SECURITIES AND EXCHANGE COMMISSION

FORM 20-F

¨" REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)

OF THE SECURITIES EXCHANGE ACT OF 1934

OR

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 20022003

OR

¨" TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-14370

COMPAÑÍA DE MINAS BUENAVENTURA S.A.A.

(Exact name of Registrant as specified in its charter)

BUENAVENTURA MINING COMPANY INC.

(Translation of Registrant's name into English)

REPUBLIC OF PERU

(Jurisdiction of incorporation or organization)

CARLOS VILLARAN 790

SANTA CATALINA, LIMA 13, PERU

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

_________________

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

Common shares nominal (par) value of S/.4.00 per share 137,444,962*

Investment shares nominal (par) value of S/.4.00 per share 372,320

*Prior to May 3, 2002, the Company had Series A common shares, Series B common shares and Investment shares. Since that date, following the redesignation of Series B common shares as Series A common shares and thereafter of Series A common shares as Common shares, the Company has Common shares and Investment shares.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesx No¨"

Indicate by check mark which financial statement item the registrant has elected to follow.

Item 17¨" Item 18x

TABLE OF CONTENTS

Page

INTRODUCTION

Presentation of Financial Information

As used in this Form 20-F (the "Annual Report" or the "Form 20-F"), unless the context otherwise requires, the "Company" or "Buenaventura" means Compañía de Minas Buenaventura S.A.A. and its consolidated subsidiaries. Unless otherwise specified or the context otherwise requires, references to "$", "US$", "Dollars" and "U.S. Dollars" are to United States Dollars, and references to "S/.", "Nuevo Sol" or "Nuevos Soles" are to Peruvian Nuevos Soles, the legal currency of the Republic of Peru ("Peru").

Buenaventura and its subsidiaries maintain their financial books and records in Nuevos Soles and present their financial statements in conformity with accounting principles generally accepted in Peru ("Peruvian GAAP"). See Note 3738 to the audited consolidated financial statements of the Company as of December 31, 20012002 and 20022003 and for the years ended December 31, 2000, 2001, 2002 and 20022003 (the "Company Financial Statements") beginning at page F-2 for a description of the significant differences between the accounting principles followed by the Company under Peruvian GAAP and accounting principles generally accepted in the United States of America ("U.S. GAAP"), and Note 3839 to the Company Financial Statements for a reconciliation to U.S. GAAP of net income and shareholders' equity for the periods covered. Pursuant to the rules of the United States Securities and Exchange Commission (the "Commission"), this Annual Report includes certain separate financial statements and other financial informationi nformation of Minera Yanacocha S.R.L. ("Yanacocha"). Yanacocha maintains its financial books and records in U.S. Dollars and presents its financial statements in accordance with U.S. GAAP. See Note 217 to the audited financial statements of Yanacocha as of December 31, 20012002 and 20022003 and for the years ended December 31, 2000, 2001, 2002 and 20022003 (the "Yanacocha Financial Statements") beginning at page F-70F-69 for a description of the significant differences between the accounting principles followed by Yanacocha under U.S. GAAP and Peruvian GAAP, and Note 1718 to the Yanacocha Financial Statements for a reconciliation to Peruvian GAAP of net income and shareholders'partners' equity for the periods covered. Pursuant to Peruvian GAAP, financial data for all periods in the financial statements of the Company included herein have been adjusted for inflation using theIndice de Precios al por Mayor a Nivel Nacional (the National Wholesale Price Index for Peru, or the "IPM") published by theInstituto Nacional de Estadística e Informática(the National Institute of Statistics, or the "INEI"). See Note 3(c)2(c) to the Company Financial Statements. Unless otherwise specified, financial data regarding the Company is presented herein in accordance with Peruvian GAAP and in constant Nuevos Soles as of December 31, 2002,2003, and financial data regarding Yanacocha is presented herein in accordance with U.S. GAAP and in U.S. Dollars.

The Company Financial Statements record the Company's investment in Yanacocha in accordance with the equity method. The Company's interest in Yanacocha has been calculated at 43.65 percent for the years ended December 31, 20012002 and 2002,2003, as described in "Item 5. Operating and Financial Review and Prospects-The Company-General"Prospects--The Company--General" and Note 11 to the Company Financial Statements.

In 1989, the Peruvian accounting standards board approved the inclusion in the financial statements of each Peruvian company of theResultado por Exposición a la Inflación ("Result from Exposure to Inflation"), which seeks to account for the effects of inflation or deflation by adjusting the value of non-monetary assets and liabilities by a factor corresponding to the inflation or deflation rate during the period covered by the financial statements. Monetary assets and liabilities are not adjusted. The net result of the adjustment is reflected in the "Result from Exposure to Inflation" line item of the income statement. This requirement was applied to the Company in 1991 and thereafter. See Note 3(c)2(c) to the Company Financial Statements. The inflation adjustment factors used in the calculation of the Result from Exposure to Inflation since 1991 are a function of the IPM. The IPM increased by 6.5 percent in 1998, 5.5 percent in 1999, increased by 3.8 percent in 2000, decreased by 2.2 percent in 2001, and increased by 1.7 percent in 2002.2002 and increased by 2.0 percent in 2003.

Exchange Rates

This Annual Report contains translations of certain Nuevo Sol amounts into Dollars at specified rates solely for the convenience of the reader. These translations should not be construed as representations that the Nuevo Sol amounts actually represent such equivalent Dollar amounts or could be converted into Dollars at the rate indicated as of the dates mentioned herein or at all. Unless otherwise indicated, such Dollar amounts have been translated from Nuevos Soles at an exchange rate of S/.3.515.3.464 = US$1.00, the average of the market exchange rates for the purchase and sale of Dollars on December 31, 2002.2003. The translation of amounts expressed in nominal or constant Nuevos Soles with purchasing power as of a specified date by the then-prevailing exchange rate may result in presentation of Dollar amounts that differ from the Dollar amounts that would have been obtained by translating nominal or constant Nuevos Soles with purchasing power as of another specified date by the prevai lingprevailin g exchange rate on that specified date. See "Item 3. Key Information-ExchangeInformation--Exchange Rates" for information regarding the average rates of exchange between the Nuevo Sol and the Dollar for the periods specified therein.

Certain amounts and percentages have been rounded for presentation purposes and may not sum exactly.

Forward-Looking Statements

Certain statements contained in this Annual Report 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 the Company's and Yanacocha's costs and expenses, results of exploration, the continued improving efficiency of operations, prevailing market prices of gold, silver and other metals mined, the success of joint ventures, estimates of future exploration, development and production, subsidiaries' plans for capital expenditures, estimates of reserves and Peruvian political, economic and legal developments. These forward-looking statements reflect the Company's view with respect to the Company's and Yanacocha'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 Annual Report, including but not limited to those discussed under "Item 3. Key Information-RiskInformation--Risk Factors".

PART I

Not applicable.

Not applicable.

Selected Financial Data

Company Selected Financial Information and Operating Data

The following information should be read in conjunction with, and is qualified in its entirety by reference to, the Company Financial Statements including the Notes thereto appearing elsewhere in this Annual Report. The selected financial information as of December 31, 20012002 and 2002,2003, and for the three years ended December 31, 2000, 2001, 2002 and 2002,2003, is derived from the Company Financial Statements appearing elsewhere in this Annual Report. The report of Medina, Zaldivar, Paredes & Asociados (a member firm of Ernst & Young Global)International) on the Company's 2002 and 2003 Financial Statements appears elsewhere in this Annual Report. The selected consolidated financial data as of December 31, 2001 and 2000 and for the yearsyear then ended areis derived from the audited consolidated financial statements audited by other auditors, Medina, Zaldivar y Asociados (a member firm of Andersen Worldwide), who have ceased operations and whose report has not been reissued in connection with this filing on Fo rmForm 20-F, see page F-3.F-4. The Company Financial Statements are prepared and presented in accordance with Peruvian GAAP, which differ in certain respects from U.S. GAAP. Note 3738 to the Company Financial Statements provides a description of the principal differences between Peruvian GAAP and U.S. GAAP as such differences relate to the Company, and Note 3839 to the Company Financial Statements provides a reconciliation to U.S. GAAP of the Company's net income for the years ended 2000, 2001, 2002 and 2002,2003, and shareholders' equity as of December 31, 20012002 and 20022003. The selected financial information as of December 31, 19981999 and 19992000 and for the years then ended has been derived from the Company's financial statements as of and for the years then ended, which have been audited by Medina, Zaldivar y Asociados. The operating data presented below is derived from the Company's records and has not been subject to audit. The financial information and operating data presented below should be read in conjunction with "Item"I tem 5. Operating and Financial Review and Prospects-TheProspects--The Company" and the Company Financial Statements and the related Notes thereto and other financial information included in this Annual Report.

____________________

Yanacocha Selected Financial Information and Operating Data

The following table presents selected financial information and operating data for Yanacocha at the dates and for each of the periods indicated. In 2002, Yanacocha changed its depreciation, depletion and amortization ("DD&A") policy to capitalize these costs as part of inventory production cost and corrections to charges of depreciation rates. Previously, DD&A were treated as period costs and not as inventory. As a result of this change, the financial statements for the years ended December 31, 2001, 2000 and 1999 have been restated from those previously issued. This information should be read in conjunction with, and is qualified in its entirety by reference to, the Yanacocha Financial Statements.Statements, which have been audited by Dongo-Soria Gaveglio y Asociados (a member firm of PricewaterhouseCoopers). The report of Dongo-Soria Gaveglio y Asociados on the Yanacocha Financial Statements appears elsewhere in this Annual Report. The Yanacocha Financial Statements are prepared and presented in accordance with U.S. GAAP, which differ in certain respects from Peruvian GAAP. Note 17 to the Yanacocha Financial Statements provides a description of the principal differences between U.S. GAAP and Per uvianPeruvian GAAP, as such differences relate to Yanacocha, and Note 18 to the Yanacocha Financial Statements provides a reconciliation to Peruvian GAAP of Yanacocha's net income for the years ended 2000, 2001, and 2002 and 2003 an d partners' equity as of December 31, 20012002 and 2002.2003. The operating data presented below, which is based on 100 percent of Yanacocha's production and reserves, is derived from Yanacocha's records and has not been subject to audit. The financial information presented below should be read in conjunction with "Item 5. Operating and Financial Review and Prospects-Yanacocha"Prospects--Yanacocha" and the Yanacocha Financial Statements and the related Notes thereto and other financial information included in this Annual Report.

________________

Exchange Rates

The following table sets forth the high and low month-end rates and the average and end-of-period offered rates for the sale of Nuevos Soles in U.S. Dollars for the period indicated, as published by the SBS. The Federal Reserve Bank of New York does not report a noon buying rate for Nuevos Soles.

Exchange Rates
(Nuevos Soles per US$)⁽¹⁾

___________________

Source: SBS

On June 19, 2003,May 31, 2004, the offered rate for Dollars as published by the SBS was S/.3.472.3.489 = US$1.00.

Capitalization and Indebtedness

Not applicable.

Reasons for the Offer and Use of Proceeds

Not applicable.

Risk Factors

Factors Relating to the Company

Dependence on Joint Ventures

An integral part of the Company's operations is the participation in joint venture projects with experienced mining companies. At the date of this Annual Report, the Company was participating in several joint operating agreements, joint ventures and other joint exploration and mining enterprises and companies, including Yanacocha.Joint venture projects benefit the Company by providing a source of outside funds for exploration of mining rights, by giving the Company access to the holdings of outside parties without the risk and costs of outright acquisition and by associating Companyexpanding the Company's senior management, geologists and engineers scope of knowledge and experience as a result of increased contact with their counterparts from other organizations and thus expanding their scope of knowledge and experience.organizations. The Company can be highly dependent upon its partners, co-venturers or other shareholders in a joint venture carrying out their obligations under the applicable joint venture agreement or joint operating agreement. Such partners, co-venturers an dco-vent urers and other shareholders in a joint venture may contribute capital to cover the expenses of the joint venture project or provide critical technological expertise and/or management and organizational expertise. See "Item 4. Information on the Company-Yanacocha-Overview"Company--Yanacocha--Overview" for a description of how the Company and Newmont Mining Corporation, a Delaware corporation ("Newmont Mining"), have joined together to participate in Yanacocha and how Yanacocha is dependent upon Newmont Peru Limited, Peruvian Branch ("NEM"Newmont Peru") to provide management and other expertise to the Yanacocha project. If, however, a partner, a co-venturer or in certain cases another shareholder does not carry out its obligations under the applicable joint venture agreement, joint operating agreement, by-laws or shareholders agreement, the value of the Company's investment in the joint venture could be adversely affected and the Company could incur significant expense in enforcing its rights or pursuing remedies. There can be no assurance that the Company's current or future partners will fulfill their obligations under such agreements. See "Item 4. Information on the Company-Yanacocha"Company--Yanacocha" and "Item 4. Information on the Company-The Company-Business Overview-Exploration"Company--The Company--Business Overview--Exploration".

Investment in International Operations

Foreign operations are subject to certain risks inherent in conducting business abroad, including, among others, exposure to foreign currency fluctuations, devaluations or supply restrictions, exchange control regulations, government policies, price and wage controls, taxation, intervention, social instability and other political, economic or diplomatic developments beyond the Company's control. There can be no assurance that the Company's foreign exploration activities will not be adversely affected in the future.

The Company is carrying out exploration activities in Argentina, Ecuador and Bolivia. In recent years, Argentina has suffered a prolonged economic crisis. The economic conditions in Argentina have not affected the Company and the Argentine economy has improved in recent months. However, there can be no assurance as to when the Argentine economy will recover or if the crisis will continue and whether the Company may be affected in the future.

