BVN Compania De Minas Buenaventura SA

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 (3Q16) and nine-month (9M16) periods ended September 30, 2016. 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$).

Third Quarter 2016 Highlights:

• In 3Q16, EBITDA from direct operations was US$83.3 million compared to US$5.6 million reported in 3Q15. Adjusted EBITDA (including associated companies) increased 99% (US$ 134.6 million in 3Q16 compared to the US$ 67.6 million in 3Q15).
• All in Sustaining Cost (AISC*) decreased 51% in 3Q16 (US$ 570/oz) compared to 3Q15 (US$ 1,171/oz).
• At El Brocal, we expect an improvement in 4Q16 due to i) higher ore treated, ii) higher zinc grade and better commercial terms.
• Net income in 3Q16 was negative US$ 24.7 mainly due to El Brocal and Yanacocha results.
• Production from direct operations in 3Q16 was 93k gold ounces and 5.8 million silver ounces, higher compared to 89k gold ounces and 5.6 million silver ounces in 3Q15.
• The Tambomayo project remains in-line with schedule and budget. Total project progress is at 96%. Production ramp up is expected to begin in December 2016.
• Buenaventura´s Net debt/EBITDA ratio has been reduced to 2x. By the end of the year, we expect a ratio of 1.6x-1.9x.
• Dividend payment to be resumed (US$ 0.030 per share/ADS).

                       

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

                                      3Q16     3Q15     Var%     9M16     9M15     Var% Total Revenues     269.0     211.0     28%     781.7     694.4     13% Operating Profit     34.7     -54.2     N.A.     107.4     -93.5     N.A. EBITDA Direct Operations     83.3     5.6     1391%     252.9     80.2     215% Adjusted EBITDA (Inc Associates)     134.6     67.6     99%     468.5     303.8     54% Net Income     -24.7     -23.2     6%     82.4     -24.7     N.A. EPS**     -0.10     -0.09     6%     0.32     -0.10     N.A.  

(*) See Appendix 5

(**) as of September 30, 2016 Buenaventura had 253,986,867 outstanding shares.

Operating Revenues

During 3Q16, net sales were US$263.1 million, a 30% increase compared to the US$202.3 million reported in 3Q15. This result was mainly explained by an increase in all metal prices as well as higher volume sales of copper, zinc and lead.

Royalty income decreased 32% from US$8.7 million in 3Q15 to US$5.9 million in 3Q16 as a result of lower revenues at Yanacocha.

                                    Operating Highlights     3Q16     3Q15     Var%     9M16     6M15     Var% Net Sales

(in millions of US$)

    263.1     202.3     30%     763.2     669.2     14% Average Realized Gold Price (US$/oz) (1) (2)     1,334     1,103     21%     1,275     1,169     9% Average Realized Gold Price (US$/oz) inc. Affiliates (3)     1,338     1,112     20%     1,267     1,172     8% Average Realized Silver Price (US$/oz) (1) (2)     20.83     14.50     44%     17.60     15.34     15% Average Realized Lead Price (US$/MT) (1) (2)     1,950     1,593     22%     1,839     1,734     6% Average Realized

Zinc Price (US$/MT) (1) (2)

    2,460     1,775     39%     2,092     1,998     5% Average Realized Copper Price (US$/MT) (1) (2)     4,820     3,723     29%     4,666     4,599     1%                                                         Volume Sold     3Q16     3Q15     Var%     9M16     6M15     Var% Gold Oz Direct Operations (1)     94,539     91,370     3%     268,280     271,479     -1% Gold Oz inc Associated Companies (3)     173,291     217,320     -20%     520,267     618,138     -16% Silver Oz (1)     4,975,143     4,801,621     4%     15,924,538     14,239,819     12% Lead MT (1)     7,138     6,409     11%     21,374     22,086     -3% Zinc MT (1)     15,040     12,543     20%     42,866     39,442     9% Copper MT (1)     11,225     7,456     51%     32,895     19,917     65%                         (1) Buenaventura’s Direct Operations includes 100% of Buenaventura’s operating units, 100% of La Zanja and 100% of El Brocal (2) The realized price considers the adjustments of quotational periods (3) Considers 100% of Buenaventura’s operating units, 100% of La Zanja, 100% of El Brocal, 40.95% of Coimolache and 43.65% of Yanacocha  

For 9M16, net sales increased 14%, from US$669.2 million in 9M15 to US$763.2 million in 9M16. Royalty income for 9M16 was US$18.5 million, lower than US$25.2 million during 9M15.

Production and Operating Costs

In 3Q16, Buenaventura’s gold equity production from direct operations was 4% higher compared to the figure reported in 3Q15 (92,571 gold ounces in 3Q16 vs 88,669 gold ounces in 3Q15). Gold production including associated companies in 3Q16 was 156,905 ounces, 19% lower than the amount reported in the same period 2015. This decline is explained by a decrease in production from Yanacocha. Silver equity production from direct operations increased 5%, mainly due to higher production at the Uchucchacua mine and the Mallay mine.

                                    Equity Production     3Q16     3Q15     Var%     9M16     9M15     Var% Gold Oz Direct Operations(1)     92,571     88,669     4%     257,280     254,195     1% Gold Oz including Associated Companies     156,905     194,500     -19%     468,222     562,553     -17% Silver Oz Direct Operations(1)     5,840,913     5,583,565     5%     17,575,037     15,232,580     15% Silver Oz including Associated Companies     6,099,334     5,716,336     7%     18,290,013     15,624,885     17% Lead MT     7,087     6,542     8%     21,135     19,697     7% Zinc MT     13,175     10,047     31%     35,819     31,502     14% Copper MT Direct Operations(1)     7,608     5,187     47%     20,978     12,640     66% Copper MT including Associated Companies     31,128     16,115     93%     93,361     42,275     121%                                                         Consolidated Production     3Q16     3Q15     Var%     9M16     9M15     Var% Gold Oz(2)     96,271     92,870     4%     269,563     267,080     1% Silver Oz(2)     5,980,514     5,854,489     2%     18,024,485     16,248,238     11% Lead MT(2)     8,156     7,957     3%     24,676     25,148     -2% Zinc MT(2)     18,527     15,407     20%     51,179     48,209     6% Copper MT(2)     12,362     9,525     30%     35,531     23,156     53%                       (1) Buenaventura’s Direct Operations includes 100% of Buenaventura’s operating units, 53.06% of La Zanja and 61.32% of El Brocal (2) Considers 100% of Buenaventura’s operating units, 100% of La Zanja and 100% of El Brocal    

Orcopampa (100% owned by Buenaventura)

  Production             3Q16     3Q15     Var %     9M16     9M15     Var % Gold     Oz     53,167     54,035     -2%     145,129     156,023     -7% Silver     Oz     179,210     146,930     22%     492,810     392,541     26%                             Cost Applicable to Sales             3Q16 3Q15 Var % 9M16 9M15 Var % Gold     US$/Oz     660 636 4% 682 676 1%  

Gold production at Orcopampa decreased 2% in 3Q16 (compared to 3Q15) mainly due to lower ore grade (see Appendix 2). Cost Applicable to Sales (CAS) in 3Q16 (660 US$/Oz) increased 4% compared to 3Q15 (636 US$/Oz), mainly due to higher exploration expenses in order to increase resources at the Pucara and the Lucia area.

Gold production guidance for 2016 is 190k – 200k ounces.

 

Uchucchacua (100% owned by Buenaventura)

  Production             3Q16     3Q15     Var%     9M16     9M15     Var% Silver     Oz     4,086,850     3,775,051     8%     12,170,024     9,801,413     24% Zinc     MT     1,950     1,293     51%     5,566     4,090     36% Lead     MT     2,772     2,340     18%     7,869     5,869     34%                             Cost Applicable to Sales             3Q16     3Q15     Var%     9M16     9M15     Var% Silver     US$/Oz     11.06     13.56     -18%     10.84     14.47     -25%  

Silver production in 3Q16 increased 8% compared to 3Q15, due to higher volumes of ore treated and higher ore grade (see Appendix 2). Cost Applicable to Sales (CAS) in 3Q16 decreased 18% compared to 3Q15, an improvement primarily explained by i) Increasing efficiencies as a result of massive mining using the bench & fill method and ii) lower reagent prices and consumption.

