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, 20042005

OR

..- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

OR

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 137,444,962137,444,962**

Investment shares nominal (par) value of S/.4.00 per share372,320

*PriorIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

If this report is an annual or transition report, indicate by check mark if the registrant is not required to May 3, 2002,file reports pursuant to Section 13 or 15(d) of the Company had Series A common shares, Series B common shares and Investment shares. Since that date, following the redesignationSecurities Exchange Act 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.1934.

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.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.

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

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

TABLE OF CONTENTS

Page

PART I*

INTRODUCTION

Presentation of Financial Information

As used in this Annual Report on Form 20-F, (the "Annual Report" or the "Form 20-F"),Annual Report, unless the context otherwise requires, the "Company"references to "we," "us," "our," "Company," "BVN" or "Buenaventura" meansmean 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").or Peru.

BuenaventuraWe and itsour subsidiaries maintain theirour financial books and records in Nuevos Soles and present theirour financial statements in conformity with accounting principles generally accepted in Peru, ("which we refer to as Peruvian GAAP").GAAP. See Note 3938 to theour audited consolidated financial statements of the Company as of December 31, 20032004 and 20042005 and for the years ended December 31, 2002, 2003, 2004 and 2004 (the "Company2005, or the Financial Statements")Statements, beginning at page F-53F-2 for a description of the significant differences between the accounting principles followed by the Companywe follow under Peruvian GAAP and accounting principles generally accepted in the United States of America, ("which we refer to as U.S. GAAP"),GAAP, and Note 4039 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"),or the Commission, this Annual Report includes certain separate financial statements and other financial information of Minera YanacochaY anacocha S.R.L. ("Yanacocha")., or 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 17 to the audited financial statements of Yanacocha as of December 31, 20032004 and 20042005 and for the years ended December 31, 2002, 2003, 2004 and 2004 (the "Yanacocha2005, or the Yanacocha Financial Statements")Statements, beginning at page F-90F-51 for a description of the significant differences between the accounting principles followed by Yanacocha under U.S. GAAP and Peruvian GAAP, and for a reconciliation to Peruvian GAAP of net income and partners' equity for the periods covered. Pursuant

We record our investment in Yanacocha in accordance with the equity method. Our interest in Yanacocha has been calculated at 43.65 percent for the years ended December 31, 2004 and 2005, as described in "Item 5. Operating and Financial Review and Prospects-The Company-General" and Note 10 to the Financial Statements.

Prior to January 1, 2005, in accordance with Peruvian GAAP and in accordance with the methodology approved by the Peruvian Accounting Standards Board, financial data for all periods in theour financial statements of the Company included herein have beenwere adjusted for inflation using theIndice de Precios al por Mayor a Nivel Nacional (National Wholesale Price Index for Peru, or "IPM")IPM) published by theInstituto Nacional de Estadística e Informática(Nati onalNational Institute of Statistics, or "INEI")INEI). This methodology required the adjustment of non-monetary assets and liabilities by a factor corresponding to the inflation or deflation rate during the period covered by the Financial Statements and reflected the net result of the adjustment in the "Result from Exposure to Inflation" line item of the income statement. See Note 2(a) to the Company Financial Statements. UnlessIn 2004, the Peruvian Accounting Standards Board adopted Resolution No. 031-2004-EF/93.01, suspending the restatement of the financial statements to recogniz e the effect of inflation effective January 1, 2005. Our restated financial statement balances as of December 31, 2004 have been considered the initial financial statement balances as of January 1, 2005. As a result, unless otherwise specified, financial data regarding the Companyprior to January 1, 2005 is presented herein in accordance with Peruvian GAAP and in constant Nuevos Soles as of December 31, 2004, 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, 2003 and 2004, as described in "Item 5. Operating and Financial Review and Prospects-The Company-General" and Note 12 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 2(a) 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 3.8 percent in 2000, decreased by 2.2 percent in 2001, increased by 1.7 percent in 2002, increased by 2.0 percent in 2003 and increasedby 4.9 percent in 2004.