Prices of Gold and Silver

Because the Company's revenues are derived primarily from the sale of ore concentrates containing gold and silver, and Yanacocha's revenues are derived primarily from the sale of gold and silver, the prices the Company and Yanacocha obtain for gold and silver and ore concentrates containing such metals, and the Company's and Yanacocha's earnings, are directly related to world market prices for such metals. Such prices have historically fluctuated widely and are affected by numerous factors beyond the Company's control, including the overall demand for and worldwide supply of gold, silver and other metals; the availability and price of competing commodities, international economic trends, currency exchange fluctuations, expectations of inflation, actions of commodity markets participants, consumption and demand patterns and political events in major producing countries. For information on gold and silver prices for each of the years in the five-year period ended December 31, 2002,2003, see &qu ot;" Item 4. Information on the Company-The Company-Business Overview-SalesCompany--The Company--Business Overview--Sales of Metal Concentrates". On December 31, 20022003 and MayApril 30, 2003,2004, the morning fixing price for gold on the London Bullion Market was US$342.75417.25 per ounce and US$365.80387.30 per ounce, respectively. On December 31, 20022003 and MayApril 30, 2003,2004, the afternoon fixing spot price of silver on the London market (the "London Spot") was US$4.675.965 per ounce and US$4.565.950 per ounce, respectively.

To minimize exposure to fluctuations in the prices of gold, silver and other metals, the Company is engaged in price hedging activities such as forward sales and option contracts, see "Item 11. Quantitative and Qualitative Disclosure About Market Risk".

Impact of Government Regulation

The Company's and Yanacocha's activities in Peru are dependentdepend on mining concessions for exploration and development (hereafter referred to as "mining concessions") being obtained from the Peruvian Ministry of Energy and Mines ("MEM"), in the case of the Company, and through the assignment of concessions granted to a related entity by the Peruvian government, in case of Yanacocha. In addition, the Company's and Yanacocha's activities in Peru are dependentdepend on provisional permits, obtained from the MEM, for exploration and/or development rights of the area of the claim obtained also from the MEM (hereafter referred to as "provisional permits," and together with mining concessions, hereafter referred to as "mining rights"), and/or processing concessions, obtained from the MEM, for treatment of mining ores obtained from the MEM (hereafter referred to as "processing concessions"), previously granted by the Peruvian government with respect to the Company's and Yanacocha's mining activitie s, as well as compliance by the Company and Yanacocha with certain agreements entered into with the Peruvian government. Under thePeru's current legal and regulatory regime, in Peru, the Company'sCo mpany's mining rights have an indefinite term and Yanacocha's assigned mining rights have a term of 20 years, with an option to renew for an additional term of 20 years. The mining rights are maintained by meeting a minimum annual level of production or investment and by the annual payment of a concession fee. A fine is payable for the years in which minimum production or investment requirements are not met. In addition if, in any year, the concession fee is not paid, payment may be made the following year within the term provided for making such payment. Any payment made shall be applied to the prior year if such prior year was not paid. Failure to pay such concession fees or fines for two consecutive years could result in the loss of one or more of the mining rights. However, mining and processing concessions will not lapse if the administrative authority failed to issue a resolution declaring the termination of the concession within the first five years following the date on which such payment failure occ urred. The Company's and Yanacocha's processing concessions enjoy the same duration and tenure as the mining rights, subject to payment of a fee based on nominal capacity for the processing plant. Failure to pay such processing fees or fines for two consecutive years could result in the loss of t hethe processing concessions. The Company is, and Yanacocha has informed the Company that Yanacocha is, current in the payment of all amounts due in respect to its mining and processing concessions.

Environmental and other Regulatory Matters

The Company's and Yanacocha's exploration, mining, milling, smelting and refining activities are also subject to a number of Peruvian laws and regulations, including environmental laws and regulations. Additional matters subject to regulation include, but are not limited to, concession fees, transportation, production, water use and discharges, power generationuse and use,generation, use and storage of explosives, surface rights, housing and other facilities for workers, reclamation, taxation, labor standards, mine safety and occupational health.

The Company anticipates additional laws and regulations will be enacted over time with respect to environmental matters. The development of more stringent environmental protection programs in Peru could impose constraints and additional costs on the Company's and Yanacocha's operations and require the Company and Yanacocha to make significant additional capital expenditures in the future. Although the Company believes it is substantially in compliance, and Yanacocha has advised the Company that Yanacocha is substantially in compliance, with all applicable environmental regulations, of which it is now aware, there iscan be no assurance that future legislative or regulatory developments will not have an adverse effect on the business or results of operations of the Company or Yanacocha. See "Item 4. Information on the Company-The Company-Regulatory Framework-EnvironmentalCompany--The Company--Regulatory Framework--Environmental Matters" and "-Permits""--Permits" and "Item 4. Information on the Company-Yanacocha-Regulation, Permitt ingCompany--Yanacocha--Regulation, Permitting and Environmental Matters".

Hedging

The Company engages in gold, silver and zinc price hedging activities, such as forward sales and options contracts, to minimize its exposure to fluctuations in the prices of such metals. Buenaventura is not required to place collateral with respect to derivative instruments and there are no margin calls associated with such contracts. Credit risk is minimized by dealing with major financial institutions. See "Item 11. Quantitative and Qualitative Disclosures About Market Risk". The intended effect of hedging transactions is to lock in a minimum sales price for future production at the time of the transactions, thereby reducing the impact on the Company of a future fall in such metals' prices. However, no assurances can be given as to whether, when or at what prices or cost the Company will be able to enter into hedging transactions and whether the Company's hedging activities will effectively protect the Company from adverse consequences of price fluctuations. The effect of some hedginghedgin g transactions will be to eliminate or limit to some extent revenues that the Company would otherwise receive as a result of increases in the price of gold, silver and zinc. A forward sale of gold, for exa mple,example, would mean the Company would not realize any additional revenues above the gold price specified in the contract. The Company's profitability could be adversely affected if for any reason, its production of gold is unexpectedly interrupted for a significant period of time and as a result it is unable to produce sufficient gold to cover any forward sales commitments it may have made. No assurance can be given that the Company will employ these or other hedging techniques in the future or that these or other hedging techniques, if employed, will be successful or achieve their desired effect.

The Company's current strategy is not to sign new derivative contracts. The Company entered into transactions that closed out approximately two thirds (2/3) of its outstanding derivative contracts in December 2003. These contracts were replaced with a series of sales contracts requiring physical delivery of the same quantity of gold over future periods that do not extend beyond 2011. See "Item 11. Quantitative and Qualitative Disclosures About Market Risk."

Yanacocha has generally not engaged in, and is currently not engaged in, gold price hedging activities, such as forward sales or option contracts, to minimize its exposure to fluctuations in the price of gold. No assurance can be given, however, that Yanacocha will not enter into hedging transactions in the future or that such transactions, if entered into, will have the desired effect.

Speculative Nature of Precious Metals Exploration and Development

Precious metals exploration, particularly gold exploration, is highly speculative in nature, involves many risks and frequently is unsuccessful. There can be no assurance that the Company's or Yanacocha's precious metals exploration efforts will be successful. Once mineralization is discovered, it may take a number of years from the initial phases of drilling before production is possible, during which time the economic feasibility of production may change. Substantial expenditures are required to establish proven and probable ore reserves through drilling, to determine metallurgical processes to extract the metals from the ore and, in the case of new properties, to construct mining and processing facilities. As a result of these uncertainties, no assurance can be given that the Company's or Yanacocha's exploration programs will result in the expansion or replacement of current production with new proven and probable ore reserves.

Development projects have no operating history upon which to base estimates of proven and probable ore reserves and estimates of future cash operating costs. Such estimates are, to a large extent, based upon the interpretation of geologic data obtained from drill holes and other sampling techniques, and feasibility studies which derive estimates of cash operating costs based upon anticipated tonnage and grades of ore to be mined and processed, the configuration of the ore body, expected recovery rates of the mineral from the ore, comparable facility and equipment operating costs, anticipated climatic conditions and other factors. As a result, it is possible that actual cash operating costs and economic returns based upon development of proven and probable ore reserves may differ significantly from those originally estimated. Moreover, significant decreases in actual over expected prices may mean reserves, once found, will be uneconomical to produce. It is not unusual in new mining oper ationsoperatio ns to experience unexpected problems during the start-up phase. The Company utilizes a three-year average historic price of US$325 per ounce of gold and US$5 per ounce of silver to calculate its proven and probable ore reserves.

Capital Intensive Nature of Precious Metals Exploration and Development

Precious metals exploration and development requires substantial capital expenditures for the exploration, extraction, production and processing stages and for machinery, equipment and experienced personnel. There iscan be no assurance that the Company or Yanacocha will generate sufficient cash flow and/or that it will have access to sufficient external sources of funds in the form of outside investment or loans to continue its exploration and development activities at the same or higher levels than in the past.

Reserves Estimates

The proven and probable ore reserve figures presented in this Annual Report are estimates of the Company and Yanacocha, and no assurancethere can be givenno assurance that the indicated level of recovery of gold, silver and certain other metals will be realized. Reserve estimates may require revision based on actual production experience. Market price fluctuations of gold, silver and these other metals, as well as increased production costs or reduced recovery rates, may render proven and probable ore reserves containing relatively lower grades of mineralization uneconomic to exploit and may ultimately result in a restatement of proven and probable ore reserves. Moreover, short-term operating factors relating to the reserves, such as the processing of different types of ore or ore grades, could adversely affect the Company's or Yanacocha's profitability in any particular accounting period. See "Item 4. Information on the Company-Property,Company--Property, Plants and Equipment-TheEquipment--The Company's Property-Reserves&q uot;Property--Reserves" and "Item"It em 4. Information on the Company-Property,Company--Property, Plants and Equipment-Yanacocha's Properties-Reserves"Equipment--Yanacocha's Properties--Reserves".

Replacement of Reserves

As the Company produces gold, silver, zinc and other metals, it depletes its ore reserves for thosesuch metals. TheTo maintain production levels, the Company must replace depleted reserves must be replaced by expandingexploiting known ore bodies or by locating new deposits in order for the Company to maintain its production levels over the long-term.deposits. Success in exploration for gold, silver and the other metals the Company produces is very uncertain and there is a risk that the Company's depletion of reserves will not be offsetoff-set by new discoveries.

Industry Risks

The business of mining, smelting and refining gold, silver and other metals is generally subject to a number of risks and hazards, including industrial accidents, labor disputes, unusual or unexpected geological conditions, changes in the regulatory environment, environmental hazards and weather and other natural phenomena such as earthquakes. Such occurrences could result in damage to, or destruction of, mining properties or production facilities, personal injury or death, environmental damage, delays in mining, monetary losses and possible legal liability. The Company and Yanacocha each maintain insurance against risks that are typical in the mining industry in Peru and in amounts that the Company and Yanacocha believe to be adequate but which may not provide adequate coverage in certain circumstances. Insurance against certain risks (including certain liabilities for environmental pollution or other hazards as a result of exploration and production) is not generally available to the Company or Yanacocha or to other companies within the industry.

Labor Matters

From time to time, the Company has experienced strikes which have had an adverse impact on its operations and operating results. Although the Company considers its relations with its employees to be good, there can be no assurance that this situation will continue and that the Company will not experience strikes or other labor-related work stoppages that could have a material adverse effect on its operations or its operating results. Yanacocha has not experienced strikes has no labor unions and, although it has not entered into any collective bargaining agreements since the beginning of its operations, on December 9, 2003 the Workers' Union of Minera Yanacocha SRL (the "Union") was created and registered before the Peruvian Labor Ministry. Yanacocha has informed the Company that it considers its relations with its employees to be good. However, there can be no assurance that this situation will continue and that Yanacocha will not experience strikes or other labor-related work stoppages that could have a material adverse effect on its operations or its operating results. See "Item 6. Directors, Senior Management and Empl oyees-Employees"Employees--Employees" and "Item 4. Information on the Company-Yanacocha-Employees"Company--Yanacocha--Employees".

Report of Former AuditorsInvestment Company Act

The Company owns a 43.65 percent partnership interest in Yanacocha. This partnership interest may constitute "investment securities" for purposes of the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act").

Under the Investment Company Act, an investment company is defined in relevant part to include (i) any company that is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities and (ii) any company that owns or proposes to acquire investment securities having a value exceeding 40 percent of such company's total assets (exclusive of certain items) on an unconsolidated basis. Issuers that are investment companies within the meaning of the Investment Company Act, and which do not qualify for an exemption from the provisions of such act, are required to register with the Commission and are subject to substantial regulations with respect to capital structure, operations, transactions with affiliates and other matters. If the Company were deemed to be an investment company and did not qualify for an exemption from the provisions of the Investment Company Act, the Company would be required to register with thet he Commission and would be subject to such regulations, which would be unduly burdensome and costly for the Company and possibly adversely impact the Company.

The Company received an order from the Commission on April 19, 1996 declaring it to be primarily engaged in a business other than that of an investment company and, therefore, not an investment company within the meaning of the Investment Company Act. The Company intends to conduct its operations and maintain its investments in a manner, and will take appropriate actions as necessary, to ensure it will not be deemed to be an investment company in the future. The Commission, however, upon its motion or upon application, may find that the circumstances that gave rise to the issuance of the order no longer exist, and as a result may revoke such order. There can be no assurance that such order will not be revoked.

Investment Company ActReport of Former Auditors

The consolidated financial statements of the Company, together with the reports of Medina, Zaldivar, Paredes & Asociados (a member firm of Ernst & Young Global)International) for the yearyears ended December 31, 2002 and 2003, respectively, and Medina, Zaldivar y Asociados (a former firm of Andersen Worldwide) for the yearsyear ended December 31, 2001 and 2000, respectively, are filed as part of this annual report.

The audit report of Medina, Zaldivar y Asociados for the years ended December 31, 2001, 2000 and 1999, issued on February 27, 2002 with respect to the Company's consolidated financial statements, was filed as part of the annual report on Form 20-F for the year ended December 31, 2001. Because Medina, Zaldivar y Asociados has ceased operations, a written consent to include their audit report with respect to the Company's consolidated financial statements for the yearsyear ended December 31, 2001 and 2000 has not been obtained. Therefore, a copy of such report, which has not been reissued by Medina, Zaldivar y Asociados, is attached to this Annual Report.

