Buenaventura(BVN)2025-04-30 21:27Market Prices - The morning fixing price for gold on the London Bullion Market was US3,120 per ounce on March 31, 2025[51]. - The afternoon fixing spot price of silver on the London market was US34.06 per ounce on March 31, 2025[51]. - The London Metal Exchange Spot Price for copper was US9,673 per tonne on March 31, 2025[51]. - A continued decline in market prices of gold, silver, and copper could adversely impact revenues, net income, and cash flows[53]. Operating Costs and Profitability - Increased operating costs, including higher equipment, energy, and production costs, could adversely affect profitability and results of operations[68]. - The company no longer engages in hedging activities for gold and silver prices, exposing it fully to market price fluctuations[51]. Mineral Reserves and Exploration - The company may face challenges in replenishing mineral reserves due to the speculative nature of exploration and potential changes in economic feasibility[64]. - The estimates of proven and probable reserves are subject to uncertainties, and actual recovery may vary from estimates[72]. Tax Liabilities - The tax claim for the years 2007, 2008, 2009, and 2010 initially amounted to 373.3 million soles (approximately US559.0 million) due to penalties and fees[78]. - The total amount paid for the disputed tax assessment related to fiscal years 2007 and 2008 was S/1,584,227,000 (equivalent to US51,299,000), and for fiscal year 2010 it was S/356,691,000 (equivalent to US111,823,000)[82]. Labor Relations - Unions represented approximately 17.6% of the company's and its subsidiaries' employees as of December 31, 2024, indicating potential risks related to labor disputes[88]. Partnerships and Interests - The company holds a 19.58% partnership interest in Cerro Verde and has no longer any interest in Yanacocha, having sold its stake to Newmont on February 8, 2022[96]. Credit Ratings - The company is rated "BB" by Fitch, "Ba3" by Moody's Investors Service, and "BB-" by S&P Global Ratings, which could impact borrowing costs if ratings are downgraded[102]. Political and Social Risks - The company has faced local political protests and social risks that could disrupt operations and affect future mining projects[89]. - The political and social situation in Peru directly impacts the company's operations, with significant unrest leading to violence and vandalism affecting mining facilities[121]. - Over 60 Peruvians died during three months of violence in early 2023, impacting public and private institutions, including critical mining infrastructure[122]. Legal and Compliance Risks - Legal proceedings against SUNAT could have a material adverse effect on the company's business, with ongoing appeals in Peruvian courts[85]. - The company is subject to evolving anti-bribery and anti-corruption laws in Peru, which may not be as stringent as those in other jurisdictions, necessitating ongoing compliance efforts[110]. Community Relations - The company has implemented extensive community relations practices to manage social issues that may arise at its operations[101]. Geotechnical and Environmental Risks - Geotechnical challenges could adversely impact production and profitability, with potential risks from severe weather and hydrological conditions[91]. - The company owns 15 tailings dams, including 1 under construction, 5 active, and 9 inactive, which could present stability risks, especially related to liquefaction[104]. - The company maintains strict operational controls on critical components to mitigate risks associated with tailings dam failures, which could lead to severe damages and loss of life[106]. Cybersecurity Risks - Cyber incidents, including deliberate attacks, have been increasing, posing risks to the company's information technology systems and potentially disrupting operations[107]. - A cyber-attack could cause temporary interruptions in production and expose the company to liabilities if sensitive personal information is compromised[108]. Shareholder Rights and Corporate Governance - As of March 31, 2025, the Benavides Family holds approximately 35% of the company's outstanding share capital, potentially limiting other shareholders' influence[129]. - Shareholders' rights under Peruvian law are less defined compared to those in the U.S., which may complicate enforcement of their rights[132]. - The company is subject to less stringent disclosure requirements than U.S. companies, potentially resulting in less information available to investors[134]. - Holders of ADSs may be unable to exercise preemptive rights and accretion rights for Common Shares unless specific conditions are met[136]. - A capital increase requires approval from holders of at least 40% of Common Shares at a properly called meeting[136]. - U.S. Holders of ADSs may face limitations in exercising rights unless a registration statement under the Securities Act is effective[136]. - Any rights offering could have a dilutive effect on shareholders who do not exercise their rights[136]. - The Depositary has discretion to sell preemptive rights or accretion rights for holders of ADSs and distribute net proceeds[136]. - If the Depositary cannot make rights available, they may allow the rights to lapse[136].