Buenaventura Announces Fourth Quarter and Full Year 2014 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 fourth quarter (4Q14) and full year 2014. All figures have been prepared in accordance with IFRS (International Financial Reporting Standards) on a non GAAP basis and are stated in U.S. dollars (US$).

Fourth Quarter 2014 Highlights:

• In 4Q14, EBITDA from direct operations was US$39.3 million and adjusted EBITDA (including associated companies) was US$166.9 million.
• Strong gold production at Yanacocha in 4Q14 (322,309k oz) permitted to achieve the high end of the annual guidance.
• Total attributable production in 4Q14 was 245k gold ounces and 5.5 million silver ounces (compared to 184k gold ounces and 4.8 million silver ounces in 4Q13).
• Full year 2014 attributable production was 846k gold ounces and 19.7 million silver ounces (compared to 895k gold ounces and 18.9 million silver ounces in 2013).
• At the Tambomayo project, an Environmental Impact Assessment (EIA) was approved in January 2015. Construction is expected to begin in 2Q15.
• Gold reserves from direct operations increased 13% due to Tambomayo project.
• At the San Gabriel (Chucapaca) project, the critical surface property acquisition was finalized and the Company is working to obtain permits for advanced explorations with underground development.
• Cerro Verde’s plant expansion to 360K TPD is in-line with schedules and budget. Additional production from the expanded plant is expected by early 2016.

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

(*) as of December, 2014, Buenaventura had 254,186,867 outstanding shares.

(**) Yanacocha’s impairment loss (related to Conga) attributable to Buenaventura was US$236.2 million

Operating Revenues

During 4Q14, net sales were US$253.7 million, a 12% decrease compared to the US$287.0 million reported in 4Q13. This was explained by the lower gold, silver and copper prices despite higher silver, zinc and copper volume sold.

Royalty income increased 67%, to US$11.9 million in 4Q14 compared to the US$7.2 million reported in 4Q13. This was due to higher revenues at Yanacocha (67% higher QoQ).

(*) Buenaventura’s Direct Operations

For the twelve-month period, net sales decreased 7%, from US$1,215.4 million in 2013 to US$1,128.3 million in 2014. Royalties decreased 17%, to US$36.9 million in FY14 vs. US$44.2 million in FY13.

Production and Operating Costs

In 4Q14, Buenaventura’s gold equity production from direct operations remained flat (104,166 oz) compared to 4Q13. Gold production including associated companies increased 33% due to higher production from Yanacocha. Silver equity production from direct operations increased 14%, mainly due to higher production in Uchucchacua and El Brocal.

¹ Direct Operation production includes 100% of Buenaventura’s operating units, 53.06% of La Zanja, 54.07% of El Brocal and 40.10% of Coimolache (Tantahuatay).

Orcopampa’s (100% owned by Buenaventura)

Gold production at Orcopampa increased 14% in 4Q14 (compared to 4Q13) due to higher ore treated (Appendix 2). Cost Applicable to Sales (CAS) in 4Q14 decreased 15% explained by lower reagent (cyanide) costs and improving efficiency due to better contractor allocation.

Gold production guidance for 2015 is 190k – 205k ounces.

Uchucchacua (100% owned by Buenaventura)

Silver production in 4Q14 increased 18% compared to 4Q13, mainly due to higher ore volume treated and recovery rate (see Appendix 2). Cost Applicable to Sales (CAS) in 4Q14 decreased 5% compared to 4Q13 mainly explained by lower reagent costs, better contractor terms and infrastructure improvements inside the mine.

Silver production guidance for 2015 is 14.5 million - 15.0 million ounces.

Mallay (100% owned by Buenaventura)

Silver production in 4Q14 was 6% lower than in 4Q13 due to lower silver grade. Cost Applicable to Sales (CAS) in 4Q14 was 16% lower compared to 4Q13 due to a strong increase in zinc by-product contribution.

Silver production guidance for 2015 is 1.1 million – 1.25 million ounces.

