Compañía de Minas Buenaventura S.A.A. Sponsored ADR

Company Overview

Business Model: COMPAÑÍA DE MINAS BUENAVENTURA S.A.A. (Buenaventura) is Peru’s largest publicly traded precious metals company, primarily engaged in the exploration, mining, and processing of gold, silver, copper, and other metals exclusively within Peru. The company generates revenue through sales of metals, services, and royalty income. Buenaventura also holds non-controlling interests in other significant mining operations, including a 19.58% equity interest in Sociedad Minera Cerro Verde S.A.A. (Cerro Verde), and owns an electric power transmission company, a hydroelectric plant, and a manganese sulphate processing plant. Its core business strategy is to maximize value by operating mines positioned near the second quartile of the cost curve, with a mine life exceeding five years for underground operations and over ten years for open-pit operations, and generating Adjusted EBITDA margins of more than 30% on an average life-of-mine basis.

Market Position: Buenaventura holds a leading position as Peru’s largest publicly traded precious metals company by market capitalization as of December 31, 2024. It operates a diversified portfolio of wholly-owned mines such as Uchucchacua/Yumpag, Orcopampa, Tambomayo, Julcani, and La Zanja, and holds significant equity interests in key Peruvian mining assets, including a 61.43% interest in Sociedad Minera El Brocal S.A.A. (El Brocal) and a 40.09% interest in Compañía Minera Coimolache S.A. (Coimolache). The company's revenue mix is currently 55% precious metals and 45% base metals.

Recent Strategic Developments:

• Asset Divestitures: In February 2022, Buenaventura sold its entire stake in Minera Yanacocha S.R.L. to Newmont for $300 million cash, with potential contingent payments up to an additional $100 million. In August 2024, the company sold its holdings in S.M.R.L. Chaupiloma Dos de Cajamarca for US$70 million cash (Buenaventura's share) plus a contingent payment.
• New Mine Operations: The Yumpag silver mine began operations in September 2023, utilizing the Uchucchacua plant for processing. The San Gabriel mine, an underground gold and silver project, is under construction with operations expected to commence in mid-2025.
• Balance Sheet Optimization: The consolidated net debt to Adjusted EBITDA ratio was significantly reduced from 3.60:1 as of December 31, 2021, to 0.34:1 as of September 30, 2024, with a stated goal to maintain a leverage ratio below 2.00:1.
• Debt Refinancing: In February 2025, Buenaventura issued US$650 million 6.800% Senior Notes due 2032 and simultaneously purchased approximately 72.98% of its US$550 million Senior Notes due 2026.

Geographic Footprint: All of Buenaventura's mining operations, exploration projects, and related facilities are located exclusively within the Republic of Peru. Key operational regions include Arequipa, Lima, Huancavelica, Cajamarca, Pasco, and Moquegua.

Cross-Border Operations: Buenaventura Trading S.A.S., a wholly owned trading subsidiary, is located in Uruguay. The company engages in joint venture exploration projects within Peru with international partners such as Southern Copper Corporation, Freeport-McMoRan Inc., and holds an equity interest in Tinka Resources Limited, an exploration and development company.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 31.1%
• Operating Margin: 38.6%
• Net Margin: 36.1%

Investment in Growth:

• R&D Expenditure: $72.7 million (6.3% of revenue)
• Capital Expenditures: $337.7 million
• Strategic Investments: Major capital expenditures in 2024 included $250.6 million for San Gabriel, $29.7 million for Uchucchacua/Yumpag, $24.9 million for Colquijirca and Marcapunta, and $24.5 million for Molle Verde (Trapiche). The projected capital expenditures budget for 2025 is approximately US$330 to US$355 million.

Currency Impact Analysis:

• Buenaventura's functional currency is the United States dollar.
• The company reported a foreign currency exchange difference loss of $9.2 million in 2024, contrasting with a gain of $19.4 million in 2023.
• Buenaventura and its wholly owned subsidiaries are unhedged for gold, silver, and copper prices as of December 31, 2024 and 2023, with the exception of El Brocal which is permitted to hedge copper and zinc. Cerro Verde does not engage in hedging activities.