Silver production guidance for 2016 is 15.5 million – 16.5 million ounces.

 

Mallay (100% owned by Buenaventura)

 

 

Production

            3Q16     3Q15     Var%     9M16     9M15     Var% Silver     Oz     412,526     323,095     28%     1,252,490     928,126     35% Zinc     MT     2,740     2,445     12%     8,137     6,765     20% Lead     MT     1,965     1,925     2%     5,907     5,353     10% Gold     Oz     420     259     62%     1,460     396     268%                            

 

Cost Applicable to Sales

            3Q16     3Q15     Var%     9M16       9M15     Var% Silver     US$/Oz     13.05     13.99     -7%     12.55       13.96     -10%  

Silver production in 3Q16 increased 28% compared to 3Q15, mainly due to increased amounts ore treated (see Appendix 2). Cost Applicable to Sales (CAS) in 3Q16 was 7% lower compared to 3Q15 mainly due to more volume sold.

Silver production guidance for 2016 is 1.5 million – 1.9 million ounces.

 

Julcani (100% owned by Buenaventura)

  Production             3Q16     3Q15     Var%     9M16     9M15     Var% Silver     Oz     782,813     794,810     -2%     2,473,802     2,397,790     3%                             Cost Applicable to Sales             3Q16     3Q15     Var%     9M16     9M15     Var% Silver     US$/Oz     11.86     12.94     -8%     11.32     12.70     -11%  

Silver production in 3Q16 is in line with the figure reported in 3Q15. Cost Applicable to Sales (CAS) in 3Q16 was 8% lower than 3Q15, an improvement primarily mainly explained by higher volume sold and lower commercial deductions.

Silver production guidance for 2016 is 3.0 million – 3.4 million ounces.

 

La Zanja (53.06% owned by Buenaventura)

  Production             3Q16     3Q15     Var %     9M16     9M15     Var % Gold     Oz     37,407     35,653     5%     106,984     103,362     4% Silver     Oz     50,309     78,844     -36%     159,012     241,969     -34%                             Cost Applicable to Sales             3Q16     3Q15     Var %     9M16     9M15     Var % Gold     US$/Oz     641     906     -29%     568     838     -32%  

Gold production in 3Q16 increased 5% compared to 3Q15. CAS in 3Q16 decreased 29% compared to 3Q15, an improvement primarily due to i) lower headcount generated by new synergies with Tantahuatay mine, ii) lower reagent and explosives prices and consumption, and iii) lower contractor expenses resulting from more favorable prices.

Gold production guidance for 2016 is 130k – 140k ounces.

 

Tantahuatay (40.10% owned by Buenaventura)

  Production             3Q16     3Q15     Var %     9M16     9M15     Var % Gold     Oz     39,595     34,739     14%     110,890     97,085     14% Silver     Oz     162,983     259,433     -37%     587,551     598,392     -2%                             Cost Applicable to Sales             3Q16     3Q15     Var %     9M16     9M15     Var % Gold     US$/Oz     527     484     9%     476     542     -12%  

Gold production in 3Q16 increased 14% compared to the figure reported in 3Q15. CAS in 3Q16 increased 9% compared to 3Q15 mainly due to an inventory write-down and higher exploration expenses.

Gold production guidance for 2016 is 145k – 155k ounces

 

El Brocal (61.32%* owned by Buenaventura)

  Production             3Q16     3Q15     Var %     9M16     9M15     Var % Copper     MT     12,291     9,446     30%     35,312     22,895     54% Zinc     MT     13,836     11,670     19%     37,477     37,353     0% Silver     Oz     468,806     735,760     -36%     1,476,348     2,486,399     -41%                             Cost Applicable to Sales             3Q16     3Q15     Var %     9M16     9M15     Var % Copper     US$/Lb     2.17     2.34     -7%     2.18     2.39     -9% Zinc     US$/Lb     0.92     0.83     12%     0.80     0.75     7%  

During 3Q16, copper production increased 30% compared to 3Q15, due to a higher ore volume treated and ore grade. Moreover, in 3Q16 zinc production increased 19% as a result of higher ore treated.

(*)   Since August 2016, the new ownership of El Brocal is 61.32%.  

In 3Q16, zinc Cost Applicable to sales (CAS) increased 34% compared to 3Q15 mainly due to lower ore grade and lower silver by-product contribution. Copper CAS in 3Q16 decreased 12% compared to 3Q15 mainly due higher ore grade and lower commercial deductions per ton resulting from the renegotiation of commercial contracts.

Zinc production guidance for 2016 is 55k – 65k MT, while copper production guidance for 2016 is 40k – 50k MT.

General and Administrative Expenses

General and administrative expenses in 3Q16 were US$16.9 million, 15% lower compared to the US$19.8 million in 3Q15. For 9M16, the expense was US$58.0 million (US$58.8 million in 9M15).

Exploration in Non-Operating Areas

Exploration costs in non-operating areas during 3Q16 were US$6.4 million compared with US$5.3 million in 3Q15. During the period, Buenaventura’s main exploration efforts were focused on the Tambomayo project (US$1.75 million), the San Gabriel project (US$1.21 million) and Marcapunta Norte (US$0.32 million). For 9M16, the expense was US$14.8 million (US$25.7 million in 9M15).

Share in Associated Companies

During 3Q16, Buenaventura’s share in associated companies was negative US$11.9 million, compared to US$13.4 million reported in 3Q15, composed by:

                        Share in the Result of Associates

(in millions of US$)

    3Q16     3Q15     Var %     9M16     9M15     Var % Cerro Verde     9.5     1.3     621%     44.3     10.1     339% Coimolache     4.9     4.1     20%     17.0     9.1     87% Yanacocha     -26.2     8.0     N.A.     -24.1     42.4     N.A. Total     -11.9     13.4     N.A.     37.2     61.6     -40%  

YANACOCHA

At Yanacocha (43.65% owned by Buenaventura), during 3Q16, gold production was 147,386 ounces, 39% lower than 3Q15 production (242,454 ounces). For 9M16, gold production was 483,258 ounces, 32% lower than 706,433 ounces in 9M15.

Gold production guidance at Yanacocha for 2016 is 630k – 660k ounces.

In 3Q16, Yanacocha reported a net loss of US$60.1 million compared to a net income of US$18.2 million reported in 3Q15. CAS in 3Q16 was US$1,040/oz, 65% higher than the US$630/oz reported in 3Q15 mainly due to: i) an inventory write-down of US$49.4 million in 3Q16 (US$19.9 million in 3Q15), and ii) lower volume sold (145,582 gold ounces in 3Q16 vs 257,606 gold ounces in 3Q15).

Advancing Yanacocha sulfides through Chaquicocha exploration drilling.

Capital expenditures at Yanacocha were US$26.7 million in 3Q16, while for 9M16 was US$62.7 million.

CERRO VERDE

At Cerro Verde (19.58% owned by Buenaventura), during 3Q16 copper production was 120,124 MT (23,520 MT attributable to Buenaventura), a 115% increase compared to 3Q15 (55,811 MT and 10,928 MT attributable to Buenaventura). For 9M16, copper production was 369,681 MT (72,384 MT attributable to Buenaventura).

During 3Q16, Cerro Verde reported a net income of US$48.3 million compared to net income of US$6.7 million in 3Q15. This increase was primarily due to: i) a lower cash cost, and ii) higher volumes sold. For 9M16, net income was US$226.0 million (compared to US$46.5 million in 9M15).

Copper production guidance at Cerro Verde for 2016 is 500k MT – 550k MT.

COIMOLACHE (Tantahuatay operation)

At Coimolache (40.10% owned by Buenaventura), attributable contribution to net income in 3Q16 was US$4.9 million (US$4.1 million in 3Q15). For 9M16, the contribution was US$17.0 million, compared to US$9.1 million reported in 9M15.

