Buenaventura Announces Fourth Quarter 2018 Production, Volume Sold per Metal Results and 2019 Guidance

Business Wire 14-Jan-2019 7:14 AM

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, today announced preliminary 4Q18 production and volume sold. The Company also announced full year 2019 operating guidance (100% basis), 2019 EBITDA guidance from direct operations, 2019 De-Bottlenecking Program guidance and 2019 CAPEX guidance.

 
4Q18 Production per Metal and 2019 Operating Guidance (100% basis)
               

4Q18 (Actual)

 

12M18 (Actual)

 

2018 (Last Guidance)

 

2019 (Estimated)

   
Gold (Oz.)                
Orcopampa   13,372   115,887   120k - 140k   75k - 90k
Tambomayo   31,026   129,172   125k - 135k   90k - 110k
La Zanja   20,101   71,630   70k - 80k   25k - 35k
Tantahuatay   49,708   173,192   160k - 180k   150k - 170k
Yanacocha   141,465   514,563   470k - 545k   510k*
El Brocal   4,111   21,429   20k - 25k   25k - 30k
 
Silver (Oz.)                
Uchucchacua   3,256,870   15,420,102   15.0M - 17.0M   14.5M - 15.5M
Julcani   666,259   2,482,907   2.3M - 2.5M   2.2M - 2.5M
Mallay   97,670   514,081   0.4M - 0.5M   0
Tambomayo   873,249   3,929,808   3.5M - 4.5M   2.5M - 3.0M
El Brocal   934,642   3,901,869   4.6M - 5.0M   4.5M - 5.5M
 
Lead (MT)                
Julcani   264   1,048   1.0k - 2.0k   0.9k - 1.0k
Uchucchacua   4,961   19,122   18.0k - 20.0k   22.0k - 26.0k
Mallay   401   1,768   0.5k - 2.5k   0
Tambomayo   1,522   4,220   3.0k - 4.5k   4.0k - 5.0k
El Brocal   5,361   20,582   20.0k - 30.0k   22.0k - 26.0k
 
Zinc (MT)                
El Brocal   9,702   45,593   45k - 55k   57k - 65k
Uchucchacua   5,867   21,840   20.0k - 22.0k   27k - 32k
Mallay   1,107   4,151   3.0k - 3.6k   0
Tambomayo   2,080   8,685   7.5k - 8.5k   6k - 8k
 
Copper (MT)                
El Brocal   12,093   46,231   45k - 55k   47k - 52k
 

*As announced by Newmont.

2018 Production Comments

Gold Operations

  • Orcopampa:As was previously announced on December 12, Orcopampa's 2018 production was below the Company's most recently released production guidance due to management's strategic decision to temporarily cease production in order to focus on centralizing the operation, prioritizing the De-Bottlenecking Program over ore extraction.
  • Tambomayo:2018 gold, silver and lead production was in line with the most recent guidance released. 2018 zinc production was slightly above the guidance provided.
  • La Zanja:2018 gold production was in line with the most recent guidance released.
  • Tantahuatay:2018 gold production was in line with the most recent guidance released.

Silver Operations

  • Uchucchacua:2018 silver, lead and zinc production was in line with the most recent guidance released.
  • Julcani:2018 silver and lead production was in line with the most recent guidance released.
  • Mallay:2018 silver and zinc production was slightly above the most recent guidance released. 2018 lead production was in line with the most recent guidance released.

Base Metals Operations

  • El Brocal:2018 gold, copper, lead and zinc production was in line with the most recent guidance released.Silver production was below the Company's most recently released guidance , mainly due to changes in the mining sequence which resulted in lower silver grades. Silver grades are expected to improve in 1Q19.