Business Segment Analysis

Orcopampa

Financial Performance:

• Revenue: Not separately disclosed. 2024 production: Gold 70,892 Oz, Silver 29,493 Oz.
• Operating Margin: Not separately disclosed.
• Key Growth Drivers: The mine's life of mine (LOM) is approximately one more year, and the company is discontinuing reporting reserves/resources for this unit. Product Portfolio:
• Gold, Silver.
• Plant Capacity: 3,000 tonnes of ore per day. Market Dynamics:
• Located in Castilla, Arequipa, Peru.
• 2024 Cost applicable to sales: Gold US$1,228/oz, Silver US$14.39/oz. Geographic Revenue Distribution:
• Peru: All operations are domestic.

Uchucchacua/Yumpag

Financial Performance:

• Revenue: Not separately disclosed. 2024 production: Silver 10,487,480 Oz, Zinc 21,205 t, Lead 13,751 t.
• Operating Margin: Not separately disclosed.
• Key Growth Drivers: The Yumpag silver mine commenced operations in September 2023, utilizing the Uchucchacua plant for processing, extending the combined LOM through 2034. Product Portfolio:
• Silver, Lead, Zinc.
• Plant Capacity: 4,200 metric tonnes per day (Uchucchacua mill). Market Dynamics:
• Located in Oyón, Lima (Uchucchacua) and Daniel Alcides Carrión, Pasco (Yumpag), Peru.
• 2024 Cost applicable to sales: Silver US$13.41/oz, Zinc US$1,724/t, Lead US$1,027/t.
• The Rio Seco manganese sulphate plant processed Yumpag mine silver manganese concentrate in 2024. Geographic Revenue Distribution:
• Peru: All operations are domestic.

Julcani

Financial Performance:

• Revenue: Not separately disclosed. 2024 production: Silver 1,402,787 Oz, Gold 4,504 Oz, Lead 727 t.
• Operating Margin: Not separately disclosed.
• Key Growth Drivers: The mine's LOM is nearly depleted, and the company is discontinuing reporting reserves/resources for this unit. Product Portfolio:
• Silver, Lead, Gold.
• Plant Capacity: 600 tonnes per day. Market Dynamics:
• Located in Angaraes, Huancavelica, Peru.
• 2024 Cost applicable to sales: Silver US$27.33/oz, Lead US$1,984/t. Geographic Revenue Distribution:
• Peru: All operations are domestic.

Tambomayo

Financial Performance:

• Revenue: Not separately disclosed. 2024 production: Gold 33,896 Oz, Silver 1,412,092 Oz, Lead 4,058 t, Zinc 5,262 t.
• Operating Margin: Not separately disclosed.
• Key Growth Drivers: The mine's LOM is approximately one more year, and the company is discontinuing reporting reserves/resources for this unit. Product Portfolio:
• Gold, Silver, Lead, Zinc.
• Plant Capacity: 2,000 tonnes per day. Market Dynamics:
• Located in Caylloma, Arequipa, Peru.
• 2024 Cost applicable to sales: Gold US$1,588/oz, Silver US$19.92/oz, Lead US$1,426/t, Zinc US$2,222/t. Geographic Revenue Distribution:
• Peru: All operations are domestic.

El Brocal (61.43% equity interest)

Financial Performance:

• Revenue: Not separately disclosed. 2024 production included Silver 91,190 Oz, Zinc 1,985 t (Tajo Norte Pb y Zn); Gold 164 Oz, Silver 379,333 Oz, Copper 3,006 t (Tajo Norte - Cu); Gold 23,482 Oz, Silver 1,652,220 Oz, Copper 53,518 t (Marcapunta).
• Operating Margin: Not separately disclosed.
• Key Growth Drivers: Underground mine production increased to 12,000 tonnes per day in 2024. Product Portfolio:
• Copper, Zinc, Lead, Silver, Gold.
• Plant Capacity: 21,000 tonnes of ore per day (Colquijirca mine). Market Dynamics:
• Located in Cerro de Pasco, Peru.
• Mining activities at Tajo Norte Pb y Zn were temporarily suspended for up to three years as of October 3, 2023.
• 2024 Cost applicable to sales: Silver US$19.07/oz, Zinc US$1,818/t (Tajo Norte Pb y Zn); Gold US$1,667/oz, Silver US$19.07/oz, Copper US$6,249/t (Tajo Norte - Cu and Marcapunta). Geographic Revenue Distribution:
• Peru: All operations are domestic.