In 2004, the Peruvian Accounting Standards Board adopted Resolution No. 031-2004-EF/93.01, suspending the restatement of the financial statements to recognize the effect of inflation effective January 1, 2005. The Company's restated financial statement balances as of December 31, 2004 will be considered the initial financial statement balances as of January 1, 2005.

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/.3.283.3.431 = US$1.00, the average of the market exchange ratesrate for the purchase and sale of Dollars on December 31, 2004.2005 as published by theSuperintendencia de Bancos y Seguros (Superintendent of Bank and Insurance, or the SBS). 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 NuevosN uevos Soles with purchasing power as of another specified date by the prevailin gprevailing exchange rate on that specified date. See "Item 3. Key Information-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'sour 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'sour view with respect to the Company'sour 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-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, 20032004 and 2004,2005, and for the three years ended December 31, 2002, 2003, 2004 and 2004,2005, 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 International) on the Company's 2003our 2004 and 20042005 Financial Statements appears elsewhere in this Annual Report. The Company Financial Statements are prepared and presented in accordance with Peruvian GAAP, which differ in certain respects from U.S. GAAP. Note 3938 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,us, and Note 4039 to the Company Financial StatementsStatement s provides a reconciliation to U.S. GAAP of the Company'sour net income for the years ended 2002, 2003, 2004 and 2004,2005, and shareholders' equity as of December 31, 20032004 and 20042005. The selected financial information as of December 31, 2000 and 2001 and for the yearsyear then ended has been derived from the Company's financial statementsour Financial Statements as of and for the yearsyear then ended, which havehas been audited by Medina, Zaldivar y Asociados (a member firm of Andersen Worldwide), who have ceased operations. The operating data presented below is derived from the Company'sour records and has not been subject to audit. The financial information and operating data presented below should be read in conjunction with "Item 5. Operating and Financial Review and Prospects-The Company" and the Company Financial Statements and the related Notes thereto and other financial information included in this Annual Report.

____________________

The following table presents selected financial information and operating data for Yanacocha at the dates and for each of the periods indicated. This information should be read in conjunction with, and is qualified in its entirety by reference to, the Yanacocha Financial 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 Peruvian GAAP, as such differences relate to Yanacocha, as well as a reconciliation to Peruvian GAAP of Yanacocha's net income for the years ended 2002, 2003, 2004 and 20042005 and partners' equity as of December 31, 2 003004 and 2004.2005. 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" and the Yanacocha Financial Statements and the related Notes thereto and other financial information included in this Annual Report.

________________

(2) Operating cash cost per ounce of gold sold is defined as the total of costs applicable to sales less non-cash provisions for reclamation and remediation costs. Operating cash is comprised of operating costs, management fees, royalty expenses, selling expenses, write-off of assets, workers' profit participation costs and credits for by-product sales. Operating cash cost is a non-GAAP financial measure that does not have a standardized meaning and may not be comparable to similarly titled measures provided by other companies. When analyzing operating performance, investors should use operating cash cost in addition to, and not as an alternative to, cost of sales. Operating cash cost per ounce is derived from historical statements of income and is presented as supplemental information because management believes it provides additional information to evaluate operations. See "Item 5. Operating and Financial Review and Prospects-Yanacocha-Operating Results-Non-GAAP information reconciliation".

(3) Under US GAAP, Yanacocha recognizes revenue when the price is determinable and upon delivery and transfer of title of gold to the customer. In addition, revenues from silver sales are credited to cost applicable to sales as a by-product credit. Under Peruvian GAAP, revenue, including gold and silver sales, is recognized, net of transportation and refining costs, when doré is delivered to the shipper.

