Compania de Minas Buenaventura Announces First Quarter 2008 Results

LIMA, Peru, April 30 /PRNewswire-FirstCall/ -- Compania 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 first quarter 2008. All figures have been prepared according to Peruvian GAAP and are stated in U.S. dollars (US$).

Comments from the Chief Executive Officer:

Mr. Roque Benavides, Chief Executive Officer of Buenaventura stated: "This quarter Buenaventura's direct operations and affiliates both performed well in terms of production, costs and value creation.

EBITDA from Buenaventura's direct operations was US$130.5 million, 52% higher than the figure reported in 1Q07. Total EBITDA increased 91% from US$192.8 million in 1Q07 to US$368.1 million in 1Q08.

Operating income was US$102.7 million, 31% higher than the figure reached in 1Q07 mainly due to higher revenues from our direct operations.

However, as was announced in February, the one time effect from the unwinding of the hedge book negatively impacted Buenaventura's results by US$267.2 million, thus contributing to a net loss of US$63.0 million (-US$0.49 per ADS) for 1Q08."

Operating Revenue

In 1Q08, net sales were US$212.0 million, a 41% increase when compared to the US$150.8 million reported in 1Q07 mainly due to higher volumes of silver and zinc sold, as well as an increase in the realized prices of gold, silver and lead. On the quarterly basis, gold volume sold decreased 23% due to lower stock at the beginning of 1Q08.

Royalty income in 1Q08 totaled US$14.3 million, a 70% increase when compared to the US$8.4 million reported in 1Q08. This was due to higher sales at Yanacocha.

Production and Operating Costs

Buenaventura's equity production(1) in 1Q08 was 98,629 ounces of gold, 5% higher than the 94,349 ounces reported in 1Q07; and 3,922,901 ounces of silver, a 17% increase when compared to the 3,359,653 ounces reported in 1Q07.

At Orcopampa (100%), total gold production in 1Q08 was 62,195 ounces, in- line with the 1Q07 production (63,219 ounces).

Cash operating cost during 1Q08 was US$213/oz, 53% higher when compared to 1Q07 (US$139/oz), but in-line with forecasts. This was best explained by an increase in diamond drilling (6,119m in 1Q08 vs. 4,202m in 1Q07), as well as the appreciation of the PEN(2).

At Poracota, gold production in 1Q08 was 9,697 ounces, while cash operating costs were US$492/oz.

Total royalties paid to the government at Orcopampa in 1Q08 were US$0.82 million.

At Uchucchacua (100%), total silver production in 1Q08 was 2,901,154 ounces, a 45% increase when compared to 1Q07 (2,006,911 ounces) mainly due to a 17% increase in silver grades (16.7 Oz/ST in 1Q08 versus 14.3 Oz/ST in 1Q07), a 10% increase in recovery rates and 6% increase in the ore mined (Appendix 2). Likewise, zinc production increased 150% (2,987 MT in 1Q08 vs. 1,194 MT in 1Q07), while lead production increased 76% (3,035 MT in 1Q08 vs. 1,721 MT in 1Q07).

Cash operating cost in 1Q08 was US$3.79/oz, a 33% decrease compared to $5.69/oz in 1Q07. This was best explained by the previously mentioned increase in production, and the higher zinc and lead by-product contribution, which offset the PEN appreciation.

Total royalties paid to the government at Uchucchacua in 1Q08 were US$0.99 million.

At Antapite (100%), total production in 1Q08 was 14,861 ounces of gold, a decrease of 20% when compared to 1Q07 (18,663 ounces), mainly due to a 10% decrease in the gold grade from 0.33 Oz/ST to 0.29 Oz/ST.

(1) Production includes 100% of operating units, 100% of CEDIMIN and
34.29% of El Brocal.

(2) The Peruvian Nuevo Sol (PEN) appreciation versus the U.S. dollar was
14% when comparing the average exchange rates of 1Q08 with 1Q07. This
directly affected labor and contractor expenses.