La Zanja (100% ownership)

Financial Performance:

• Revenue: Not separately disclosed. 2024 production: Gold 15,746 Oz, Silver 23,637 Oz.
• Operating Margin: Not separately disclosed.
• Key Growth Drivers: Rehandled 2.9 million tonnes and releached 73 Hectares of San Pedro Sur heap leach PAD since June 2024. The mine's LOM is nearly depleted, and the company is discontinuing reporting reserves/resources for this unit. Product Portfolio:
• Gold, Silver. Market Dynamics:
• Located in Santa Cruz, Cajamarca, Peru. Geographic Revenue Distribution:
• Peru: All operations are domestic.

Coimolache (40.09% equity interest)

Financial Performance:

• Revenue: Not separately disclosed. 2024 production: Gold 48,120 Oz, Silver 236,082 Oz.
• Operating Margin: Not separately disclosed.
• Key Growth Drivers: The MEIAd for Coimolache was approved in June 2024, allowing for expansion of Tajo, PAD, and PTAA Ciénaga Norte components. LOM through 2029. Product Portfolio:
• Gold, Silver.
• Plant Capacity: 60,000 tonnes of ore per day. Market Dynamics:
• Located in Hualgayoc, Cajamarca, Peru.
• 2024 Cost applicable to sales: Gold US$1,637/oz, Silver US$19.37/oz. Geographic Revenue Distribution:
• Peru: All operations are domestic.

Cerro Verde (19.58% equity interest)

Financial Performance:

• Revenue: $4,238.3 million (+2.3% YoY)
• Operating Margin: 35.1%
• Key Growth Drivers: Higher average realized copper prices in 2024 (US$9,237/t vs. US$8,532/t in 2023) contributed to increased sales despite a slight decrease in sales volume. The mine has a long LOM through 2052. Product Portfolio:
• Copper, Molybdenum, Silver.
• Permitted Milling Capacity: 409,500 metric tonnes per day (expandable to 450,450 metric tonnes per day).
• 2024 Production: Copper 430,670 t, Molybdenum 9,055 t, Silver 3,599,132 Oz. Market Dynamics:
• Located in Arequipa, Peru.
• 2024 Copper Cash Cost: US$2.18/Cu Lb.
• Freeport-McMoRan Inc. increased its ownership to 55.08% in September 2024.
• Cerro Verde entered a new power purchase agreement in 2023 to transition its electric power to fully renewable energy sources in 2026. Geographic Revenue Distribution:
• Asia: $3,315.6 million (78.2% of segment revenue)
• North America: $416.3 million (9.8% of segment revenue)
• Europe: $320.6 million (7.6% of segment revenue)
• South America (primarily Peru): $185.8 million (4.4% of segment revenue)

International Operations & Geographic Analysis

Revenue by Geography (Buenaventura Consolidated):

International Business Structure:

• Subsidiaries: Buenaventura Trading S.A.S. is a wholly owned trading company based in Uruguay, facilitating international sales and logistics.
• Joint Ventures: Buenaventura holds a 70% interest in Apu Coropuna S.R.L., a joint venture with Southern Peru Copper Corporation, focused on exploration activities in Castilla, Arequipa, Peru.
• Licensing Agreements: Not explicitly detailed as licensing agreements, but the company holds a 19.88% equity interest in Tinka Resources Limited, an exploration and development company.

Cross-Border Trade:

• Export Markets: Primary export customers in 2024 included Asahi Refining Canada Ltd and Asahi Refining US Inc. (17.54% of total sales), Daye Qiansheng (HK) Investment Trading Limited (4.26%), Axaya AG (2.13%), Glencore International AG (1.03%), and MRI Trading AG (0.57%).
• Import Dependencies: The filing does not explicitly detail key imported materials or suppliers.
• Transfer Pricing: Buenaventura has conducted tax compliance and transfer pricing studies, concluding that its tax treatments are likely to be accepted by tax authorities.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: Not explicitly detailed in the filing.
• Dividend Payments: Buenaventura declared and paid US$0.073 per Common Share, ADS, and Investment Share in 2024. For 2024 profit, the board approved a dividend proposal of US$80.5 million (US$74.2 million net of Treasury shares) in February 2025, scheduled for payment by May 5, 2025.
• Dividend Yield: Not explicitly stated.
• Future Capital Return Commitments: The company's dividend policy is to distribute an annual cash dividend of at least 20% of net income from majority-owned operations and subsidiaries, including 20% of attributable net income from associates (Coimolache and Cerro Verde) if they distribute cash dividends.

