Cia de Minas Buenaventura* S.A.A announced today Q2 2014 results *Peru's largest publicly-traded precious metals mining company

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, announced today results for the second quarter (2Q14) and 6-month (6M14) periods ended June 30, 2014. All figures have been prepared in accordance with IFRS (International Financial Reporting Standards) on a non GAAP basis and stated in U.S. dollars (US$).

Second Quarter 2014 Highlights:

• EBITDA from direct operations increased 89% compared to 2Q13 and 41% compared to 1Q14.
• Net Income increased 22% compared to 2Q13 and improved significantly compared to the US$16.1 loss in the previous quarter.
• Stronger results were driven by higher silver and copper volume sold, from Uchucchacua and El Brocal’s production, respectively.
• Yanacocha’s contribution to results was a loss of US$12.9 million, mainly due to a US$21.3 million leachpad write-down. Gold production is expected to ramp up in 2H14 to reach guidance of 895k - 985k ounces.
• Equity gold production from direct operations to recover in 2H14 to achieve annual guidance (420k – 430k ounces). Accessing new areas closer to surface in Orcopampa will allow a 2014 production of 200k ounces. La Zanja and Tantahuatay are expected to produce 140k ounces each in 2014. Breapampa will produce 80k ounces of gold in 2014.
• Uchucchacua is expected to increase ore treated volume in 3Q14 due to new permittings. Ore extraction will be focused in the Socorro mine with high silver-manganese content.
• The Public Audience at Tambomayo project was successfully held on July 24-25. The Environmental Impact Assessment (EIA) has been filed and approval is expected by the end of 2014.
• Huanza Hydro plant commenced full commercial operations And should generate an excess of 95 MW to supply energy to all direct operations at competitive costs.
• El Brocal plant expansion to 18K tons per day was completed and full operations should start in September. The plant will operate in August at 14k tons per day capacity.

       

Compañía de Minas Buenaventura S.A.A. and Subsidiaries
Consolidated Income Statement
For the six-month periods ended June 30, 2014 and 2013
			For the three-month period ended June 30,						For the six-month period ended June 30,
			2,014			2,013			2,014			2,013
			US$(000)			US$(000)			US$(000)			US$(000)
Operating income
Net sales			297,710			273,099			571,678			613,972
Royalty income			7,399			12,693			15,424			26,495
Total operating income			305,109			285,792			587,102			640,467
Operating costs
Cost of sales, without considering depreciation and amortization			(149,634	)		(172,869	)		(292,593	)		(331,004	)
Exploration in operating units			(21,907	)		(49,681	)		(53,635	)		(96,050	)
Depreciation and amortization			(49,771	)		(46,494	)		(95,909	)		(85,670	)
Royalties			(7,102	)		(6,929	)		(14,480	)		(16,595	)
Total operating costs			(228,414	)		(275,973	)		(456,617	)		(529,319	)
Gross profit			76,695			9,819			130,485			111,148
Operating expenses
Administrative expenses			(23,061	)		(22,262	)		(51,817	)		(37,168	)
Exploration in non-operating areas			(14,821	)		4,085			(25,195	)		(17,675	)
Stoppage of mining units			(15,941	)		-			(15,941	)		-
Selling expenses			(4,614	)		(3,970	)		(8,784	)		(8,480	)
Contingencies			(2,002	)		(1,340	)		(9,643	)		(2,393	)
Impairment of long-term lived assets			-			-			(794	)		-
Other, net			8,268			9,320			9,724			9,631
Total operating expenses			(52,171	)		(14,167	)		(102,450	)		(56,085	)
Operating profit (loss)			24,524			(4,348	)		28,035			55,063
Other income, net
Share in the results of associates under equity method			20,169			48,806			15,689			132,974
Financial income			1,842			2,228			3,648			3,184
Financial expenses			(3,199	)		(8,678	)		(6,590	)		(9,881	)
Net loss from currency exchange difference			(268	)		(6,715	)		(764	)		(6,603	)
Total other income, net			18,544			35,641			11,983			119,674
Profit before income taxes and non-controlling interest			43,068			31,293			40,018			174,737
Income taxes			(10,494	)		(10,434	)		(17,816	)		(42,945	)
Net profit			32,574			20,859			22,202			131,792
Attributable to:
Owners of the parent			23,088			18,953			6,976			121,630
Non-controlling interest			9,486			1,906			15,226			10,162
			32,574			20,859			22,202			131,792
Basic and diluted earnings per share attributable
to owners of the parent, stated in U.S. dollars			0.09			0.07			0.03			0.48
Weighted average number of shares outstanding
(common and investment), in units			254,186,867			254,186,867			254,186,867			254,186,867

