Buenaventura Announces Third Quarter and Nine-Month 2013 Results
Compañia de Minas Buenaventura S.A.A. (“Buenaventura” or “the Company”) (NYSE: BVN; Lima Stock Exchange: BUE.LM), Peru’s largest, publicly-traded precious metals mining company, announced today results for the third quarter 2013 (3Q13) and nine-month (9M13) periods, ended September 30, 2013. All figures have been prepared in accordance with IFRS (International Financial Reporting Standards), are on a non GAAP basis and are stated in U.S. dollars (US$).
Comments from the Chief Executive Officer:
Mr. Roque Benavides, Buenaventura’s Chief Executive Officer, stated:
“During the third quarter, Buenaventura’s previously-announced measures to achieve significant cost savings and focus on cash generation were successfully implemented, including:
- Stop production in three small unprofitable operating units.
- Focusing mine exploration activities on high-grade and accessible targets for both brownfield and greenfield areas.
- Improving efficiency across all our operations.
As a consequence of implementing this cash flow oriented plan, results improved in line with the new budget.
Operating income during 3Q13 was US$63.4 million, 48% lower than in 3Q12, but a significant improvement when compared to the US$4.3 million loss reported in 2Q13. Net income was US$65.1 million, 65% lower than in 3Q12, however 244% higher than the US$19.0 million reported in 2Q13. EBITDA from Direct Operations was US$103.8 million, 35% lower than in 3Q12, but 157% higher when compared to the US$40.3 million reported in 2Q13.
Quotation (QP) Period provisions, for concentrate sales, positively impacted sales during 3Q13.
EBITDA including Associates was US$237.7 million, 37% lower than the figure reported in 3Q12. This was mainly due to an inventory write-down provision and social responsibility expenses at Yanacocha.
Financial Highlights (in millions of US$, except EPS figures):
| 3Q13 | 3Q12 | Var% | 9M13 | 9M12 | Var% | |||||||||||||||||||||
| Total Revenues | 345.8 | 411.9 | -16% | 986.3 | 1,139.4 | -13% | ||||||||||||||||||||
| Operating Income | 63.4 | 122.8 | -48% | 118.5 | 335.9 | -65% | ||||||||||||||||||||
| EBITDA Direct Operations | 103.8 | 160.7 | -35% | 231.9 | 444.0 | -48% | ||||||||||||||||||||
| EBITDA Including Associates | 237.7 | 379.6 | -37% | 666.3 | 1,129.4 | -41% | ||||||||||||||||||||
| Net Income | 65.1 | 188.2 | -65% | 202.2 | 549.5 | -63% | ||||||||||||||||||||
| EPS* | 0.26 | 0.74 | -65% | 0.80 | 2.2 | -63% | ||||||||||||||||||||
| (*) as of September 30, 2013, Buenaventura had 254,186,867 shares outstanding. | ||||||||||||||||||||||||||
Operating Revenues
During 3Q13, net sales were US$335.3 million, a 15% decrease compared to the US$394.0 million reported in 3Q12. This was explained by lower gold, silver and copper prices as well as a reduction in zinc and lead volumes sold.
Royalty income decreased 41%, to US$10.5 million in 3Q13 compared to the US$17.9 million reported in 3Q12. This was due to lower revenues at Yanacocha (40% lower QoQ).
| Operating Highlights | 3Q13 | 3Q12 | Var% | 9M13 | 9M12 | Var% | |||||||||||||||||||||
| Net Sales (in millions of US$) | 335.3 | 394.0 | -15% | 949.3 | 1,084.7 | -12% | |||||||||||||||||||||
| Average Realized Gold Price Gold (US$/oz)* | 1,335 | 1,671 | -20% | 1,428 | 1,672 | -15% | |||||||||||||||||||||
| Average Realized Gold Price (US$/oz) inc. Associates | 1,331 | 1,656 | -20% | 1,458 | 1,658 | -12% | |||||||||||||||||||||
| Average Realized Silver Price (US$/oz)* | 20.71 | 29.82 | -31% | 22.60 | 30.04 | -25% | |||||||||||||||||||||
| Average Realized Lead Price (US$/MT)* | 2,087 | 2,034 | 3% | 2,095 | 1,975 | 6% | |||||||||||||||||||||
| Average Realized Zinc Price (US$/MT)* | 1,868 | 1,868 | 0% | 1,867 | 1,909 | -2% | |||||||||||||||||||||
| Average Realized Copper Price (US$/MT)* | 7,155 | 7,989 | -10% | 7,175 | 8,119 | -12% | |||||||||||||||||||||
| (*) Buenaventura’s Direct Operations | |||||||||||||||||||||||||||
| Sales Content | |||||||||||||||||||||||||||
| 3Q13 | 3Q12 | Var% | 9M13 | 9M12 | Var% | ||||||||||||||||||||||
| Gold Oz Direct Operations | 115,824 | 113,564 | 2% | 357,097 | 347,406 | 3% | |||||||||||||||||||||
| Gold Oz inc. Associated | 245,448 | 287,284 | -15% | 765,841 | 866,210 | -12% | |||||||||||||||||||||
| Silver Oz | 4,482,882 | 4,390,173 | 2% | 12,387,187 | 11,879,593 | 4% | |||||||||||||||||||||
| Lead MT | 6,122 | 8,387 | -27% | 20,741 | 19,993 | 4% | |||||||||||||||||||||
| Zinc MT | 9,438 | 15,613 | -40% | 30,281 | 37,987 | -20% | |||||||||||||||||||||
| Copper MT | 7,670 | 3,887 | 97% | 17,159 | 10,398 | 65% | |||||||||||||||||||||
| (*) Buenaventura’s Direct Operations | |||||||||||||||||||||||||||
Net sales for the first nine months of 2013 were US$949.3 million, 12% lower than in the first nine months of 2012 (US$1.1 billion), while royalty income was US$37.0 million in 2013, a 32% decrease compared to the US$54.6 million reported in the same period 2012.