Balance Sheet Position:

• Cash and Equivalents: $478.4 million (as of December 31, 2024)
• Total Debt: $623.1 million (Financial obligation – capital, as of December 31, 2024, including Senior Notes due 2026 and Huanza debt). This figure does not include the US$650 million Senior Notes due 2032 issued in February 2025.
• Net Cash Position: -$144.7 million (Cash and Equivalents minus Financial obligation – capital, as of December 31, 2024).
• Credit Rating: “BB” by Fitch, “Ba3” by Moody’s Investors Service, and “BB-” by S&P Global Ratings.
• Debt Maturity Profile (as of December 31, 2024):
  • Less than 1 year: $8.4 million (capital)
  • Between 1 and 2 years: $556.8 million (capital, includes Senior Notes due 2026)
  • Between 2 and 5 years: $57.9 million (capital, includes Huanza debt)
  • More than 5 years: No amounts from the contractual obligations table, but US$650 million Senior Notes due 2032 were issued in February 2025.

Cash Flow Generation:

• Operating Cash Flow: $486.1 million (2024)
• Free Cash Flow: $148.3 million (2024)
• Cash Conversion Metrics: Not explicitly stated.

Currency Management:

• Cash holdings by major currencies: Primarily in US dollars, with exposure to Peruvian Soles.
• Natural hedging through operational diversification: The company mitigates exchange-rate risk by conducting most transactions in its functional currency (US$).
• Financial hedging instruments and strategies: Buenaventura and its wholly-owned subsidiaries are unhedged for gold, silver, and copper prices as of December 31, 2024 and 2023, except El Brocal which is allowed to hedge copper and zinc. Cerro Verde does not engage in hedging activities.

Operational Excellence

Production & Service Model: Buenaventura operates as an integrated mining company, covering exploration, extraction, and processing of precious and base metals. Its operational philosophy centers on maximizing value by maintaining mines near the second quartile of the cost curve, ensuring long mine lives (over five years for underground, over ten for open-pit), and achieving high Adjusted EBITDA margins. The company also diversifies its operational model through an electric power transmission company, a hydroelectric plant, and a manganese sulphate processing plant.

Global Supply Chain Architecture: Key Suppliers & Partners:

• Energy Suppliers: Cerro Verde receives electrical power under long-term contracts with ElectroPeru S.A. and Engie Energia Peru S.A., with a transition to fully renewable energy sources expected by 2026.
• Mining Equipment: Cerro Verde operates a substantial fleet of haul trucks (fifty-four 300-metric-ton, ninety-one 250-metric-ton, eight leased 380-metric-ton) and 14 electric shovels.
• Logistics Partners: Copper cathodes and concentrate are transported by truck and rail to the Port of Matarani for international shipment, while molybdenum concentrate uses the Ports of Callao or Matarani.

Facility Network:

• Manufacturing: Buenaventura operates multiple processing plants at its wholly-owned mines (e.g., Uchucchacua mill, El Brocal plant, Coimolache plant) and owns Procesadora Industrial Rio Seco S.A., which operates a manganese sulphate crystallization plant in Huaral, Lima.
• Research & Development: The company conducts exploration activities in both operating units and non-operating areas across Peru, with a 2025 budget of approximately US$35-40 million for operating units and US$19-25 million for non-operating areas.
• Distribution: The company leverages Peruvian ports (Matarani, Callao) for the international distribution of its metal concentrates and cathodes.

Operational Metrics:

• Gold Production: 139,563 oz (2024), a decrease from 147,195 oz (2023).
• Silver Production: 14,659,489 oz (2024), a significant increase from 7,912,857 oz (2023).
• Copper Production: 35,255 t (2024), a slight decrease from 35,463 t (2023).
• Cerro Verde Copper Production (recoverable pounds): 949,463 thousand lbs (2024), a decrease from 985,542 thousand lbs (2023).
• Cerro Verde Average Milling Rate: 415,500 metric tonnes of ore per day (2024).
• Accident Rate (Buenaventura consolidated): 0.77 (2024), representing a 20% decrease from 0.97 (2023).