Copper underpinned as Fed relaxes on rate rise timing

London copper was underpinned on Thursday by indications that the U.S. Federal Reserve is not hurrying to raise interest rates, even as the world's top economy logged robust second quarter growth that brightened the outlook for demand.

The U.S. economy rebounded sharply in the second quarter as consumers stepped up spending and businesses restocked, putting it on course to close out the year on a solid footing. 

But the Federal Reserve on Wednesday reaffirmed it was in no rush to raise interest rates, even as it upgraded its assessment of the U.S. economy and expressed some comfort that inflation was moving up toward its target.[ID:nW1N0Q4007]

This has all helped to burnish the outlook for metals - at least for the near term.

"It's really the metals where people have a little higher confidence, and we share that," said analyst Dominic Schnider of UBS Wealth Management in Singapore.

"Maybe we already have 75 percent behind us and we're looking at the last 25 percent. The (positive) Chinese economy story might carry into the next quarter. But the game is structural deceleration, so bad news is waiting to come around again," he added.

Three-month copper on the London Metal Exchange edged down by 0.2 percent to $7,128.75 a tonne by 0053 GMT after gaining around half a percent in the previous session. Prices are creeping back up towards $7,212, the peak from July 8 that was the loftiest since February

The most-traded October copper contract on the Shanghai Futures Exchange rose 0.6 percent in overnight trade.

Activity in China's vast factory sector likely expanded at the fastest pace in eight months in July, a Reuters poll showed on Wednesday, adding to evidence that the economy is regaining momentum after a burst of government stimulus measures.
However the International Monetary Fund said that China should lower its growth targets for next year, as part of a push towards safer and more sustainable growth. It also flagged the country's property slowdown as a cause for concern. [ID:nB9N0OL01V]

China's construction sector consumes a large portion of China's copper needs. China accounts for around 40 percent of refined copper demand.

In other upbeat news for the global economy, Euro zone economic sentiment unexpectedly improved in July despite the deepening crisis between the West and Russia over Ukraine, data showed on Wednesday. 


LME aluminium slipped by 0.2 percent after gaining 2 percent on Wednesday, while LME zinc and lead were mixed after profit-taking on a rally the session before.

Aluminium's gains came as exchange stocks looked to be locked up for a while.

The London Metal Exchange's attempts to cut backlogs at warehouses with new rules are likely to be delayed again for several months after judges declined to make an immediate ruling on a case holding up the reforms.

The news also helped propel cash prices to the highest against benchmark prices since Dec. 2012. 

Newmont Mining Corp will stick to a "parallel path" of arbitration and negotiation with the government of Indonesia in an attempt to resolve an impasse over copper concentrate exports, the company's chief executive said on Wednesday. 
Source: Reuters

Crude Oil falls under $100, set for deepest monthly fall since Oct

U.S. crude oil futures fell under $100 in early Thursday trade, putting the contract on course for its steepest monthly slide in nine months, as concerns over weak demand rose while fears over supply shortages in the Middle East and North Africa waned.

FUNDAMENTALS

* U.S. crude futures for September delivery <CLc1> fell 80 cents to $99.47 a barrel by 0007 GMT, putting the contract on course for a 5.6 percent fall for the month - its deepest since October.

* The contract finished 70 cents lower on Wednesday. 

* U.S. crude stockpiles fell more than forecast last week, while gasoline and distillate inventories rose less than expected, the Energy Information Administration reported on Wednesday. [EIA/S]

* OPEC's oil production rose in July from June, a Reuters survey found on Wednesday, as a fragile recovery in Libyan supply outweighed fighting in Iraq and reduced output from Angola.