Production and Operating Costs
Buenaventura’s equity production1 in 3Q13 was 99,966 ounces of gold, 3% higher than the 97,073 ounces reported in 3Q12, mainly due to the additional production from Breapampa partially offset by a decline at Orcopampa. Silver production, including associated companies, during 3Q13 was 4,930,336 million ounces, 5% higher when compared to the figure reported in 3Q12 (4,678,811 million oz.).
Equity production1 in 9M13 was 303,639 ounces of gold and 14,101,919 million ounces of silver. This represented a 3% increase in gold production (295,541 oz. in 2012) and a 7% increase in silver production compared to 9M12 (13.2 million oz.).
| Equity Production 1 | |||||||||||||||||||||||||||
| 3Q13 | 3Q12 | Var% | 9M13 | 9M12 | Var% | ||||||||||||||||||||||
| Gold (oz) Direct Operations | 99,966 | 97,073 | 3% | 303,639 | 295,541 | 3% | |||||||||||||||||||||
| Gold (oz) inc. Associated | 227,589 | 267,160 | -15% | 711,022 | 822,521 | -14% | |||||||||||||||||||||
| Silver (oz) inc. Associated | 4,930,336 | 4,678,811 | 5% | 14,101,919 | 13,203,863 | 7% | |||||||||||||||||||||
| Lead ( MT) | 5,977 | 7,942 | -25% | 19,580 | 19,450 | 1% | |||||||||||||||||||||
| Zinc ( MT) | 6,842 | 13,073 | -48% | 27,076 | 32,328 | -16% | |||||||||||||||||||||
| Copper (MT) inc. Associated | 17,546 | 15,648 | 12% | 45,815 | 44,683 | 3% | |||||||||||||||||||||
Orcopampa’s (100% owned by Buenaventura) total gold production in 3Q13 was 59,086 ounces, 16% lower than the 70,588 ounces reported in 3Q12. Production from the Chipmo mine during 3Q13 was 54,228 ounces, 17% lower compared to the 65,362 ounces reported in 3Q12, as a result of lower ore grade and tonnage treated (see Appendix 2). The old tailings treatment produced 4,858 ounces of gold (compared to 5,226 oz. in 3Q12). Total gold production in 9M13 was 13,761 ounces, 15% decrease when compared to 9M12 (16,177 oz.).
Cash operating cost in 3Q13 was US$649/oz., 21% higher when compared to 3Q12 (US$537/oz.). However, when compared to 2Q13, cash operating cost decreased 18%. The higher cost was mainly explained by lower gold production and higher contractor costs that resulted from an increase in drilling works and drifting to reach Pucay and to develop East Nazareno areas.
At Uchucchacua (100% owned by Buenaventura), total silver production in 3Q13 was 2.9 million ounces, 5% higher than the 2.8 million ounces produced in 3Q12. This increase was mainly explained by higher recovery rate, from 74% (3Q12) to 80% (3Q13) (see Appendix 2). Zinc production in 3Q13 was 2,055 MT, 22% lower than the figure reported in 3Q12 (2,897 MT), while lead production increased 5% (2,371 MT in 3Q13 vs. 2,259 MT in 3Q12). During 2013, silver production was 8.6 million ounces; zinc production was 5,992 MT, while lead production was 6,541 MT compared to 8.2 million ounces, 6,879 MT and 6,102 MT, respectively, in 9M12.
Cash operating cost in 3Q13 was US$14.43/oz., 14% lower than the figure reported in 3Q12 (US$16.78/oz.) due to higher production, lower labor expenses, a decrease in treatment charges, resulting from lower prices, and partially offset by higher contractor expenses.
At Mallay (100% owned by Buenaventura), total production in 3Q13 was 348,626 ounces of silver, 35% higher than in 3Q12 (258,492 oz), and 950,245 ounces in 9M13, 140% higher than the 395,562 reported in 9M12. Silver cash operating cost in 3Q13 was US$8.85, a decrease of 71% when compared to US$30.99/oz in 3Q12, when the operation started.
____________________
1 Production from Direct Operations includes 100% of Buenaventura’s operating units, 53.06% of La Zanja and 53.76% of El Brocal.
At Julcani (100% owned by Buenaventura), total production in 3Q13 was 779,776 ounces of silver, 32% higher compared to 3Q12 (589,838 ounces), due to higher ore treated explained by the increase in plant capacity (from 400 TPD to 500 TPD). During 9M13, silver production was 1.9 million ounces, 6% higher than the 1.8 million reported in 9M12.
Silver cash operating cost in 3Q13 was US$12.59/oz., 14% lower than 3Q12 (US$14.61/oz.), mainly explained by the higher production.
Breapampa’s (100% owned by Buenaventura) total production in 3Q13 was 20,138 ounces of gold with a cash cost of US$371/oz. For the first nine months of 2013, gold production was 59,964 oz.
La Zanja’s (53.06% owned by Buenaventura) total production in 3Q13 was 35,693 ounces of gold, a 20% increase when compared to 3Q12 (29,702 oz.) and was due to an increase in ore grade (0.70 g/MT in 3Q13 vs. 0.56 g/MT in 3Q12). 9M13 gold production was 103,945 ounces, 24% higher than in 9M12 (83,718 oz.), but in-line with La Zanja’s mining plan.
Cash operating cost in 3Q13 was US$552/oz., 11% lower than 3Q12 (US$620/oz.), due to a better stripping ratio and the higher grade.
Tantahuatay’s (40.10% owned by Buenaventura) total production in 3Q13 was 39,561 ounces of gold (15,864 oz. attributable to Buenaventura) in-line with the figure reported in 3Q12. During 9M13, gold production was 109,250 ounces (43,809 oz. attributable to Buenaventura).