Project Development and Exploration

The Tambomayo Project (100% ownership)

• Proyect is on schedule and within budget
• Total CAPEX: US$ 340 M
• Overall project progress is at 96% (As of September 2016)
  • Exploration and mine development are completed (100% of progress).
  • The construction progress of the facilities is at 93%.
• The following facilities have been completed and already commissioned:
  • Tailings dam
  • Water dam
  • Power line and substations
  • Access road
  • Crusher and stockpile area

The San Gabriel Project (100% ownership)

• Environmental Impact Assessment (EIA) of the project´s construction is expected to be approved in December 2016.
• Objectives for 4Q16:
  • Drilling program: 3,000 meters in order to confirm resources and certainty
  • Complete Metallurgical studies to be completed in order to improve recovery

Other

During the October 27, 2016 meeting, the Board of Directors meeting passed the following resolution:

• Declaration of cash dividend of US$ 0.030 per share or ADS, payable on November 30, 2016

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*, Mallay*, Julcani*, El Brocal, La Zanja and Coimolache and is developing the Tambomayo project.

The Company owns 43.65% of Minera Yanacocha S.R.L (a partnership with Newmont Mining Corporation), 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 2015 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 Associates (as of September 30, 2016)

   

BVNEquity %

    OperatingMines / Business           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*     61.32    

Colquijirca and Marcapunta

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 Processadora Industrial Rio Seco S.A*     100.00     Rio Seco chemical plant Consorcio Energético de Huancavelica S.A*     100.00     Energy – Huanza Hydroelectrical plant Buenaventura Ingenieros S.A*     100.00     Engineering Consultant  

(*)Consolidates

(**) Equity Accounting

                            APPENDIX 2                                 GOLD PRODUCTION             3Q16     3Q15     %     9M16     9M15     % Mining Unit     Operating Results     Underground Orcopampa Ore Milled DMT 121,714 114,509 6% 350,643 337,344 4% Ore Grade OZ/MT 0.42 0.49 -14% 0.42 0.48 -11% Recovery Rate % 97.0% 95.2% 2% 96.0% 95.8% 0%       Ounces Produced*     53,167     54,035     -2%     145,129     156,023     -7% Mining Unit     Operating Results     Open Pit La Zanja Ounces Produced 37,407 35,653 5% 106,984 103,362 4% Tantahuatay     Ounces Produced     39,595     34,739     14%     110,890     97,085     14%                                   SILVER PRODUCTION             3Q16     3Q15     %     9M16     9M15     % Mining Unit     Operating Results     Underground Uchucchacua Ore Milled DMT 320,838 310,733 3% 943,460 803,255 17% Ore Grade OZ/MT 15.15 14.56 4% 15.37 14.57 6% Recovery Rate % 84.1% 83.5% 1% 83.9% 83.8% 0%       Ounces Produced     4,086,850     3,775,051     8%     12,170,024     9,801,413     24% Julcani Ore Milled DMT 42,647 44,937 -5% 131,425 132,924 -1% Ore Grade OZ/MT 18.96 18.51 2% 19.60 18.93 4% Recovery Rate % 96.8% 95.5% 1% 96.1% 95.3% 1%       Ounces Produced     782,813     794,810     -2%     2,473,802     2,397,790     3% Mallay Ore Milled DMT 51,463 41,888 23% 152,422 115,312 32% Ore Grade OZ/MT 8.39 8.31 1% 8.77 8.57 2% Recovery Rate % 93.3% 92.8% 1% 93.7% 94.0% 0%       Ounces Produced     412,526     323,095     28%     1,252,490     928,126     35% Mining Unit     Operating Results     Open Pit Colquijirca     Ounces Produced     277,255     517,648     -46%     937,547     1,781,192     -47%                                   ZINC PRODUCTION             3Q16     3Q15     %     9M16     9M15     % Mining Unit     Operating Results     Underground Uchucchacua Ore Milled DMT 320,838 310,733 3% 943,460 803,256 17% Ore Grade % 1.16% 1.03% 13% 1.15% 1.05% 10% Recovery Rate % 52.45% 40.5% 29% 51.0% 48.2% 6%       MT Produced     1,950     1,294     51%     5,566     4,091     36% Mallay Ore Milled DMT 51,463 41,888 23% 152,422 115,312 32% Ore Grade % 5.93% 6.6% -11% 6.05% 6.64% -9% Recovery Rate % 88.5% 87.8% 1% 87.9% 88.5% -1%       MT Produced     2,740     2,445     12%     8,137     6,765     20% Mining Unit     Operating Results     Open Pit                               Colquijirca     MT Produced     13,836     11,670     19%     37,477     37,353     0%              

APPENDIX 3: EBITDA Reconciliation (in thousand US$)

                              3Q16     3Q15     9M16     9M15 Net Income     -28,366     -39,006     81,355     -60,248

Add / Subtract:

    111,685     44,596     171,593     140,429 Provision for income tax, net     31,129     -14,297     37,625     -3,934 Share in associated companies by the equity method, net     11,850     -13,381     -37,222     -61,621 Interest income     -1,749     -827     -6,061     -2,441 Interest expense     10,911     6,934     26,585     21,078 Loss on currency exchange difference     4,233     3,936     -1,255     7,517 Long Term Compensation provision     336     -12     926     123 Depreciation and Amortization     45,361     59,564     138,041     169,078 Workers´ participation provision     2,878     246     6,572     629 Impairment of long-term lived assets     0     0     0     3,803 Loss from discontinued operations     6,736     2,433     6,382     6,197 EBITDA Buenaventura Direct Operations     83,319     5,590     252,948     80,181 EBITDA Yanacocha (43.65%)     -2,817     40,736     42,808     153,251 EBITDA Cerro Verde (19.58%)     41,603     11,906     136,151     44,764 EBITDA Coimolache (40.10%)     12,515     9,402     36,567     25,605 Adjusted EBITDA (Including Associated companies)     134,620     67,634     468,475     303,801  

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: 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 nine months ended September 30, 2015 and 2016, 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 nine months ended September 30, 2015 and 2016 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.

   

Set forth below is a reconciliation of consolidated Cost of sales, excluding depreciation and amortization,

to consolidated Cost applicable to sales:

                    For the 3 months ended Sep 30 For the 9 months ended Sep 30 2016     2015 2016     2015 (in thousands of US$) Consolidated Cost of sales excluding depreciation and amortization 129,752 145,921 371,545 427,228 Add: Consolidated Exploration in units in operation 24,985 20,990 66,206 66,008 Consolidated Commercial deductions 57,590 45,094 171,306 135,147 Consolidated Selling expenses 5,531 4,655 15,646 12,701 Consolidated Cost applicable to sales 217,858 216,660 624,703 641,084  

Set forth below is a reconciliation of Cost of sales, excluding depreciation and amortization

(by mine and mineral) to consolidated Cost of sales:

                For the 3 months ended Sep 30   For the 9 months ended Sep 30 2016 2015 2016 2015

Cost of sales by mine and mineral

(in thousands of US$) Julcani, Gold 9 6 15 40 Julcani, Silver 5,460 3,709 14,545 16,398 Julcani, Lead 464 282 1,345 1,420 Julcani, Copper 9 41 57 189 Mallay, Gold 103 58 454 54 Mallay, Silver 2,476 1,950 7,157 5,784 Mallay, Lead 1,120 1,313 3,620 3,848 Mallay, Zinc 1,883 1,588 5,289 4,933 Orcopampa, Gold 24,293 24,290 66,824 78,317 Orcopampa, Silver 1,136 813 3,173 2,636 Orcopampa, Copper 33 0 42 0 Uchucchacua, Gold 20 16 68 18 Uchucchacua, Silver 20,552 28,758 66,971 78,965 Uchucchacua, Lead 1,185 1,748 3,855 4,653 Uchucchacua, Zinc 990 825 2,946 3,837 La Zanja, Gold 22,964 32,256 64,726 86,549 La Zanja, Silver 369 940 1,208 2,826 El Brocal, Gold 1,600 1,370 5,370 2,542 El Brocal, Silver 2,513 3,861 7,645 14,007 El Brocal, Lead 2,299 2,566 6,718 9,693 El Brocal, Zinc 12,747 11,403 30,718 31,404 El Brocal, Copper 24,852 17,878 70,449 46,358 Non Mining Units 2,675 10,252 8,351 32,757 Consolidated Cost of sales, excluding depreciation and amortization 129,752 145,921 371,545 427,228  