Julcani (100% owned by Buenaventura)

Silver production in 4Q14 was in-line with 4Q13 production. Cost Applicable to Sales (CAS) in 4Q14 was 34% higher than 4Q13 mainly explained by higher silver concentrate inventories (approximately 65% of the quarterly production, in transit to the smelter).

Silver production guidance for 2015 is 2.9 million – 3.1 million ounces.

La Zanja’s (53.06% owned by Buenaventura)

Gold production in 4Q14 increased 4% when compared to 4Q13. CAS in 4Q14 increased 26% due to higher stripping ratio in Pampa Verde open pit (1.06 in 4Q14 vs. 0.42 in 4Q13).

Gold production guidance for 2015 is 138k – 142k ounces.

Tantahuatay’s (40.10% owned by Buenaventura)

Gold production in 4Q14 increased 15% compared to the figure reported in 4Q13. CAS in 4Q14 increased 24% due to higher consumption of reagents (lime) and blasting supplies due to a higher stripping ratio (0.042 in 4Q14 vs. 0.01 in 4Q13).

Gold production guidance for 2015 is 138k – 142k ounces

El Brocal (54.07% owned by Buenaventura)

During 4Q14, zinc production increased 100% compared to 4Q13, due to higher volume treated from Tajo Norte (polymetalic ore). Copper production increased 15% in 4Q14 compared to 4Q13. Silver production increased 57% compared to the figure for 4Q13. Copper CAS increased 13% compared to 4Q13, due to higher commercial deduction and zinc CAS increased 5%.

Zinc production guidance for 2015 is 75k – 85k MT. Copper production guidance for 2015 is 30k – 35k MT.

General and Administrative Expenses

General and administrative expenses in 4Q14 were US$24.8 million, 30% higher when compared to the 4Q13 figure (US$19.2 million). Due to a US$20.2 million credit in long-term compensation provisions in 2013, total G&A expenses in 2014 were 35% higher (US$101.1 million in 2014 vs US$75.1 million in 2013).

Exploration in Non-Operating Areas

Exploration in non-operating areas during 4Q14 was US$17.8 million compared with a US$9.4 million for 4Q13. During the period, Buenaventura’s main exploration efforts were focused on the following projects: La Zanja Underground (US$5.9 million) and Tambomayo (US$3.2 million). For the twelve-month 2014 period, the expense was US$50.0 million (US$32.8 million in 2013).

Share in Associated Companies

During 4Q14, Buenaventura’s share in associated companies was negative US$113.8 million, compared to the negative US$288.0 million reported in 4Q13, composed by:

YANACOCHA

At Yanacocha (43.65% owned by Buenaventura), during 4Q14, gold production was 322,309 oz of gold, 75% higher than 4Q13 production (184,318 oz). For the twelve-month 2014 period, gold production was 969,944 ounces, 5% lower than 1,017,259 ounces in 2013, but in the high end of the guidance given at the beginning of the year (895k – 985k). 2015 Gold production guidance for Yanacocha is 880k – 940k ounces.

Despite of the fact that Yanacocha reported US$80.6 million of net income (under US GAAP), the impact of an impairment loss (in accordance to IFRS) related to Conga resulted in a loss of US$380.3 million. In 4Q14, CAS was US$426/oz, a decrease of 50% when compared to US$849/oz in 4Q13 due to lower stripping ratio in accordance with the mining plan.

Capital expenditures at Yanacocha were US$31.6 million in 4Q14 and US$117.3 million in FY2014.

Yanacocha still has a strong pipeline of growth projects: Quecher Main (prefeasibility), Chaquicocha Sulphides and Yanacocha Verde (scoping) and Maqui Maqui (exploration).

CERRO VERDE

At Cerro Verde (19.58% owned by Buenaventura), during 4Q14 copper production was 56,001 MT (10,965 MT attributable to Buenaventura), a 19% decrease compared to 4Q13 (69,318 MT and 13,572 MT attributable to Buenaventura). For full year 2014, copper production was 226,906 MT (44,428 MT attributable to Buenaventura).