As a result, Medina, Zaldivar y Asociados will not have any liability under Section 11(a) of the Securities Act of 1933, as amended, and investors will not be able to assert a claim, for any untrue statement of a material fact contained in the financial statements audited by them or any omission of a material fact required to be stated therein.

Factors Relating to Peru

Exposure to Peruvian Political Risk

All of the Company's and Yanacocha's operations are conducted in Peru. Accordingly, the business, financial condition or results of operations of the Company and Yanacocha could be affected by changes in economic or other policies of the Peruvian government or other political, regulatory or economic developments in Peru.

During the past several decades, Peru has had a history of political instability that has included military coups and a succession of regimes with differing policies and programs. Past governments have frequently played an interventionist role in the nation's economy and social structure. Among other things, past governments have imposed controls on prices, exchange rates and local and foreign investment as well as on limitations on imports, have restricted the ability of companies to dismiss employees, have expropriated private sector assets (including mining companies) and have prohibited the remittance of profits to foreign investors.

During the 1980s, government policies restricted the ability of the Company, among other things, to repatriate funds and import products from abroad. In addition, currency exchange rates were strictly controlled, and all exports sales were required to be deposited in Peru's Banco Central de Reserva (the "Central Bank"), where they were exchanged from U.S. Dollars to Peruvian currency at less-than-favorable rates of exchange. These policies generally affected the results of operations of the Company. Controls on repatriation of funds limited the ability of the Company's shareholders to receive dividends outside of Peru, but did not limit the ability of the Company's shareholders to receive distributions of earnings in Peru. See "Item 10. Additional Information-ExchangeInformation--Exchange Controls".

In July 1990, Alberto Fujimori was elected president, and his administration implemented a broad-based reform of Peru's political system, economy and social conditions, aimed at stabilizing the economy, restructuring the national government by reducing bureaucracy, privatizing state-owned companies, promoting private investment, developing and strengthening free markets, institutionalizing democratic representation and enacting programs for the strengthening of basic services related to education, health, housing and infrastructure. As part of Fujimori's program of reform, the Peruvian Congress was dissolved in April 1992, and a democratically elected congressional body was reestablished in November 1992. A new Constitution was enacted and ratified in the fourth quarter of 1993.

In April 1995, Fujimori was elected to a second five-year term of office as provided by the Constitution enacted in 1993. During Fujimori's second term, inflation continued to decrease and GDP increased.

On May 28, 2000, as a result of an election run-off with Alejandro Toledo, a former Peruvian business school professor, Fujimori was reelected to a third five-year term of office with approximately 74 percent of the votes counted. After several national and international institutions charged the elections were unfair and political scandals involving several government officials, Fujimori called for new elections to be held in 2001. Amid increasing pressure on Fujimori to resign, on November 19, 2000, Fujimori resigned his post from Tokyo, Japan, and has not returned to Peru since then. New elections were subsequently held on April 8, 2001 and a run-off election was held on June 3, 2001, in which Mr. Alejandro Toledo was elected President.

President Toledo's government has largely retained the economic policies of the previous government, focusing on promoting private investment, privatizing state-owned companies in various sectors including energy, mining and public services, eliminating exemptions to tributary obligations and reducing unemployment.services.

Risks of Inflation, Reduced Economic Growth and Currency Devaluation

Over the past several decades, Peru has experienced periods of high inflation, slow or negative economic growth and substantial currency devaluation. The inflation rate in Peru, as measured by theIndice de Precios al Consumidor ("IPC") and published by INEI, has fallen from a high of 7,649.7 percent in 1990 to 6.0 percent in 1998, 3.7 percent in 1999, 3.7 percent in 2000, -0.1 percent in 2001, and 1.5 percent in 2002.2002 and 2.5 percent in 2003. The Peruvian currency has been devalued numerous times during the last 20 years. The devaluation rate has decreased from a high of 4,019.3 percent in 1990 to 15.4 percent in 1998, 11.1 percent in 1999, 0.5 percent in 2000, -2.3 percent in 2001, and 2.0 percent in 2002.2002 and -1.5 percent in 2003. The Company's revenues are almost entirely denominated in U.S. Dollars, and its operating expenses are primarily denominated in Nuevos Soles.U.S. Dollars. If inflation in Peru were to increase without a corresponding devaluation of the Nuevo Sol relative to the U.S. Dollar, the financial positi onposition and results of operations of the Company, and the market price of the Common Shares and the American Depository Shares ("ADSs"), could be affected. Although the Peruvian government's stabilization plan has significantly reduced inflation, and the Peruvian economy has experienced strong growth in recent years, there can be no assurance that inflation will not increase from its current level or that such growth will continue in the future at similar rates or at all.

Among the economic circumstances that could lead to a devaluation would be the decline of Peruvian foreign reserves to inadequate levels. Peru's foreign reserves at December 31, 20022003 were US$9.610.2 billion as compared to US$8.69.6 billion at December 31, 2001.2002. There can be no assurance that Peru will be able to maintain adequate foreign reserves to meet its foreign currency denominated obligations, or that Peru will not devalue its currency should its foreign reserves decline. See "Item 3. Key Information-ExchangeInformation--Exchange Rates".

Peru's current account deficit is being funded partially by foreign direct investment. There can be no assurance that foreign direct investment will continue at current levels, particularly if adverse political or economic developments in Peru arise, a development that may also contribute to devaluation pressure.

Exchange and Investment Controls

Peruvian law currently imposes no restrictions on the ability of companies operating in Peru to transfer foreign currency from Peru to other countries, to convert Peruvian currency into foreign currency or foreign currency into Peruvian currency or to remit dividends abroad or on the ability of foreign investors to liquidate their investment and repatriate their capital. Prior to 1991, Peru had restrictive exchange controls and exchange rates. During the latter part of the 1980s, exchange restrictions prevented payment of dividends to the Company's shareholders in the United States in U.S. Dollars. Accordingly, should such or similar controls be instituted, dividends paid to holders of Common Shares and, consequently, holders of American Depositary Receipts ("ADRs"), could be affected. There can be no assurance that the Peruvian government will continue to permit such transfers, remittances or conversion without restriction. See "Item 10. Additional Information-Exc hangeInformation--Exchange Controls".

Corporate Disclosure and Accounting Standards

The Company prepares its financial statements using Peruvian GAAP, which differ in certain material respects from U.S. GAAP. Thus, the presentation of Peruvian financial statements and reported earnings may not be comparable to those companies whose financial statements are prepared in accordance with U.S. GAAP. See Note 3738 to the Company Financial Statements for a description of the significant differences between Peruvian GAAP and U.S. GAAP, as such differences relate to the Company, and Note 3839 for a reconciliation to U.S. GAAP of the Company's net income and shareholders' equity for the period included therein. In addition, since the Company is not a United States registrant, information regarding the Company may not be as readily disseminated into the market.

Enforceability of Civil Liabilities

The Company is organized under the laws of Peru. A significant majority of the Company's directors and officers reside outside the United States (principally in Peru). All or a substantial portion of the assets of such persons or the Company are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or the Company or to enforce against them in federal or state courts in the United States judgments predicated upon the civil liability provisions of the federal securities laws of the United States. The Company has been advised by its Peruvian counsel, that there is uncertainty as to the enforceability, in original actions in Peruvian courts, of liabilities predicated solely under the United States federal securities laws and as to the enforceability in Peruvian courts of judgments of United States courts obtained in actions predicated upon the civil liability provisions of the United StatesStat es federal securities laws.

Factors Relating to the Common Shares and ADSs

Voting Rights; Effective Control by Principal Shareholders

The aggregate percentage of the economic interest of the outstanding share capital of the Company held by Alberto Benavides de la Quintana, the Company's Chairman and former Chief Executive Officer, and certain members of his immediate and extended family and their spouses (collectively, the "Benavides Family") as of May 31, 2003April 30, 2004 was 26.7926.77 percent. Because of the significant ownership interest the Benavides family holds in the Company and because the Investment Shares do not have voting rights, the Benavides Family has the power to elect a significant number of the outstanding directors and has a significant influence over the outcome of substantially all matters to be decided by a vote of shareholders. In addition, under the terms of the Amended and Restated Deposit Agreement dated May 3, 2002, as further amended and restated as of November 12, 2003, among the Company, The Bank of New York, as depositary (the "Depositary"), and the owners and beneficial owners of ADSs (the "Amended and Restated Deposit Agreement&q uot;Agreement") relating to the Company's ADRs, if holders of ADRs do not provide the Depositary with timely instructions for the voting of Common Shares represented by such ADRs, the Depositary will be deemed to be instructed to give a person designated by the Company, which will likely be Alberto Benavides de la Quintana, a discretionary proxy to vote such shares, unless the Company informs the Depositary that the Company does not wish such proxy to be given.

Fewer and Less Well Defined Shareholders' Rights

The Company's shareholders have fewer and less well-defined rights under applicable Peruvian law than they might have as shareholders of a corporation incorporated in a jurisdiction of the United States or certain other countries.

Shares Eligible for Future Sale

Sales of a substantial number of shares of the Company by Alberto Benavides de la Quintana and certain other members of the Benavides Family could materially and adversely affect prevailing market prices for the Common Shares and ADSs. There is no contractual restriction on the disposition of shares of the Company's share capital by its shareholders, including the Benavides Family. Furthermore, under the Peruvian Companies Law, any restriction on the free sale of shares in asociedad anónima abierta, such as the Company, is null and void.

Possible Inability of ADS Holders to Exercise Preemptive Rights

Holders of the ADSs are, under Peruvian law, entitled to exercise preemptive rights and accretion rights on the Common Shares underlying the ADSs in the event of any future capital increase by the Company unless (x) the increase is approved, expressly stating that the shareholders have no preemptive rights to subscribe and pay for the Shares to be issued in such increase, by holders of Common Shares, holding at least 40 percent of the Common Shares, at a properly called meeting with a proper quorum and (y) the increase is not designed to improve directly or indirectly the shareholding of any shareholder. However, United States holders of ADSs may not be able to exercise through the Depositary for the ADSs the preemptive rights and accretion rights for Common Shares underlying their ADSs unless a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), is effective with respect to such rights or an exemption from the registration r equirementrequirement thereunder is available. Any such rights offering would have a dilutive effect upon shareholders who are unable or unwilling to exercise their rights. The Company intends to evaluate, at the time of any rights offering the costs and potential liabilities associated with any registration statement as well as the benefits to it of enabling the holders of ADSs to exercise such rights and will then make a decision as to whether to file such a registration statement. Therefore, no assurance can be given that any such registration statement would be filed. To the extent that holders of ADSs are unable to exercise such rights because a registration statement has not been filed and no exemption from such registration statement under the Securities Act is available, the Depositary will, to the extent practicable, sell such holders' preemptive rights or accretion rights and distribute the net proceeds thereof, if any, to the holders of ADSs and such holders' equity interest in the Company would be dilut ed proportionately.diluted proportionat ely. The Depositary has discretion to make rights available to holders of ADSs or to dispose of such rights and to make any net proceeds available to such holders. If, by the terms of any rights offering or for any other reason, the Depositary is not able to make such rights or such net proceeds available to any holder of ADSs, the Depositary may allow the rights to lapse.

THE COMPANY

History and Development

Overview

Buenaventura is Peru's largest publicly-traded precious metals company. The Company is engaged in the mining, processing, development and exploration of gold, silver and, to a lesser extent, other metals, in Peru. The Company currently operates three mines (Julcani, Uchucchacua and Orcopampa) and has controlling interests in fourfive mining companies which have controlling interests in the Antapite, Colquijirca, Ishihuinca, Shila and Paula mines. In March 2001, the Company ceasedtemporarily suspended operations and discontinued exploration efforts at the Recuperada mine. See "-History.In April 2004, the Company elected to resume exploration efforts at the Esperanza vein of the Recuperada mine due to an increase in the price of metals.See "--History." In March 2002, the Company sold its 100 percent interest in Minera Huallanca S.A.C. ("Minera Huallanca") to BHL-Perú S.A.C. See "-Recent Developments-Sale"--Recent Developments--Sale of Interest in Minera Huallanca S.A.C." The Company also owns an electric power transmissiontransmi ssion company and an engineering services consulting company and has minority interests in several other mining companies, including a signif icantsignificant ownership interest in Yanacocha, a Peruvian partnership that operates South America's largest gold mine. In 2002,2003, the Julcani, Uchucchacua, Orcopampa, Antapite, Colquijirca, Ishihuinca, Shila Paula and HuallancaPaula mines produced 277,490319,427 ounces of gold, 13,346,37413,813,658 ounces of silver and 72,14767,949 short tons of zinc. Yanacocha produced approximately 2,285,5842,851,143 ounces of gold and 1,921,6703,035,275 ounces of silver. The Company's equity share of production in 20022003 was 1,252,8691,534,410 ounces of gold, 12,523,27813,122,763 ounces of silver and 28,07423,992 short tons of zinc, including 997,6571,244,524 ounces of gold and 838,8091,324,898 ounces of silver for Yanacocha. For the year ended December 31, 2002,2003, the Company's net sales were approximately S/.579.9 million.700.9million (US$165.0202.4 million), and its net income was approximately S/.388.5.166.9 million (US$110.548.2 million).

Compañía de Minas Buenaventura S.A.A., asociedad anónima abierta (open stock company) under the laws of Peru,was originally established in 1953 as asociedad anónima (company) under the laws of Peru, and currently operates under the laws of Peru. The Company's registered office is located at Carlos Villarán 790, Santa Catalina, Lima 13, Perú, telephone no. 5-11-419-2538. The Company's Internet Website address is www.buenaventura.comhttp://www.buenaventura.com. The information on the Company's website is not a part of, nor incorporated into this document.