Set forth below is a reconciliation of Exploration expenses in units in operation (by mine and mineral) to consolidated Exploration expensesin mining units:

                For the 3 months ended Sep 30   For the 9 months ended Sep 30 2016 2015 2016 2015

Exploration expenses in units in operation by mine and mineral

(in thousands of US$) Julcani, Gold 4 4 7 22 Julcani, Silver 2,503 2,582 7,321 8,944 Julcani, Lead 213 196 677 775 Julcani, Copper 4 29 29 103 Mallay, Gold 33 21 157 20 Mallay, Silver 800 699 2,475 2,178 Mallay, Lead 362 470 1,252 1,449 Mallay, Zinc 609 569 1,829 1,857 Orcopampa, Gold 11,680 9,364 29,259 30,664 Orcopampa, Silver 546 313 1,389 1,032 Orcopampa, Copper 16 0 18 0 Uchucchacua, Gold 7 3 20 4 Uchucchacua, Silver 7,336 6,177 19,671 17,087 Uchucchacua, Lead 423 375 1,132 1,007 Uchucchacua, Zinc 353 177 865 830 La Zanja, Gold 94 10 101 35 La Zanja, Silver 2 0 2 1 El Brocal, Gold 0 0 0 0 El Brocal, Silver 0 0 0 0 El Brocal, Lead 0 0 0 0 El Brocal, Zinc 0 0 0 0 El Brocal, Copper 0 0 0 0 Non Mining Units 0 0 0 0 Consolidated Exploration expenses in units in operation 24,985 20,990 66,206 66,008   Set forth below is a reconciliation of Commercial Deductions in units in operation (by mine and mineral)to consolidated Commercial deductions:                 For the 3 months ended Sep 30   For the 9 months ended Sep 30 2016 2015 2016 2015

Commercial Deductions in units in operation by mine and mineral

(in thousands of US$) Julcani, Gold 2 2 3 11 Julcani, Silver 1,022 1,241 3,892 5,251 Julcani, Lead 87 95 362 447 Julcani, Copper 1 16 20 64 Mallay, Gold 42 29 166 29 Mallay, Silver 1,319 1,083 3,578 2,883 Mallay, Lead 572 732 1,803 1,920 Mallay, Zinc 1,538 1,062 4,210 3,155 Orcopampa, Gold 183 81 331 200 Orcopampa, Silver 66 0 82 0 Orcopampa, Copper 8 0 9 0 Uchucchacua, Gold 8 5 27 5 Uchucchacua, Silver 8,686 9,094 28,325 25,236 Uchucchacua, Lead 491 565 1,620 1,486 Uchucchacua, Zinc 1,458 831 4,201 3,958 La Zanja, Gold 16 77 181 141 La Zanja, Silver 4 12 12 12 El Brocal, Gold 1,939 1,287 6,541 2,922 El Brocal, Silver 1,974 2,646 6,094 9,592 El Brocal, Lead 1,097 1,129 3,418 4,400 El Brocal, Zinc 9,794 5,631 23,747 17,719 El Brocal, Copper 27,281 19,477 82,682 55,717 Non Mining Units 0 0 0 0 Consolidated Commercial deductions in units in operation 57,590 45,094 171,306 135,147   Set forth below is a reconciliation of Selling expenses (by mine and mineral) to consolidated Selling expenses:           For the 3 months ended Sep 30   For the 9 months ended Sep 30 2016 2015 2016 2015

Selling expenses by mine and mineral

(in thousands of US$) Julcani, Gold 0 0 1 2 Julcani, Silver 168 197 554 781 Julcani, Lead 14 15 51 68 Julcani, Copper 0 2 2 9 Mallay, Gold 8 4 33 4 Mallay, Silver 185 147 523 418 Mallay, Lead 84 99 265 278 Mallay, Zinc 141 119 387 357 Orcopampa, Gold 249 192 569 634 Orcopampa, Silver 12 6 27 21 Orcopampa, Copper 0 0 0 0 Uchucchacua, Gold 1 0 3 0 Uchucchacua, Silver 1,014 816 3,036 2,166 Uchucchacua, Lead 58 50 175 128 Uchucchacua, Zinc 49 23 134 105 La Zanja, Gold 294 272 780 927 La Zanja, Silver 5 8 15 30 El Brocal, Gold 93 79 341 133 El Brocal, Silver 146 222 486 733 El Brocal, Lead 134 147 427 507 El Brocal, Zinc 742 654 1,952 1,642 El Brocal, Copper 1,447 1,026 4,476 2,424 Non Mining Units 686 576 1,411 1,334 Consolidated Selling expenses 5,531 4,655 15,646 12,701                                                                                                                       JULCANI 3Q 2016 3Q 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 9 5,460 464 - 9 5,942 6 3,709 282 - 41 4,038 Add: Exploration Expenses (US$000) 4 2,503 213 - 4 2,724 4 2,582 196 - 29 2,811

Commercial Deductions (US$000)

2 1,022 87 - 1 1,112 2 1,241 95 - 16 1,353 Selling Expenses (US$000) 0 168 14 - 0 183 0 197 15 - 2 215 Cost Applicable to Sales (US$000) 16 9,153 777 - 15 9,961 12 7,729 588 - 88 8,417 Divide: Volume Sold     21     771,898     726     -     5     Not Applicable     12     597,425     405     -     19     Not Applicable CAS     776     11.86     1,070     -     2,751     Not Applicable     993     12.94     1,451     -     4,722     Not Applicable                                                                                                                   JULCANI 9M 2016 9M 2015   GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 15 14,545 1,345 - 57 15,963 40 16,398 1,420 - 189 18,047 Add: Exploration Expenses (US$000) 7 7,321 677 - 29 8,035 22 8,944 775 - 103 9,844 Commercial Deductions (US$000) 3 3,892 362 - 20 4,277 11 5,251 447 - 64 5,773 Selling Expenses (US$000) 1 554 51 - 2 608 2 781 68 - 9 860 Cost Applicable to Sales (US$000) 26 26,313 2,436 - 108 28,883 75 31,375 2,710 - 365 34,524 Divide: Volume Sold 31     2,323,633     2,092     -     37     Not Applicable     76     2,471,004     1,804     -     77    

NotApplicable

CAS 828     11.32     1,165     -     2,939    

Not Applicable

    984     12.70     1,502     -     4,739    

Not Applicable

                                                                          MALLAY 3Q 2016     3Q 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 103     2,476     1,120     1,883     -     5,582 58     1,950     1,313     1,588     -     4,908 Add: Exploration Expenses (US$000) 33 800 362 609 - 1,804 21 699 470 569 - 1,759 Commercial Deductions (US$000) 42 1,319 572 1,538 - 3,471 29 1,083 732 1,062 - 2,906 Selling Expenses (US$000) 8 185 84 141 - 418 4 147 99 119 - 369 Cost Applicable to Sales (US$000) 186 4,781 2,138 4,171 - 11,275 112 3,878 2,614 3,338 - 9,942 Divide: Volume Sold     234     366,346     1,845     2,277     -     Not Applicable     105     277,157     1,737     2,024     -     Not Applicable CAS     794     13.05     1,159     1,832     -     Not Applicable     1,066.11     13.99     1,505     1,649     -     Not Applicable                                                                           MALLAY 9M 2016     9M 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 454     7,157     3,620     5,289     -     16,520 54     5,784     3,848     4,933     -     14,619 Add: Exploration Expenses (US$000) 157 2,475 1,252 1,829 - 5,713 20 2,178 1,449 1,857 - 5,504 Commercial Deductions (US$000) 166 3,578 1,803 4,210 - 9,757 29 2,883 1,920 3,155 - 7,987 Selling Expenses (US$000) 33 523 265 387 - 1,208 4 418 278 357 - 1,057 Cost Applicable to Sales (US$000) 810 13,734 6,940 11,715 - 33,198 108 11,262 7,494 10,302 - 29,167 Divide: Volume Sold     933     1,094,056     5,415     6,802     -     Not Applicable     105     806,831     4,847     5,501     -     Not Applicable CAS     868     12.55     1,281     1,722     -    

