Bloomberg News

Buenaventura Profit Rises 19% as Gold, Silver Prices Gain

October 28, 2011

(Updates with analyst’s comment in third paragraph.)

Oct. 28 (Bloomberg) -- Cia. de Minas Buenaventura SA, Peru’s biggest precious-metals producer, said third-quarter profit increased 19 percent as higher metals prices offset falling gold output.

Net income rose to $208 million, or 82 cents a share, from $174.3 million, or 68 cents, in the year-earlier period, Lima- based Buenaventura said today in an e-mailed statement. Analysts expected profit of $1.04 a share on an adjusted basis, the average of five estimates in a Bloomberg survey.

Buenaventura sold gold for an average $1,676 an ounce in the quarter, 36 percent more than a year earlier.

Record gold and silver prices offset lower output of gold and lead, said Cynthia Bejarano, an analyst at Lima-based investment fund NF&C Inversiones SA, which owns Buenaventura shares.

“Earnings were boosted by rising gold and silver prices,” said Bejarano, who rates the stock a “buy,” in a telephone interview before the report was released. “Gold output won’t rise until they bring a new project online in 2015.”

Income from Buenaventura’s 44 percent stake in Newmont Mining Corp.’s Yanacocha gold mine and a 19 percent stake in Phoenix-based Freeport-McMoRan Copper & Gold Inc.’s Cerro Verde copper mine fell 10 percent to $106.5 million.

Rising Revenue

Revenue climbed 56 percent to $435 million. Gold production fell 6 percent to 256,887 ounces, while lead dropped 2 percent, Buenaventura said. Silver output rose 15 percent to 4.2 million ounces. New York-traded silver futures doubled in the period.

Gold futures for December delivery fell less than 0.1 percent to settle at $1,747.20 an ounce today on the Comex in New York after reaching a record $1,923.70 an ounce on Sept. 6. Silver climbed to a 31-year high of $49.845 on April 25.

Buenaventura’s American depositary receipts, each representing one ordinary share, traded little changed at $42.87 in New York. The ADRs have fallen 12 percent this year.

(Buenaventura will hold its quarterly conference call Oct. 31 at 11 a.m. New York time. To call from outside the U.S.: 1- 973-582-2710, Code: 14677387. For U.S. participants: 1-888-693- 3477.)

--Editor: Charles Siler

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net


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