* The Federal Reserve on Wednesday reaffirmed it was in no rush to raise interest rates, even as it upgraded its assessment of the U.S. economy and expressed some comfort that inflation was moving up toward its target. 

* U.S. crude oil exports reached 288,000 barrels per day in May, the highest levels since April 1999, data from the U.S. Energy Information Administration showed on Wednesday. 

* Iraqi Kurdistan's attempts to export oil independently of Baghdad hit another obstacle on Wednesday, as a Turkish energy official and industry sources said the autonomous region's pipeline to the Mediterranean has been shut for the past week. 

MARKETS NEWS

* The U.S. dollar held below a 10-month peak against a basket of major currencies early on Thursday, having soared at first on upbeat growth data only to have a dovish Federal Reserve take some steam out of the rally. 

* The S&P 500 and Nasdaq ended higher on Wednesday after the Federal Reserve gave a rosier assessment of the U.S. economy while reaffirming that it is in no hurry to raise interest rates. 

Source: Reuters

WSJ:Argentina Teeters on Default as Talks Collapse

         The WSJ reports,"Argentina teetered on the brink of its second default in 13 years after talks with bondholders collapsed late Wednesday.

The setback, after glimmers of hope in recent days that a last-minute agreement could be reached, immediately sent Argentine stocks plunging in after-hours trading.

Still, there remained the possibility that talks could resume and a deal could eventually be reached.

At a press conference after talks with a court-appointed mediator ended Wednesday, Argentine Economy Minister Axel Kicillof, who had led the country's delegation to New York, said "we won't sign an agreement that would compromise Argentina's future." A spokeswoman later said negotiations would continue, without giving a timetable.

"Default is not a mere 'technical' condition, but rather a real and painful event that will hurt real people," said Daniel Pollack, the mediator, in a statement late Wednesday. He added, "The full consequences of default are not predictable, but they certainly are not positive."

The development is the latest turn in a years long battle between Argentina and a small group of hedge funds that have demanded full payment for bonds the country defaulted on in 2001. Argentina has refused to pay, despite an order by a U.S. District Court judge requiring it to pay the hedge funds. The issue came to a head Wednesday as Argentina missed a deadline to make a payment it owed to other bondholders, because the court order had prevented such a move.

Mr. Pollack, who had been trying to broker a deal between the two sides, said the country would "imminently" be in default. Standard & Poor's Ratings Services had earlier Wednesday declared Argentina in default on some of its bonds.

A default would pressure an economy already mired in recession, potentially leading to higher inflation and a weaker currency. The breakdown of negotiations also complicates President Cristina Kirchner's efforts to stabilize the economy ahead of elections next year.

Wednesday marked the end of a 30-day grace period for Argentina to make a $539 million interest payment to the holders of $29 billion of the country's restructured bonds that was due on June 30. A ruling by U.S. District Judge Thomas Griesa prevents Argentina from paying its restructured bondholders until the hedge funds, also known as the holdout creditors, are compensated. The holdout creditors are owed about $1.5 billion.

Mr. Kicillof hinted on Wednesday that a private-sector solution was a possibility, apparently referring to a proposal by a group of Argentine banks to offer a $250 million guarantee to the holdouts. The idea would be to give the hedge funds a financial incentive to ask Judge Griesa to suspend his ruling until the end of the year and allow payment of holders of the other bonds.

A default could shave as much as one percentage point off growth this year, said Martin Redrado, former governor of Argentina's central bank. Analysts said it would also fuel inflation, which some economists already estimate to be close to 40%, and deepen the country's recession. It could roil the country's financial markets, ending a period of relative calm in the peso's exchange rate and Argentine bond prices.

The immediate impact to debt markets outside Argentina is expected to be limited. Argentina has been relatively isolated from global financial markets since its default in 2001, and the country's legal battles with its creditors are unprecedented and have dragged on in U.S. courts for years. In 2001, the country's bonds made up 20% of J.P. Morgan Chase & Co.'s widely followed emerging-market debt index. Now, they are only 1.3% of the index, signaling little chance that another default would rattle the global economy.

However, the case has raised questions about the power of U.S. courts to adjudicate cases involving sovereign nations and their creditors.