Not Applicable

    1,029     13.96     1,546     1,873     -    

Not Applicable

                                                                          ORCOPAMPA 3Q 2016     3Q 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 24,293     1,136     -     -     33     25,461 24,290     813     -     -     -     25,102 Add: - Exploration Expenses (US$000) 11,680 546 - - 16 12,242 9,364 313 - - - 9,678 Commercial Deductions (US$000) 183 66 - - 8 257 81 - - - - 81 Selling Expenses (US$000) 249 12 - - 0 261 192 6 - - - 198 Cost Applicable to Sales (US$000) 36,405 1,759 - - 57 38,221 33,926 1,133 - - - 35,059 Divide: Volume Sold     55,191     182,484     -     -     21     Not Applicable     53,376     136,573     -     -     -     Not Applicable CAS     660     9.64     -     -     2,693     Not Applicable     636     8.29     -     -     -     Not Applicable                                                                           ORCOPAMPA 9M 2016     9M 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 66,824     3,173     -     -     42     70,039 78,317     2,636     -     -     -     80,953 Add: Exploration Expenses (US$000) 29,259 1,389 - - 18 30,666 30,664 1,032 - - - 31,696 Commercial Deductions (US$000) 331 82 - - 9 423 200 0 - - - 200 Selling Expenses (US$000) 569 27 - - 0 596 634 21 - - - 655 Cost Applicable to Sales (US$000) 96,983 4,671 - - 70 101,724 109,815 3,689 - - - 113,504 Divide: Volume Sold     142,272     524,582     -     -     24     Not Applicable     162,333     415,757     -     -     -     Not Applicable CAS     682     8.90     -     -     2,885    

Not Applicable

    676     8.87     -     -     -    

Not Applicable

      UCHUCCHACUA 3Q 2016     3Q 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 20     20,552     1,185     990     -     22,747 16     28,758     1,748     825     -     31,347 Add: Exploration Expenses (US$000) 7 7,336 423 353 - 8,119 3 6,177 375 177 - 6,733 Commercial Deductions (US$000) 8 8,686 491 1,458 - 10,644 5 9,094 565 831 - 10,495 Selling Expenses (US$000) 1 1,014 58 49 - 1,122 0 816 50 23 - 889 Cost Applicable to Sales (US$000) 36 37,588 2,157 2,850 - 42,632 25 44,845 2,738 1,856 - 49,464 Divide: Volume Sold     51     3,398,654     2,141     1,313     -     Not Applicable     23     3,307,909     1,831     815     -     Not Applicable CAS     714     11.06     1,008     2,171     -    

Not Applicable

    1,047     13.56     1,496     2,277     -    

Not Applicable

      UCHUCCHACUA 9M 2016                     9M 2015                       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 68     66,971 3,855 2,946 - 73,839 18     78,965 4,653 3,837 - 87,473 Add: Exploration Expenses (US$000) 20 19,671 1,132 865 - 21,689 4 17,087 1,007 830 - 18,929 Commercial Deductions (US$000) 27 28,325 1,620 4,201 - 34,174 5 25,236 1,486 3,958 - 30,685 Selling Expenses (US$000) 3 3,036 175 134 - 3,347 0 2,166 128 105 - 2,399 Cost Applicable to Sales (US$000) 118 118,003 6,782 8,146 - 133,049 27 123,454 7,273 8,731 - 139,486 Divide: Volume Sold     153     10,882,782     6,131     4,041     -     Not Applicable     26     8,534,639     4,567     3,230     -     Not Applicable

CAS

    771     10.84     1,106     2,016     -    

Not Applicable

    1,058     14.47     1,593     2,703     -    

Not Applicable

      LA ZANJA 3Q 2016     3Q 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 22,964     369     -     -     -     23,333 32,256     940     -     -     -     33,196 Add: Exploration Expenses (US$000) 94 2 - - - 96 10 0 - - - 10 Commercial Deductions (US$000) 16 4 - - - 21 77 12 - - - 90 Selling Expenses (US$000) 294 5 - - - 299 272 8 - - - 280 Cost Applicable to Sales (US$000) 23,369 380 - - - 23,749 32,615 961 - - - 33,576 Divide: Volume Sold     36,472     40,097     -     -     -     Not Applicable     35,995     79,267     -     -     -     Not Applicable CAS     641     9.47     -     -     -     Not Applicable     906     12.12     -     -     -     Not Applicable       LA ZANJA 9M 2016     9M 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 64,726     1,208     -     -     -     65,934 86,549     2,826     -     -     -     89,375 Add: Exploration Expenses (US$000) 101 2 - - - 103 35 1 - - - 36 Commercial Deductions (US$000) 181 12 - - - 193 141 12 - - - 153 Selling Expenses (US$000) 780 15 - - - 795 927 30 - - - 957 Cost Applicable to Sales (US$000) 65,788 1,237 - - - 67,025 87,652 2,869 - - - 90,521 Divide: Volume Sold     115,760     166,485     -     -     -     Not Applicable     104,594     255,566     -     -     -     Not Applicable CAS     568     7.43     -     -     -     No Applicable     838     11.23     -     -     -     Not Applicable       BROCAL 3Q 2016     3Q 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 1,600     2,513     2,299     12,747     24,852     44,012 1,370     3,861     2,566     11,403     17,878     37,077 Add: Exploration Expenses (US$000) - - - - - - - - - - - - Commercial Deductions (US$000) 1,939 1,974 1,097 9,794 27,281 42,085 1,287 2,646 1,129 5,631 19,477 30,169 Selling Expenses (US$000) 93 146 134 742 1,447 2,562 79 222 147 654 1,026 2,128 Cost Applicable to Sales (US$000) 3,632 4,634 3,530 23,283 53,580 88,659 2,735 6,729 3,842 17,688 38,380 69,374 Divide: Volume Sold     2,570     215,665     2,426     11,450     11,199     Not Applicable     1,858     403,292     2,436     9,704     7,437     Not Applicable CAS     1,413     21.49     1,455     2,033     4,785     Not Applicable     1,472     16.68     1,577     1,823     5,161     Not Applicable       BROCAL 9M 2016     9M 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 5,370     7,645     6,718     30,718     70,449     120,899 2,542     14,007     9,693     31,404     46,358     104,004 Add: Exploration Expenses (US$000) - - - - - - - - - - - - Commercial Deductions (US$000) 6,541 6,094 3,418 23,747 82,682 122,482 2,922 9,592 4,400 17,719 55,717 90,349 Selling Expenses (US$000) 341 486 427 1,952 4,476 7,681 133 733 507 1,642 2,424 5,439 Cost Applicable to Sales (US$000) 12,252 14,224 10,563 56,417 157,607 251,062 5,597 24,331 14,600 50,765 104,499 199,792 Divide: Volume Sold     9,131     933,000     7,736     32,023     32,834     Not Applicable     4,346     1,756,023     10,869     30,711     19,840     Not Applicable CAS     1,342     15.25     1,365     1,762     4,800    