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 May 25, 2005,June 1, 2006, the offered rate for Dollars as published by the SBS was S/.3.254.3.279 = 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 VenturesMining Exploration Agreements

An integral part of the Company'sour operations is the participation in joint venturemining exploration 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 ventureSuch projects benefit the Companyus by providing a source of outside funds for exploration of mining rights, by giving the Companyus access to the holdings of outside parties without the riskrisks and costs of outright acquisitionacquisition. They also enable us to expand the scope of knowledge and by expanding the Company'sexperience of our senior management, geologists and engineers scope of knowledge and experience as a result ofthrough increased contact with their counterparts from other organizations. The CompanyWe can be highly dependent upon itsour partners, co-venturers or other shareholders in a joint venturemining exploration project carrying out their obligations under the applicable joint venturemining exploration agreement or jointmining operating agreement. Such partners, co-vent urersco-venturers and other shareholders in a joint mining exploration 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" for a description of how the Companywe and Newmont Mining Corporation, a Delaware corporation, ("or Newmont Mining"),Mining, have joined together to participate in Yanacocha and how Yanacocha is dependent upon Newmont Peru Limited, Peruvian Branch, ("or Newmont Peru")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 mining operating agreement, by-laws or shareholders agreement, the value of the Company'sour investment in the joint venturemining exploration project could be adversely affected and the Companywe could incur significant expense in enforcing itsour rights or pursuing remedies. There can be no assurance t hat the Company'sthat our current or future partners will fulfill their obligations under such agreements. See "Item 4. Information on the Company-Yanacocha" and "Item 4. Information on the Company-The Company-Business Overview-Exploration"Ov erview-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'sour control. There can be no assurance that the Company'sour foreign exploration activities will not be adversely affected in the future.

The Company is carryingWe carry out our exploration activities in Argentina, Bolivia, Ecuador, Mexico and Spain. In recent years, Argentina has suffered a prolonged economic crisis. Thecrisis for the past several years; however, such economic conditions in Argentina have not affected the Company andus. In recent months, the Argentine economy has improved in recent months. However,shown signs of improvement, although there can be no assurance as to when the Argentine economy will recover or if the crisis will continue and whether the Companywe may be affected in the future.

Prices of Gold and Silver

Because the Company'sour 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 Companywe and Yanacocha obtain for gold and silver and ore concentrates containing such metals, and the Company'sour 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'sour 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. Although the Company engageswe engage in hedging activities, such as forward sales and option contracts, to minimize its exposu reour exposure to fluctuations in the prices of gold, silver and other metals, there can be no assurance that hedging activities will protect the Companyus from price fluctuations in such metals, seemetals. In 2006, management decided to close out gold derivative contracts maintained as of December 31, 2005 and replace them with normal sales contracts. See "Item 11. Quantitative and Qualitative Disclosure About Market Risk". and Note 34 to the Financial Statements. For information on gold and silver prices for each of the years in the five-year period ended December 31, 2004,2005, see "Item 4. Information on the Company-The Company-Business Overview-Sales of Metal Concentrates". On December 31, 200430, 2005 and April 29, 2005,28, 2006, the morning fixing price for gold on the London Bullion Market was US$438.00513 per ounce and US$435.70638.25 per ounce, respectively. On December 31, 200430, 2005 and April 29, 2005,28, 2006, the afternoon fixing spot price of silver on the London market, (the "London Spot")or London Spot, was US$6.828.83 per ounce and US$6.9812.56 per ounce, respectively.

