2017 Denver Gold Forum Victor Gobitz - CEO. September, 2017

Transcription

1 2017 Denver Forum Victor Gobitz - CEO September, 2017

2 Cautionary Statement This presentation contains certain information that may constitute forward-looking information under applicable U.S. securities legislation, including but not limited to information about costs applicable to sales, general and administrative expenses; production volumes; current expectations on the timing, extent and success of exploration; development and metallurgical sampling activities, the timing and success of mining operations and the optimization of mine plans. This forward-looking information entails various risks and uncertainties that are based on current expectations, and actual results may differ materially from those contained within said information. These uncertainties and risks include, but are not limited to, the strength of the global economy, the price of commodities; operational, funding and liquidity risks; the degree to which mineral resource estimates are reflective of actual mineral resources; the degree to which factors which would make a mineral deposit commercially viable are present, and other risks and hazards associated with mining operations. Risks and uncertainties about the Company s business are more fully discussed in the BVN s form 20-F filed with the Securities and Exchange Commission in the U.S. and available at Readers are urged to read these materials. Buenaventura assumes no obligation to update any forward-looking information or to update the reasons why actual results could differ from such information unless required by law. 2

3 Investment Thesis Support Safety Human Resources Social Management Environmental Management Technology and Innovation Energy Communications Head Office Tambomayo Orcopampa La Zanja Coimolache Yanacocha Uchucchacua Mallay Julcani El Brocal Cerro Verde Drivers Silver San Gabriel Quecher Main Yumpaq Base Metals Silver OERATIONS Diversified ortfolio artner of Choice in eru 4 5 More than Six Decades Replenishing Reserves Long Term Business lan Track Record Creating Value Through Organic Growth El Faique Trapiche San Gregorio Marcapunta Norte-Sur Yanacocha s Sulfides Coimolache s Sulfides Base Metals ROJECTS eru Investment Grade - Low Cost of Capital 3

4 Leading layer in One of the Most Extensively Mineralized Countries Buenaventura has built a strong portfolio of diversified operations and projects in eru, a country situated in one of the world s most prolific polymetallic belts eru: en Mining Opportunities Regional Clusters Leverage Important Synergies for BVN eru is considered one of the top ten richest mineral countries in the world and is positioned among the best jurisdictions for mining investment Recognized Mineral Wealth (1) Operation roject Yanacocha Quecher Main Yanacocha Sulfides Silver ercentage of World Reserves Global roduction Ranking 5% 6 21% 1 Coimolache Coimolache Sulfides La Zanja North Copper Zinc Lead 11% 2 13% 3 8% 4 Uchucchacua Yumpaq El Faique Marcapunta Cerro Verde eru: Investment Grade (2) BBB+ A3 BBB+ Central Tajo Norte San Gregorio Julcani Mallay Orcopampa Tambomayo Trapiche San Gabriel South Source: Mineral Commodity Summaries US Geological Survey, Ministry of Economy and Finance Notes: (1) As of 2016 (2) As of August 17,

5 Unparalleled Track-Record Buenaventura has over 64 years of experience in exploration, development, construction and mining operations activities as well as joint ventures with world class companies Copper La Zanja (around 1M AuOz produced to date) JV 4 : Orcopampa (1967: : 1.5K TD) 20x BVN acquires 11% from El Brocal. As of 2017, BVN s has 61% JV 1 : First doré bar obtained in Yanacocha (More than 36 M Au Oz produced to date) JV 2 : 1994 Copper 2011 Coimolache, first doré bar is obtained (around 1M Au Oz produced to date) JV 5 : 2016 Silver rivatization of Cerro Verde (together with Cyprus) 2013 Acquisition of the Julcani mine in Huancavelica Foundation of Buenaventura Silver Uchucchacua (1975: : ~4K TD) 25x JV 3 : (1994: 30K 2017: K Cu MT) 18x Inauguration of the chemical plant of Rio Seco Mn The first doré bar of Tambomayo is obtained BVN lists on the Lima Stock Exchange First Latin American mining company to list on the New York Stock Exchange 5

6 Operations Drivers Tambomayo Orcopampa La Zanja Coimolache Yanacocha Uchucchacua Mallay Julcani Silver OERATIONS Support El Brocal Cerro Verde Base Metals 6