Not Applicable

    1,288     13.86     1,343     1,653     5,267     Not Applicable       NON MINING COMPANIES 3Q 2016     3Q 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) -     -     -     -     -     2,675 -     -     -     -     -     10,252 Add: Selling Expenses (US$000)     -     -     -     -     -     686     -     -     -     -     -     576 Total (US$000)     -     -     -     -     -     3,361     -     -     -     -     -     10,828                           NON MINING COMPANIES 9M 2016 9M 2015   GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) -     -     -     -     -     8,351 - - - - - 32,757 Add: Selling Expenses (US$000) -     -     -     -     -     1,411     -     -     -     -     -     1,334 Total (US$000) -     -     -     -     -     9,762     -     -     -     -     -     34,091                       BUENAVENTURA CONSOLIDATED 3Q 2016     3Q 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 48,989     32,507     5,067     15,620     24,894     129,752 57,995     40,031 5,908 13,816 17,919 145,921 Add: Exploration Expenses (US$000) 11,819 11,187 997 962 20 24,985 9,402 9,771 1,042 746 29 20,990 Commercial Deductions (US$000) 2,190 13,072 2,248 12,790 27,291 57,590 1,480 14,077 2,521 7,524 19,492 45,094 Selling Expenses (US$000) 645 1,530 290 932 1,447 5,531 547 1,396 311 797 1,028 4,655 Cost Applicable to Sales (US$000) 63,644 58,295 8,603 30,304 53,651 217,858 69,424 65,274 9,782 22,883 38,468 216,660 Divide: Volume Sold     94,539     4,975,143     7,138     15,040     11,225     Not Applicable     91,370     4,801,621     6,409     12,543     7,456     Not Applicable CAS     673     11.72     1,205     2,015     4,780     Not Applicable     760     13.59     1,526     1,824     5,160     Not Applicable       BUENAVENTURA CONSOLIDATED 9M 2016     9M 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 137,456     100,699     15,538     38,953     70,548     371,545 167,522     120,615     19,613     40,174     46,546     427,228 Add: Exploration Expenses (US$000) 29,544 30,859 3,061 2,694 47 66,206 30,745 29,243 3,230 2,688 103 66,008 Commercial Deductions (US$000) 7,249 41,985 7,203 32,158 82,711 171,306 3,307 42,973 8,253 24,832 55,782 135,147 Selling Expenses (US$000) 1,727 4,640 917 2,472 4,478 15,646 1,700 4,149 980 2,104 2,433 12,701 Cost Applicable to Sales (US$000) 175,976 178,183 26,720 76,277 157,785 624,703 203,273 196,981 32,077 69,798 104,864 641,084 Divide: Volume Sold     268,280     15,924,538     21,374     42,866     32,895     Not Applicable     271,479     14,239,819     22,086     39,442     19,917     Not Applicable CAS     656     11.19     1,250     1,779     4,797     Not Applicable     749     13.83     1,452     1,770     5,265     Not Applicable                                       COIMOLACHE 3Q 2016 3Q 2015       GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 16,681     1,085     -     - - 17,766 13,666 1,307 - - - 14,973 Add: Exploration Expenses (US$000) 2,932 191 - - - 3,123 2,192 210 - - - 2,402 Commercial Deductions (US$000) 114 7 - - - 122 219 18 - - - 237 Selling Expenses (US$000) 240 16 - - - 256 207 20 - - - 227 Cost Applicable to Sales (US$000) 19,967 1,299 - - - 21,267 16,285 1,554 - - - 17,839 Divide: Volume Sold     37,923     162,764     -     -     -     Not Applicable     33,682     247,769     -     -     -     Not Applicable CAS     527     7.98     -     -     -     Not Applicable     484     6.27     -     -     -     Not Applicable     COIMOLACHE 9M 2016     9M 2015   GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL     GOLD (OZ)     SILVER (OZ)     LEAD (MT)     ZINC (MT)     COPPER (MT)     TOTAL Cost of Sales (without D&A) (US$000) 43,048     3,192     -     -     -     46,240 39,023     3,212     -     -     -     42,235 Add: Exploration Expenses (US$000) 6,878 510 - - - 7,388 11,015 907 - - - 11,922 Commercial Deductions (US$000) 434 40 - - - 474 509 40 - - - 549 Selling Expenses (US$000) 753 56 - - - 809 647 53 - - - 700 Cost Applicable to Sales (US$000) 51,114 3,798 - - - 54,911 51,194 4,212 - - - 55,406 Divide: Volume Sold 107,327     592,768     -     -     -     Not Applicable     94,428     579,275     -     -     -     Not Applicable CAS 476    

6.41

    -     -     -    

Not Applicable

    542     7.27     -     -     -     Not Applicable                                  

APPENDIX 5: ALL-IN SUSTAINING COST

All-in Sustaining Cost for 3Q16   Buenaventura13Q16 La Zanja3Q16

Tantahuatay3Q16

Attributable 23Q16

Au Ounces Sold BVN 91,908 Au Ounces bought from La Zanja -36,412 Au Ounces Sold Net 55,497 51,272 37,923 97,907  

3Q16

3Q16

3Q16

3Q16

Income Statement & Cash Flow

US$ 000'

    US$/Oz Au US$ 000'     US$/Oz Au US$ 000'    

US$000'/Oz Au

US$ 000'     US$/Oz Au   Cost of Sales3 67,151 1,210 23,180 452 17,766 468 86,573 884 Exploration in Operating Units 24,889 448 875 17 3,122 82 26,605 272 Royalties 6,143 111 0 0 0 0 6,143 63

Commercial Deductions4

15,484 279 803 16 122 3 15,959 163 Selling Expenses 2,045 37 236 5 256 7 2,273 23 Administrative Expenses5 12,653 228 615 12 746 20 13,279 136 Other Expenses 0 0 2,484 48 2,702 71 2,401 25 Other Incomes -2,993 -54 -5,589 -109 -3,072 -81 -7,190 -73 Administrative charges 0 0 1,562 30 354 9 971 10 Sustaining Capex6 17,774 320 9,076 177 9,611 253 26,443 270   By-product Credit -115,724 -2,085 -1,015 -20 -3,373 -89 -117,615 -1,201   All-in Sustaining Cost 27,422 494 32,227 629 28,234 745 55,842 570   *All-in Sustaining Cost does not include: Depreciation and Amortization, Stoppage of mining units, Exploration in non-operating areas.  

Notes:

1. Non-consolidated financial statements for Compañia De Minas Buenaventura S.A.A. 2. Considers 100% from Compañia De Minas Buenaventura S.A.A., 53.06% from La Zanja and 40.095% from Tantahuatay. 3. For Buenaventura does not consider purchase of concentrate from La Zanja. 4. For all metals produced. 5. For Buenaventura, does not consider management services charged to subsidiaries. 6. Sustaining Capex + Growth Capex equals Acquisitions of mining concessions, development costs, property, plant and equipment.  

 

                                All-in Sustaining Cost for 3Q15   Buenaventura13Q15 La Zanja3Q15 Tantahuatay

3Q15

Attributable Production2

3Q15

Au Ounces Sold BVN 92,866 Au Ounces bought from La Zanja -35,879 Au Ounces Sold Net 56,987 32,990 33,682 87,996   3Q15

3Q15

3Q15

3Q15

Income Statement & Cash Flow US$ 000'     US$/Oz Au US$ 000'     US$/Oz Au US$ 000'     US$/Oz Au US$ 000'     US$/Oz Au   Cost of Sales3 76,109 1,336 29,950 908 14,973 445 98,004 1,114 Exploration in Operating Units 20,982 368 137 4 2,402 71 22,018 250 Royalties 5,302 93 0 0 0 0 5,302 60

Commercial Deductions4

14,852 261 855 26 237 7 15,401 175 Selling Expenses 1,724 30 277 8 227 7 1,962 22 Administrative Expenses5 11,516 202 459 14 436 13 11,934 136 Other Expenses 0 0 3,525 107 2,887 86 3,028 34 Other Incomes -965 -17 -6,704 -203 -3,422 -102 -5,894 -67 Other administrative charges 0 0 3,031 92 233 7 1,702 19 Sustaining Capex6 12,643 222 12,488 379 17,092 507 26,122 297   By-product Credit -74,363 -1,305 -1,333 -40 -3,590 -107 -76,510 -869   All-in Sustaining Cost 67,800 1,190 42,684 1,294 31,476 935 103,069 1,171   *All-in Sustaining Cost does not include: Depreciation and Amortization, Stoppage of mining units, Exploration in non-operating areas.  