Impact of Government Regulation

The Company'sOur and Yanacocha's activities in Peru depend on mining concessions for exploration, and development (hereafter referredwhich we refer to as "mining concessions")mining concessions, being obtained from the Peruvian Ministry of Energy and Mines, ("MEM"),or MEM, in theour case, of the Company, and through the assignment of concessions granted to a related entity by the Peruvian government, in the case of Yanacocha. In addition, the Company'sour and Yanacocha's activities in Peru depend on provisional permits, obtained from the MEM, for exploration and/or development rights of the area of the claim, (hereafter referredwhich we refer to as "provisionalprovisional permits," and together with mining concessions, hereafter referred to as "mining rights"),mining rights, and/or processing concessions, obtained from the MEM, for treatment of mining ores, (hereafter referred to as "processing concessions"),or processing concessions, as well as compliance by the Companyus and Yanacocha with certain agreements entered into with the Peruvian government. Under Peru's current legal and regulatory regime, the Co mpany'sour mining rights have an indefinite term and Yanacocha's assigned mining rights have a term of 20 years, contingent upon payment ofo f the annual concession fee for each mining right, 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 will 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 withi nwithin the first five years following the date on which such payment failure occurred. The Company'sOur 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 the processing concessions. The Company is,We are, and Yanacocha has informed the Companyus that Yanacocha is, current in the payment of all amounts due in respect to its mining and processing concessions.

On June 24, 2004, the Peruvian Congress approved Law 28258 - Mining Royalties Law. This law established a mining royalty that owners of mining concessions must pay to the Peruvian government for the exploitation of metallic and non-metallic resources. The mining royalties are calculated on a sliding scale with rates ranging from 1 to 3 percent over the value of mineral concentrates based on international market prices. See "Item 4. Information on the Company-The Company-Regulatory Framework-Mining Royalties". The CompanyWe made itsour first payment of the mining royalty pursuant to Law 28258 in 2004. Yanacocha was exempt from this payment pursuant to its Mining Law Stabilization Agreements under the General Mining Law with the Peruvian government. There can be no assurance that the Peruvian government will not impose additional mining royalties on the Companyus or Yanacocha in the future or that such mining royalties will not have an adverse effect on the Company'sour or Yanacocha's results of operations or financial condition.cond ition.

Environmental and other Regulatory Matters

The Company'sOur 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 use and 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 anticipatesWe anticipate 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'sour and Yanacocha's operations and require the Companyus and Yanacocha to make significant capital expenditures in the future. Although the Company believes it iswe believe we are substantially in compliance, and Yanacocha has advised the Companyus that Yanacocha is substantially in compliance, with all applicable environmental regulations, there can be no assurance that future legislative or regulatory developments will not have an adverse effect on theour or Yanacocha's business or results of operations of the Company or Yanacocha.operations. See "Item 4. Information on the Company-The Company-Regulatory Framework-Environmental Matters" and "-Permits" and "Item 4. Information on the Company-Yanacocha-Regulation, Permitting and Environmental Matters".

Hedging

The Company engagesIn October 2004, our Board of Directors issued a mandate not to enter into new hedging transactions. At December 31, 2005, we were engaged in gold silver and zinc price hedging activities, such as forward sales and put/call options, from derivative contracts executed prior to minimize its exposure to fluctuations in1999. Since 2003, we have been modifying the pricesterms of such metals. Buenaventura is not required to place collateral with respect tocertain derivative instruments in order to qualify them as normal sales contracts. In March 2006, we closed out all our outstanding gold derivative contracts as of December 31, 2005 and there are no margin calls associatedreplaced them with suchnormal sales 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 and Note 34 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 hedgin 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 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.Financial Statements. No assurance can be given that the Companywe 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.

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'sour 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'sour or Yanacocha's exploration programs will result in the expansion or replacement of current production with new proven and probable ore reserves.

DevelopmentAdvanced exploration 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 operatio nsoperations to experience unexpected problems during the start-up phase. The Company utilizesOur significant affliliate, Yanacocha, uses US$400 per ounce of gold to calculate its gold reserves; however, we use a three-year average historicfixed price of US$350 per ounce of gold and a three-year average historic price of US$5.256.30 per ounce of silver to calculate itsour proven and probable ore reserves.reserves due to the fact that most of our gold sales contracts consider fixed prices.

Increased Costs Could Affect Profitability

Costs at any particular mining location frequently are subject to variation due to a number of factors, such as changing ore grade, changing metallurgy and revisions to mine plans in response to the physical shape and location of the ore body. In addition, costs are affected by the price of commodities, such as fuel, electricity and labor. Commodity costs are at times subject to volatile price movements, including increases that could make production at certain operations less profitable. Reported costs may be affected by changes in accounting standards. A material increase in costs at any significant location could have a significant effect on our profitability.

