BVN Compania De Minas Buenaventura SA

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 6-K

 

REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15b-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of October 2021

 

Commission File Number 001-14370

 

COMPANIA DE MINAS BUENAVENTURA S.A.A.

(Exact name of registrant as specified in its charter)

 

BUENAVENTURA MINING COMPANY INC.
(Translation of registrant’s name into English)

 

Republic of Peru
(Jurisdiction of incorporation or organization)

 

CARLOS VILLARAN 790
SANTA CATALINA, LIMA 13, PERU
(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F ____X___ Form 40-F _______

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]


Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes _______ No ___X____

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable.

 

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Buenaventura Announces

Third Quarter and Nine-month 2021 Results

Lima, Peru, October 28, 2021 – 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 results for the third quarter (3Q21) and nine-month period (9M21) ended September 30, 2021.  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 and Nine-month 2021 Highlights:

●	3Q21 EBITDA from direct operations reached US$ 39.5 million, compared to US$ 68.5 million reported in 3Q20. 9M21 EBITDA from direct operations reached US$ 141.6 million; an increase as compared to US$ 88.1 million for the 9M20.
●	3Q21 Adjusted EBITDA including associated companies reached US$ 183.7 million, compared to US$ 183.9 million in 3Q20. 9M21 Adjusted EBITDA including associates reached US$ 593.3 million; a significant increase as compared to US$ 298.5 million for the 9M20.
●	3Q21 net loss reached US$ 91.9 million, compared to a US$ 14.9 million net income for the same period in 2020. 9M21 net loss was US$ 39.3 million, compared to a US$ 68.9 million net loss in the 9M20.  It is important note that net loss for the 3Q21 and 9M21 was impacted by a US$ 66.4 million Yanacocha impairment, corresponding to BVN’s equity ownership position in this asset.
●	Aligned with the Company’s strategy to focus primarily on exploration, 3Q21 exploration at operating units increased to US$ 17.1 million, compared to US$ 7.6 million in 3Q20. 9M21 exploration at operating units increased to US$ 40.9 million, compared to US$ 16.1 million in 9M20.
●	3Q21 capital expenditures were US$ 24.0 million, compared to US$ 12.9 million for the same period in 2020. 9M21 capital expenditures reached US$ 58.5 million, compared to US$ 35.2 million in 9M20.
●	Cost Applicable to Sales (CAS) for the 9M21 reflects a US$ 43.8 million impact due to COVID-19-related expenses.
●	Buenaventura’s cash position reached US$ 287.9 million as of September 30, 2021.
●	Mining and ore processing activities were suspended at the Uchucchacua mine in line with Buenaventura’s strategy to reduce costs and become cash neutral while enabling the Company to focus on underground exploration and optimize the current reserve exploitation sequence with a gradual operations re-start.

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Compañía de Minas Buenaventura S.A.A. Third Quarter 2021 Results  Page 8 of 25

CERRO VERDE

Cerro Verde (19.58% owned by Buenaventura) 3Q21 copper production was 102,382 MT, 20,046 MT of which is attributable to Buenaventura; an increase as compared to 98,718 MT produced in 3Q20; 19,329 MT of which was attributable to Buenaventura.

Cerro Verde reported 3Q21 net income of US$ 293.3 million, compared to net income of US$ 115.8 million in 3Q20. This is primarily due to a 56% year on year net sales increase, mainly due to a higher average realized copper price of US$ 4.07 per pound in the third quarter of 2021, compared to US$ 3.20 per pound in the third quarter of 2020. This increase was partially offset by a year on year income tax increase.

3Q21 capital expenditures at Cerro Verde were US$ 48.8 million.

COIMOLACHE (Tantahuatay operation)

Coimolache, which is 40.10% owned by Buenaventura, 3Q21 attributable contribution to net income was US$ 0.8 million, as compared to US$ 3.0 million attributable contribution to net income in 3Q20.

***

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: Tambomayo*, Orcopampa*, Uchucchacua*, Julcani*, 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; 19.58% of Sociedad Minera Cerro Verde, an important Peruvian copper producer.

For a printed version of the Company’s 2020 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 and related conference call contain, in addition to historical information, forward-looking statements including statements related to the Company’s ability to manage its business and liquidity during and after the COVID-19 pandemic, the impact of the COVID-19 pandemic on the Company’s results of operations, including net revenues, earnings and cash flows, the Company’s ability to reduce costs and capital spending in response to the COVID-19 pandemic if needed, the Company’s balance sheet, liquidity and inventory position throughout and following the COVID-19 pandemic, the Company’s prospects for financial performance, growth and achievement of its long-term growth algorithm following the COVID-19 pandemic, future dividends and share repurchases. This press release may also 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.

Compañía de Minas Buenaventura S.A.A. Third Quarter 2021 Results  Page 9 of 25

**Tables to follow**

 (*) Consolidated

(**) Equity Accounting

Compañía de Minas Buenaventura S.A.A. Third Quarter 2021 Results  Page 10 of 25

Compañía de Minas Buenaventura S.A.A. Third Quarter 2021 Results  Page 12 of 25

APPENDIX 3: Adjusted EBITDA Reconciliation (in thousand US$)

*Cerro Verde’s EBITDA accounts for D&A related to the capitalization of the stripping.

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

Compañía de Minas Buenaventura S.A.A. Third Quarter 2021 Results  Page 13 of 25

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.

 

Operations’ Cost applicable to sales does not include operating cost for those months during which Buenaventura’s operations were suspended due to COVID-19, as these have been classified as “Unabsorbed costs due to production stoppage” within the financial statements.

 

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.