7 ortfolio of Operations Our Operations Name Stake owned Mining method By product BVN s operations presence 1 2 Tambomayo % U/G Orcopampa % U/G 3 Coimolache 40.10% O/ 4 Yanacocha 43.65% O/ Cajamarca La Zanja 53.06% O/ 9 of 11 mining units operated by BVN 1 recious Metal focused Base Metals Long-term potential asco Lima 7 6 Huancavelica Arequipa Base Metals Silver Uchucchacua % U/G Mallay % U/G Julcani % U/G Tajo Norte 61.32% O/ Marcapunta 61.32% U/G Cerro Verde 19.58% O/ L L L Z Z Z L Notes: (1) Affiliates are Coimolache, Yanacocha and Cerro Verde. BVN is in charge of the operation of Coimolache despite having less than 50% share Silver Copper Zinc Lead Z L U/G: Underground O/: Open it 7

8 ortfolio of Operations Opportunities De-bottlenecking program at Buenaventura s direct operations and subsidiaries to maximize value De-bottlenecking rogram To develop a more robust infrastructure will allow Increase the average production (more steady) Increase exploration and development activities (efficient movement of ore mineral and waste) 1 Tambomayo Full production capacity was achieved in August Improve the backfill system 2 Orcopampa Improve ventilation and hoist systems ositive results replenishing reserves and resources 3 Uchucchacua Increasing mining production by 12% per year to be treated at Mallay s facilities (more profitable) Improve ventilation, hoist and drainage systems 4 Mallay Devoting metallurgical capacity to Uchucchacua s ore (more value) Cost Reduction Increase of Ore Reserves 5 El Brocal (Marcapunta) rioritize copper production (40,000 MT Cu/year 70,000 MT Cu/year) Improve backfill system in order to exploit ore pillars 6 Julcani Optimizing production rate (less volume with higher ore grades) 8

9 Expanding roduction Through Organic Growth Equity roduction Equity Silver roduction In 000 Oz In M Oz Direct Operations Yanacocha Direct Operations In 000 MT Equity Copper roduction In 000 MT Equity Zinc roduction Direct Operations Cerro Verde Direct Operations Notes: (1) Direct Operations includes Tambomayo, Orcopampa, Coimolache, La Zanja, Uchucchacua, Mallay, Julcani, Tajo Norte and Marcapunta 9

10 Operations Highlights: Tambomayo (U/G 100%) The newest BVN s gold mine. Successful ramp-up and full capacity achieved in August 2017 Operation Overview Operating Results Highlights Improvement rogram roduction 2017 Au guidance: 60k 90k Full year production guidance will be: o Au: 120k 150k o Ag: 3 M 4 M Lower cost expected after fine tuning operation Full plant capacity of 1,500 MTD achieved in August Exploration rogram o Drift/Tunnels: 2,089m o Diamond drilling: 16,362m Costs: o Optimization of mining productivity: up to 10% savings in mining contract costs o Improve the backfill to get a more efficient mining cycle roduction: o o Fine tuning processing plant in order to improve recovery rate Increase mine development (K Au Oz) General Information Key oints lant capacity: 1,500 MTD roducts: - Doré bars - Ag/b concentrate - Ag/Zn concentrate Reserves, Resources and LOM (1) (2) (K Au Oz) (3.8 yr) (4.9 yr) Location Location: Arequipa 4,800 MASL Costs CAS 12 (US$/Au Oz) 6M E FY Guidance Reserves Resources (LOM) 6M E FY Guidance Notes: (1) As of December 31, 2016 (2) Resources includes measured and indicated 10

11 B-200 E B-500 E R_100 B-978 E Operations Highlights: Tambomayo (U/G 100%) Improve of the backfill system to reduce mining cycle-time and increase productivity Backfill Circuit TODAY lan View Cross Section Backfill (waste rock + concrete) Truck transportation More expensive Slower activity Concrete lant Mine entrance (pilot) Nv 4846 Nv 4797 Nv 4748 Sub Level Fill Raise Nv 4698 AFTER IMROVEMENTS Nv 4650 Backfill (tailing + cement) ipeline transportation Less expensive o Lower filtering o Lower consumption of cyanide Faster activity lan VIew Fill Raise 11