The concerns stem from the controversial 2012 ruling made by Judge Griesa, who has presided over disputes between Argentina and its creditors for more than a decade. He ruled that Argentina isn't allowed to pay the bondholders who accepted the country's restructuring offers since its 2001 default, unless it also pays the holdouts, who have refused those offers.

Lawyers said the ruling marked the first time a U.S. judge had issued such an injunction on the so-called "pari passu" clause, which states that all bondholders must be treated equally.

The U.S. government has called Judge Griesa's ruling "impermissibly broad" and said it could undermine U.S. foreign relations. The International Monetary Fund warned that Judge Griesa's ruling could make it easier for a handful of creditors to disrupt other debt restructurings. "There is a cost to the world," IMF Chief Economist Olivier Blanchard said last week.

Analysts say Wednesday's developments will likely rock Argentine markets on Thursday, as the country's stocks and bonds had rallied this week on hopes that the two sides would reach a deal and avert default. Investors said they had been encouraged by marathon talks on Tuesday and Wednesday between Argentine officials and a court-appointed mediator, as well as a proposal by Argentine banks to pay the holdout creditors.

"The market reaction won't be positive," said Brian Joseph, head trader at local brokerage Puente. "There were big expectations of a deal. This isn't good news.""

Lead falls as investors book profits after rally

Lead prices fell on Wednesday as investors took profits after a rally this month, but a brighter global economic outlook is seen providing support to industrial metals.

Investors have bought beaten down assets like lead, zinc and aluminium on prospects that the economy is slowly improving and that supply will diminish as demand increases.

Fund buying helped push aluminium and zinc prices to the highest levels in nearly 18 months and three years respectively in July, while lead hit a 17-month top on Tuesday.

"The main reason why these metals prices have moved higher has not been a change in fundamental conditions, it's been a change in investment behaviour. Part of that is driven by improving macro sentiment," said commodity analyst Ivan Szpakowski of Citi in Shanghai.

Three-month lead on the London Metal Exchange, closed 0.3 percent lower at $2,260 a tonne, extending a 1.4 percent loss in the previous session.

LME zinc rebounded from earlier falls to close 0.6 percent higher at $2,380 a tonne. It posted a 1.8 percent fall in the previous session when it snapped a six-day winning streak.

Zinc has risen on forecasts that falling mine supply will lead to a shortage of metal.

"The moves look technically driven, with no change in fundamental issues to speak of," ANZ Research said in a note to clients.

"While sell-offs like this will not be uncommon, the macro environment remains accommodative for further gains in base metals prices over the coming weeks."

Manufacturing growth in top metals consumer China expanded at its fastest clip in 18 months in July, an initial survey showed.

In the United States, economic growth accelerated more than expected in the second quarter and the decline in output in the prior period was less steep than previously reported, bolstering views for a stronger performance in the last six months of the year.


The U.S. Federal Reserve will issue a policy statement on Wednesday after a two-day meeting. The central bank looks certain to press forward with its plan to wind down its bond-buying stimulus, and could offer some vague clues on how much nearer it might be to finally raising interest rates.

"A positive outlook by the Fed could help sentiment among the traders which could help industrial metals recover some of their losses," Naeem Aslam, chief market analyst at Ava Trade, said.

In other metals, copper closed 0.6 percent higher at $7,125 a tonne, aluminium ended 2 percent higher at $2,022, tin was almost flat at $22,890 and nickel closed 1.7 percent higher at $18,960 a tonne.

Lead springs back to life, with some Chinese help

The lead market has sprung back into life after months of slumber, with London Metal Exchange

(LME) three-month metal <CMPB3> touching a 16-month high of $2,307 per tonne on Tuesday.

The price action has helped lead close a widening gap with zinc, a divergence that was attracting increasing analyst attention.

It just remains to be seen whether lead can maintain this level of activity. The London market seemed unimpressed, knocking the price back to $2,230 on Wednesday morning.

But then it wasn't the London market that kicked lead into life in the first place.

DIVERGENCE

Trading zinc and lead as a relative value pair has long been a favourite pastime on the LME, partly because of the supply overlap between the two metals. More often than not, they co-exist in the same deposits in the ground and are extracted from the same mines.

It's perhaps surprising, therefore, that lead has been unaffected by zinc's bull narrative of pending mine closures and shift to supply shortfall. After all, every zinc mine that closes removes some lead supply as well.