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 can be no assurance that the Companywe or Yanacocha will generate sufficient cash flow and/or that itwe will have access to sufficient external sources of funds in the form of outside investment or loans to continue 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 Companyour and Yanacocha,Yanacocha's estimates, and there can be no 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'sour or Yanacocha's profitability in any particular accounting period. See "Item 4. Information on the Company-Property, Plants and Equipment-The Company's Property-Reserves" and "Item 4. Information on the Company-Property,Company - -Property, Plants and Equipment-Yanacocha's Properties-Reserves".

Replacement of Reserves

As the Company produceswe produce gold, silver, zinc and other metals, it depletes itswe deplete our ore reserves for such metals. To maintain production levels, the Companywe must replace depleted reserves by exploiting known ore bodies orand locating new deposits. Success in exploration for gold, silver and the other metals the Company produceswe produce is very uncertain and there is a risk that the Company'sour depletion of reserves will not be off-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 CompanyWe and Yanacocha each maintain insurance against risks that are typical in the mining industry in Peru and in amounts that the Companywe 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 Companyus or Yanacocha or to other companies within the industry.

Labor Matters

The Company hasWe have not experienced a strike since 1993, which is indicative of the good relations between the Companyus and itsour employees. However, there can be no assurance that this situation will continue and that the Companywe will not experience strikes or other labor-related work stoppages that could have a material adverse effect on itsour operations and and/or operating results in the future. In February 2004, Yanacocha has not experienced strikes and in 2004 entered into its first collective bargaining agreement with Workers' Union of Minera Yanacocha SRL, (the "Union"),or the Union, which was created and registered before the Peruvian Labor Ministry on December 9, 2003. This collective bargaining agreement expires in February 2007. Yanacocha has informed the Companyus that it considers its relations with its employees to be good. However, therea small percentage of Union members engaged in a three-day strike in April 2006 despite the fact that the collective bargaining agreement has not yet expired. The strike did not have any material impact on Yanacocha's operations; nevertheless t here can be no assurance that this situation will continue and that Yanacocha will not experience other 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 Mana gementManagement and Employees-Employees" and "Item 4. Information on the Company-Yanacocha-Employees".

Political and Social Perception

The Company'sOur and Yanacocha's exploration development and production activities are potentially subject to political and social risks. Over the past several years, the Companywe and Yanacocha have been the target of local political protests, including community protests at the Company'sour La Zanja project and a blockade of the road in protest of drilling activities at Yanacocha's Cerro Quilish mine. See "Item 4. Information on the Company-The Company-History and Development-Joint Venture Exploration Projects-La Zanja" and "Information"Item 4. Information on the Company-Yanacocha-Legal Proceedings". There can be no assurance that these incidents will not continue, or that similar incidents will not occur, or that the continuation or intensification of community protests would not adversely affect the Company'sour or Yanacocha's exploration development and production activities or the Company'sour or Yanacocha's results of operations or financial condition.

Investment Company Act

The Company ownsWe own 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 "Investmentor the Investment Company Act").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 Companywe were deemed to be an investment company and did not qualify for an exemption from the provisions of the Investment Company Act, the Companywe would be required to register with t hethe Commission and would be subject to such regulations, which would be unduly burdensome and costly for the Companyus and possibly adversely impact the Company.us.

The CompanyWe received an order from the Commission on April 19, 1996 declaring itus 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 intendsWe intend to conduct itsour operations and maintain itsour investments in a manner, and will take appropriate actions as necessary, to ensure itwe 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.