Notes:

1. Non-consolidated financial statements for Compañia De Minas Buenaventura S.A.A. 2. Considers 100% from Compañia De Minas Buenaventura S.A.A., 53.06% from La Zanja and 40.095% from Tantahuatay. 3. For Buenaventura does not consider purchase of concentrate from La Zanja. 4. For all metals produced. 5. For Buenaventura, does not consider management services charged to subsidiaries. For La Zanja does not consider US$ 3.8 MM Impairment. 6. Sustaining Capex + Growth Capex equals Acquisitions of mining concessions, development costs, property, plant and equipment.  

 

                                All-in Sustaining Cost for 9M16   Buenaventura19M16 La Zanja9M16 Tantahuatay

9M16

Attributable 2

9M16

Au Ounces Sold BVN 258,386 Au Ounces bought from La Zanja -114,997 Au Ounces Sold Net 143,389 107,702 107,327 243,568   9M16

9M16

9M16

9M16

Income Statement & Cash Flow US$ 000'     US$/Oz Au US$ 000'     US$/Oz Au US$ 000'     US$/Oz Au US$ 000'     US$/Oz Au   Cost of Sales3 342,087 2,386 60,004 557 46,240 431 392,465 1,611 Exploration in Operating Units 66,103 461 2,147 20 7,388 69 70,204 288 Royalties 15,499 108 0 0 0 0 15,499 64

Commercial Deductions4

48,833 341 2,611 24 474 4 50,409 207 Selling Expenses 10,738 75 732 7 809 8 11,450 47 Administrative Expenses5 38,122 266 1,641 15 1,799 17 39,714 163 Other Expenses 0 0 6,578 61 4,840 45 5,431 22 Other Incomes -5,162 -36 -12,745 -118 -5,892 -55 -14,287 -59 Administrative charges 0 0 1,959 18 858 8 1,383 6 Sustaining Capex6 33,852 236 11,897 110 18,483 172 47,575 195   By-product Credit -458,672 -3,199 -2,801 -26 -10,269 -96 -464,275 -1,906   All-in Sustaining Cost 91,401 637 72,022 669 64,731 603 155,569 639  

*All-in Sustaining Cost does not include: Depreciation and Amortization, Stoppage of mining units, Exploration in non-operating areas.

 

Notes:

1. Non-consolidated financial statements for Compañia De Minas Buenaventura S.A.A. 2. Considers 100% from Compañia De Minas Buenaventura S.A.A., 53.06% from La Zanja and 40.095% from Tantahuatay. 3. For Buenaventura does not consider purchase of concentrate from La Zanja. 4. For all metals produced. 5. For Buenaventura, does not consider management services charged to subsidiaries. 6. Sustaining Capex + Growth Capex equals Acquisitions of mining concessions, development costs, property, plant and equipment.  

 

                                All-in Sustaining Cost for 9M15   Buenaventura19M15 La Zanja9M15

Tantahuatay9M15

Attributable Production29M15

Au Ounces Sold BVN 283,085 Au Ounces bought from La Zanja -104,477 Au Ounces Sold Net 178,608 100,618 94,428 269,857  

9M15

9M15

9M15

9M15

Income Statement & Cash Flow US$ 000'     US$/Oz Au US$ 000'     US$/Oz Au US$ 000'     US$/Oz Au US$ 000'     US$/Oz Au   Cost of Sales3 228,941 1,282 87,133 866 42,235 447 292,108 1,082 Exploration in Operating Units 66,056 370 8,446 84 11,922 126 75,318 279 Royalties 16,902 95 0 0 0 0 16,902 63

Commercial Deductions4

44,711 250 2,494 25 549 6 46,254 171 Selling Expenses 5,088 28 954 9 700 7 5,875 22 Administrative Expenses5 35,644 200 1,200 12 1,364 14 36,827 136 Other Expenses 0 0 10,156 101 5,635 60 7,648 28 Other Incomes -3,983 -22 -16,039 -159 -7,022 -74 -15,308 -57 Other administrative charges 0 0 5,472 54 126 1 2,954 11 Sustaining Capex6 22,652 127 26,024 259 32,644 346 49,549 184   By-product Credit -226,736 -1,269 -3,969 -39 -9,122 -97 -232,500 -862   All-in Sustaining Cost 189,275 1,060 121,870 1,211 79,032 837 285,626 1,058   *All-in Sustaining Cost does not include: Depreciation and Amortization, Stoppage of mining units, Exploration in non-operating areas.  

Notes:

1. Non-consolidated financial statements for Compañia De Minas Buenaventura S.A.A. 2. Considers 100% from Compañia De Minas Buenaventura S.A.A., 53.06% from La Zanja and 40.095% from Tantahuatay. 3. For Buenaventura does not consider purchase of concentrate from La Zanja. 4. For all metals produced. 5. For Buenaventura, does not consider management services charged to subsidiaries. For La Zanja does not consider US$ 3.8 MM Impairment. 6. Sustaining Capex + Growth Capex equals Acquisitions of mining concessions, development costs, property, plant and equipment.      

APPENDIX 6

Compañía de Minas Buenaventura S.A.A. and Subsidiaries Consolidated Statement of Financial Position As of September 30, 2016 and December 31, 2015 2016 2015 Assets US$(000) US$(000) Current assets Cash and cash equivalents 117,243 78,519 Trade and other accounts receivable, net 286,035 219,862 Inventory, net 139,127 101,473 Income tax credit 17,607 45,919 Prepaid expenses 6,860 8,231 Total current assets 566,872 454,004 Assets classified as held for sale 4,421 15,592 571,293 469,596   Non-current assets Trade and other accounts receivable, net 167,869 162,567 Income tax credit 4,092 - Inventory, net 5,655 26,029 Investment in associates 1,941,603 2,043,983 Mining concessions, development costs, property, plant and equipment, net 1,854,681 1,747,624 Investment properties, net 10,293 10,719 Deferred income tax asset, net 30,653 41,574 Prepaid expenses 30,647 29,235 Other assets 17,814 15,854 Total non-current assets 4,063,307 4,077,585     Total assets 4,634,600 4,547,181     Liabilities and shareholders’ equity Current liabilities Bank loans 54,547 285,302 Trade and other accounts payable 240,000 247,114 Provisions 60,805 49,829 Income tax payable 4,516 2,444 Embedded derivatives for concentrate sales, net 4,153 1,694 Hedge derivative financial instruments 219 10,643 Financial obligations 38,945 33,394 Total current liabilities 403,185 630,420   Liabilities directly associated with assets classified as held for sale 8,768 20,611 411,953 651,031   Non-current liabilities Trade and other accounts payable 17,266 15,057 Provisions 144,752 141,885 Financial obligations 561,712 320,316 Contingent consideration liability 20,524 16,994 Deferred income tax liability, net 10,206 12,662 Total non-current liabilities 754,460 506,914     Total liabilities 1,166,413 1,157,945   Shareholders’ equity Capital stock 750,497 750,497 Investment shares 791 1,396 Additional paid-in capital 218,450 219,055 Legal reserve 162,744 162,714 Other reserves 269 269 Retained earnings 2,103,608 2,024,895 Other reserves of equity (313) 2,240 Shareholders’ equity, net attributable to owners of the parent 3,236,046 3,161,066 Non-controlling interest 232,141 228,170 Total shareholders’ equity 3,468,187 3,389,236     Total liabilities and shareholders’ equity 4,634,600 4,547,181     Compañía de Minas Buenaventura S.A.A. and Subsidiaries Consolidated Statement of profit or loss For the three-month and nine-month periods ended September 30, 2016 and 2015        