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: The company engages in direct sales to both domestic and foreign customers.
• Channel Partners: Major domestic customers in 2024 included Trafigura Peru (40.61% of sales), IXM Trading Peru S.A.C. (14.79%), Glencore Peru S.A.C. (9.63%), and Andina Trade S.A.C. (2.29%).
• Digital Platforms: Not explicitly mentioned in the filing.

Customer Portfolio: Enterprise Customers:

• Tier 1 Clients (Export): Key export customers in 2024 included Asahi Refining Canada Ltd and Asahi Refining US Inc. (17.54% of total sales), Daye Qiansheng (HK) Investment Trading Limited (4.26%), Axaya AG (2.13%), Glencore International AG (1.03%), and MRI Trading AG (0.57%).
• Strategic Partnerships (Cerro Verde): For Cerro Verde, 95-97% of sales were to related entities, specifically Freeport Minerals Corporation, Sumitomo Metal Mining Company, and Climax Molybdenum Marketing Corporation, under long-term agreements.
• Customer Concentration: Buenaventura faces customer concentration risk, particularly for Cerro Verde's sales to related parties and for its domestic sales to Trafigura Peru.

Regional Market Penetration:

• Peru: The domestic market represents a significant portion of Buenaventura's sales, accounting for 68.71% of total sales in 2024.
• Growth Markets: Cerro Verde's revenue distribution highlights strong penetration in Asia (78.2% of segment revenue), with additional presence in North America (9.8%) and Europe (7.6%).

Competitive Intelligence

Global Market Structure & Dynamics

Industry Characteristics: The global mining industry is characterized by high capital intensity, long project development cycles, and significant exposure to commodity price volatility. Prices for gold, silver, copper, zinc, lead, and molybdenum are influenced by global economic growth, supply-demand imbalances, and geopolitical events. The industry also faces stringent regulatory environments, particularly concerning environmental and social compliance, which can lead to substantial operating costs and potential liabilities. International conflicts can disrupt supply chains and impact treatment charges for base metals, as seen with zinc smelter closures in Europe in 2022.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors: While specific direct competitors are not named in the filing, Buenaventura operates in a competitive global market for precious and base metals. Its major partners and shareholders in joint ventures and associates, such as Freeport-McMoRan Inc., Sumitomo Metal Mining Company Ltd., Southern Peru Copper Corporation, and Newmont, are also significant players in the global mining industry and represent competitive forces.

Regional Competitive Dynamics: The Peruvian mining sector is highly competitive, involving various local and international players. Buenaventura's extensive operational history, diversified asset base, and ongoing project pipeline provide a strong competitive advantage within the region.

Risk Assessment Framework

Strategic & Market Risks

Global Market Dynamics:

• Commodity Price Volatility: Buenaventura's financial performance is highly sensitive to fluctuations in gold, silver, and copper prices, which are influenced by global economic conditions and are largely beyond the company's control. The company and its wholly-owned subsidiaries are generally unhedged for these prices.
• Technology Disruption: While not explicitly detailed as a risk, the long-term viability of mining operations depends on continuous innovation and adaptation to new technologies.
• Customer Concentration: High customer concentration exists for Cerro Verde, with 95-97% of its sales directed to related entities (Freeport Minerals Corporation, Sumitomo Metal Mining Company, Climax Molybdenum Marketing Corporation). Buenaventura's domestic sales also show concentration with Trafigura Peru.

Operational & Execution Risks

Global Supply Chain Vulnerabilities:

• Supplier Dependency: Reliance on specific energy suppliers (e.g., ElectroPeru S.A., Engie Energia Peru S.A. for Cerro Verde) and mining equipment providers could pose risks.
• Regional Disruptions: As all operations are exclusively in Peru, the company is exposed to country-specific political, economic, social, and natural disaster risks (e.g., extreme precipitation, water stress, flooding identified for Mining Units).
• Trade Restrictions: International conflicts, such as the Russia-Ukraine war, have demonstrated the potential to disrupt supply chains and increase treatment charges for base metals.