Factors Relating to Peru

Exposure to Peruvian Political Risk

All of the Company'sour and Yanacocha's operations are conducted in Peru. Accordingly, theour and Yanacocha's 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 theour 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 exportsexport sales were required to be deposited in Peru's Banco Central de Reserva, (the "Central Bank"),or Central Bank, where they were exchanged from U.S. Dollars to Peruvian currency at less-than-favorable rates of exchange. These policies generally affected theour results of operations of the Company.operations. Controls on repatriation of funds limited the ability of the Company'sour shareholders to receive dividends outside of Peru, but did not limit the ability of the Company'sour shareholders to receive distributions of earnings in Peru. See "Item 10. Additional Information-Exchange Controls".

In July 1990, Alberto Fujimori was elected president of Peru, 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 ofHowever, after 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 electedreelection 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 ahis 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,May 29, 2000, Fujimori resigned his post from Tokyo, Japan, and has not returned to Peru since then.amid increasing social pressure. The Peruvian Congress appointed Valentin Paniagua as interim President. New elections were subsequently held on April 8, 2001 and a run-off election was held on June 3, 2001, in which 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.

The political and economic impact of the upcoming Peruvian presidential and congressional elections is uncertain. At the elections held on April 9, 2006, no presidential candidate received the required 50 percent or more of the votes. As a result, a second round election between the top two presidential candidates, Ollanta Humala Tasso from thePartido Union por el Peru, or the UPP, and Alan Garcia Perez of thePartido Alianza Popular Revolucionaria, or APRA, will be held on June 4, 2006. The outcome of these elections as well as the economic policies of the new government are uncertain. Despite the uncertainty of the electoral outcome, the next president will not likely have a majority in Congress.

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"), or IPC, and published by INEI, has fallen from a high of 7,649.7 percent in 1990 to 3.7 percent in 2000, -0.1 percent in 2001, 1.5 percent in 2002, 2.5 percent in 2003, and 3.5 percent in 2004.2004 and 1.5 percent in 2005. 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 0.5 percent in 2000, -2.32.3 percent in 2001, 2.0 percent in 2002, -1.51.5 percent in 2003, and -5.25.2 percent in 2004. The Company's2004 and 4.5 percent in 2005. Our revenues and operating expenses are primarily denominated in U.S. Dollars. If inflation in Peru were to increase without a corresponding devaluation of the Nuevo Sol relative to the U.S. Dollar, theour financial position and results of operations, of the Company, and the market price of theour Common Shares and the American Depository Shares, ("ADSs"),or 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, 20042005 were US$12.614.1 billion as compared to US$10.212.6 billion at December 31, 2003. There2004. Although actual foreign reserves must be maintained at levels that will allow the succeeding government the ability to manage the Peruvian economy and to assure monetary stability in the near future, 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-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.

Deterioration in Economic and Market Conditions in Latin America and Other Emerging Market Countries

The market for securities issued by Peruvian companies is influenced by economic and market conditions in Peru and, to varying degrees, market conditions in other Latin American and emerging market countries. Although economic conditions are different in each country, the reaction of investors to developments in one country is likely to cause the capital markets in other countries to fluctuate. For example, political and economic events, such as the crises in Venezuela, Ecuador, Bolivia, Brazil and Argentina, have influenced investors' perceptions of risk with regards to Peru. The negative investor reaction to developments in our neighboring countries may adversely affect the market for securities issued by countries in the region, cause foreign investors to decrease the flow of capital into Latin America, and introduce uncertainty about plans for further integration of regional economies.

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'sour 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"),or 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-Exchange Controls".

Corporate Disclosure and Accounting Standards

The Company prepares itsWe prepare our financial statements using Peruvian GAAP, which differdiffers 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 3938 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,us, and Note 4039 for a reconciliation to U.S. GAAP of the Company'sour net income and shareholders' equity for the period included therein. In addition, sinceas a foreign private issuer in the Company is not a United States, registrant,we have less intensive reporting requirements and information regarding the Companyus may not be as readily disseminated into the market.