For the three-month period ended September 30,

For the nine-month period ended September 30,

2016 2015 2016 2015 US$(000) US$(000) US$(000) US$(000) Continuing operations Operating income Net sales of goods 257,484 191,869 746,310 626,503 Net sales of services 5,598 10,391 16,859 42,698 Royalty income 5,947 8,720 18,493 25,200 Total operating income 269,029 210,980 781,662 694,401   Operating costs Cost of sales of goods, excluding depreciation and amortization (127,210) (130,505) (363,194) (380,910) Cost of services, excluding depreciation and amortization (2,542) (15,416) (8,351) (46,318) Depreciation and amortization (45,361) (59,564) (138,041) (169,078) Exploration in operating units (24,985) (20,990) (66,206) (66,008) Mining royalties (7,332) (6,937) (20,375) (21,844) Total operating costs (207,430) (233,412) (596,167) (684,158)         Gross profit 61,599 (22,432) 185,495 10,243   Operating expenses, net Administrative expenses (16,879) (19,838) (58,048) (58,806) Exploration in non-operating areas (6,355) (5,259) (14,824) (25,660) Selling expenses (5,531) (4,655) (15,646) (12,701) Reversal (expense) for provision for contingencies (331) 201 (129) (280) Provision for impairment of long–lived assets - - - (3,803) Other, net 2,241 (2,225) 10,561 (2,445) Total operating expenses, net (26,855) (31,776) (78,086) (103,695)   Operating profit (loss) 34,744 (54,208) 107,409 (93,452)   Other income (expense), net Share in results of associates under equity method (11,850) 13,381 37,222 61,621 Financial income 1,749 827 6,061 2,441 Net gain (loss) from currency exchange difference (4,233) (3,936) 1,255 (7,517) Financial costs (10,911) (6,934) (26,585) (21,078) Total other income (expense), net (25,245) 3,338 17,953 35,467   Profit (loss) before income tax 9,499 (50,870) 125,362 (57,985) Current income tax (14,054) (3,176) (32,359) (10,556) Deferred income tax (17,075) 17,473 (5,266) 14,490         Profit (loss) from continuing operations (21,630) (36,573) 87,737 (54,051)   Discontinued operations Profit (loss) from discontinued operations (6,736) (2,433) (6,382) (6,197) Net profit (28,366) (39,006) 81,355 (60,248)   Attributable to: Owners of the parent (24,651) (23,229) 82,372 (24,656) Non-controlling interest (3,715) (15,777) (1,017) (35,592) (28,366) (39,006) 81,355 (60,248)   Basic and diluted profit (loss) per share attributable to equity holders of the parent, stated in U.S. dollars (0.10) (0.09) 0.32 (0.10)   Profit (loss) for continuing operations, basic and diluted per share attributable to equity holders of the parent, expressed in U.S. dollars (0.07) (0.08) 0.35 (0.07)   Weighted average number of shares outstanding (common and investment), in units 253,715,190 253,715,190 253,715,190 253,715,190     Compañía de Minas Buenaventura S.A.A. and Subsidiaries Consolidated Statements of cash Flows For the three-month and nine-month periods ended September 30, 2016 and 2015        

For the three-month period ended September 30,

For the nine-month period ended September 30,

2016 2015 2016 2015 US$(000) US$(000) US$(000) US$(000)   Operating activities Proceeds from sales 262,108 239,513 677,953 721,967 Proceeds from dividends 3,142 1,816 139,926 4,775 Value Added Tax recovered 34,850 21,911 105,722 74,784 Royalty received 5,947 7,151 27,005 28,966 Interest received 52 700 1,766 2,497 Payments to suppliers and third-parties (190,615) (192,714) (523,634) (553,471) Payments to employees (36,065) (40,892) (105,219) (127,920) Payments of interest (1,068) (7,684) (18,941) (17,283) Payment of income taxes (2,705) (6,125) (14,166) (17,387) Payments of mining royalties (6,053) (5,525) (15,409) (17,407)   Net cash and cash equivalents provided by operating activities 69,593 18,151 275,003 99,521   Investing activities Proceeds from sales of mining concessions, property, plant and equipment 3,352 569 5,651 2,589 Proceeds from loan to third parties - 141 - 141 Acquisitions of mining concessions, development costs, property, plant and equipment (118,296) (84,895) (239,664) (166,527) Loans granted to associates - (20,800) - (20,800) Opening of time deposits - (7,350) - (7,350)   Net cash and cash equivalents used in investing activities (114,944) (112,335) (234,013) (191,947)   Financing activities Proceeds from bank loans - 150,000 175,851 240,000 Payments of bank loans (3,760) (50,000) (415,760) (90,000) Proceeds from financial obligations 210 - 275,210 10,000 Payments of financial obligations (8,297) (20,784) (25,180) (29,870) Dividends paid to non-controlling interest (1,649) (2,140) (5,709) (8,048) Acquisition of non-controlling interest (4,152) - (5,459) - Increase of restricted bank accounts (2,023) - (4,011) - Repurchase of treasury shares (1,210) - (1,210) - Payments of dividends - (70) (9) (70)   Net cash and cash equivalents provided by (used in) financing activities (20,881) 77,006 (6,277) 122,012   Net increase (decrease) in cash and cash equivalents during the period (66,232) (17,178) 34,713 29,586 Cash and cash equivalents at the beginning of the period 179,464 125,276 78,519 78,512         Cash and cash equivalents at period-end 113,232 108,098 113,232 108,098     Unrealized gain (loss) for changes in the fair value of hedge financial instruments 827 (154) (2,911) (2,495) Changes in the asset for closure of mining units - 12,272 8,433 53,988    

For the three-month period ended September 30,

For the nine-month period ended September 30,

2016 2015 2016 2015 US$(000) US$(000) US$(000) US$(000)   Reconciliation of net profit to cash and cash equivalents provided by operating activities   Net profit (loss) attributable to owners of the parent (24,651) (23,229) 82,372 (24,656)   Plus (less): Depreciation and amortization 45,361 61,377 138,041 179,185 Net loss (gain) on sales of mining concessions, property, plant and equipment - 10,667 2,072 13,620 Accretion expense of provision for closure of mining units and exploration projects 1,112 96 2,810 2,931 Loss (income) attributable to non-controlling interest (3,715) (15,777) (1,017) (35,592) Net share in results of associates 11,850 (13,381) (37,222) (61,621) Provision for estimated fair value of embedded derivatives related to concentrate 20,651 (5,752) (9,298) (6,347) sales and adjustments on open liquidations Deferred income tax expense (income) 17,075 (17,473) 5,266 (14,490) Reversal (provision) for impairment loss of inventories (291) 8,928 (9,145) 13,710 Net loss (gain) from currency exchange difference 4,233 3,945 (1,255) 7,525 Provision for impairment of long–lived assets - - - 3,803 Other net (765) (513) (1,352) 3,326   Net changes in operating assets and liabilities: Decrease (increase) in operating assets - Trade and other accounts receivable (32,057) 22,496 (68,235) 51,970 Inventories (8,598) (12,810) (6,777) 11,656 Income tax credit 6,219 5,570 24,220 5,390 Prepaid expenses 3,809 4,543 (3,115) 7,242 Increase (decrease) in operating liabilities - Trade and other accounts payable 38,245 (17,892) 21,908 (35,210) Provisions (12,621) 5,845 (4,196) (26,749) Income tax payable 594 (305) - (947) Proceeds from dividends 3,142 1,816 139,926 4,775         Net cash and cash equivalents provided by operating activities 69,593 18,151 275,003 99,521

 

 

 

 

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Compañia de Minas Buenaventura S.A.A.In Lima:Carlos Galvez, 511-419-2540VP & Chief Financial OfficerorDaniel Dominguez, 511-419-2591Manager of Financial Planning and Investor Relationsdaniel.dominguez@buenaventura.peorRodrigo Echecopar, 511-419-2609Investor Relations Coordinatorrodrigo.echecopar@buenaventura.peorIn New York:i-advize Corporate CommunicationsMaria Barona / Rafael Borja212-406-3691/3693buenaventura@i-advize.comorVisit our website:www.buenaventura.com/ir