2018 Volume Sold

 
4Q18 Volume sold per Metal (100% basis)
       
4Q18 (Actual)   12M18 (Actual)
 
Gold (Oz.)        
Orcopampa   13,405   116,719
Tambomayo   25,691   119,211
La Zanja   20,234   74,370
Tantahuatay   51,355   171,770
El Brocal   2,482   14,297
 
Silver (Oz.)        
Uchucchacua   2,949,234   14,443,456
Julcani   635,338   2,368,497
Mallay   97,106   458,671
Tambomayo   662,978   3,570,382
El Brocal   773,051   3,058,987
 
Lead (MT)        
Julcani   237   915
Uchucchacua   4,553   17,071
Mallay   387   1,633
Tambomayo   709   3,268
El Brocal   5,248   18,713
 
Zinc (MT)        
El Brocal   8,020   37,470
Uchucchacua   4,328   16,811
Mallay   931   3,369
Tambomayo   1,769   7,143
 
Copper (MT)        
El Brocal   11,523   43,710
 
Realized Metal Prices
     
4Q18   12M18
 
         
Gold   1,223   1,268
Silver   13.51   15.09
Lead   1,792   2,141
Zinc   2,338   2,686
Copper   5,801   6,277
 

2019 Guidance

1. EBITDA Direct Operations

The company expects an EBITDA of $310-380 million during 2019.

Regarding Buenaventura's guidance for 2019, the Company expects 2019E EBITDA to be in line with that which was announced for 2018, despite an anticipated decrease in production which is expected to be offset by decreased Opex resulting from the continued success of Buenaventura's De-Bottlenecking Program.

*2019 prices: Au: 1,250 US$/Oz; Ag: $16.00 US$/Oz; Cu: 6,000 US$/MT; Zn: 2,500 US$/MT & Pb: 2,100 US$/MT

2. 2019 De-Bottlenecking Program*

       
         
        Name   Stage   Annual EBITDA
TAMBOMAYO   1   Mine Design Optimization   Increase of efficiency of the ratio of mining preparations per tone + Haulage Fleet reduction   $4.0 -5.0M
    2   Improvement of the Metallurgical Process   Change in the process: Cyanidation ? Flotation to Flotation ? Cyanidation of concentrate   $11.0 – 12.0M
    3   Cost Optimization in Support Areas   Synergies between Orcopampa and Tambomayo   $1.0 – 2.0M
ORCOPAMPA   1   Mine Centralization   Reduction of equipment   $2.0 – 2.5M
    2   Improvement of efficiency in exploration   Reduction of exploration galleries and emphasis in diamond drilling   $2.0 – 2.5M
    3   Cost Optimization in Support Areas   Synergies between Orcopampa and Tambomayo   $1.0 – 2.0M
UCHUCCHACUA   1   Optimization of the ore transport system   Reduction of equipment and haulage distances   $1.0 – 1.5M
    2   Improvement of efficiency in exploration   Emphasis in zones close to the exploitation areas (centralization)   $3.5 – 4.5M
    3   Cost Optimization in Support Areas   Optimization of services and process   $1.5 – 2.5M
EL BROCAL   1   Mine Design Optimization   Stope design optimization to reduce galleries per ton mined   $5.0 – 6.0M
    2   Renegotiation cost rates with contractors   Optimization of the use of the equipment fleet   $1.5 – 2.5M
    3   Increase in production due to operational improvements   Second stage in the optimization of metallurgical processes: Availability and Performance   $6.0 – 7.0M
 
TOTAL : $40.0 - 50.0M
 

*In the coming conference call, the company will present a breakdown of the De-Bottlenecking Program by quarter.

3. Total Capex**

The company expects a total CAPEX of $80-120 million during 2019.

**In the coming conference call, the company will present a breakdown of total capex by objectives (sustaining and growth).

Company Description

Compañía de Minas Buenaventura S.A.A. is Peru's largest, publicly traded precious and base metals Company and a major holder of mining rights in Peru. The Company is engaged in the exploration, mining development, processing and trade of gold, silver and other base metals via wholly-owned mines and through its participation in joint venture projects. Buenaventura currently operates several mines in Peru (Orcopampa*, Uchucchacua*, Mallay*, Julcani*, Tambomayo*, El Brocal, La Zanja and Coimolache).

The Company owns 43.65% of Minera Yanacocha S.R.L (a partnership with Newmont Mining Corporation), an important precious metal producer and 19.58% of Sociedad Minera Cerro Verde, an important Peruvian copper producer.

For a printed version of the Company's 2017 Form 20-F, please contact the persons indicated above, or download a PDF format file from the Company's web site.

(*) 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.

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