Enforceability of Civil Liabilities

The Company isWe are organized under the laws of Peru. A significant majority of the Company'sour directors and officers reside outside the United States (principally in Peru). All or a substantial portion of our assets or 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 us or 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 hasWe have been advised by itsour 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 Stat esStates 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 theour outstanding share capital of the Company held by Alberto Benavides de la Quintana, the Company'sour Chairman and former Chief Executive Officer, and certain members of his immediate and extended family and their spouses, (collectively,or the "Benavides Family")Benavides Family, as of April 30, 20052006, was 26.8227.24 percent. Because of the significant ownership interest the Benavides familyFamily holds in the Companycommon shares and because the Investment Shares held by others 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,us, The Bank of New York, as depositary, (the "Depositary"),or the Depositary, and the owners and beneficial owners of ADSs, (the "Amendedor the Amended and Restated Deposit Agreement")Agreem ent, relating to the Company's ADRs,our ADSs, if holders of ADRsADSs 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,us, which will likely be Alberto Benavides de la Quintana, a discretionary proxy to vote such shares, unless the Company informswe inform the Depositary that the Company doeswe do not wish such proxy to be given.

Fewer and Less Well Defined Shareholders' Rights

The Company'sOur 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 our 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'sour share capital by itsour shareholders, including the Benavides Family. Furthermore, under theLey General de Sociedades Peruana (the "Peruvian, or Peruvian Companies Law"),Law, any restriction on the free sale of shares in asociedad anónima abierta(open stock company) such as the Company,we are, 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 Companyus 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"),or the Securities Act, is effective with respect to such rights or an exemption from the registration requirement thereunderthereunde r is available. Any such rights offering would have a dilutive effect upon shareholders who are unable or unwilling to exercise their rights. The Company intendsWe intend 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 Companyus would be diluted proportionat ely.proportionately. The Depositary has discretiondis cretion 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 isWe are Peru's largest publicly-traded precious metals company. The Company iscompany, and are engaged in the exploration, mining processing, development and explorationprocessing of gold, silver and, to a lesser extent, other metals, in Peru. The CompanyWe currently operates three mines (Julcani,operate the Julcani, Recuperada, Orcopampa and Uchucchacua)Uchucchacua mines and hashave controlling interests in three other mining companies which have controlling interests inoperate the Colquijirca, Antapite, Colquijirca, Ishihuinca Shila and PaulaShila-Paula mines. Effective March 2001, the Companywe temporarily suspended operations and discontinued exploration efforts at the Recuperada mine. In April 2004, the Companywe elected to resume exploration efforts at the Esperanza vein of the Recuperada mine due to an increase in ore reserves as well as the rising price of metals.The Companymetals and in February 2006 we initiated mining operations.In addition, as of January 1, 2005, the operating data from the Paula mine has been consolidated with the operating data from the Shila mine and after such date is referred to herein as the Shila-Paula mine. We also ownsown an electric power transmissiontran smission company and an engineering services consulting company and hashave minority interests in several other mining companies, including a significant ownership interest in Yanacocha, a Peruvian partnership that opera tesoperates South America's largest gold mine.mine, and Sociedad Minera Cerro Verde S.A.A., or Cerro Verde, a Peruvian company that operates a copper mine located in the south of Peru. In 2004,2005, the Julcani, Uchucchacua, Orcopampa, Antapite, Colquijirca, Ishihuinca Shila and PaulaShila-Paula mines produced 357,562388,042 ounces of gold, 15,095,56216,429,816 ounces of silver and 70,92569,550 short tons of metallic zinc. Yanacocha produced 3,017,3023,333,088 ounces of gold and 3,479,4354,342,292 ounces of silver. The Company'ssilver and Cerro Verde produced 103,123 short tons of copper. Our equity share of production in 20042005 was 1,642,8121,814,861 ounces of gold, 14,274,45815,377,704 ounces of silver, and 28,21628,154 short tons of metallic zinc and 15,220 short tons of copper, including 1,317,0521,454,893 ounces of gold and 1,518,7731,895,410 ounces of silver for Yanacocha.Yanacocha and 15,066 short tons of copper for Cerro Verde. For theth e year ended December 31, 2004, the Company's2005, our net sales were S/.972.2million.936.5million (US$297.7273.0 million), and itsour net income was S/.685.6.940.9 million (US$208.8274.3 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'sOur registered office is located at Carlos Villarán 790, Santa Catalina, Lima 13, Perú, telephone no. 5-11-419-2538. The Company'sOur Internet Website address is http://www.buenaventura.com. The information on the Company'sour website is not a part of, norand is not incorporated into, this document.