Cash operating cost in 3Q13 was US$360/oz., 11% higher than in 3Q12 (US$325/oz.) due to the lower tonnage treated, in order to remain within the limits of the permits, as well as lower silver by-product contribution.
During the first seven months of 2013, El Brocal’s (53.76% owned by Buenaventura), plant capacity was, on average, devoted to treat 60% polymetallic ore (Colquijirca Tajo Norte) and 40% to copper ore (Marcapunta Norte). However, since August 2013, plant capacity was entirely devoted to the treatment of copper ore.
Copper production was 8,244 MT vs 3,754 MT reported in 3Q12 (120% increase). For 9M13, copper production increased 89% (17,830 MT in 3Q13 versus 9,438 MT in 3Q12). Copper cash cost was US$5,240/MT, 22% lower than the figure reported in 3Q12 (US$6,754/MT).
Silver production, from polymetallic and copper ores, decreased 62%, from 1.2 million ounces in 3Q12 to 0.4 million ounces in 3Q13, due to lower tonnage treated and ore grade. During 9M13, silver production decreased 53% from 2.9 million oz. (in 3Q12) to 1.4 million oz. (in 3Q13).
During 3Q13, total zinc production was 2,117 MT, an 84% decline when compared to the 13,298 MT reported in 3Q13. In 9M13, zinc production decreased 43% (19,898 MT in 2013 versus 34,949 MT in 2012). Zinc cash cost was US$1,238/MT, 27% higher than the figure reported in 3Q12 (US$975/MT).
General and Administrative Expenses
General and administrative expenses in 3Q13 were US$16.9 million, 26% lower than the figure reported in 3Q12 (US$22.9 million) due to lower workers profit sharing and the long-term compensation program. For the nine-month period of 2013, general and administrative expenses were US$56.5 million versus US$77.7 million in the same period of 2012, representing a 27% decline.
Exploration in Non-Operating Areas
Exploration in non-operating areas during 3Q13 was US$5.7 million, compared to US$27.4 million reported in 3Q12. During the period, Buenaventura’s main exploration efforts were focused on the following projects: La Zanja Underground (US$1.5 million) and Chanca (US$1.4 million). For 9M13, exploration in non-operating areas were US$23.4 million versus US$73.2 million in 9M12, representing a decrease of 68%.
It is important to mention that Buenaventura entered into an agreement with a Mexican company (Surutato Mining, S.A de C.V) to explore a silver-zinc-lead deposit located North East of Culiacan city in Sinaloa. The property comprises around 14,000 has and was explored by the Geological Mexican Service (SGM) during years 1982-1988. Lately, the property was transferred to Surutato Mining.
Operating Income
Operating income in 3Q13 was US$63.4 million, 48% lower when compared to the US$122.8 million reported in 3Q12. However, this result was significantly better than the negative US$4.3 million reported in 2Q13, due to higher sales, lower production costs and lower exploration expenses.
During 9M13, operating income was US$118.5 million, versus US$335.9 million in 9M12, representing a 65% decrease
Share in Associated Companies
During 3Q13, Buenaventura’s share in associated companies was US$40.9 million, 65% lower than the US$118.3 million reported in 3Q12. Yanacocha’s contribution towards these results decreased 96%, from US$65.7 million in 3Q12 to US$2.4 million in 3Q13; and Cerro Verde’s contribution decreased 27%, from US$45.8 million in 3Q12 to US$33.6 million in 3Q13. Coimolache’s (Tantahuatay mine) contribution decreased 64% (US$4.9 million in 3Q13 vs. US$13.5 million in 3Q12).
During 9M13, Buenaventura’s share in associated companies was US$173.8 million, 54% lower than the figure reported in 2012 (US$376.7 million).
YANACOCHA
At Yanacocha (43.65% owned by Buenaventura), 3Q13 gold production was 256,038 ounces of gold, 28% lower than 3Q12 production (353,710 oz.). Accumulated gold production in 2013 was 832,941 ounces, 25% lower than 2013 (1.11 million oz.). Production guidance for full year 2013 remains between 0.9 and 1 million ounces of gold.
Costs applicable to sales (CAS) at Yanacocha in 3Q13 were US$612/oz., 14% higher than the figure reported in 3Q12 (US$539/oz.) explained by a US$48/oz inventories write-down from La Quinua, Yanacocha and Maqui Maqui pads, due to the fall in gold prices.
Net income decreased 96% (US$5.5 million in 3Q13 vs. US$150.5 million in 3Q12) explained by lower revenues, higher costs applicable to sales and a US$31.8 million provision due to social responsibility expenses. Accumulated net income in 2013 was US$176.8 million, 68% lower than 2012 (US$550.8 million). During 3Q13, EBITDA totaled US$145.2 million, a 54% decrease compared to 3Q12 (US$316.1 million). Accumulated EBITDA in 2013 was US$584.2 million, 45% lower than 2013 (US$1.1 billion).
Capital expenditures at Yanacocha were US$69.1 million in 3Q13 (US$262.6 million in 3Q12) and US$322.4 million in 9M13 (US$560.3 million in 9M12).
CERRO VERDE
At Cerro Verde (19.58% owned by Buenaventura), 3Q13 copper production was 66,416 MT (13,004 MT attributable to Buenaventura), a 4% decrease compared to 3Q12 (69,150 MT and 13,540 MT attributable to Buenaventura). Accumulated total copper production in 2013 was 183,442 MT (35,918 MT attributable to Buenaventura), 9% lower than 200,775 MT in 2012 (39,312 MT attributable to Buenaventura).
During 3Q13, Cerro Verde reported net income of US$171.4 million, a 22% decrease compared to US$219.7 million in 3Q12. This was mainly due to a 19% decrease in sales revenues (US$465.9 million in 3Q13 versus US$575.0 million in 3Q12) explained by the lower copper prices. Accumulated net income in 2013 was US$416.5 million, 33% lower than US$625.9 million in 2012.