12 Operations Highlights: Orcopampa (U/G 100%) Extending LOM through exploration (ucará area) Operation Overview Operating Results Highlights Improvement rogram roduction Increase of the annual production guidance: o 180k 190k 190k 200k Expected cost improvement in 2H17 due to higher ore grades and lower cost coming from ucara and ucarina areas 2017 Exploration rogram: o Drift/Tunnels: 6,445m o Diamond drilling: 35,661m Cost reduction: o Optimization of mining contracts: up to 10% savings in mining contract costs o Expansion of the mine shaft (civil works started on Mar-17) - Hoist system improvement o Expansion of the ventilation system (K Au Oz) General Information Key oints lant capacity: 1,500 TD roduct: Doré bars roduction initiated in 1967: more than 4.8M Au Oz and more than 73.8M Ag Oz were produced to date Reserves, Resources and LOM (1) (2) (K Au Oz) (2.2 yr) (2.5 yr) Reserves Resources (LOM) Location Location: Arequipa 3,800 MASL Costs CAS (US$/Au Oz) Notes: (1) As of December 31, 2016 (2) Resources includes measured and indicated 12

13 Operations Highlights: Orcopampa (U/G 100%) Exploration Areas / Ventilation and Hoist Systems Ventilation and Hoist system (looking west) 13

14 Operations Highlights: Coimolache (O/ 40.10%) Low-cost and extended (in oxides) LOM operation. otential to become a long-term Cu producer Operation Overview Operating Results Highlights Improvement rogram roduction 2017 production guidance: o Au: 145k 155k In 2H17 we expect more production contribution coming from the Cienaga Norte area: o Higher ore grades o Lower costs Costs: o Optimization of mining contracts: up to 10% savings in mining contract costs roject: o Coimolache s Sulfides project, currently under resource delineation (Resources: 488 M 0.76% Cu (3.7 M Cu MT) and Au Oz/MT (3.5 M Au Oz)) (K Au Oz) General Information Key oints roduct: Doré bars roduction initiated in 2011: more than 0.8M Au Oz were produced to date Reserves, Resources and LOM (1) (2) (K Au Oz) Oxides (7.7 yr) Oxides (8.3 yr) 5,019 3,531 1, , Reserves Resources (sulfides) Resources (LOM) Location Location: Cajamarca 3,800 MASL Costs CAS (US$/Au Oz) Notes: (1) As of December 31, 2016 (2) LOM only considers Tantahuatay oxides R&R Tantahuatay oxides resources: includes measured and indicated / Tantahuatay sulfides resources: only includes indicated 14

15 Operations Highlights: Yanacocha (O/ 43.65%) Important mining district Quecher Main to extend LOM until 2025 and optionality to become a long-term Cu producer (Yanacocha sulfides) Operation Overview Operating Results Highlights 2017 production guidance: o Au: 530k 560k o Annual Guidance maintained despite heavy rains at the beginning of the year Quecher Main will bridge the operation to Yanacocha Sulfides rojects Quecher Main: o Good results. roject decision is expected by 2H17 o Estimated annual production of 200k Au Oz o roduction between 2020 and o CAEX: $275 - $325 million / ositive FCF project Yanacocha Sulfides (O/): o roject added 2 M Au Oz to resources o Studies will take more years o More drilling and mining exploration expected at Chaquicocha (U/G) roduction (K Au Oz) General Information Key oints roduct: Doré bars roduction initiated in 1993: more than 36.7M Au Oz were produced to date Reserves (1) and Resources (1) (2) (M Au Oz) Reserves Resources Reserves Resources Location Location: Cajamarca 3,800 MASL Costs CAS (US$/Au Oz) Conga Yanacocha Notes: (1) As of December 31,

16 Operations Highlights: La Zanja (O/ 53.06%) Exploration to increase oxides (LOM) until 2019 and potential Cu producer Highlights 2017 production guidance: o Au: 115k 125k LOM will be extended until 2019 Operation Overview Improvement rogram Reserves increase: o otential copper porphyry Emperatriz (sulfides project) roduction (K Au Oz) Operating Results General Information Key oints roduct: Doré bars roduction initiated in 2010: more than 0.9M Au Oz were produced to date Reserves, Resources and LOM (1) (2) (K Au Oz) (2.4 yr) (2.6 yr) Location Location: Cajamarca 3,500 MASL Costs CAS (US$/Au Oz) Reserves Resources (LOM) Notes: (1) As of December 31, 2016 (2) Resources includes measured and indicated. Alejandra project is not considered 16