During 4Q14, Cerro Verde reported net income of US$55.9 million, 72% lower compared to US$196.8 million in 4Q13. This was mainly due to lower sales. For FY2014, net income was US$377,605 million (compared to US$613,262 million in FY2013).

Capital expenditures at Cerro Verde were US$448.6 million in 4Q14 and US$1,750 billion in 2014.

Cerro Verde’s plant expansion has an excess of 50% progress and completion expected by 4Q15. The total CAPEX for the project is US$4.6 billion.

COIMOLACHE (Tantahuatay operation)

At Coimolache (40.10% owned by Buenaventura), attributable contribution to the net income in 4Q14 was US$5.0 million (US$5.7 million in 4Q13). For 2014, the contribution was US$22.3 million, compared to US$20.8 million reported in 2013.

Project Development and Exploration

The Tambomayo Project (100% ownership)

The Environmental Impact Study was approved in January 2015 and the Company is in the process of acquiring construction permits. Tambomayo has 251k gold ounces in reserves and 336k gold ounces in resources. The estimated annual production is 110k-120k gold ounces and 3.0 million silver ounces.

The San Gabriel Project (100% ownership)

The Company is currently in the process of obtaining permits for the advanced exploration with underground development of the Canahuire ore bodies and diamond drilling of other prospects.

Other

At the Board of Directors meeting held February 26, 2015, the following resolutions were passed:

To call for the Annual Shareholders Meeting to be held on March 27, 2015, the following items will be proposed for approval:

* * *

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 and is developing the Tambomayo and San Gabriel projects.

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.

For a printed version of the Company’s 2013 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

(*)Consolidates

(**) Equity Accounting

APPENDIX 2

APPENDIX 3: EBITDA Reconciliation (in thousand US$)

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 associated companies) 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 associated 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: PROVEN AND PROBABLE RESERVES

APPENDIX 5: COST APPLICABLE TO SALES RECONCILIATION

Reconciliation of Costs Applicable to Sales and Cost Applicable to Sales per Unit Sold

Cost applicable to sales consists of cost of sales, excluding depreciation and amortization, plus Selling expenses. Cost applicable to sales per unit sold for each mine consists of cost applicable to sales for a particular metal produced at a given mine divided by the volume of such metal produced at such mine in the specified period. We note that cost applicable to sales is not directly comparable to the cash operating cost figures disclosed in previously furnished earnings releases.

Cost applicable to sales and Cost applicable to sales per unit of mineral sold are not measures of financial performance under IFRS, and may not be comparable to similarly titled measures of other companies. We consider Cost applicable to sales and Cost applicable to sales per unit of mineral sold to be key measures in managing and evaluating our operating performance. These measures are widely reported in the precious metals industry as a benchmark for performance, but do not have standardized meanings. You should not consider Cost applicable to sales or Cost applicable to sales per unit of mineral sold as alternatives to cost of sales determined in accordance with IFRS, as indicators of our operating performance. Cost applicable to sales and Cost applicable to sales per unit of mineral sold are calculated without adjusting for by-product revenue amounts.

The tables below set forth (i) a reconciliation of consolidated Cost of sales, excluding depreciation and amortization to consolidated Cost applicable to sales, (ii) reconciliations of the components of Cost applicable to sales (by mine and mineral) to the corresponding consolidated line items set forth on our consolidated statements of profit or loss for the three and six months ended June 30, 2013 and 2014, and (iii) reconciliations of Cost of sales, excluding depreciation and amortization to Cost applicable to sales for each of our mining units. The amounts set forth in Cost applicable to sales and Cost applicable to sales per unit sold for each mine and mineral indicated in the tables below can be reconciled to the amounts set forth on our consolidated statements of profit or loss for the three and six months ended June 30, 2013 and 2014 by reference to the reconciliations of Cost of sales, excluding depreciation and amortization (by mine and mineral), Selling Expenses (by mine and metal) expenses and Exploration in units in operations (by mine and mineral) to consolidated Cost of sales, excluding depreciation and amortization, consolidated Selling Expenses and consolidated Exploration in units in operations expenses, respectively, set forth below.