Capital expenditures at Cerro Verde in 3Q13 totaled US$305.9 million and US$716.2 million in 2012.
COIMOLACHE (Tantahuatay operation)
At Coimolache (40.10% owned by Buenaventura), attributable contribution was US$4.9 million (US$13.5 million in 3Q12). During 9M13, attributable contribution was US$15.1 million (US$31.4 million in 9M12).
Net Income
Buenaventura’s 3Q13 net income was US$65.1 million (US$0.26 per share), a 63% decrease compared to the US$188.2 million (US$0.74 per share) reported in 3Q12. Accumulated net income in 9M13 was US$186.7 million (US$0.73 per share), 66% lower compared to 9M12 (US$549.5 million).
Project Development
LA ZANJA DEVELOPMENT PROGRAM
- The Pampa Verde Project will allow the development of a new open pit, an expansion of the current leach pad and improvements to the operation’s road access. Construction began in 2Q11. Total investment in this project is US$84.9 million. Completion is expected for 4Q13.
RIO SECO MANGANESE SULFATE PLANT
- Buenaventura continued with the construction of the manganese sulphate plant. Total budget for the project is US$ 98.5 million. As of the end of 3Q13, total expenditures were US$ 94.0 million.
- The project includes an acid leaching plant, a sulphuric acid production plant and a manganese sulphate crystallization plant; it also includes a warehouse to store low manganese Ag-Pb concentrate and another one to store the finished manganese sulphate crystals.
- In September, test operations began on the acid leaching facility and the sulphuric acid plant.
- The manganese sulphate crystallization plant is in the final start up stages and is expected to begin production during 4Q13.
HUANZA HYDROELECTRICAL PLANT
Construction progress at the Huanza Project during the quarter included:
- Water Conduction Tunnel: 10,074 meters of construction - 100% complete.
- Power plant: civil work - 100% complete.
- Pallca Dam: 100% complete.
- Penstock: 100% complete.
- Installation of Generator Number 2 is completed 100% and Generator Number 1 is 70% completed.
- Commissioning of the Pallca Dam has been completed.
Board Resolutions
At the Board of Directors meeting held October 30, 2013, the following resolution was passed:
- Declaration of a cash dividend for US$0.01 per share / ADS, payable on November 29, 2013 to shareholders of record as of November 18, 2013.
* * *
Company Description
Compañía de Minas Buenaventura S.A.A. is Peru’s largest, publicly traded, precious metals company and a major holder of mining rights in Peru. The Company is engaged in the mining, processing, development and exploration of gold and silver and other metals via wholly owned mines as well as through its participation in joint exploration projects.
Buenaventura currently operates several mines in Peru (Orcopampa*, Uchucchacua*, Breapampa*, Mallay*, Julcani*, Recuperada*, El Brocal, La Zanja and Coimolache.
The Company owns 43.65% of Minera Yanacocha S.R.L (a partnership with Newmont Mining Corp.), an important precious metal producer; 19.58% of Sociedad Minera Cerro Verde, an important Peruvian copper producer, and 49% of Canteras del Hallazgo S.A, owner the Chucapaca project.
For a printed version of the Company’s 2012 Form 20-F, please contact the investor relations contacts on page 1 of this report, or download the PDF format file from the Company’s web site at www.buenaventura.com.
(*) Operations wholly owned by Buenaventura
Note on Forward-Looking Statements
This press release may contain forward-looking information (as defined in the U.S. Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties, including those concerning the Company’s, Yanacocha’s and Cerro Verde’s costs and expenses, results of exploration, the continued improving efficiency of operations, prevailing market prices of gold, silver, copper and other metals mined, the success of joint ventures, estimates of future explorations, development and production, subsidiaries’ plans for capital expenditures, estimates of reserves and Peruvian political, economic, social and legal developments. These forward-looking statements reflect the Company’s view with respect to the Company’s, Yanacocha’s and Cerro Verde’s future financial performance. Actual results could differ materially from those projected in the forward-looking statements as a result of a variety of factors discussed elsewhere in this Press Release.