17 Operations Highlights: Uchucchacua (U/G 100%) Optimizing mine and plant infrastructure to increase production capacity Operation Overview Operating Results Highlights Improvement rogram roduction Increase of the 2017 production guidance: o Ag: 16M 18M Oz 17M 18M Oz Since June, the underground production of Uchucchacua was increased from 3,910 TD to 4,400 TD. The exceeded capacity is being treated at Mallay s processing plant 2017 Exploration rogram: o Drift/Tunnels: 8,416m o Diamond drilling: 39,281m Cost reduction: o Optimization of mining contracts: up to 10% savings in mining contract costs o Improvement of the ventilation, drainage and the hoist system (mineral transportation system) roduction increase: o Evaluating plant expansion (3.9K 5.0/6.0K TD) Reserves increase: o Good exploration results at Yumpaq o Start the studies related to the Uchucchacua- Yumpaq integration Silver (M Ag Oz) General Information Key oints lant capacity: 3,910 TD roducts: - Silver bars - Ag/b concentrate - Ag/Zn concentrate roduction initiated in 1975: more than 259 M Ag Oz were produced to date Reserves, Resources and LOM (1) (2) (M Ag Oz) (4.7 yr) (4.8 yr) Reserves Resources (LOM) Location Location: Lima 4,500 MASL Costs CAS (US$/Ag Oz) Notes: (1) As of December 31, 2016 (2) Includes measured and indicated resources. Yumpaq is not being considered (24.2 M Ag Oz) 17

18 Operations Highlights: Uchucchacua (U/G 100%) Exploration Areas/ Ventilation, Hoist and Drainage 18

19 Operations Highlights: Cerro Verde (O/ 19.58%) World class deposit with largest processing facility Operation Overview Operating Results Highlights roduction lant throughput of 360k TD (largest concentrating facility): o Concentrator # 1: 120K TD o Concentrator # 2: 240k TD Copper production distribution: roduction 2017E: o Cu: 500k 550k MT o Mo: 9.6k 11.6k MT o Ag: 3.5M 4.5M Oz Cash Cost 2017E: $/Cu Lb Copper (K Cu MT) o Cu Concentrate: 90% o Cu Cathodes: 10% General Information Key oints lant capacity: 360k TD roducts: - Cu concentrate - Cu cathodes - Mo concentrate Reserves (1) (M Cu MT) (23.7 yr) (21.9 yr) Reserves Location Location: Arequipa 2,600 MASL Costs CAS (US$/Cu Lb) Notes: (1) As of December 31,

20 rojects Drivers Support San Gabriel Quecher Main Silver Yumpaq El Faique Trapiche San Gregorio Marcapunta Norte-Sur Yanacocha s Sulfides Coimolache s Sulfides Base Metals ROJECTS 20

21 Line of rojects (1) Allocation of resources to the roject Feasibility review Design review and development Closing review of the project roject 5 roject 1 roject 3 roject 2 roject 4 Conceptual Feasibility Construction Operation Notes: (1) Based on the methodology of the book: roject Management for Mining (Hickson y Owen, 2015) 21

22 roject 1 (Example) roject Status (1) (2) Current: Identify gap with pre-feasibility study lan: Complete missing studies (ECM hase I) to achieve pre-feasibility level resentation to committee and approval Develop feasibility study under new set limits (ECM hase II) (12) Communities (11) eople (10) Security (9) ermits (1) Geology (2) Mine (3) lant (4) Deposit (5) Energy (8) Lands (6) Water (7) Infrastructure Level Conceptual Feasibility Construction Operation Nota: (1) Based on the methodology of the book: roject Management for Mining (Hickson y Owen, 2015) (2) Levels 9 and 10 can only be achieved when all 12 dimensions are at the same level of development 22