History

During its first 25 years, the Company's efforts focused on the exploration and development of silver mines. During this period, the Company built up its principal mines in Peru, commencing with the purchase of the Julcani mine in 1953. The Company commenced exploration of the Orcopampa mine in 1962 and operations in 1965. The Company began exploring the Uchucchacua mine site in 1960 and, after operating a pilot project in the area in the early 1970s with successful results, it built an ore processing plant at the mine site, which began operations in 1975.

Because of political uncertainties in Peru in the mid-1970s, the Company decided to considerexplored mining possibilities in other countries in South America, including Colombia, Ecuador, Venezuela, Bolivia and Argentina. Exploration and development began on a small scale at the Toachi mine near Quito, Ecuador, but this project was discontinued in 1981 due to border disputes between Peru and Ecuador. At that time, the Company also decided to discontinue its exploration outside Peru and to intensify efforts in Peru.

Following a sharp increase in silver prices, which peaked in 1980, the Company initiated a program to explore for gold and, to a lesser extent, other metals in Peru to reduce its dependence on silver assince the Company believed that the high levelsprice of silver prices could not be sustained. Faced with declining silver prices throughout the 1980s, the Company expanded silver output to reduce its cash flow while at the same time continuing its exploration efforts for other metals. Exploration of gold anomalies in the Yanacocha district began in 1983 and an expansion of the Orcopampa mine (which had operated since 1967 as a silver-producing mine) to enable the Company to develop newly-discovered gold veins began in 1984 and was concluded in 1986, enabling1999. In 2002, after an intense exploration program of the Company to develop newly-discoveredOrcompampa mine, gold veins.production was commenced at the Chipmo vein. New gold mining operations commenced at the Ishihuinca mine in the early 1980s.1980s and at the Antapite mine in 2001. However, Peru's economic and politicalpoli tical crisis during the 1980's, which led to the imposition of exchange controls, restrictions on imports of supplies, lack of capital and international credit and the increasing incidence of terrorism, adversely affected mining companies in Peru, including the Company.

Since the late 1980s, the Company has continued its efforts to decrease its exposure to silver price fluctuations and has pursued a plan to increase its overall precious metals production and production efficiency. The Company has continued to expand its mineral resource base through the implementation of acquisition, development and exploration programs designed to increase its production and reserves of gold while maintaining its strong position in silver. As part of this strategy, the Company acquired an equity interest in Yanacocha and conducted exploration leading to the discovery of gold mineralization and subsequent production of gold in Orcopampa, Shila, Ishihuinca, Antapite and other Company mines. These initiatives have transformed the Company from primarily a silver producer into primarily a gold producer, based on allocated revenue. In 2001, gold, silver and other metals accounted for 76.05 percent, 14.75 percent and 9.2 percent, respectively, and in 2002, gold, silver and other metals accounted for 90.5581.85 percent, 6.2312.25 percent and 3.225.90 percent, respectively, and in 2003, gold, silver and other metal s accounted for 85.92 percent, 9.29 percent and 4.79 percent, respectively, of the Company's equity share of production value in its consolidated subsidiaries and Yanacocha.

The Company's emphasis on gold production has largely been achieved by its acquisition of an equity interest in Yanacocha. On January 14, 1992, the Company, through its 100 percent owned subsidiary, Compañía Minera Condesa S.A. ("Condesa"), together with Newmont Second Capital Corporation ("Newmont Second"), a wholly owned subsidiary of Newmont Mining, and Société d'Etudes, de Recherches et d'Exploitations Miniéres ("Serem"), a wholly owned subsidiary of the Bureau de Recherches et D'Etudes Geologiques ("BRGM"), the geological and mining bureau of the French government, formed Yanacocha to continue exploration and development of the deposits at a mining site in the Cajamarca area. At that time, Yanacocha was 38 percent owned by Newmont Second, 24.7 percent owned by Serem, 32.3 percent owned by Condesa, with the remaining 5 percent owned by The International Finance Corporation ("IFC"), the branch of the World Bank that promotes private investments. Since then, the Company has increased its participation in Yanacocha to 43.65 percent, and Newmont Second has increased its participation in Yanacocha to 51.35 percent, with IFC continuing to own 5 percent.

In October 2000, the Company and Newmont Mining reached a settlement in their long-standing dispute with BRGM and Normandy Mining Ltd. ("Normandy") over ownership of Yanacocha and Compañía de Exploraciones, Desarrollo e Inversiones Mineras S.A.C. ("Cedimin") shares. Pursuant to the settlement, BRGM and Normandy together received US$80 million, half from Newmont Mining in the form of common shares and half from the Company in cash. In return, Newmont Mining, through Newmont Second, and the Company, through Condesa, received undisputed title to BRGM's former 24.7 percent interest in Yanacocha and the Company received undisputed title to BRGM's 65 percent interest in Cedimin, which originally owned 40 percent of Minas Conga S.R.L. ("Minas Conga") and other Peruvian assets. The Company paid the US$40 million amount on December 14, 2000.

In October 2000, the Company and Newmont Mining agreed to unitize in Yanacochaconsolidate their properties in Cajamarca, northern Peru.Peru, in Yanacocha. Under the unitizationconsolidation plan and according to agreements signed in December 2000, the Company sold to Yanacocha several assets, including those formerly owned by Minas Conga, the China Linda lime plant, mining rights, erialaerial land and other machinery and equipment and inventories. See "-Property,"--Property, Plants and Equipment-Yanacocha's Properties-OperatingEquipment--Yanacocha's Properties--Operating Properties". The Company received approximately US$9 million in connection with this sale of assets to Yanacocha. See Note 2 to the Company Financial Statements. Yanacocha and the Company also entered into an administration agreement setting forth that the Company would manage the China Linda lime plant until December 18, 2010, for a monthly fee of US$10,000 plus reimbursement of all incurred costs. However, in December 2001, Yanacocha terminated the agreement and the Company ceased to manage the China Li ndaLinda plant. As a result of the termination, the CompanyCompan y received a payment of $1,800,000 from Yanacocha. See Note 36(a)37(b) to the Company Financial Statements.

In March 2001, the Company ceasedtemporarily suspended operations at the Recuperada mine primarily due to the sharp drop in zinc prices and the flooding in October 2000 of the lower levels of the mine, where the majority of ore reserves were located. The Company made the decision to ceasetemporarily suspend operations and exploration efforts at Recuperada after exhaustive exploration conducted in the area yielded only negative results. TheHowever, due to an increase in the price of metals,the Company also decidedelected in April 2004 to discontinueresume exploration efforts atin the Esperanza vein of the Recuperada and, as a result, all activity at the mine is suspended at this time.mine.

Recent Developments

Redesignation of the Company's Shares and ADSs

At a shareholder meeting of the Company held on April 30, 2002, following special meetings of the Company's Series A shareholders and Series B shareholders on the same date (the "Special Meetings"), amendments to the Company'sestatutos (the "Company By-laws") were approved pursuant to the Special Meetings to effect the redesignation of each outstanding Series B Share as one Series A Share and the immediate redesignation thereafter of each Series A Share as one Common Share (the "Redesignation"). The Redesignation was effective May 3, 2002. From and afterAt that date, theThe Company hashad Common Shares with a nominal par value of S/.4.00 per share and Investment Shares also with a nominal par value of S/.4.00 per share. The Common Shares represent 100 percent of the outstanding share capital of the Company. The Investment Shares have no voting rights and are not, under Peruvian law and accounting rules, characterized as share capita l.capital.

The Company's ADSs have traded on the New York Stock Exchange Inc. (the "New York Stock Exchange") since May 15, 1996. Prior to the Redesignation, each of the Company's ADSs represented two Series B Shares. In connection with the Redesignation, the Company submitted a technical original listing application to the New York Stock Exchange dated April 25, 2002 (the "Application") for the redesignation of the Company's ADSs representing non-voting Class B Shares to ADSs representing voting Common Shares and the reservation of additional ADSs issuable upon redesignation of Class B Shares as Class A Shares and immediate redesignation thereafter of Class A Shares as Common Shares. The New York Stock Exchange approved the Application prior to the date of Redesignation and consequently, from and after such date,on May 3, 2002, each of the Company's ADSs has represented two Common Shares.

Sale of Interest in Minera Huallanca S.A.C.

Until March 30, 2002, the Company held, indirectly through Condesa From and Cedimin, a 100 percent interest in Minera Huallanca. On suchafter that date, the Company transferred this interest to BHL-Perú S.A.C. through the salehas Common Shares with a nominal par value of all of its shares in Minera Huallanca for US$2 million. From this total,S/.4.00 per share. On November 3, 2003, the Company will collect US$1.5 million in semi-annual installments until September 2004, and will collectsubmitted a supplemental listing application to the remaining US$0.5 million on September 30, 2006 as long as: (i)New York Stock Exchange to modify the levelratio of economic reserves as measured between September 24, 2004 and September 30, 2006 allows Huallanca to produce 15,000 tons per month of mineral, and (ii) the average price of zinc is higher than US$1,050 per ton during that period. If these conditions are not satisfied, the final price for the Company's participation in Minera Huallanca will be US$1.5 million.ADSs and on November 12, 2003 the Company's ratio of Common Shares per ADSs was modified from two Common Shares per ADS to one Common Share per ADS.

Business Strategy

The Company's strategy is to strengthen its position as one of Peru's leading gold and silver mining companies by expanding its reserves and production. The Company is currently engaged in an active exploration and mine development program and participates in several joint ventures. Further, the Company seeks to increase the efficiency and capacity of its mining operations. The Company is aware of its social and environmental responsibilities and aims to excel in the prevention, mitigation and rehabilitation of mining-related disturbances.

Maintaining an Active Exploration Program

The Company views an active exploration program as its primary means to obtain new reserves. As of May 31, 2003,April 30, 2004, through an intensive exploration program, the Company holds, either directly or in conjunction with joint venture partners, 546,053556,776 hectares of mining rights, excluding an additional 142,610158,797 hectares in mining properties which consolidate production units, making it a major holder of mining rights in Peru. During 20022003 the Company spent approximately US$7.515.04 million primarily on mining exploration-related investments in Peru, concentrating on the exploration and development of precious metals deposits in the following mining projects: Los Pircos, La Zanja, Mesa de Plata, Tantahuatay, Salpo, Marcapunta, Pampa Andino, Jatun Orco, Huancavelica, Ccarhuarazo, Samana, Poracota, Franja Sur, Crucero and Patagonia. In 2003,2004, the Company intends to concentrate on the Los Pircos, La Zanja, Mesa de Plata, Salpo, Marcapunta,Estrella del Norte, Pampa Andino, Jatun Orco, Huancavelica, Poracota, Crucero, Altiplano and PatagoniaP atagonia exploration projects. The amount spent in 2003 does not include exploration performedexplorations program was financed by operating mines within their scope.internal funds as well as a US$6.4 million contribution by Newmont, ABX, MDG, SPCC and Hochschild.

Participation in Joint Ventures

In addition to managing and operating precious metals mines, Buenaventura also enters intoparticipates in exploration joint ventures with mining partners where appropriate, to reduce risks, gain exposure to new technologies, support high mine development costs and diversify revenues to include other metals. See "-Business Overview-Exploration""--Business Overview--Exploration". The Company believes that maintaining its focus on mining operations complements thisits joint-venture strategy because the engineering and geological expertise gained from such operations enhances the Company's ability to participate in and contribute to those joint-venture projects that offer the greatest potential.

The Company engages in gold, silver and zinc price hedging activities, such as forward sales and option contracts, to minimize its exposure to fluctuations in the prices of such metals. See "Item 11. Quantitative and Qualitative Disclosures About Market Risk" and "Item 3. Key Information-Risk Factors-FactorsInformation--Risk Factors--Factors Relating to the Company-Hedging"Company--Hedging".

Capital Expenditures

The Company's capital expenditures in the past three years have related principally to the acquisition of new assets, construction of new facilities and renewal of plant and equipment. Capital expenditures relating to exploration and development are not included herein and are discussed separately in "-Business Overview-Exploration""--Business Overview--Exploration". Set forth below is information concerning capital expenditures incurred by the Company in respect to each of its principal operating mines and by category of expenditure:

The Company financed its capital expenditures in 20002001 and 20012002 with internally-generated funds and borrowings under its lines of credit. In 2002,2003, capital expenditures were also financed with internally-generated funds and borrowings under the Company's lines of credit. See Notes 1516 and 1718 to the Company Financial Statements.

The Company has budgeted approximately US$27.344.1 million and US$12.738.8 million for capital expenditures in 20032004 and 2004, respectively, of which2005, respectively. Exploration expenses in non-operating units are expected to be US$6 million10.0 and US$610.0 million are allocated for explorationin 2004 and development activities in 2003 and 2004,2005, respectively. To fund its planned capital expenditures program, the Company plans to use internally-generated cash.Seecash. See "Item 5. Operating and Financial Review and Prospects-The Company-LiquidityProspects--The Company--Liquidity and Capital Resources".

The Company's ongoing projects include (i) continuing with the construction of a tunnel,new cyanidation plant, which began operations in March 2004, and tailings dam ("presa de relaves") N. 4 at the Patón tunnel,Orcopampa mining unit, which will be completed in 2004, for an estimated cost of US$9.5 million, (ii) the construction of a new 104 kilometer transmission line between the districts of Callalli and Ares with 138kV, and (iii) the construction of a new cyanidation plant in the Uchucchacua mining unit at an estimated cost of US$4.5 million in 2003, and (ii) the construction of a new cyanidation plant and tailings dam ("presa de relaves") in the Orcopampa mining unit at an estimated cost of US$6.59.0 million. In the Antapite mining unit, the Company is in the process of expanding its productiontailing damproduction capacity to 450 TPD at an estimated cost of US$2.23.0 million. The significant increase in capital expenditures for 20022003 was due to improvements in the exploration and treatmentconstruction of the metals produced byPatón tunnel at the Company.Uchucchacua mining unit and the cyanidation plant at the Orcopampa.