**Tables to follow**
| APPENDIX 1 | ||||||||||||||
| Equity Participation in Subsidiaries and Affiliates (as of September 30, 2013) | ||||||||||||||
| BVN Equity % | Operating Mines / Business | |||||||||||||
| Consorcio Energetico de Huancavelica S.A* | 100.00 | Energy – Huanza Hydroelectrical Project | ||||||||||||
| Buenaventura Ingenieros S.A* | 100.00 | Engineering Consultant | ||||||||||||
| Procesadora Industrial Rio Seco S.A | 100.00 | Rio Seco chemical plant | ||||||||||||
| El Molle Verde S.A.C | 100.00 | Trapiche project | ||||||||||||
| Minera La Zanja S.A* | 53.06 | La Zanja | ||||||||||||
| Sociedad Minera El Brocal S.A.A* | 53.76 | Colquijirca and Marcapunta | ||||||||||||
| Canteras del Hallazgo S.A ** | 49.00 | Chucapaca project | ||||||||||||
| Compañía Minera Coimolache S.A ** | 40.10 | Tantahuatay | ||||||||||||
| Minera Yanacocha S.R.L ** | 43.65 | Yanacocha | ||||||||||||
| Sociedad Minera Cerro Verde S.A.A ** | 19.58 | Cerro Verde | ||||||||||||
| (*)Consolidates (**) Equity Accounting | ||||||||||||||
| APPENDIX 2 | ||||||||||||||||||||||||||||||||||||
| GOLD PRODUCTION | ||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||
| Orcopampa | Orcopampa Old Tailings | Orcopampa | Orcopampa Old Tailings | |||||||||||||||||||||||||||||||||
| 2013 | 2012 | % | 2013 | 2012 | % | 2013 | 2012 | % | 2013 | 2012 | % | |||||||||||||||||||||||||
| Ore Milled DST | 128,666 | 138,396 | -7% | 136,432 | 135,287 | 1% | 379,684 | 386,429 | -2% | 416,137 | 413,295 | 1% | ||||||||||||||||||||||||
| Ore Grade OZ/ST | 0.44 | 0.49 | -11% | 0.05 | 0.06 | -21% | 0.44 | 0.50 | -11% | 0.04 | 0.06 | -24% | ||||||||||||||||||||||||
| Recovery Rate % | 96.7% | 95.9% | 1% | 78.0% | 73.8% | 6% | 96.0% | 96.0% | 0% | 76.15% | 75.9% | 0% | ||||||||||||||||||||||||
| Ounces Produced | 54,228 | 65,362 | -17% | 4,858 | 5,219 | -7% | 162,793 | 184,482 | -12% | 13,761 | 16,110 | -15% | ||||||||||||||||||||||||
| Orcopampa Total Production | 3Q13 | 59,086 | 3Q12 | 70,581 | 9M13 | 176,554 | 9M12 | 200,592 | ||||||||||||||||||||||||||||
| La Zanja | Tantahuatay | |||||||||||||||||||||||||||||||||||
| 3Q13 | 3Q12 | % | 9M13 | 9M12 | % | 3Q13 | 3Q12 | % | 9M13 | 9M12 | % | |||||||||||||||||||||||||
| Ounces Produced | 35,693 | 29,702 | 20% | 103,944 | 83,718 | 24% | 39,561 | 39,194 | 1% | 109,250 | 105,929 | 3% | ||||||||||||||||||||||||
| Breapampa | ||||||||||||||||||||||||||||||||||||
| 3Q13 | 3Q12 | % | 9M13 | 9M12 | % | |||||||||||||||||||||||||||||||
| Ounces Produced | 20,138 | NA | 59,964 | NA | ||||||||||||||||||||||||||||||||
| SILVER PRODUCTION | ||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||
| Uchucchacua | Colquijirca | Uchucchacua | Colquijirca | |||||||||||||||||||||||||||||||||
| 2013 | 2012 | % | 2013 | 2012 | % | 2013 | 2012 | % | 2013 | 2012 | % | |||||||||||||||||||||||||
| Ore Milled DST | 294,031 | 290,408 | 1% | 133,059 | 766,987 | -83% | 840,745 | 864,175 | -3% | 1,179,357 | 1,862,734 | -37% | ||||||||||||||||||||||||
| Ore Grade OZ/ST | 12.38 | 13.00 | -5% | 0.88 | 1.07 | -18% | 12.57 | 13.10 | -4% | 1.03 | 1.20 | -14% | ||||||||||||||||||||||||
| Recovery Rate % | 80.2% | 73.8% | 9% | 67.0% | 66.0% | 2% | 81.1% | 72.8% | 11% | 66.0% | 63.2% | 4% | ||||||||||||||||||||||||
| Ounces Produced | 2,920,872 | 2,785,910 | 5% | 78,155 | 536,167 | -85% | 8,572,792 | 8,247,266 | 4% | 800,801 | 1,410,027 | -43% | ||||||||||||||||||||||||
| ZINC PRODUCTION | ||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||
| Uchucchacua | Colquijirca | Uchucchacua | Colquijirca | |||||||||||||||||||||||||||||||||
| 2013 | 2012 | % | 2013 | 2012 | % | 2013 | 2012 | % | 2013 | 2012 | % | |||||||||||||||||||||||||
| Ore Milled DST | 294,031 | 290,408 | 1% | 133,059 | 766,987 | -83% | 840,745 | 864,175 | -3% | 1,179,357 | 1,862,734 | -37% | ||||||||||||||||||||||||
| Ore Grade % | 1.22% | 1.57% | -22% | 2.93% | 2.69% | 9% | 1.20% | 1.47% | -18% | 2.89% | 2.93% | -1% | ||||||||||||||||||||||||
| Recovery Rate % | 63.3% | 63.6% | 0% | 58.84% | 65.4% | -10% | 65.2% | 59.6% | 9% | 64.32% | 67.1% | -4% | ||||||||||||||||||||||||
| ST Produced | 2,265 | 2,897 | -22% | 2,333 | 13,594 | -83% | 6,605 | 7,583 | -13% | 21,934 | 36,672 | -40% | ||||||||||||||||||||||||
| APPENDIX 3: EBITDA RECONCILIATION (in thousands of US$) | |||||||||||||||||||
| 3Q13 | 3Q12 | 9M13 | 9M12 | ||||||||||||||||
| Net Income | 74,546 | 206,571 | 206,338 | 599,723 | |||||||||||||||
| Add / Substract: | 29,241 | -45,891 | 25,586 | -155,704 | |||||||||||||||
| Provision for income tax, net | 29,176 | 36,046 | 72,121 | 115,685 | |||||||||||||||
| Share in associated companies by the | -40,866 | -118,340 | -173,840 | -376,721 | |||||||||||||||
| Interest income | -697 | -2,470 | -2,353 | -7,761 | |||||||||||||||
| Interest expense | 1,157 | 1,502 | 9,510 | 4,682 | |||||||||||||||
| Loss on currency exchange difference | 106 | -527 | 6,709 | 254 | |||||||||||||||
| Long Term Compensation provision | -1,919 | 0 | -20,446 | 7,312 | |||||||||||||||
| Depreciation and Amortization | 40,078 | 32,445 | 125,748 | 84,240 | |||||||||||||||
| Workers´ participation provision | 2,206 | 5,453 | 8,137 | 16,605 | |||||||||||||||
| Write-Down Adjustment | 0 | 0 | 0 | 0 | |||||||||||||||
| EBITDA Buenaventura Direct Operations | 103,787 | 160,680 | 231,924 | 444,019 | |||||||||||||||
| EBITDA Yanacocha (43.65%) | 63,389 | 137,997 | 255,004 | 460,891 | |||||||||||||||
| EBITDA Cerro Verde (19.58%) | 57,740 | 71,823 | 141,475 | 202,775 | |||||||||||||||
| EBITDA Coimolache (40.10%) | 12,761 | 9,111 | 37,902 | 21,762 | |||||||||||||||
| EBITDA Buenaventura + All Associates | 237,677 | 379,611 | 666,304 | 1,129,447 | |||||||||||||||
Note:
EBITDA (Buenaventura Direct Operations) consists of earnings before net interest, taxes, depreciation and amortization, share in associated companies, net, loss on currency exchange difference, other, net, provision for workers’ profit sharing and provision for long-term officers’ compensation.
