(f)		1,024		909		-
Unrealized variation of the fair value related to contingent consideration liability (b)		-		-		2,349

Total finance costs		38,456		34,623		31,580

Contingent consideration -

On August 18, 2014, Buenaventura acquired from Minera Gold Fields Peru S.A. (“Gold Fields”) 51 percent of the voting shares of Canteras del Hallazgo S.A.C., which represent the whole interest of Gold Fields in the equity of such entity.

Through the fusion with Canteras del Hallazgo S.A.C, the Company is the owner of the Chucapaca project, which is located in the Ichuña district, in the General Sanchez Cerro province, in the Moquegua department, Peru. According to previously performed studies, there is evidence of the existence of gold, silver, copper and antimony in the area, specifically in the Canahuire deposit.

The purchase and sale agreement considered a contingent consideration of US$23,026,000, which corresponds to the present value of the future royalty payments equivalent to 1.5 percent over the future sales of the minerals arising from the mining properties acquired. The fair value has been determined using the income approach.

Significant increase (decrease) in the future sales of mineral would result in higher (lower) fair value of the contingent consideration liability, while significant increase (decrease) in the discount rate would result in lower (higher) fair value of the liability. Changes in the fair value of this contingent consideration have been recognized through profit or loss in the consolidated statement of profit or loss.

As of December 31, 2018, it is highly probable that the Group reaches the projected future sales. The fair value of the contingent consideration determined as of December 31, 2018 reflects this assumption and changes in metal prices.

A reconciliation of fair value measurement of the contingent consideration liability is provided below:

	2018			2017			2016
	US$(000)			US$(000)			US$(000)

Beginning balance		17,570			19,343			16,994

Variation of the fair value in results, note 27(a)		(1,815	)		(1,773	)		2,349
Final balance		15,755			17,570			19,343

Significant unobservable valuation inputs are provided below:

	2018		2017

Annual average of future sales of mineral (US$000)		196,801		193,588
Useful life of mining properties		13		13
Pre-tax discount rate (%)		10		10

The Group has the preferential right of acquisition of the royalty in case Gold Fields decides to sell it.

Minera Yanacocha SRL and subsidiary [Member]

Finance costs and revenues [Line Items]

Disclosure of finance income (cost) [text block]

20.

Finance costs

Finance costs for the year ended December 31, 2018 are mainly related to the unwinding of the discount of the reclamation and mine closure liability amounting to US$36,015,000 (US$21,769,000, and US$14,104,000 for the years ended December 31, 2017 and 2016, respectively). See note 12(b).