The Company initiated exploration activities for three silver, leadcompleted the La Zanja feasibility study in 2003 and zinc bearing veins in Bolivia in May 2001. In April 2001,plans to approve the Company entered into an option agreement with Minera La Solución S.A., a Bolivian mining company, which requires the Company to make minimum expenditures of US$100,000Environmental Impact Study and US$200,000 for the first two years, respectively, of the agreementbegin operations in the event that it decides to undertake exploration. After two years, the Company has the option to purchase 70 percentthird or fourth quarter of Minera La Solución2005 for US$1.5 million. In March 2002, the Company decided to suspend exploration activities in Bolivia due to the decrease in the pricean estimated investment of zinc.US$30.0 million.

The Company continuously evaluates opportunities to expand its business within Peru, as well as in other countries as opportunities arise, and expects to continue to do so in the future. The Company may in the future decide to acquire part or all of the equity of, or undertake joint ventures or other transactions with, other companies involved in the same business as the Company or in related other businesses. However, there can be no assurance that the Company will decide to pursue any such new activity or transaction.

Business Overview

Production

The Company principally produces refined gold and different types of metal concentrates that it distributes and sells internationally, including silver-lead concentrate, silver-gold concentrate, zinc concentrate and lead-gold-copper concentrate. The following table sets forth the production of the Antapite, Julcani, Uchucchacua, Orcopampa, Recuperada (which temporarily ceased operations in March 2001), Ishihuinca, Paula, Huallanca (which was sold in March 30, 2002), Colquijirca and Shila minesShilamines by type of product for the last three years, calculated in each case on the basis of 100 percent of the applicable mine's production.

___________

Exploration

The Company views exploration as its primary means of generating growth value for shareholders and typically maintains a portfolio of active exploration projects for mineral resources in Peru at various stages of investigation. The Company currently holds, either directly or in conjunction with joint venture partners, 546,053556,776 hectares of mining rights as part of its exploration program; this area excludes an additional 142,610158,797 hectares in mining properties which consolidate production units. The Company invested US$7.515.04 million in exploration for mineral resources during 2002,2003, including 21,83631,480 meters of exploratory diamond drilling, primarily in the Mesa de Plata, La Zanja, Salpo, Pampa Andino, Samana, Poracota, Franja Sur, Crucero and Patagonia prospects. In addition, the partners invested US$6.4 million in 21,440 meters of exploratory diamond drilling in the Los Pircos, Tantahuatay, Marcapunta Jatun Orco, Ccarhuarazo and PotrobayoMinasnioc prospects.

Relying on its own field reconnaissance of satellite image color anomalies and in light of geochemical data recently published by the Instituto Geológico Minero y Metalúrgico ("INGEMMET"), the Company has shifted its exploration focus inside Peru to the Southeastern Andean Region. As a result, while the Company continues exploration in Cajamarca, Cerro de Pasco and Huancavelica as its high-priority target region, it has renewed prospecting and exploration efforts during 2002 for gold and silver in Ayacucho and for gold and copper in Apurímac and Cusco. TheCusco.The Company is also exploring for precious metal epithermal deposits in Puno and continues evaluating prospects in Mexico, Ecuador, Bolivia, Argentina and Argentina.Spain.

In 20032004 the Company expects to invest a minimum of approximately US$8.010 million, respectively, in exploration and development activities (all exploration and development programs at the Company's principal mines are separate and expressed as part of mine cost structure). Exploration and development expenditures include all of the costs associated with manpower and activities such as geologists, contractors, engineering, drilling equipment, metallurgical testing and economic feasibility studies. Management for the exploration division prepares programs and budgets for individual projects each year and the Company allocates, through approval of the board, an amount to finance such exploration and development activities in those projects considered worthwhile. In light of the nature of mining exploration and in order to maintain flexibility to take advantage of opportunities, the Company allocates budgeted amounts by property or project, only in the case of high geological prospectivity as decideddec ided by man agement.management. The Company also allocates non-budgeted amounts over the course of the year to new projects based on the Company's needs and its geologists' periodic evaluations of the progress of each opportunity and its potential for development.

An integral part of the Company's exploration program is the participation in joint ventures with experienced mining companies, including NEM;Newmont Peru; Minera Barrick MisquichilcaABX Exploraciones ("ABX"); Southern Peru Copper Corporation ("SPCC"); Teck Cominco Metals Ltd. ("TCL"); Gold Fields Peru S.A. ("Gold Fields"); Meridian Peru SAC ("MDG"); Minera Peñoles de Peru S.A.; and BHP-BILLITON World Exploration Inc. ("BHP-B"), as well as certain of their affiliates. The benefits of joint operationsventures include greater investment in the exploration of the Company's mining rights from the funds contributed by the partners, an investment of US$1.7 million in 2002, access to the assets of the partners without the costs and risks of outright acquisition, increased exposure to new exploration technologies and expansion of knowledge and sharing of experiences of the Company's management, geologists and engineers. In these exploration joint ventures, the Company may be either the designated operator, an equity participant, the manager or a comb inationcombination of thesethe se and other functions. The Company does not generally conduct significant research and development activities other than investments in exploration as described herein. Funding has provided for university-based research and training of geological staff, with the objective of improving the appraisal of the Company's properties, presently carried out at the Mineral Deposit Research Unit, University of British Columbia, with research on mineral zonationzoning at Uchucchacua, and at the Research School of Earth Sciences, Australian National University, with research on metallogenetic fertility of Circumpacific magmas.

The following table lists the Company's current exploration projects, its effective participation in each project, its partners with respect to each project, the total hectares as of May 31, 2003,April30, 2004, observed mineralization of each project and the total exploration expenditures (in millions of US$) during 2001, 2002 and 2002.2003.

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The following is a brief summary of current exploration activities conducted by the Company directly and through joint ventures that are believed to represent the best prospects for the discovery of new reserves. There can be no assurance, however, that any of the Company's current exploration projects will result in viable mineral production or that any of the mineralization identified to date will ultimately result in an increase in the Company's ore reserves. Mineralization out of reservesNon-reserve mineralization or mineral resources as indicated by diamond drilling have been included in the Company's Annual Report 20022003 from the Los Pircos, La Zanja, Tantahuatay, Marcapunta and MarcapuntaPoracota exploration projects.

Joint Venture Exploration Projects

Colquirrumi. The Colquirrumi project, a silver, zinc and lead project, is wholly owned by Compañía Minera Colquirrumi S.A. ("Colquirrumi"), an entity which is 73.63 percent owned by the Company, 26.07 percent owned by ESPRO S.A.C. and 0.3 percent owned by César and Ana Marí6a de Col. Located in the Hualgayoc district, the project commenced operations in March 1973 and drilling for zinc and lead ore continued until March 1991. Since 1991, the project has engaged in a mineral exploration program. On April 20, 2004, a capital increase, through the creation of Series A Common Shares and Series B Common Shares, was authorized at an extraordinary meeting of shareholders. The Series A Common Shares and Series B Common Shares will receive 90 percent and 10 percent, respectively, of the profits or losses of the Colquirrumi.As of May 28, 2004, the Company is the sole shareholder of the Series A Common Shares and holds a 99.99 percent interest in Colquirrum i.

La Zanja. Sociedad Minera Coshuro S.A. ("Coshuro") controls 28,29923,904 hectares and the Company controls 8,496 hectares of mineralized ground in the La Zanja project, which is located 35 kilometers north-west of Cajamarca. Originally, the La Zanja project was part of the Northern Peru joint venture exploration project, which was 35 percent owned by the Company and 65 percent owned by NEM.Newmont Peru. The Company executed a carve-out agreement with NEMNewmont Peru on August1,August 1, 2000, providing for the eventual dilution of NEM'sNewmont Peru's interest in the project. The project, which is operated by the Company, consists of two discretethe San Pedro Sur and Pampa Verde superficial gold and silver oxide deposits, amenable to low-strip open pits and heap-leach operation. Mineralization out of reserves isReserves are drill proven, indicated and inferred at 18.8 million metric tons with an average grade of 1.1 grams of gold per ton. The Company has not yet tested deep oxide nor sulfide ore potential in other prospects within the property. In 2001, the Company initiated the acquisition of surf acesurface rights. In 2002, the Company advanced in the acquisition of 115 hectares in surface rights and also performed large column tests to prove amenability to cyanide leaching in heaps. During 2003, the Company invested US$3.5 million to acquire an additional 910 hectares in surface rights, conduct an airborne electromagnetic survey of 30,000 hectares, and drill of 5,759 meters at the Pampa Verde deposit, 875 meters at the Alcaparrosa prospect and 1,197 meters at the San Pedro Norte deposit with mineralization out of reserves indicated at 18.1 million of metric tons with an average grade of 1.1 grams of gold per ton. As of December 31, 2002,2003, the Company owned a 54.4853.06 percent interest in La Zanja and NEM'sNewmont Peru's interest was diluted to 45.5246.94 percent. NEM hasNewmont Peru elected to be maintain a 45.5246.94 percent interest in La Zanja during 2002for 2003 and 2003.2004.

Lancones. The Lancones project is a joint venture which is 40 percent owned by Cía. Minera Totoral S.A. ("Minera Totoral") and 60 percent owned by BHP-B. The Company has an option to purchase shares representing the entire social capital of Minera Totoral. Consisting of approximately 37,5004,600 hectares of mineralized land, the project is located in northern Peru and southern Ecuador. The project is operated by BHP-B and with an objective of identifying massive sulfide deposits in the area. In 2001, BHP-B detected three clusters of airborne gravity anomalies in prospective volcanic rocks. Detailed follow-up mapping and sampling has been performed at the Potrobayo, Cerro Colorado and Valdivia sites. In 2002, 10,000 hectares of the Potrobayo prospect were carved out from the Lancones project after negative results were evidenced by 2,012 meters of reverse circulation drilling. Reprocessing ofAt March 11, 2004,BHP-B decided not to pursue further exploration work in the regional airborne gravity survey has generated new anomalies that warran t field appraisalLancones project and new claims.to terminate the agreement. The Company does not plan to develop the Lancones project in 2004.

Los Pircos. The Los Pircos project is a joint venture with MDG. AsAt December 31, 2003, MDG had invested US$2.1 million, for a total investment of January 2001,US$2.8 million in the Company has spent US$300,000 andLos Pircos Projects. On March 25, 2004, MDG has spent US$700,000resolved not to complete Stage 1 of the contract. MDG has anexecute its option to acquire a 51 percent interest in the project if, in addition to replacing the Company as the operator as of October 5, 2002, it invests, at its own risk, an additional amount of US$2.0 million in advanced exploration efforts over a period of 2 years.project. Consisting of 14,972 hectares, the project is located east of Chiclayo in the Western Cordillera of Cajamarca, approximately 690 kilometers northwest of the city of Lima. TheOn March 25, 2004 MDG withdrew from project is currently beingand, since that time, the Company has operated by MDG and has as itsthe project with the primary objective theof exploration of precious metal veins of epithermal character. To date, the Company has located, mapped and sampled five principal veins, which have shown strong anomalous gold and silver values. The principal vein, the Diana vein, has a central section of 380 meters with aver ageaverage widths of 2.10 meters and grades of 8 grams of gold per ton and 300 grams of silver per ton. First pass drilling with a total 3,566 meters in 2002 over the Diana vein system indicated resources of 203,680 metric tons at 18.3 grams per ton of gold and 17.4 ounces per ton of silver in veins with an average thickness of 2 meters. During 2003, MDG conducted 5,073 meters of diamond drilling of the Diana, Maribel, Juana Sofia, Milagros, Andrea and Rosa Victoria veins and Lucero area, and an 18.5 kilometers electromagnetic survey of the Los Pircos vein system to define the depth of vein continuity. The Company plans to continue exploring the Diana and Maribel veins during 2004.

Minasnioc. The Minasnioc project is a joint venture with Minera ABX Exploraciones S.A. ("ABX") and Compañía Minera Ares S.A.C., a company owned by the Hochschild Group ("MHC"). The Minasnioc project is operated by ABX, which has a 40 percent effective participation. As of December 31, 2003, ABX had invested US$1.18 million and perfomed 3,767 meters of diamond drilling. The Minasnioc project is a 23,200 hectares high sulfidation epithermal prospect located in southern Peru, in the Huancavelica region, 310 kilometers southeast of Lima. The first-pass 2003 drilling campaign confirmed the presence of low-grade gold mineralization hosted in volcanic rocks, mainly following a stratabound pattern. In 2004, ABX plans to conduct additional drilling, and may exercise an option to acquire an additional 11 percent of shares of Empresa Minera Minasnioc S.A. after completing, at its own risk, an investment of US$3.0 million.

Patagonia.The Patagonia project is a joint venture between the Company, Yamana Resources Inc., Yamana Resources Ltd., Recursos Yamana Ltd., Recursos Yamana S.A. (the owner of the mining concessions) and Lorenzon Ltd. (a company owned by the Hochschild Group)Group ("MHC")). The Company has an option to purchase 50 percent of the shares of Recursos Yamana Ltd. after three years and an investment ofUS$2.85 million and an option to purchase an additional 16.67 percent after US$3.0 million is invested in the project. The Company has invited Lorenzon Ltd. to share the risk in this investment. In January 2004, MHC withdrew from the Patagonia project and, as a result, the Company acquired an option to purchase 66.67 percent of Recursos Yamana. Consisting of 127,927 hectares, the project is located in southern Argentina, 60 kilometers northeast from the Anglo Gold Cerro Vanguardia gold mine in the Santa Cruz province. To date, the Patagonia project has two main prospective areas identified;identifie d; namely Martinetas and La Paloma. In 2002,During 2003, the Company focused on the Martinetas area, withand MHC invested US$1.4 million in a trenching and sampling program following2,020 meter diamond drilling campaign over two sets of gold bearing v eins. During first quarterveins in the Martinetas prospect, which indicated resources of 2003, the Company conducted141,300 metric tons at 15.6 grams per ton of gold with an average thickness of 1.1 meters, and a 2,5002,172 meter diamond drilling campaign over Martinetas and results are expected shortly. The Company plans to focus onin the La Paloma regionprospect, which indicated resources of 206,250 metric tons at 9.8 grams per ton of gold with an average thickness of 1.8 meters. The Company intends to conduct an intensive survey to discover new prospective areas in its extensive land holdingsthe regions outside the Martinetas and La Paloma prospects in the region in 2003.2004.