EBITDA (including Affiliates) consists of EBITDA (Buenaventura Direct Operations), plus (1) Buenaventura’s equity share of EBITDA (Yanacocha) (2) Buenaventura’s equity share of EBITDA (Cerro Verde), plus (3) Buenaventura’s equity share of EBITDA (Coimolache). All EBITDA mentioned were similarly calculated using financial information provided to Buenaventura by the affiliated companies.
Buenaventura presents EBITDA (Buenaventura Direct Operations) and EBITDA (including affiliates) to provide further information with respect to its operating performance and the operating performance of its equity investees, the affiliates. EBITDA (Buenaventura Direct Operations) and EBITDA (including affiliates) are not a measure of financial performance under IFRS, and may not be comparable to similarly titled measures of other companies. You should not consider EBITDA (Buenaventura Direct Operations) and EBITDA (including affiliates) as alternatives to operating income or net income determined in accordance with IFRS, as an indicator of Buenaventura’s, affiliates operating performance, or as an alternative to cash flows from operating activities, determined in accordance with IFRS, as an indicator of cash flows or as a measure of liquidity.
| APPENDIX 4 | ||||||||||
| Compañía de Minas Buenaventura S.A.A. and Subsidiaries | ||||||||||
| Consolidated Statement of Financial Position | ||||||||||
| As of September 30, 2013 and December 31, 2012 | ||||||||||
| 2013 | 2012 | |||||||||
| Assets | US$(000) | US$(000) | ||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | 103,984 | 186,712 | ||||||||
| Financial assets at fair value through profit or loss | 12,864 | 54,509 | ||||||||
| Trade and other accounts receivable, net | 271,611 | 362,904 | ||||||||
| Income tax credit | 35,217 | 24,629 | ||||||||
| Prepaid expenses | 8,062 | 11,837 | ||||||||
| Embedded derivatives for concentrate sales, net | 486 | - | ||||||||
| Inventory, net | 167,897 | 157,533 | ||||||||
| Total current assets | 600,121 | 798,124 | ||||||||
| Non-current assets | ||||||||||
| Trade and other accounts receivable, net | 34,645 | 40,079 | ||||||||
| Long-term inventory | 14,922 | 40,253 | ||||||||
| Investment in associates | 2,612,248 | 2,441,039 | ||||||||
| Mining concessions, development costs and property, plant and equipment, net | 1,433,375 | 1,159,805 | ||||||||
| Deferred income tax asset, net | 87,013 | 111,701 | ||||||||
| Other assets | 4,898 | 5,123 | ||||||||
| Total non-current assets | 4,187,101 | 3,798,000 | ||||||||
| Total assets | 4,787,222 | 4,596,124 | ||||||||
| Liabilities and shareholders’ equity | ||||||||||
| Current liabilities | ||||||||||
| Bank loans | 21,126 | - | ||||||||
| Trade and other accounts payable | 267,135 | 259,537 | ||||||||
| Provisions | 35,405 | 71,780 | ||||||||
| Income tax payable | 3,160 | 7,935 | ||||||||
| Embedded derivatives for concentrate sales, net | - | 4,939 | ||||||||
| Hedge derivatives financial instruments | 716 | - | ||||||||
| Financial obligations | 28,270 | 5,815 | ||||||||
| Total current liabilities | 355,812 | 350,006 | ||||||||
| Non-current liabilities | ||||||||||
| Trade and other accounts payable | 5,219 | 731 | ||||||||
| Provisions | 128,190 | 100,041 | ||||||||
| Hedge derivatives financial instruments | 232 | - | ||||||||
| Financial obligations | 210,892 | 173,489 | ||||||||
| Total non-current liabilities | 344,533 | 274,261 | ||||||||
| Total liabilities | 700,345 | 624,267 | ||||||||
| Shareholders’ equity | ||||||||||
| Issued capital, net of treasury shares for US$(000)62,665 | 750,497 | 750,540 | ||||||||
| Investment shares, net of treasury shares for US$(000)765 | 1,396 | 1,399 | ||||||||
| Additional paid-in capital | 219,055 | 219,471 | ||||||||
| Legal reserve | 162,663 | 162,663 | ||||||||
| Other reserves | 269 | 269 | ||||||||
| Retained earnings | 2,683,418 | 2,572,943 | ||||||||
| Other equity reserves | 177 | 925 | ||||||||
| 3,817,475 | 3,708,210 | |||||||||
| Non-controlling interest | 269,402 | 263,647 | ||||||||
| Total shareholders’ equity | 4,086,877 | 3,971,857 | ||||||||
| Total liabilities and shareholders’ equity | 4,787,222 | 4,596,124 | ||||||||
|
|
| |||||||||
| Compañía de Minas Buenaventura S.A.A. and Subsidiaries | |||||||||||||||||||||
| Consolidated Income Statement | |||||||||||||||||||||
| For the three and nine-month periods ended September 30, 2013 and 2012 | |||||||||||||||||||||
| For the three-month periods | For the nine-month periods | ||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
| US$(000) | US$(000) | US$(000) | US$(000) | ||||||||||||||||||
| Operating income | |||||||||||||||||||||
| Net sales | 335,283 | 393,987 | 949,255 | 1,084,736 | |||||||||||||||||