23 ortfolio of rojects ipeline for Growth Buenaventura s roject Strategy Legend To implement a disciplined process and increase value through our portfolio of mining projects Increase Value Focus on optimize capital allocation Disciplined process Focus on implementing best practices in terms of project management 1 5 years In preparation to Ramp-up Quecher Main Marcapunta (expansion) Rio Seco Expansion (Mn) Yumpaq (hase I) projects Silver projects Base Metal projects Operated by Newmont San Gabriel Trapiche (Cu) years El Faique (Zn/b/Cu) Yanacocha Sulphides (Cu/Au) San Gregorio (Zn/b/Ag) Coimolache Sulphides (Cu/Au) Rio Seco (Cu/As) 23

24 rojects Highlights: San Gabriel (U/G 100%) Assuring a robust engineering analysis roject Overview Highlights San Gabriel Ore Body Access Ramp Environmental Impact Assessment (EIA) approved on March 31, 2017 refeasibility studies underway Key aspects under analysis: Complementary geomechanical testwork studies to optimize mining methods General Information Main Mineral Resources (1) Deposit Type Ownership (1) 100% High-grade and Silver Underground Buenaventura 7.7 M 5.7 g/t Au (1.4 M Au 0.23 Oz/t Ag (1.7 M Ag Oz) *Measured and indicated 5.3 M 4.6 g/t Au (0.8 M Au 0.23 Oz/t Ag (1.2 M Ag Oz) *Inferred Location Location: Moquegua 4,800 MASL Notes: (1) As of December 31,

25 2Q17 Financial Highlights Total Revenues Consolidated EBITDA In US$ millions -10% % ~+22% 1,069 1,200-1,400 In US$ millions -48% % ~+28% Q16 2Q17 2Q16 2Q17 Net Income In US$ millions -40% (1) 2Q16 2Q17 In US$ millions % 111 EBITDA Including Affiliates -12% Q16 2Q17 6M16 6M17 ~+26% E Other Operations (2) (42%) Direct Operating Units (3) (58%) Notes: (1) 2016 net Income includes a Yanacocha s impairment of US$ M (2) Includes Yanacocha and Cerro Verde (3) Operating units includes all BVN s direct operations (Tambomayo, Orcopampa, La Zanja, Uchucchacua, Mallay, Julcani, Tajo Norte and Marcapunta) and Coimolache 25

26 2Q17 Financial Highlights Buenaventura has maintained an adequate debt structure through recent years, which allowed to achieve a solid financial performance and low cost of funding levels Net Debt / EBITDA (1) Debt rofile (2) (3) 5.3x 25% 4.0x 60% Total Debt: US$ 714 M 15% 2.5x 2.0x 1.7x 1.7x 1.9x < 1 year < 1 & 2 years> <2 & 5 years> Debt Rating 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Ba2 BBB- Notes: (1) EBITDA from Direct Operations. As of June, 2017, the cash amount is US$156.7 M (2) Consolidated debt includes: 100% BVN, 100% La Zanja, 100% El Brocal, 100% Huanza (3) Huanza s debt is non recourse to BVN 26

27 2017 CAEX: US$ M In US$ millions Consolidated CAEX (1) E 2017 Estimated Consolidated Total CAEX by Asset ~-40% Uchucchacua 15% La Zanja 12% Others 5% El Brocal 13% (US$ M) San Gabriel 8% Orcopampa 6% E Sustaining Growing Tambomayo (2) 41% Notes: (1) Consolidated Capex includes 100% BVN, 100% La Zanja, 100% El Brocal. (2) Includes US$ 40 M of mine development 27

28 Closing Remarks Drivers Support Safety Human Resources Social Management Environmental Management Technology and Innovation Energy Communications Head Office Tambomayo Orcopampa La Zanja Coimolache Yanacocha Uchucchacua Mallay Julcani El Brocal Cerro Verde Silver San Gabriel Quecher Main Yumpaq Base Metals Silver OERATIONS I. II. III. IV. BVN 100% based in eru, one of the richest mineral countries in the world Long tradition of ore reserves replenishing Implementing de-bottlenecking program in our operations to increase its profitability Establishing best practices for roject management El Faique Trapiche San Gregorio Marcapunta Norte-Sur Yanacocha s Sulfides Coimolache s Sulfides Base Metals ROJECTS V. Commited to generating value for our stake holders (personnel, shareholders, rural neighbors, our country) 28

29 2017 Denver Forum Investor Relations Contact: Rodrigo Echecopar, (511)