Poracota.The Poracota project, operated by the Company, is a joint venture between Southwestern Resources Corp. ("SWG") and TCL. The project encompasses 6,674 hectares and is located 35 kilometers west of the Orcopampa mine in southern Peru, owned by Minas Poracota S.A. (a subsidiary of Minera del Suroeste S.A.C.). The Company has an option to acquire a 50 percent interest in Minas Poracota S.A. with a US$4.6 million payment to SWG. The Company has agreed to invest US$0.4, US$1.0 and US$1.6 million in 2003, 2004 and 2005, respectively, to exercise a second option for an additional 25 percent interest from TCL. Thereafter, the Company may exercise an option to acquire a 50 percent interest of Minas Poracota S.A. During 2003, the Company claimed an additional 16,300 hectares in the Soras region, located between the Poracota project and the Orcopampa mine. The epithermal high sulfidation system comprises two main areas: PoracotaHuamanihuayta and Perseverancia. In 2003, the first quarter of 2003,Company invested US $1.5 million in the Poracota project, which included an assessment87.2 kilometer magnetic survey and a 7,314 meter diamond drilling campaign. The drilling campaign in the Huamanihuayta area indicated resources of 1,560,920 metric tons at 10.8 grams per ton of gold with an average thickness of 6.2 meters in two sub-horizontal structures, the Manto Dorado and the Manto Aguila, and the Fatima vein. The Manto Dorado structure included resources of 662,423 tons at 10.8 grams per ton of gold with an average thickness of 7.5 meters; the Manto Aguila structure included resources of 801,687 metric tons at 10.0 grams per ton of gold with an average thickness of 7.5 meters; and the Fatima vein included resources of 96,801 metric tons at 18.0 grams per ton of gold with an average thickness of 5.2 meters. The Company plans to advance exploration with 1,600 meters of underground workings and conduct 5,300 meters of diamond drilling in 2004 and 2005.

Puquio. The Puquio generative project is a joint venture with Gold Fields Perú S.A. ("Gold Fields") that encompasses 22,600 hectares of hydrothermally altered and mineralized volcanic terrain in the Ayacucho region 500 kilometers southeast of Lima. The project is operated by Gold Fields, which has a 60 percent effective participation, and administrated by Buenaventura Ingenieros S.A. ("BISA"). In 2003, US$120,000 was initiatedinvested to review selected anomalies detected by rock-geochemistry and satellite imagery. Five prospective areas were identified during this first-pass which will be explored in both2004. The Incapacha property was explored with 2492 meters of drilling and the Poracota and Perseverancia area.results are being evaluated.

Salpo. GrupoSalpo.Grupo Wiese owns mining concessions that encompass 6,271 hectares in northern Peru, 70 kilometers east from Trujillo, through Minera Salpo S.A. The Company hashad an option to acquire a 51 percent interest of Minera Salpo S.A. if it invests US$2.0 million in exploration. Salpo is ana historical mining district characterized by epithermal veins rich in gold and silver .silver. In 2002, the Company reopened mines along the Salpo and Milluachaqui veins to conduct mapping and sampling, that have demonstrated 4 to 6 grams of gold per ton and 15 to 20 ounces of silver per ton in a thickness of 0.6 to 1.0 meters. During 2003, the Company plansinvested US$1.7 million in drilling and exploration activities, including 3,424 meters of diamond drilling and exploration of 731 meters of tunneling, which indicated resources of 20,000 metric tons at 6.4 grams per told of gold and 3.2 ounces per ton of silver with an average width of 1.0 meters. After a total investment of US$2.1 million, the Company decided n ot to initiate tunneling and conduct a drilling campaignexercise its option to generate reserves and discover new mineral resources.acquire an additional 51 percent interest in Minera Salpo S.A. due to the disappointing results of exploration efforts.The Company has performed environmental remediation efforts prior to returning the property to Minera Salpo S.A.

Samana. The Samana project, which is operated by the Company, is a carve-out of the former Ayacucho joint venture with NEM.Newmont Peru. The Companies executed the carve-out agreement on December 6, 2000, providing for the eventual dilution of NEM'sNewmont Peru's interest in the project. Following the Company's investment of US$884,000, NEMNewmont Peru will decide whether to maintain its diluted participation in the project or repurchase its participation interest in the project. Consisting of 7,300 hectares, the project is located in the high plateaus of Ayacucho, 35 kilometers northwest of Puquio. During the period from 1996 to 1999, NEMNewmont Peru performed geological mapping, rock-chip sampling, trenching and 1,200 meters of diamond drilling. The existence of a low-grade, superficial, disseminated gold and silver oxide deposit was tested and eventually disregarded. Thereafter, the Company undertook the evaluation of smaller but higher-grade mineralized breccias. The 2001-2002 exploration campaigncamp aign focused on accessing 20 0200 meters of the Osiris breccia by tunneling to conduct detailed evaluation of grade, thickness and continuity of this tabular structure. In addition, the Company performed three short diamond drill holes which proved the persistence of this potential ore shoot 50 to 100 meters below surface, with a thickness ranging between 2 and 20 meters and grades fluctuating between 5 and 6 grams of gold per ton in oxides. FurtherDuring 2003, the Company invested US$0.2 million in 1,190 meters of diamond drilling is plannedover the east side of the Osiris breccia. This drilling campaign indicated the presence of limited resources and after having invested, in the aggregate, US$922,274, the Company has decided to assess lateral continuity todiscontinue its investment in the east.Samana project.

Tantahuatay. The Tantahuatay project, a gold copper project, is wholly owned by Compañía Minera Coimolache S.A. ("Coimolache"), an entity which is 40.1 percent owned by the Company, 44.2 percent owned by SPCC, and 15.7 percent owned by ESPRO S.A.C., a Peruvian-based holding company. Between 1992 and 1999 the project was managed by SPCC, which explored for copper, and held drill-indicated mineral resources in the order of 350 million tons of ore containing 0.8 percent copper, 0.35 grams per ton of gold and 0.25 percent arsenic. The mineral resources consist of primary sulfides that include pyrites, enargite and native gold. Since 1999January 2003, the project washas been managed and operated by Compañía Minera Colquirrumi S.A. ("Colquirrumi"), 73.3 percent ownedan independent mining engineer, Ing. Amado Yataco, appointed by the Company and 26.7 percent owned by ESPRO S.A.C. As of December 2002, Cedimin replaced Colquirrumi as the manager and operator of the project.Company. The area of the project consists of over 17,722 hectares of potentially mineralized ground. The Tantahuatay project is located 30 kilometers northwest of Yanacocha in the Hualgayoc district, 950 kilometers northnort h of the city of Lima. Two of the five outcropping gold anomalies have drill-indicated geological resources of 600,000 ounces of gold and 7 million ounces of silver. Tantahuatay 2 was infill-drilled during 2002 and hosts a measured and drill-indicated mineral resource of 274,000 ounces of gold. The studies are currently focused in the oxide zone only. Cyanidation column tests have been realized with encouraging results, which indicate rapid extractions in the order of 80 to 90 percent, by low-concentration cyanide leaching. After infill-drilling is finished in the Ciénaga deposit, a feasibility study will be finalized to address viability of a 15,000 tons per day open-pit/heap leach operation. The Company focused its efforts on resolving community issues and obtaining permits and licenses to continue its explorationandenhance support of its infill drilling and feasibility studies.

Company Exploration Projects

Ccarhuarazo. The Ccarhuarazo project, located 40 kilometers north of Puquio, in the department of Ayacucho in south-central Peru, and consisting of 15,187 hectares was operated by the Company until December 2002. Inversiones Minera La Familia owns the southern 3,201 hectares of the project. The Company had an agreement with La Familia to jointly develop the area, which consists of a volcanic center with epithermal veins and breccias with copper-silver-gold mineralization. During 2002, 1,188 meters were drilled in 10 holes over the veins systems. Due to disappointing results, the Company transferred its properties and information in the Ccarhuarazo project has been discardedand will not be pursued byto Minera Argento S.A.C. in 2003.The Company performed environmental remediation efforts prior to delivering the Company in 2003.Theproperty to Minera Argento S.A.C.The agreement with Inversiones Mineras La Familia S.A.C. has beenwas terminated and no legal obligations exist. The Company intends to discard this project.on January 10, 2003.

Huancavelica Project.The Huancavelica project is wholly owned and operated by the Company. Consisting of 55,60041,306 hectares, the project is located in several prospects of the Huancavelica region. The Company initiated exploration efforts in 1994 with the purpose of identifying base-metal skarns and/or disseminated precious metal deposits along the Cenozoic volcanic belt. During 2002, the Company focused exploration activities in epithermal precious metal deposits hosted in volcanic formations; two new deposits were discovered and claimed in2003, the Pampa Andino and Minasnioc prospects. A trenching and first-pass drilling program will be initiated in Pampa Andino, wholly owned and operated byprospect was separated from the Company, during 2003. The Minasnioc prospect will be explored in conjunction with ABX accordingHuancavelica project. In addition, pursuant to a joint venture agreement whichbetween the Company and ABX, ABX conducted a 3,767 meter diamond drilling program in 26 holes, confirming the presence of strata-bounded gold mineralization. In 2004, Company and ABX intend to continue the drilling program for an addition 3,000 meters.

Pampa Andino. The Pampa Andino project is currently being negotiated.owned by Minera Totoral S.A ("Totoral"). Consisting of 18,900 hectares and located 175 kilometers south east of Lima, on the border between the Ica and Huancavelica regions, the project is operated by the Company. The Company owns 16,000 hectares of the Pampa Andino project and has an option to purchase 100 percent, representing 2,900 hectares, of Totoral. The Pampa Andino project is a low sulfidation epithermal vein system and is the outcome of a regional exploration program designed to focus on goldexplorationin Huancavelica. During 2003, the Company invested US$0.3 million in 2,726 meters of diamond drilling over the Rosita and Claudia veins. During 2004, the Company plans to conduct a 1,570 meter underground exploration program and 850 meter diamond drilling program.

Jatun Orco. The Jatun Orco project is wholly owned and operated by the Company. Consisting of 16,20019,900 hectares of mining properties, the project is located 20 kilometers north of the Antapite mine in the headwaters of the Ica valley. The Jatun Orco project is the outcome of a regional exploration program designed to focus on goldexplorationin Huancavelica. Epithermal veins, located in the Jatun Orco Norte, Jatun Orco Sur and Karla prospects, have sporadic high-grade gold and silver leakage anomalies. TheDuring 2003, the Company's exploration efforts in 2002 included 2,289 meters of diamond drilling to intersect the principal veins and to determine their thickness and precious metal grades to a depth of approximately 300 meters. Although results were poor, given the coarse-gold nature of the known mineralization,US$1.1 million investment in an advanced exploration program of 1,5001,276 meters was initiated in 2003 to test for grade continuity along the Mercedes and Capicua veins in the Jatun Orco Sur prospect. The results indicated resources of 15,040 metric tons at 16.9 grams per ton of gold and 6.6 ounces per ton of silver with an average width of 1.1 meters. In 2004, the Company intends to continue its exploration efforts, including 1,370 meters of tunneling and 1,000 meters of diamond drilling, in the Jatun Orco Sur prospect.

Franja Sur. The Franja Sur project, renamed the Altiplano Peru project in 2004, is wholly owned and operated by the Company. Consisting of 70,10865,508 hectares, the project is located in the departments ofApurimac, Arequipa and Puno inregions of volcanic rocks of south-eastern Peru. After regional reconnaissance and selection of mineralized areas, the Company is currently conducting initial mapping and sampling at several project sites, including the Pichacani prospect which has demonstrated a strong mercury and tellurium anomaly. The Company's geologists are exploringanomaly in a high sulfidation epithermal system. During 2003, the Company invested US$0.6 million to explore the Pichacani prospect for gold by trenching and conducting 624 meters of first pass diamond drilling.

Potrobayo. The Potrobayo project, wholly owned by Such exploration efforts have had disappointing results. In 2004, the Company isintends to conduct a preliminary study in the Chilacocha epithermal prospect located in northern Peru and within the Lancones project area. Previously, the project was 60 percent owned by the Company and 40 percent owned by BHP-B. Consisting of 10,000 hectares, Potrobayo is a carve-out of the Lancones joint venture exploration project. First-pass drilling by BHP-B did not encounter superficial deposits, so the Company initiated ground truthing of airborne gravity anomalies and proceeded with deeper drilling on a sole risk basis. In 2002, the Company drilled 1,155 meters in two deep holes to explore for deep volcanogenic massive sulfide deposits. Due to disappointing results, the Potrobayo prospect has been discarded. Exploration tenements will elapse in June 2003 and June 2004.Apurimac region.

Cedimin. Cedimin S.A.C. is wholly owned by the Company and controls 57,735121,259 hectares of owned and leased mining concessions, manages and conducts explorations efforts in the Mesa de Plata project on behalf of Compañía Minera Colquirrumi S.A., in the Tantahuatay project on behalf of Compañía Minera Coimolache S.A. as well as in the Crucero project and the surrounding are of the Shila and Paula mines in southern Peru. During 2002, Cedimin invested US$ 2.5 million in exploration. As of January 2, 2003, Minera Shila S.A.C. merged with and into Cedimin and is no longer a separate legal entity. As a result of this merger, mining activities at Cediminincreased significantly compared to its exploration activities.