| Royalty income | 10,538 | 17,868 | 37,033 | 54,621 | |||||||||||||||||
| Total operating income | 345,821 | 411,855 | 986,288 | 1,139,357 | |||||||||||||||||
| Operating costs | |||||||||||||||||||||
| Cost of sales, without considering depreciation and amortization | (162,964 | ) | (161,958 | ) | (493,968 | ) | (430,651 | ) | |||||||||||||
| Exploration in operating units | (39,140 | ) | (30,341 | ) | (135,190 | ) | (97,153 | ) | |||||||||||||
| Depreciation and amortization | (40,078 | ) | (32,445 | ) | (125,748 | ) | (84,240 | ) | |||||||||||||
| Royalties | (7,272 | ) | (10,963 | ) | (23,867 | ) | (30,120 | ) | |||||||||||||
| Total operating costs | (249,454 | ) | (235,707 | ) | (778,773 | ) | (642,164 | ) | |||||||||||||
| Gross profit | 96,367 | 176,148 | 207,515 | 497,193 | |||||||||||||||||
| Operating expenses | |||||||||||||||||||||
| Administrative expenses | (16,923 | ) | (22,856 | ) | (56,484 | ) | (77,652 | ) | |||||||||||||
| Exploration in non-operating areas | (5,686 | ) | (27,400 | ) | (23,361 | ) | (73,229 | ) | |||||||||||||
| Selling expenses | (4,063 | ) | (5,204 | ) | (12,543 | ) | (12,281 | ) | |||||||||||||
| Other, net | (6,273 | ) | 2,094 | 3,358 | 1,831 | ||||||||||||||||
| Total operating expenses | (32,945 | ) | (53,366 | ) | (89,030 | ) | (161,331 | ) | |||||||||||||
| Operating profit (loss) | 63,422 | 122,782 | 118,485 | 335,862 | |||||||||||||||||
| Other income, net | |||||||||||||||||||||
| Share in the results of associates under equity method | 40,866 | 118,340 | 173,840 | 376,721 | |||||||||||||||||
| Net loss from currency exchange difference | (106 | ) | 527 | (6,709 | ) | (254 | ) | ||||||||||||||
| Financial income | 697 | 2,470 | 2,353 | 7,761 | |||||||||||||||||
| Financial expenses | (1,157 | ) | (1,502 | ) | (9,510 | ) | (4,682 | ) | |||||||||||||
| Total other income, net | 40,300 | 119,835 | 159,974 | 379,546 | |||||||||||||||||
| Profit before income taxes and non-controlling interest | 103,722 | 242,617 | 278,459 | 715,408 | |||||||||||||||||
| Income taxes | (29,176 | ) | (36,046 | ) | (72,121 | ) | (115,685 | ) | |||||||||||||
| Net profit | 74,546 | 206,571 | 206,338 | 599,723 | |||||||||||||||||
| Attributable to: | |||||||||||||||||||||
| Owners of the parent | 65,114 | 188,221 | 186,744 | 549,540 | |||||||||||||||||
| Non-controlling interest | 9,432 | 18,530 | 19,594 | 50,183 | |||||||||||||||||
| 74,546 | 206,751 | 206,338 | 599,723 | ||||||||||||||||||
| Basic and diluted earnings per share attributable | |||||||||||||||||||||
| to owners of the parent, stated in U.S. dollars | 0.26 | 0.74 | 0.73 | 2.16 | |||||||||||||||||
| Weighted average number of shares outstanding | |||||||||||||||||||||
| (common and investment), in units | 254,186,867 | 254,232,571 | 254,186,867 | 254,232,571 | |||||||||||||||||
| Compañía de Minas Buenaventura S.A.A. and Subsidiaries | ||||||||||||||||||||||||
| Consolidated Statement of Cash Flows | ||||||||||||||||||||||||
| For the three and nine-month periods ended September 30, 2013 and 2012 | ||||||||||||||||||||||||
| For the three-month | For the nine-month periods | |||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
| US$(000) | US$(000) | US$(000) | US$(000) | |||||||||||||||||||||
| Operating activities | ||||||||||||||||||||||||
| Proceeds from sales | 291,083 | 363,513 | 1,039,480 | 1,057,157 | ||||||||||||||||||||
| Value Added Tax (VAT) recovered | 25,399 | 16,884 | 59,106 | 30,161 | ||||||||||||||||||||
| Royalties received | 13,646 | 19,818 | 39,824 | 55,071 | ||||||||||||||||||||
| Dividends received | 712 | 3,845 | 7,776 | 10,854 | ||||||||||||||||||||
| Interest received | 1,992 | 1,528 | 4,133 | 6,906 | ||||||||||||||||||||
| Payments to suppliers and third-parties | (176,678 | ) | (212,512 | ) | (654,597 | ) | (607,692 | ) | ||||||||||||||||
| Payments to employees | (66,545 | ) | (33,694 | ) | (170,277 | ) | (155,521 | ) | ||||||||||||||||
| Payment of income tax | (11,392 | ) | (31,238 | ) | (66,380 | ) | (107,057 | ) | ||||||||||||||||
| Payment of royalties | (10,497 | ) | (9,738 | ) | (27,991 | ) | (29,798 | ) | ||||||||||||||||
| Payment of interest | (143 | ) | (514 | ) | (8,558 | ) | (1,279 | ) | ||||||||||||||||
| Net cash and cash equivalents provided by operating activities | 67,577 | 117,892 | 222,516 | 258,802 | ||||||||||||||||||||
| Investing activities | ||||||||||||||||||||||||
| Settlement of financial assets at fair value through profit or loss | 40,000 | - | 40,000 | - | ||||||||||||||||||||
| Proceeds from associate loan's collections | 5,530 | - | 20,494 | - | ||||||||||||||||||||
| Proceeds from sales of mining concessions, property, plant and equipment | 1,948 | 98 | 4,963 | 119 | ||||||||||||||||||||