Financial & Regulatory Risks

Currency & Financial Risks:

• Foreign Exchange: The primary currency exposure arises from balances denominated in Peruvian Soles, although most transactions are conducted in US dollars to mitigate this risk.
• Interest Rate Risk: As of December 31, 2024, Cerro Verde had no outstanding bank debt, limiting its interest rate risk. Buenaventura has long-term notes with fixed interest rates.
• Credit & Liquidity: The company manages credit risk by investing excess cash in highly rated institutions and maintaining conservative credit policies. Liquidity risk is managed through adequate cash reserves, debt maturity management, and access to credit lines. Buenaventura holds credit ratings of “BB” by Fitch, “Ba3” by Moody’s, and “BB-” by S&P Global Ratings. Regulatory & Compliance Risks:
• Multi-Jurisdictional Compliance: Operations are subject to Peru's comprehensive General Mining Law, environmental regulations, health and safety laws, and mine closure requirements.
• Trade Regulations: Not explicitly detailed beyond general commodity market impacts.
• Tax Regulations: Buenaventura is involved in significant tax disputes with SUNAT (Peruvian tax authority) for fiscal years 2007-2010, totaling approximately US$559.0 million with penalties and fees. The company has paid disputed amounts and is appealing adverse Supreme Court rulings. Cerro Verde also faces ongoing tax disputes regarding mining royalties, with an international arbitration claim by Freeport dismissed in May 2024, and a Sumitomo case pending.

Geopolitical & External Risks

Country-Specific Risks:

• Political Risk: Peruvian government policies and political/economic developments can adversely affect business. Mining concessions require minimum production or investment levels and annual fees; failure for two consecutive years can lead to loss of rights.
• Economic Risk: Not explicitly detailed beyond general economic conditions impacting commodity prices.
• Regulatory Changes: Changes in Peruvian mining, environmental, health & safety, and tax laws can impact operations and costs. The Law of Prior Consultation for Indigenous and Native Communities requires consultation for measures affecting indigenous communities, which Buenaventura successfully concluded for its 2024 projects.

Innovation & Technology Leadership

Research & Development Focus: Global R&D Network:

• Exploration in non-operating areas: Buenaventura invested US$21.9 million in 2024 (vs. US$13.5 million in 2023).
• Exploration in operating units: The company invested US$50.9 million in 2024 (vs. US$49.2 million in 2023).
• Innovation Pipeline: The 2025 exploration budget is approximately US$35-40 million for operating units (primarily Uchucchacua and El Brocal) and US$19-25 million for non-operating areas. Key development projects include the San Gabriel mine (under construction, operations expected mid-2025) and the Trapiche project (in development). The Yumpag silver mine commenced operations in September 2023, demonstrating successful project execution.

Intellectual Property Portfolio:

• Patent Strategy: Not explicitly detailed in the filing.
• Licensing Programs: Not explicitly detailed in the filing.
• IP Litigation: Not explicitly detailed in the filing.

Technology Partnerships:

• Strategic Alliances: Buenaventura engages in joint venture exploration projects with Southern Copper Corporation, Freeport-McMoRan Inc., and holds an equity interest in Tinka Resources Limited, indicating strategic collaborations for resource development.
• Research Collaborations: Not explicitly detailed in the filing.

Leadership & Governance

Executive Leadership Team

International Management Structure:

• The executive leadership team includes specialized Vice Presidents for Operations, Projects, and Explorations, indicating a centralized functional management structure overseeing the company's exclusively Peruvian operations.

Board Composition:

• The Board of Directors consists of nine members, elected for three-year terms, with the next election scheduled for March 2026.
• Independence: The Audit Committee is composed entirely of independent directors (Marco Antonio Zaldívar, Jorge Francisco Betzhold, and Diego de la Torre).
• International Expertise: The Board includes directors with extensive international mining experience, such as William Champion (over 40 years in mining, including Rio Tinto PLC and Phelps Dodge Mining Company), Ivan Arriagada Herrera (CEO of Antofagasta plc, former CFO of Codelco), and Andrónico Luksic Lederer (Vice-President of Development at Antofagasta plc).
• Regulatory Compliance: Peruvian law mandates non-controlling shareholder representation on the Board.