Gold cash operating cost in 1Q08 was US$454/Oz, a 31% increase when compared to US$347/Oz in 1Q07. This increase was due to:

1. The lower gold content due to lower grades
2. A 40% increase in exploration expenses due to a 51% increase in diamond
drilling (6,281m in 2008 vs. 4,164m in 1Q07)

Total royalties paid to the government at Antapite in 1Q08 were US$0.20 million.

At Colquijirca (34.29% at El Brocal), total zinc production was 21,004 MT in 1Q08, an 11% increase when compared to the 18,984 MT reported in 1Q07, mainly due to an 8% increase in the tonnage treated, as well as a 4% increase in the zinc grade (6.33% in 1Q08 vs. 6.08% in 1Q07). Total silver production during 1Q08 was 1,216,328 ounces, a 41% decrease when compared to the 2,074,277 ounces reported in 1Q07, mainly due to a significant decrease in ore grade to the average grade of the mine despite a higher volume of ore treated (Appendix 2).

Zinc cash operating costs for 1Q08 totaled US$518/MT, 98% higher than 1Q07 due to the reduction in silver contribution.

At Marcapunta, 64,000 MT of ore were milled at the pilot plant during 1Q08 reaching total copper production of 1,379 MT, with a cash operating cost of US$2,989 per MT.

Total royalties paid to the government at Colquijirca in 1Q08 were US$0.51 million.

Operating Expenses

General and administrative expenses for 1Q08 were US$27.5 million, a 235% increase when compared to the US$8.2 million reported in 1Q07. This was mainly due to an increase in the non-cash long term compensation provision and a US$5.4 million provision for doubtful accounts.

Exploration Costs in non-operating mining sites

Exploration costs in non-operating areas during 1Q08 were US$11.4 million, a 27% increase compared to the US$9.0 million reported in 1Q07. The main efforts were focused at the Marcapunta (US$2.6 million), Mallay (US$1.7 million), El Milagro (US$1.0 million) and La Zanja (US$0.8 million) projects.

Operating Income

Operating income in 1Q08 was US$102.7 million, 31% higher than the US$78.2 million reported in 1Q07. As reported in February, during 1Q08 Buenaventura completely unwound its hedge book by paying US$517.4 million. This transaction negatively affected the Company's operating income by US$415.1 million, thus resulting in an operating loss of US$312.4 million.

Share in Affiliated Companies

Buenaventura's income from non-consolidated affiliates was US$145.7 million in 1Q08, an increase of 165% when compared to the US$55.0 million reported in 1Q07. This increase is explained by the higher contribution from Yanacocha (US$81.1 million) and Cerro Verde (US$64.6 million).

At Yanacocha (43.65%), 1Q08 gold production was 500,377 ounces of gold, an increase of 20% when compared to 1Q07 (418,170 ounces).

Cost applicable to sales at Yanacocha during 1Q08 was US$323/oz a 12% increase when compared to US$289/oz in 1Q07 due to higher inventories and workers participation.

Net income at Yanacocha during 1Q08 was US$186.2 million, a 168% increase when compared to the US$69.3 million in 1Q07.

In 1Q08, EBITDA was US$299.7 million, an increase of 115% compared to 1Q07 (US$139.6 million). This increase was due to the higher volume of gold sold (18%), as well as higher realized gold prices, which increased from US$653/oz in 1Q07 to US$926/oz in 1Q08.

CAPEX for 1Q08 was US$47.9 million, a 15% decrease when compared to the US$56.1 reported in 1Q07.

At Cerro Verde (18.50%), 1Q08 copper production was 75,370 MT, which represented a 48% increase when compared to 1Q07 (50,880 MT).

Net sales at Cerro Verde increased 124% from US$317.7 million in 1Q07 to US$711.4 million in 1Q08. This was due to an increase in copper concentrate sold.