| Acquisitions of mining concessions, development costs, property, plant and equipment | (122,818 | ) | (140,213 | ) | (356,082 | ) | (308,920 | ) | ||||||||||||||||
| Payment for purchase of investments | - | (23,273 | ) | - | (32,184 | ) | ||||||||||||||||||
| Contributions to associates | (1,654 | ) | (13,083 | ) | (5,339 | ) | (21,961 | ) | ||||||||||||||||
| Decrease in time-deposits | - | 2,736 | - | 9,582 | ||||||||||||||||||||
| Net cash and cash equivalents used in investing activities | (76,994 | ) | (173,735 | ) | (295,964 | ) | (353,364 | ) | ||||||||||||||||
| Financing activities | ||||||||||||||||||||||||
| Increase in financial obligations | - | 40,026 | 60,000 | 54,313 | ||||||||||||||||||||
| Bank loans received | 21,126 | - | 21,126 | - | ||||||||||||||||||||
| Payment of financial obligations | (41 | ) | - | (142 | ) | (1,020 | ) | |||||||||||||||||
| Dividends paid | - | - | (76,269 | ) | (101,779 | ) | ||||||||||||||||||
| Dividends paid to non-controlling interest | (6,960 | ) | (4,942 | ) | (13,533 | ) | (39,117 | ) | ||||||||||||||||
| Purchase of treasury shares | - | - | (462 | ) | - | |||||||||||||||||||
| Purchase of associates' shares | - | (7,980 | ) | - | (7,980 | ) | ||||||||||||||||||
| Net cash and cash equivalents provided by (used in) financing activities | 14,125 | 27,104 | (9,280 | ) | (95,583 | ) | ||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents during the period | 4,708 | (28,739 | ) | (82,728 | ) | (190,145 | ) | |||||||||||||||||
| Cash and cash equivalents at the beginning of the period | 99,276 | 309,441 | 186,712 | 470,847 | ||||||||||||||||||||
| Cash and cash equivalents at period-end | 103,984 | 280,702 | 103,984 | 280,702 | ||||||||||||||||||||
| For the three-month | For the nine-month periods | |||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
| US$(000) | US$(000) | US$(000) | US$(000) | |||||||||||||||||||
| Reconciliation of net profit to cash and cash equivalents provided by operating activities | ||||||||||||||||||||||
| Net profit attributable to owners of the parent | 65,114 | 188,221 | 186,744 | 549,540 | ||||||||||||||||||
| Plus (less) | ||||||||||||||||||||||
| Depreciation and amortization | 40,549 | 32,445 | 126,219 | 84,240 | ||||||||||||||||||
| Deferred income tax | 13,928 | 5,373 | 25,688 | 18,518 | ||||||||||||||||||
| Net profit attributable to non-controlling interest | 9,432 | 18,350 | 19,594 | 50,183 | ||||||||||||||||||
| Accretion expense of provision for closure of mining units and exploration projects | 926 | 988 | 7,074 | 3,405 | ||||||||||||||||||
| Share in results of associates under equity method, net of dividends received in cash | (40,154 | ) | (114,495 | ) | (166,064 | ) | (365,867 | ) | ||||||||||||||
| Provisions | 7,868 | (124,047 | ) | (5,164 | ) | (137,589 | ) | |||||||||||||||
| Net loss (gain) from currency exchange difference | 106 | (527 | ) | 6,709 | 254 | |||||||||||||||||
| Changes in fair value of embedded derivatives for concentrate sales and | ||||||||||||||||||||||
| adjustments on open liquidations | (33,243 | ) | (21,983 | ) | (7,651 | ) | (32,076 | ) | ||||||||||||||
| Proceeds from sales of mining concessions, property, plant and equipment | (1,948 | ) | (98 | ) | (4,963 | ) | (119 | ) | ||||||||||||||
| Net changes in operating assets and liabilities | ||||||||||||||||||||||
| Decrease (increase) in operating assets | ||||||||||||||||||||||
| Trade and other accounts receivable | (25,013 | ) | (17,576 | ) | 63,458 | (30,639 | ) | |||||||||||||||
| Income tax credit | 1,279 | 4,677 | (10,588 | ) | - | |||||||||||||||||
| Prepaid expenses | 6,001 | (21,512 | ) | 4,093 | (26,747 | ) | ||||||||||||||||
| Inventory | (4,562 | ) | (5,871 | ) | 17,742 | (21,247 | ) | |||||||||||||||
| Increase (decrease) in operating liabilities | ||||||||||||||||||||||
| Trade and other accounts payable | 32,408 | 187,253 | 20,190 | 194,976 | ||||||||||||||||||
| Provisions | (4,466 | ) | (13,114 | ) | (55,790 | ) | - | |||||||||||||||
| Income tax payable | (648 | ) | (192 | ) | (4,775 | ) | (28,030 | ) | ||||||||||||||
| Net cash and cash equivalents provided by operating activities | 67,577 | 117,892 | 222,516 | 258,802 | ||||||||||||||||||
|
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Contact
Compañia de Minas Buenaventura S.A.A.
In Lima:
Carlos Galvez, 511-419-2540
Chief Financial Officer
or
Daniel Dominguez, 511-419-2591
Director of Treasury and Investor Relations
daniel.dominguez@buenaventura.pe
or
In New York:
i-advize Corporate Communications, Inc.
Maria Barona / Rafael Borja
212-406-3691/3693
buenaventura@i-advize.com
or
Visit our website: http://www.buenaventura.com