But while zinc has been the second-best performer in the LME base metals pack after nickel this year, lead has done little more than shuffle sideways, only moving into positive territory over the last few days.

This divergence has been manifest in zinc's widening premium over its sister metal, an inversion of the normal relationship in recent years.

     
    At one stage last week, that premium stood at close to $160 
per tonne, the widest since April 2010. By yesterday's close it 
had contracted to $99, a level that is still highly unusual by 
the standards of the last few years. 

    UNLOVED 
    This divergence is odd, given that both markets are expected 
to be in supply deficit this year. The International Lead and 
Zinc Study Group (ILZSG) at its April meeting forecast a 49,000 
tonne deficit for lead and a 117,000 tonne deficit for zinc.  
    Moreover, lead has less inventory overhang to act as a 
cushion against supply shortfall, in theory offering an even 
more bullish narrative than that of zinc.  
    "Stocks measured as weeks of consumption are likely to fall 
to very low levels, amongst the lowest in the LME complex", over 
2015-2016, according to Leon Westgate, an analyst at Standard 
Bank London, writing in the bank's quarterly commodities review. 
    Yet while zinc has soared, lead has sagged. Why? 
    Its underlying supply-demand dynamics may be as bullish as 
those of zinc, but there has been an absence of signals to 
corroborate the bull narrative.  
    LME lead stocks, for example, have been largely static over 
recent weeks, with minimal activity either in or out. Contrast 
that with LME zinc stocks, which have been trending steadily 
lower, with each daily exchange report providing a reminder of 
the apparent market deficit.  
    Then there is China. The country's imports of zinc rose by 
38 percent to 375,000 tonnes over the first half of this year. 
When it comes to lead, though, China has been a net exporter. 
The volumes may not be huge, just 15,000 tonnes or so over the 
first six months of 2014, but this is metal that is coming out 
despite a prohibitive 10 percent export tax.  
    No matter that LME zinc stocks may be going no further than 
off-market storage or that the zinc entering China is going no 
further than a bonded warehouse to act as collateral for the 
shadow credit market.  
    In terms of bull perception, zinc is generating the "right" 
signals and lead the "wrong" signals.  
    Hence the collective lack of investor interest in the LME 
lead market so far this year, "mild indifference" verging on 
"outright neglect", to quote Standard Bank's Westgate. LME 
volumes have been humdrum, and open interest dropped to a 
two-year low last month.  
    The divergence between the two metals seems to be largely 
down to the simple fact that lead is unloved.  

    CHINA BULLS 
    That may be changing, or at least in China it may be 
changing.  
    As the graphic below shows, open interest on the Shanghai 
Futures Exchange (SHFE) lead contract has exploded over the last 
few days. It ended last week at 24,080 lots. As of Tuesday's 
close that figure had risen to over 51,000 lots. Volumes have 
gone equally supernova over the same time frame.  
    
    This surge in interest echoes a similar phenomenon in the 
SHFE zinc contract last month as Chinese investors collectively 
picked up the bull baton from London.  
    In lead, though, it looks very much as if it is China that 
is leading a still reluctant LME market higher.  
    This raises several interesting questions.  
    Is it another sign of the growing power of China's fund 
players to influence global markets? Back in March a bear attack 
on the copper market by Chinese funds sent both SHFE and LME 
prices tumbling.  
    Is the Shanghai metals market now evolving from follower to 
leader of the London market?  
    And what do Chinese lead bulls know that the rest of us 
apparently don't? Are they also just playing a relative trade 
against zinc? Or are they taking a more strategic view of the 
metal's prospects in China?  
    The country's de-stocking cycle this year has been one of 
the main reasons for the lack of investment interest in the lead 
market. If that cycle is about to turn, it makes sense that 
Chinese investors might be the first to notice and to place 
their bets.  



Source: Reuters

U.S. crude inventories fall more than forecast - EIA

U.S. crude stocks fell more than forecast last week, while gasoline and distillate inventories rose less than expected, the Energy Information Administration reported on Wednesday.

Crude inventories fell 3.7 million barrels in the last week, compared with analysts' expectations for a decrease of 1.5 million barrels.