In 1Q08, net income reached US$352.1 million, a 137% increase compared to 1Q07 (US$148.6.0 million), best explained by higher sales.

CAPEX for 1Q08 totaled US$22.3 million.

Net Income

This quarter, Buenaventura's net income was a negative US$63.0 million, representing -US$0.49 per ADS compared to the US$36.7 million reported (US$0.29 per ADS) in 1Q07. This was explained by the expenses associated with the unwinding of the hedge book, which negatively affected the bottom line by US$267.2 million.

Project Development

UCHUCCHACUA

-- The deepening of the Carmen and Socorro mines includes:

Carmen Mine: The deepening of the Master Shaft from level 3,990 to level 3,930 includes:

-- 60 meters of deepening, begun in 1Q07 and completed in February
2008.
-- Auxiliary works, begun in March 2008, and is 10% completed, with
final completion estimated for 2Q08.
-- Drifting 2,394 meters to level 3,990 began in 2Q07. The project is
50% complete and is expected to be finished by 3Q08.

Socorro Mine: The construction of ramp 626 to reach level 3,920 (1,216 meters) is 33% complete and is expected to be concluded by 1Q09. The development of level 3,990 (1,639 meters of drifting) began in 3Q07, is 19% complete and is expected to be finished by 1Q09. The deepening of the Luz Shaft to reach level 3,920 from level 4,060 is now scheduled to begin in 3Q08 and completed in 4Q09.

During 1Q08, total investment was US$1.3 million (accumulated US$8.1 million) of a budgeted US$10.3 million.

-- The plant expansion from 2,500 STPD to 3,000 STPD, to treat additional
Lead/Zinc materials from lower levels of the mine, includes a 13=B4x20=B4
grinding mill, flotation cells, a 25'x10' thickener and 2 press
filters. All equipment is currently in the assembly stage except for
the mill, which is in the shipping process. The project schedule has
had a slight delay and is expected to be completed in 3Q08. Total
investment is US$5.3 million

ORCOPAMPA

-- The deepening of the Nazareno Shaft from level 3,290 to level 3,170
includes:

-- 113 meters of deepening work to start in April 2008.
-- 1,000 meters ramp, started in January 2008, which is 30% complete.

This project is expected to be completed in 1Q09. Accumulated investment during 1Q08 was US$1.1 million from an estimated investment of US$4.5 million.

-- The deepening of the Prometida Shaft from level 3,440 to level 3,290
(150 meters) started in October 2007 and is 15% complete. This project
is expected to be concluded in 2Q09. Investment in 1Q08 was US$0.2
million (accumulated to date US$1.8 million) from a total investment of
US$3.8 million.

-- The construction of the facilities to treat the old flotation tailings
will permit the recovery of approximately 53,000 ounces of gold in 2008
and 2009. This project includes 6 cyanidation tanks, 2 thickeners and a
desorption circuit, which are all currently in the assembly stage.
Investment in 1Q08 was US$1.3 million (accumulated to date US$5.1
million) from a total investment is US$9.2 million.

Company Description

Compania 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 six mines in Peru and also has controlling interests in two 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. which is one of the most important precious metal producers in the world and 18.50% in Sociedad Minera Cerro Verde S.A.A, an important copper Peruvian Company.

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 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 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.

First Call Analyst:
FCMN Contact: pmajeski@i-advize.com

Source: Compania de Minas Buenaventura S.A.A.

CONTACT: Contacts in Lima: Roque Benavides, +511-419-2538, Carlos
Galvez, +511-419-2540, Investor Relations: Daniel Dominguez, +511-419-2536,
ddominguez@buenaventura.com.pe, all of Compania de Minas Buenaventura S.A.A.;
Contacts in New York: Maria Barona, or Peter Majeski, both of i-advize
Corporate Communications, Inc., +1-212-406-3690, buenaventura@i-advize.com

Web site: http://www.buenaventura.com.pe/

2008-04-30 19:14:11 0349796 PRNEWSWIRE