Competition

The Company believes that competition in the metals market is based primarily upon cost. The Company competes with other mining companies and private individuals for the acquisition of mining concessions and leases in Peru and for the recruitment and retention of qualified employees.

Sales of Metal Concentrates

Substantially allAll of the Company's metal production is sold to smelters, traders and tradersbanks, either in concentrate or metal form, includingsuch as gold-silver concentrate, silver-lead concentrate, silver-gold concentrate, zinc concentrate, lead-gold-copper concentrate and lead-gold-copper concentrate.gold bullion. The majority of the Company's concentrates sales are made under one orto three-year, U.S. Dollar-denominated contracts, pursuant to which the selling price is based on world metal prices as follows: generally, in the case of gold and silver-based concentrates, the London Spot settlement prices for gold, less certain allowances, and the London Spot or the United States Commodities Exchange settlement price for silver, less certain allowances; and, in the case of base-metal concentrates, such as zinc, lead and copper, the London Metals Exchange settlement prices for the specific metal, less certain allowances. Sales prices vary according to formulas that take into account prevailing monthlyagreed contactual average prices for a quotational period, generally being the month of, the monthmont h prior to, or the month f ollowingfollowing the scheduled month of shipment or delivery according to the terms of the contracts.

The historical average annual prices for gold and silver per ounce and the Company's average annual gold and silver prices per ounce for each of the last five years are set forth below:

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SomeMost of the sales contracts the Company enters into with its customers state a specific amount of metal or concentrate the customer will purchase. The Company has sales commitments from various parties for virtually all of its estimated 20032004 and 2005 production; however, concentrates not sold under any of the Company's contracts may be sold on a spot sale basis to merchants and consumers.

Sales and Markets

The following table sets forth the Company's total revenues from the sale of gold, silver, lead, zinc and copper in the past three fiscal years:

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(1) Does not include refinery charges and penalties incurred in 2003, 2002 2001 and 20002001 of S/.143,552.137,457 (US$40,817)39,511), S/.163,619.145,043 (US$45,875)41,241), and S/.170,190.166,891 (US$48,079)45,875) respectively.

The Company sold its concentrates to 1514 customers in 2002.2003. Approximately 60 percent, 54 percent, 45 percent and 4548 percent of the Company's concentrate sales in 2000, 2001, 2002 and 2002,2003, respectively, were sold outside Peru. Set forth below is a table that shows the percentage of sales of concentrate from the Company's mines, and of sales of gold bullion that were sold to the Company's various customers from 20002001 to 2002.2003.

Under the terms of the NorandaConsorcio Minero S.A. ("Cormin") sales contract dated January 15, 2001,February 20, 2004, the Company is required to supply NorandaCormin with approximately 4,000 wet metric tons ("WMT") per year of Uchucchacua silver-lead concentrates from February 2001January 2004 to December 2003.2004. The price of the concentrate supplied under the contract is based on specified market quotations minus deductions.

Under the terms of the Pechiney World Trade (USA) Inc.Trafigura Beheer B.V. ("Pechiney"Trafigura") sales contract dated February 2, 2001,20, 2004, the Company is required to supply PechineyTrafigura with a single shipmentapproximately 3,500 WMTs of 4,000Uchucchacua silver-lead concentrates from January 2004 to December 2004. The price of the concentrate supplied under the contract is based on specified market quotations minus deductions.

Under the terms of the BHL Perú S.A.C. ("BHL") sales contract, dated March 30, 2004, the Company is required to supply BHL with approximately 5,000 WMTs per year of Uchucchacua silver-lead concentrates in 2001, 20022004 and 2003.2005. The price of the concentrate supplied under the contract is based on specified market quotations minus deductions.

Under the terms of the Doe Run S.R.L. ("Doe Run") sales contract dated January 25, 2001,February 14, 2004, the Company is required to supply Doe Run with a minimum of 15,000 WMTs per year of Uchucchacua silver-lead concentrates to be delivered during 2001, 20022004 and 2003.2005. The price of the concentrate supplied under the contract is based on specified market quotations minus deductions.

Under the terms of the Consorcio Minero S.A. ("Cormin")BHL sales contract dated December 18, 2001,March 30, 2004, the Company is required to supply CorminBHL with 10,000approximately 5,000 WMTs in 20022004 and 9,2008,000 WMTs in 20032005 of Uchucchacua's zinc concentrates. The price of the concentrates supplied under the contract is based on specified market quotations minus deductions.

Under the terms of the CorminAYS S.A. ("Ayssa") sales contract dated November 26, 2002,February 14, 2004, the Company is required to supply CorminAyssa with 4,000approximately 5,000 WMTs in 2004 and 8,000 WMTs in 2005 of Uchucchacua's silver-lead concentrates in 2003.zinc concentrates. The price of the concentrate supplied under the contract is based on specified market quotations minus deductions.

Under the terms of the CorminDoe Run sales contract dated March 21, 2003,February 14, 2004, the Company is required to supply CorminDoe Run with 12,000approximately 1,600 WMTs of Orcopampa's silver-goldJulcani's silver-lead concentrates production from April to September 2003. The price of the concentrates supplied under the contract is based on specified market quotations minus deductions.

Under the terms of the Hochschild Partners LLC ("Hochschild") sales contract dated December 20, 2001, the Company is required to supply Hochschild with 8,000 WMTs in 2002 and 10,000 WMTs in 2003 of Uchucchacua's zinc concentrates.2004. The price of the concentrates supplied under the contract is based on specified market prices minus deductions.

The Company also sells refined gold, which is derived from its operations at Orcopampa, Shila and Ishihuinca, and processed at its industrial plantplants at Metalúrgica Los Volcanes S.A.Orcopampa and at a local smelter in Lima, to one customer, Johnson Matthey Public Limited Company ("Johnson Matthey"), which further refines the gold. Under the terms of the Johnson Matthey sales contract, the Company supplies Johnson Matthey, at Johnson Matthey's option, with gold assaying in excess of 75 percent gold and approximately 20 percent silver, monthly from January 1, 20022004 to December 31, 2003.2005. The price of the gold supplied under the contract is determined based on, for the gold content, the quotation for gold at the London Gold Market PM fixing in U.S. Dollars, and for the silver content, the quotation for silver at the London Silver Market spot fixing in U.S. Dollars, minus, in each case, certain minimum charges, as well as charges for customs clearance and treatment of the gold (which varies depending on its gold and silver content)conte nt). The contract also provides that the Company may elect to have its material toll refined at Johnson Matthey's Royston U.K. works and returned to the Company's account for sale to third parties. Under the terms of the contract, the Company is responsible for delivering the gold to Johnson Matthey's designated flight at the Lima airport.

As of December 31, 2003, the Company replaced four derivative contracts with sales contracts requiring physical delivery of gold over future periods that do not extend beyond 2011. Under the terms of the contracts, the Company will realize capped prices ranging from US$332 to US$415 per ounce. These contracts are accounted as normal sales contracts. See "Item 11. Quantitative and Qualitative Disclosures about Market Risk".

In addition, the Company sells zinc and lead derived from its operations at the Colquijirca mine through Sociedad Minera El Brocal S.A.S.A.A. ("El Brocal"). The Company sells the zinc concentrates from the Colquijirca mine under the terms of the following contracts: (1) pursuant to a contract dated January 22, 2001, the Company is required to supply Glencore with approximately 27,500 WMTs per year in 2001 and 2002, and with approximately 20,000 to 30,000 WMTs per year in 2003 and 2004; (2) pursuant to a contract dated January 22, 2001 the Company is required to supply Cormin/Trafigura Beheer B.V. with approximately 35,000 WMTs per year in 2001 and 2002, with approximately 20,000 to 30,000 WMTs in 2003 and with 20,000 to 35,000 WMTs in 2004; (3) pursuant to a contract dated December 10, 1997, the Company is required to supply Metaleurop Commercial S.A.S. with approximately 20,000 WMTs per year during 2001, 2002, 2003 and 2004; (4) pursuant to a contract dated December 12, 2001, t hethe Company is required to supply Marc Rich & Co. Investments with approximately 5,000 WMTs per year during 2002 and 2003; and (5) pursuant to a contract dated January 22, 2002, the Company is required to supply Refinería de Cajamarquilla/TCL with approximately 20,000 WMTs per year during 2002 and 2003. The Company sells the lead concentrates from the Colquijirca mine under the terms of the following contracts: (1) pursuant to a contract dated January 22, 2001, the Company is required to supply Glencore with approximately 15,000 WMTs per year in 2001 and 2002, and with approximately 10,000 to 15,000 WMTs per year in 2003 and 2004; (2) pursuant to a contract dated February 26, 2001, the Company is required to supply Cormin/Trafigura with approximately 10,000 WMTs per year in 2001, 2002, 2003 and 2004; and (3) pursuant to a contract dated April 26, 2001, the Company is required to supply S.A. Sogem N.V. with approximately 10,000 WMTs in 2001, and with approximately 5,000 WMTs in 2002.

Hedging

The Company engages in gold, silver and zinc price hedging activities, such as forward sales and options contracts, to minimize its exposure to fluctuations in the prices of such metals. Currently, the Company only hedges for risk management purposes and does not hold or issue financial instruments for trading purposes. See "Item 11. Quantitative and Qualitative Disclosures About Market Risk" and Note 32(a)33 to the Company Financial Statements.

The Company's current strategy is not to sign new derivative contracts. The Company entered into transactions that closed out approximately two thirds (2/3) of its outstanding derivative contracts in December 2003. These contracts were replaced with a series of sales contracts requiring physical delivery of the same quantity of gold over future periods that do not extend beyond 2011. See "Item 11. Quantitative and Qualitative Disclosures About Market Risk."

Regulatory Framework

Mining and Processing Concessions

In Peru, as in many other countries, the government retains ownership of all subsurface land and mineral resources. The surface land, however, is owned by the individual landowners. The Company's right to explore, develop, extract, process and/or produce silver, gold and other metals is granted by the Peruvian government in the form of mining and processing concessions. The rights and obligations of holders of mining concessions, provisional permits and processing concessions are currently set forth in the General Mining Law (Single Unified Text, 1992, Supreme Decree 014-92-EM), which is administered by the MEM.

In order to obtain a mining concession prior to 1991, a prospective claimant filed a mining claim with the MEM and obtained from it a provisional permit to explore and/or develop the area of the claim. Thereafter, the MEM would issue a technical and legal report on the claimed area and the mining concession would be granted. In 1991, however, a new system was established for granting new mining concessions, based onUniversal Transversal Mercator Coordinates ("UTM Coordinates") to map the mining concessions and provisional permits on Peru's land area. Under the new system, no provisional permits are granted, and therefore filers of mining claims filed after 1991 must obtain a mining concession before they may explore and/or develop the areas claimed. A holder of a provisional permit, granted with respect to claims over an area claimed before 1991 who follows proper procedures to comply with the new 1991 system, however, is permitted to continue to explore and/or develo pdevelop the area claimed.cla imed.

Following implementation of the new system in 1991, there was a period of transition during which pre-1991 provisional permits and mining concessions could be brought into compliance with the new grid coordinate system by following certain specified procedures. Some conflicts developed regarding recognizing new mining concessions, identifying the exact location of old mining claims and placing old mining claims into the established UTM Coordinates, which slowed down the period of transition. To address such conflicts, in May 1996, the Mining Properties Mapping Law was enacted. The Mining Properties Mapping Law established a new mapping system to identify the land area of mining claims and to set forth a procedure to resolve such conflicts and to recognize the rights held by holders of mining concessions and provisional permits claimed from colonial times until 1991. Under this law, to establish mining concessions claimed from colonial times to 1991, the MEM publishes provisional UTM Co ordinatesCoordi nates with respect to such mining concessions inEl Peruano ("El Peruano"), the official gazette of Peru, and requests that any objections to such provisional UTM Coordinates be made to the MEM within 90 days of such publication. A similar procedure has been established for provisional permits claimed from colonial times to 1991; however, an owner of such provisional permit must establish the area subject to such provisional permit in UTM Coordinates and, once such land area is established, MEM publishes such provisional UTM Coordinates in El Peruano, requesting that any objections to such provisional permit be made to the MEM within 120 days of such publication and before the granting of the mining concession. Mining concessions applied for after 1991 under the UTM Coordinates system have been placed into the new mapping system and do not have to follow the procedure described above.

Mining concessions have an indefinite term, subject to payment of (a) an annual concession fee of US$3 per hectare claimed and (b) an annual fine if a minimum annual production of US$100 per hectare is not achieved before the expiration of the sixth year, following the year after the year in which the title of the concession is granted, of US$6 per hectare will be payable starting in the seventh year following the year after the year in which the title of the concession was granted until the year in which such minimum annual production is achieved; and if the failure to comply with the minimum annual production continues after the eleventh year following the year in which the title of the concession was granted, the penalty will increase to US$20 per hectare starting in the twelfth year counted since the year in which the title of the concession was granted. The fine may be avoided, however, by demonstrating investments in the mining rights during the previous year of amounts more than t enten times greater than the fine to be paid. In order to calculate the production of and investment in each mining right, the titleholder may create an operating unit (Unidad Económica Administrativa) provided the mining rights are all within a radius of five kilometers. If, in any year, the concession fee is not paid, payment may be made the following year within the term provided for making such payment. Any payment made shall be applied to the prior year if such prior year was not paid. Failure to pay such concession fees or fines for two consecutive years willcould result in the loss of one or more of the mining right.rights. However, mining and processing concessions will not lapse if the administrative authority failed to issue a resolution declaring the termination of the concession within the first five years following the date on which such payment failure occurred. Processing concessions have an indefinite term, subject to payment of a fee based on nominal capacity for the processing plant. No otherothe r payments or royalties are required by the Peruvian government for the Company to maintain mining and exploration property rights in full force and effect. As of 2002, the annual concession fee and the annual fine will be calculated pursuant to the provisions of the General Mining Law and of Supreme Decree No. 010-2002-EM, effective since March 10, 2002. The Company paid approximately US$1.11.8 million, US$1.12.0 million and US$1.22.1 million in fees for mining rights for the years ended December 31, 2000, 2001, 2002 and 2002,2003, respectively, approximately US$5,496,5,540, US$5,5404,687 and US$4,6877,984 in fees for processing concessions, respectively, and is current in the payment of all amounts due in respect of its mining rights and processing concessions.

