By Robert Kozak
LIMA, Peru--Compania de Minas Buenaventura SAA (BVN, BUENAVC1.VL) has started cutting costs at its operations, the precious metals producer's chief executive said Tuesday.
"We are working with a team of executives to find ways to reduce costs," Roque Benavides said in a conference call with analysts.
He added that similar cost cutting was under way at the Yanacocha mine, partially owned by Buenaventura, and at copper mining company Sociedad Minera Cerro Verde SAA (CVERDEC1.VL), in which Buenaventura has a stake of about 20%.
Late Monday, Buenaventura said its first-quarter net income declined 51% to $102.7 million. The weaker results were mainly due to lower metal prices, higher operating costs and lower contributions from the Yanacocha and Cerro Verde affiliates.
Chief Financial Officer Carlos Galvez said a number of projects were under what he called a serious review given low metals prices.
Mr. Benavides said, however, that despite lower metals prices, he remains convinced that the Chucapaca gold project in southern Peru will proceed.
Gold Fields Ltd. (GFI) owns 51% of the Chucapaca project in southern Peru, and Buenaventura has a 49% stake in the project that has about 8 million ounces of gold resources.
"In my experience we have a deposit there that will be developed," he said.
Mr. Benavides said that Minera Yanacocha continues with work at the stalled Minas Conga copper and gold project in northern Peru.
Protests against the $5.0 billion project led the joint venture Minera Yanacocha to focus on building the water reservoirs there.
Mr. Benavides said that work on two reservoir dams is expected to be done by the end of the year.
The project is run by majority shareholder Newmont Mining Corp. (NEM)
Buenaventura has a number of operating mines in Peru, as well as a 43.65% stake in Minera Yanacocha, one of South America's largest gold mines.
Write to Robert Kozak at firstname.lastname@example.org
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