Crude stocks at the Cushing, Oklahoma, delivery hub fell 924,000 barrels to 17.9 million barrels, EIA said.

"That number to some is disturbing," said Phil Flynn, an analyst at the Price Futures Group in Chicago. "Some people believe it’s pretty close to minimum operating capacity. Obviously it’s one factor that would be supportive for WTI over Brent."

Refinery crude runs fell 47,000 barrels per day, EIA data showed.

Gasoline stocks rose 365,000 barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel gain and a 1 percent fall in demand from a year ago, suggesting products exports out of the U.S. Gulf continued to be strong.

"The export number has potential to be a point of support for U.S. crude oil prices," said Richard Hastings, macro strategist at Global Hunter Securities in Charlotte, North Carolina.

Distillate stockpiles , which include diesel and heating oil, rose 789,000 barrels, vs. expectations for a 1.5 million-barrel increase, the EIA data showed.

U.S. crude imports last week rose 315,000 barrels per day.

Following the report, both Brent and U.S. crude oil prices fell after briefly spiking higher.

Source: Reuters

U.S. economy bounces back strongly in second quarter

U.S. economic growth accelerated more than expected in the second quarter and the decline in output in the prior period was less steep than previously reported, bolstering views for a stronger performance in the last six months of the year.

Gross domestic product expanded at a 4.0 percent annual rate as activity picked up broadly after shrinking at a revised 2.1 percent pace in the first quarter, the Commerce Department said on Wednesday.

That pushed GDP above the economy's potential growth trend, which analysts put somewhere between a 2 percent and 2.5 percent pace. Economists had forecast the economy growing at a 3.0 percent rate in the second quarter after a previously reported 2.9 percent contraction.

A separate report showing private employers added 218,000 jobs to their payrolls last month, a decline from June's hefty gain of 281,000, did little to change perceptions the economy was strengthening. 

U.S. stock futures added to gains and yields on U.S. Treasuries rose after the data. The U.S. dollar hit a seven-week high against the yen and an eight-month high against the euro.

The economy grew 0.9 percent in the first half of this year and growth for 2014 as a whole could average above 2 percent. The first quarter contraction, which was mostly weather-related, was the largest in five years.

Employment growth, which has exceeded 200,000 jobs in each of the last five months, and strong readings on the factory and services sectors from the Institute for Supply Management underpin the bullish expectations for the rest of the year.

The government also published revisions to prior GDP data going back to 1999, which showed the economy performing much stronger in the second half of 2013 and for that year as a whole than previously reported. 


EYES ON THE FED

The GDP data, which was released only hours before Federal Reserve officials conclude a two-day policy meeting, could fuel debate on whether the central bank may need to raise interest rates a bit sooner than had been anticipated.

Growth in the second quarter was driven mainly by consumer spending and a swing in business inventories.

Consumer spending growth, which accounts for more than two-thirds of U.S. economic activity, accelerated at a 2.5 percent pace, as Americans bought long-lasting manufactured goods and spent a bit more on services.

Consumer spending had braked to a 1.2 percent pace in the first quarter because of weak healthcare spending.

Despite the pick-up in consumer spending, Americans saved more in the second quarter. The saving rate increased to 5.3 percent from 4.9 percent in the first quarter as incomes rose, which bodes well for future spending.

Inventories contributed 1.66 percentage points to GDP growth after chopping off 1.16 points in the first quarter.

The economy also received a boost from business investment, government spending and investment in home building.

Trade, however, was a drag for a second consecutive quarter as some of the increase in domestic demand was met by a surge in imports. Domestic demand rose at a 2.8 percent pace, the fastest since the third quarter of 2011. It increased at a 0.7 percent pace in the first quarter.

Solid demand, which underscores the economy's firming fundamentals, led to some pick-up in price pressures in the second quarter, a welcome development for Fed officials who have long worried about inflation being too low.

A price index in the report rose at a 2.3 percent rate in the second quarter, the quickest in three years, after advancing at a 1.4 percent pace in the prior period.

A core price measure that strips out food and energy costs increased at a 2.0 percent pace, the fastest since the first quarter of 2012. It had increased at a 1.2 percent rate in the first quarter.

Source: Reuters