Regulatory Environment & Compliance

Multi-Jurisdictional Regulatory Framework: Primary Regulatory Environments:

• Peru: Buenaventura's operations are governed by the Peruvian General Mining Law (Supreme Decree No.014-92-EM).
• Key Regulations:
  • Mining Rights: Concessions require adherence to minimum production or investment levels and annual fees; non-compliance for two consecutive years can result in loss of rights.
  • Environmental Oversight: The Environmental Evaluation and Overseeing Agency (OEFA) conducts audits and imposes fines. Environmental Protection and Management Regulations for Mining Activities (Supreme Decree No. 040-2014-EM, amended) dictate environmental compliance.
  • Health & Safety: Law 29783 (Employee Health and Safety), amended by Law 30222, is audited by SUNAFIL. Occupational Health and Safety Regulations for Mining (Supreme Decree No. 024-2016-EM, amended) are supervised by OSINERGMIN.
  • Mine Closure: Law No. 28090 mandates Mine Closure Plans and financial guarantees. Law No. 31347 requires guarantees for progressive closure. The mine closure provision was US$316.9 million as of December 31, 2024.
  • Prior Consultation: Law No. 29785 requires consultation with indigenous and native communities for measures affecting them. Buenaventura's 2024 Prior Consultation process concluded satisfactorily.

Cross-Border Compliance:

• Export Controls: Not explicitly detailed in the filing.
• Sanctions Compliance: Not explicitly detailed in the filing.
• Anti-Corruption: Peruvian Law 30424, effective January 1, 2018, introduced corporate liability for corruption, money laundering, terrorist financing, tax, and customs crimes.

International Tax Strategy:

• Transfer Pricing: Buenaventura has conducted tax compliance and transfer pricing studies, asserting that its tax treatments are likely to be accepted by tax authorities.
• Tax Treaties: There is no tax treaty between Peru and the U.S., except for information exchange.
• BEPS Compliance: Not explicitly detailed in the filing.
• Peruvian Tax Considerations: The company is subject to Peruvian income tax at a rate of 29.5% for resident entities. Cash dividends are subject to a Peruvian withholding income tax of 5% for profits earned on or after January 1, 2017. Capital gains for non-residents are taxed at 5% if transacted in Peru or 30% if outside Peru.
• Tax Disputes: Buenaventura is involved in significant ongoing tax disputes with SUNAT for fiscal years 2007-2010, with approximately US$454.1 million paid on disputed assessments and appeals ongoing. Cerro Verde also faces ongoing disputes regarding mining royalties.

Environmental & Social Impact

Global Sustainability Strategy: Environmental Commitments:

• Climate Strategy: Buenaventura's 2023 corporate carbon footprint inventory was 406,199.93 tCO₂e (location-based) and 349,959.91 tCO₂e (market-based). The company aligns with TCFD recommendations.
• Carbon Neutrality: While not explicitly stated as a direct commitment for Buenaventura, its associate Cerro Verde entered a new power purchase agreement in 2023 to transition its electric power to fully renewable energy sources by 2026.
• Renewable Energy: Cerro Verde's commitment to fully renewable energy sources by 2026 demonstrates a significant step towards reducing its environmental footprint.

Regional Sustainability Initiatives:

• Peru: Main physical risks identified for Mining Units (MUs) include extreme precipitation, water stress, and flooding. Buenaventura maintains a mine closure provision of US$316.9 million as of December 31, 2024, reflecting its commitment to environmental remediation.
• Supply Chain: The filing does not explicitly detail global supplier ESG requirements or sustainability standards.

Social Impact by Region:

• Community Investment: Buenaventura has provisions for social commitments stemming from agreements with local communities and other stakeholders.
• Labor Standards: As of December 31, 2024, unions represented approximately 17.6% of Buenaventura and its subsidiaries’ employees, with about 51% of permanent employees belonging to 12 different labor unions. Employees are entitled to an 8% share of annual pre-tax profits, capped at 18 times their monthly salary. The company maintains a Wage Policy ensuring equitable compensation and non-discrimination.

Currency Management & Financial Strategy

Multi-Currency Operations: Currency Exposure:

Hedging Strategies:

• Transaction Hedging: Buenaventura and its wholly-owned subsidiaries are unhedged for gold, silver, and copper prices as of December 31, 2024 and 2023, with the exception of El Brocal which is allowed to hedge copper and zinc. Cerro Verde does not engage in hedging activities.
• Translation Hedging: Not explicitly detailed in the filing.
• Economic Hedging: Not explicitly detailed in the filing.
• Embedded Derivatives: Embedded derivatives arising from provisionally priced sales of copper, molybdenum, and silver are measured at fair value. As of December 31, 2024, the fair value of these embedded derivatives represented a liability of US$(37.6) million.