As of May 31, 2003,April 30, 2004, the Company, directly and indirectly, through subsidiaries or in conjunction with joint venture partners, owns and administers approximately 688,663715,572 hectares devoted to mineral exploration and mining operations. Mining rights related to the current operations are provisional permits or mining concessions. Almost all of the mining rights related to the current operations already are provisional permits or mining concessions. The mining rights and processing concessions are in full force and effect under applicable Peruvian laws. The Company believes that it is in compliance with all material terms and requirements applicable to the mining rights and processing concessions and that it is not subject to any condition, occurrence or event that would cause the revocation, cancellation, lapse, expiration or termination thereof, except that the Company may, from time to time, allow to lapse, revoke, cancel or terminate mining rights and processing concessions that are not m aterialma terial to the conduct of its business. The principal mining rights and processing concessions are (i) with respect to the Company's mines, new applications filed for mining concessions, provisional permits and mining concessions at Julcani, Uchucchacua, Orcopampa, Colquijirca, Ishihuinca, Antapite, Paula Huallanca and Shila; and (ii) with respect to the Company's current exploration projects, new applications filed for mining concessions, the provisional permits and the mining concessions at the Tantahuatay project, the Ayacucho project, the Totoral project and the Huancavelica project. The principal processing concessions are the processing concessions of the concentrators at Julcani, Uchucchacua, Orcopampa, Colquijirca, Ishihuinca, Antapite, Paula and Shila and the processing plant Los Volcanes in Orcopampa.Shila.

Both mining concessions and provisional permits staked before 1991 conferred on their holders the right to explore and develop the underground mineral resources, and it is often the case that the titleholders of these mining rights are not the owners of the land surface. Since October 1996, pursuant to Peruvian regulations, all operators of new mining areas in Peru are required to have an agreement with the owners of the land surface above the mining rights or to establish an easement upon such surface for mining purposes pursuant to General Mining Law, Article 7 of Law No. 26505, as amended by Law No. 26570 and the regulations to such Article 7 contained in Supreme Decree 017-96-AG, as amended by Supreme Decree No. 014-2003-AG.015-2003-AG. The Company has been actively pursuing the acquisition of the land surface or obtaining easements relating to land positions containing prospective geological exploration targets, deposits that can be exploited in the future or areas that would be considered for plantpl ant or facility sites.

On December 19, 1998, Special Law No. 27015, the Law Regulating Mining Concessions in Urban Areas and Urban Expansion Areas was released. Law No. 27015 was amended by Law No. 27560, released on November 24, 2001 (Law No. 27015 as amended by Law No. 27560, the "Urban Mining Concessions Law"). Regulations pursuant to the Urban Mining Concessions Law were set forth in Supreme Decree No. 007-99-EM published on March 22, 1999, which was amendedabrogated and replaced by Supreme Decree No. 008-2002-EM, dated as of February 21, 2002 (as amended, the(the "Regulations"). Under the Urban Mining Concessions Law, metallic or non-metallic mining concessions will be granted in areas that have been or are designated as urban areas by means of municipal ordinances issued by the Provincial Municipality pursuant to the procedures set forth in the Regulations for the Territorial Conditioning, Urban Development and Environment approved by Supreme Decree No. 007-85-VC, unless the grant of such title or concession is expre ssly authorizedexpressly authori zed by a special law.

The granting of titles to metallic and non-metallic mining concessions in an area designated as an urban expansion area by means of municipal ordinances in force as of the date of filing of an application for a mining concession requires authorization through a Ministerial Resolution. The issuance of a Ministerial Resolution requires the receipt of a resolution of the Cabinet of the applicable Provincial Municipality, which will be issued within a period of sixty days. If the opinion is negative or if no opinion is issued, the application for the mining concession will be rejected. Any change from a metallic concession to a non-metallic concession and vice versa will be subject to these same requirements.

Applications for concessions in urban expansion areas will be presented on the basis of increments of 10 to 100 hectares under the UTM Coordinates system.

A mining concession in an urban expansion area, whether metallic or non-metallic, will be granted for a term of 10 years, renewable for like terms under the procedures set forth above for the grant of the initial concession. In both urban areas or urban expansion areas the only legally valid easements for mining purposes are those which are entered into directly with the owner of the surface area.

In order to begin exploration activities, holders of mining concessions in urban areas or urban expansion areas must comply with the provisions of the Environmental Regulations for Mining Exploration Activities set forth in Supreme Decree No. 038-98-EM. To begin development activities, holders of mining concessions in urban areas or urban expansion areas must comply with the Regulations for Environmental Protection of the Mining and Metallurgical Activities set forth in Supreme Decree No. 016-93-EM, as amended and supplemented by Supreme Decrees Nos. 059-93-EM, 029-99-EM and 022-2002-EM, as well as with the provisions contained in the Safety and Hygienic Regulations for Mining Activities set forth in Supreme Decree No. 046-2001-EM published on July 26, 2001.2001, as amended by Supreme Decree No. 018-2005-EF published on May 30, 2003. Failure to comply the provisions of the Regulations may be punished with a fine or by the temporary suspension of mining activities. If the failure continues,conti nues, the mining concession may be revoked.

Law No. 27474 was published on June 6, 2001, and replaced Law No. 25763, the purpose of which was to ensure that mining, power and hydrocarbons obligations be audited by auditing companies duly registered with the MEM. Pursuant to Law No. 27474 and its Regulations approved by Supreme Decree No. 049-2001-EM, as amended by Supreme Decree No. 018-2005-EF, the MEM is now in charge of auditing the fulfillment of the obligations contained in the General Mining Law and its Regulations, including technical, economic, financing and administrative obligations, as well as safety and environmental obligations. The MEM may perform audits either with its own personnel or through individuals or companies registered with the MEM to provide external audit services.

Environmental Matters

On September 8, 1990, a new regime of environmental laws, codified in Legislative Decree 613, was enacted in Peru. On June 2, 1992, new environmental laws, codified in Title 15 of the General Mining Law, relating to the mining industry were enacted. These laws and the related regulations significantly increased the level of environmental regulation previously in effect in Peru and established standards as well as guidelines with respect to particulate emissions in the air, water quality, exploration, tailings and water discharges, among other requirements.

The MEM monitors environmental compliance and sets specific environmental standards. In particular, the MEM has established standards for emissions or discharges of metallurgical liquid effluents. The MEM also approves the environmental impact assessments and programs for environmental control.

The MEM has issued regulations that establish maximum permissible levels of emissions of metallurgical liquid effluents approved byMinisterial Resolution No. 011/96-EM/VMM. Generally, holders of mining rights and processing plants that were in operation prior to May 2, 1993 have a maximum of 10 years to comply with the maximum permissible levels; in the meantime, they must prepare theirProgramas de Adecuación y Manejo Ambiental (Environmental Adaptation and Management Schedules or "PAMAs") to comply with less stringent maximum permissible levels. Under Peruvian environmental regulations that were passed in 1993, a company that initiated operations prior to May 2, 1993, as is the case for the Company and most of its affiliated companies, iswas required to file with the Peruvian government a Preliminary Environmental Evaluation, orEvaluación Ambiental Preliminar ("EVAP") for each of its mining units to disclose any pollution prob lemsproblems in its operations and, thereafter,thereaft er, to submit a follow-up filing of a PAMA to detail explanations of how such companies will comply with these less stringent maximum permissible levels for metallurgical liquid effluents and other environmental problems. Companies must correct the pollution problems relating to their mining activities within five years and relating to their processing plants within five or ten years, depending on the type of processing plant. These companies must allocate no less than one percent of their annual sales to redress the problems identified in their EVAPs and contemplated in their PAMAs. Mining and plant processing activities that began after May 2, 1993 or had at that time a specific environmental program will be required to file and obtain approval for an Environmental Impact Study ("EIS") before being authorized to operate. Mining and plant processing activities that began after May 2, 1993 are required to comply with the more stringent maximum permi ssiblepermissible levels for metallurgical liquid effluents from the initiation of their operations.

Many of the Company's mining rights and processing plants were in operation prior to May 2, 1993, and the Company is in substantial compliance with the interim maximum permissible levels. EVAPs for Julcani, Uchucchacua, Orcopampa, Recuperada, Ishihuinca and Shila were all accepted between August and September 1995. The EISs for Huallanca and Paula were approved in 1998 and February 2001, respectively. The EVAPs for the La Zanja, Los Pircos, Tantahuatay and Samana exploration projects were approved in July 2001, August 2001, December 2000 and December 2001 respectively. EVAPs for Jatun Orco, Ccarhuarazo, Salpo and Poracota were all accepted in 2003. Between November 2002 and April 2003, the MEM approved and verified the PAMAs for all these entities, issuing an approving resolution for each respective mining unit.

In October 2001, Consorcio Energético de Huancavelica S.A. ("Conenhua") completed the construction of two transmission lines, one between Trujillo and Cajamarca and the other between Cajamarca Norte and La Pajuela, and of a substation in Cajamarca Norte, in order to provide electricity to Yanacocha and the city of Cajamarca. The final concessions for the two transmission lines were granted by Supreme Resolution No. 165-2001-EM in October 2001.

In 2001, the Company submitted an EIS for a transmission line from Ares to Huancarama, which will connect Orcopampa with the national electricity grid. Orcopampa was connected to the Peruvian national electricity grid on September 12, 2002 and Minera Shila S.A.C. was connected on April 9, 2003.

The EVAPs filed with respect to the Company identify certain environmental issues that must be addressed by the Company. There can be no assurance that the Company will not be required to make additional capital expenditures in order to bring its operations into compliance in the future.

Except as described above, there are no material legal or administrative proceedings pending against the Company with respect to any environmental matters.

Law No. 28090, Law that Rules the Closing of Mines (Ley que Regula el Cierre de Minas), was published on October 14, 2003, establishing the obligations and procedures that mining companies shall follow to prepare, submit and execute the plan for the closing of mines (the "Plan") and the granting of environmental guarantees to secure compliance with the Plan. Pursuant to Law No. 28090, the Company is required to (i) submit a Plan to the MEM within one year following approval of the EIS or PAMA, or in case of mining or processing concessions in operations, within six months of effectiveness of the Law; (ii) inform the MEM semi-annually of any progress on the conditions established in the Plan; (iii) perform the Plan consistent with the schedule approved by the MEM during the life of the concession; and (iv) grant an environmental guarantee that covers the estimated amount of the Plan. The guarantee may be in cash, trusts, and any other guarantee contemplated in the Banking Law. On Nov ember 24, 2003, Ministerial Resolution No. 627-2003-MEM/DM was published to create the Registry for Authorized Entities to Elaborate the Closing of Mines and the Beneficial Plants (Registro de Entidades Autorizadas a Elaborar Planes de Cierre de Mina y de Plantas de Beneficio). Only the entities recorded in such registry are allowed to prepare the Plan. Pursuant to Law No. 28234, published on May 28, 2004, compliance with Law No. 28090 has been extended for one year from its effective date.

The Company anticipates additional laws and regulations will be enacted over time with respect to environmental matters. The development of more stringent environmental protection programs in Peru could impose constraints and additional costs on the Company's operations, and the Company would be required to make significant additional capital expenditures in the future. Although the Company believes that it is substantially in compliance with all applicable environmental regulations of which it is now aware, there is no assurance that future legislation or regulatory developments will not have an adverse effect on its business or results of operations.

Permits

Management believes that the Company's mines and facilities have all necessary material permits. All future exploration and development projects require or will require a variety of permits. Although the Company believes the permits for these projects can be obtained in a timely fashion, permitting procedures are complex, time-consuming and subject to potential regulatory delay. The Company cannot predict whether it will be able to renew its existing permits or whether material changes in existing permitting conditions will be imposed. Non-renewal of existing permits or the imposition of additional conditions could have a material adverse effect on the Company's financial condition or results of operations.

Insurance

The Company maintains a comprehensive insurance program designed to address the specific risks associated with its operations, in addition to covering the normal insured risks encountered by major mining companies.

The Company's insurance program is provided through the local Peruvian insurance market and includes employers' liability, comprehensive third party general liability, comprehensive automobile liability, all risk property on a replacement basis, including transit risks, business interruption insurance and mining equipment.

Mining Royalties

Article 20 of Law No. 26821,Ley Orgánica para el Aprovechamiento Sostenible de los Recursos Naturales,establishes that private companies must pay compensation to the Peruvian government for the economic use of natural resources. Any such compensation, to the extent deemed a tax, will be included in the scope of the Mining Law Stabilization Agreements and mining companies that are taxpayers and are party to such Stabilization Agreements will not have to pay this compensation or royalty during the life of their Stabilization Agreements. Although the Company is not party to a Stabilization Agreement, Yanacocha has entered into Mining Law Stabilization Agreements under the General Mining Law with the Peruvian government. See "Item 5. Operating and Financial Review and Prospects--Yanacocha--Operating Results." As of May 28, 2004, neither the Company nor Yanacocha has incurred an obligation to pay compensation to the Peruvian government pursuant to Article 20 of Law No. 26821 . There can be no assurance that the Company will not be required to pay any such compensation in the future.

Organizational Structure

At May 31, 2003,2004, the Company conducted its mining operations directly and through various majority-owned subsidiaries, controlled companies and other affiliated companies as described in the following organizational chart.

Compañía de Minas Buenaventura S.A.A
Corporate Structure