Buenaventura Announces Voluntary Temporary Ore Treatment Suspension at El Brocal Mine

Rhea-AI Summary

Buenaventura (NYSE: BVN; Lima Stock Exchange: BUE.LM), Peru's largest publicly-traded precious metals mining company, has announced a voluntary, temporary suspension of its El Brocal processing plant facilities. The suspension follows an unauthorized entry by a small group from the nearby Huaraucaca Community onto the property. Despite this, underground mining operations remain unaffected, with ore stockpiled for later processing. Buenaventura is confident that it will reach a peaceful resolution with the community through ongoing dialogue. The company's primary focus remains on the safety of its employees and facilities.

Positive

• Underground mining operations at El Brocal are continuing uninterrupted.
• Accumulated mined ore is stockpiled for later processing once the suspension is lifted.
• Buenaventura is engaging in open dialogue with the Huaraucaca Community to resolve the situation peacefully.
• Safety of employees and infrastructure is prioritized, reflecting the company's proactive and prudent approach.

Negative

• Temporary suspension of El Brocal's processing plant could impact short-term revenue.
• Unauthorized entry by the Huaraucaca Community indicates potential community relations issues.
• There may be costs associated with the temporary suspension and subsequent restart of operations.

Financial Analyst

The temporary suspension of the ore treatment at El Brocal processing plant is a noteworthy development. Although underground mining continues, the halting of the processing plant could lead to a delay in revenue generation and potentially increase operational costs due to stockpiling and later processing. It's important for investors to consider the balance between short-term disruptions and long-term operational health.

In the short-term, this suspension may reflect negatively on Buenaventura's financial performance in upcoming quarters, as it halts part of the production pipeline. This could impact EPS and potentially affect investor sentiment.

However, the company's proactive and safety-first approach might mitigate long-term risks. Ensuring the safety of employees and maintaining community relations might lead to a more stable and sustainable operation in the future. Investors should monitor updates on negotiations with the Huaraucaca community closely, as a swift resolution will be important in resuming normal operations and minimizing financial impact.

The company's solid track record and diversified asset base might cushion the overall impact, but clarity on the timeline for resolving the issue will be key for more accurate financial projections.

Market Research Analyst

The voluntary suspension of operations due to community intervention at El Brocal processing plant highlights the importance of community relations in the mining industry. Such issues, if not resolved efficiently, can lead to operational interruptions and affect investor confidence.

For retail investors, it is essential to understand that community disputes are not uncommon in the mining sector, especially in regions with significant indigenous populations. The fact that Buenaventura maintains an open dialog with communities suggests a potential for a peaceful resolution, but investors should remain cautious.

On a broader scale, this situation sheds light on the social license to operate, a critical risk factor for mining operations. Companies that effectively manage these relationships tend to have more stable operations. Hence, while this suspension is a temporary setback, Buenaventura’s long-term prospects depend on their ability to navigate such challenges.

It’s also worth noting that similar incidents can have industry-wide implications, affecting perceptions and investment flows into the sector. Thus, monitoring these developments can provide insights into the operational environment of mining companies in regions with sensitive social dynamics.

Underground Mining Continues Per Normal

LIMA, Peru--(BUSINESS WIRE)-- 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, announces the voluntary temporary suspension of El Brocal’s processing plant facilities. Underground mining works at El Brocal continue uninterrupted per normal, with accumulated mined ore stockpiled for later processing, as has been previously provisioned and authorized, to be processed once concentrator plant operations have resumed.

A small group from the Huaraucaca Community residing adjacent to the El Brocal processing facility entered the property without El Brocal’s authorization. The Company has therefore voluntarily suspended its two El Brocal processing plant operations to ensure the safety of its employees and infrastructure.

Buenaventura maintains a respectful open dialog with all communities surrounding its operations, and is therefore confident that discussions with the Huaraucaca community will result in a peaceful and mutually amenable resolution. The Company will continue to maintain a proactively prudent approach at all of its operations, prioritizing the safety of its workers and of its facilities.

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*, Julcani*, Tambomayo*, La Zanja*, El Brocal and Coimolache).

The Company owns 19.58% of Sociedad Minera Cerro Verde, an important Peruvian copper producer (a partnership with Freeport-McMorRan Inc. and Sumitomo Corporation).

For a printed version of the Company’s 2023 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 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 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240522985130/en/

Lima:

Daniel Dominguez, Chief Financial Officer

(511) 419 2540

Gabriel Salas, Head of Investor Relations

(511) 419 2591 / Gabriel.salas@buenaventura.pe

NY:

Barbara Cano

(646) 452 2334

barbara@inspirgroup.com

Company Website: www.buenaventura.com.pe/ir

Source: Compañia de Minas Buenaventura S.A.A.

FAQ

Why did Buenaventura suspend operations at the El Brocal processing plant?

Buenaventura suspended operations at the El Brocal processing plant due to an unauthorized entry by a small group from the Huaraucaca Community. The suspension aims to ensure the safety of employees and infrastructure.

Is mining continuing at El Brocal despite the suspension?

Yes, underground mining operations at El Brocal are continuing as usual. The mined ore is being stockpiled for later processing once operations resume.

How is Buenaventura addressing the situation with the Huaraucaca Community?

Buenaventura is maintaining an open and respectful dialogue with the Huaraucaca Community to reach a peaceful and mutually agreeable resolution.

Will the suspension of the El Brocal processing plant affect Buenaventura's revenue?

The temporary suspension of the El Brocal processing plant could impact Buenaventura's short-term revenue, as processing operations are halted.

What steps is Buenaventura taking to ensure safety during the suspension?

Buenaventura has suspended operations to protect employees and infrastructure. The company's proactive and prudent approach prioritizes safety at all times.