History

During itsour first 25 years, the Company'sour efforts focused on the exploration and development of silver mines. During this period, the Companywe built up itsour principal mines in Peru, commencing with the purchaseacquisition of the Julcani mine in 1953. The CompanyWe commenced exploration of the Orcopampa mine in 1962 and operations in 1965. The CompanyWe began exploring the Uchucchacua mine site in 1960 and, after operating a pilot project in the area in the early 1970s with successful results, 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 Companywe explored 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 Companywe also decided to discontinue itsour exploration outside Peru and to intensify efforts in Peru.

Following a sharp increase in silver prices, which peaked in 1980, the Companywe initiated a program to explore for gold and, to a lesser extent, other metals in Peru to reduce itsour dependence on silver, since the Companywe believed the high price of silver could not be sustained. Faced with declining silver prices throughout the 1980s, the Companywe expanded silver output to reduce its cash flow while at the same time continuing itsour exploration efforts for other metals. Exploration of gold anomalies in the Yanacocha district began in 1983 and an expansion of the Orcopampa mine, (whichwhich had operated since 1967 as a silver-producing mine)mine, to enable the Companyus to developexplore newly-discovered gold veins began in 1984 and was concluded in 1999. In 2002, after an intense exploration program of the Orcompampa mine, gold production was commenced atin the Chipmo vein.area. New gold mining operations commenced at the Ishihuinca mine in the early 1980s and at the Antapite mine in 2001. However, Peru's economic and poli 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 haswe have continued itsour efforts to decrease itsour exposure to silver price fluctuations and hashave pursued a plan to increase its overall precious metals production and production efficiency. The Company hasWe have continued to expand itsour mineral resource basereserves through the implementation of property acquisition development and intensive exploration programs designed to increase itsreserves and production and reserves of gold. As part of this strategy, the Companywe acquired an equity interest in Yanacocha and conducted exploration leading to the discovery of gold mineralization and subsequent production of gold inat the Orcopampa, Shila, Ishihuinca Antapite and otherAntapite mines. These initiatives have transformed the Companyus from primarily a silver producer into primarily a gold producer, based on allocated revenue. In 2004,2005, gold, silver and other metals accounted for 84.2579.59 percent, 10.5410.15 percent and 5.2110.26 percent, respectively, of the Company'sour equity share of production value in itsour consolidated subsidiaries and Yan acocha.Yanacocha.

On January 14, 1992, the Company,we, through itsour 100 percent owned subsidiary, Compañía Minera Condesa S.A. ("Condesa"), or Condesa, together with Newmont Second Capital Corporation, ("or Newmont Second"),Second, a wholly owned subsidiary of Newmont Mining, and Société d'Etudes, de Recherches et d'Exploitations Miniéres, ("Serem"),or Serem, a wholly owned subsidiary of the Bureau de Recherches Geologiques et D'Etudes Geologiques ("BRGM"),Minières, or 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 and 5 percent owned by The International Finance Corporation, ("IFC"),or IFC, the branch of the World Bank that promotes private investments. Since then, the Company haswe have increased itsour participation in Yanacocha to 43.65 percent, and Newmont Second has increased its participation in Yanacocha to 51.35 percent,percen t, with IFC continuing to own 5 percent.

In October 2000, the Companywe and Newmont Mining agreed to consolidate theirour properties in Cajamarca, northern Peru, in Yanacocha. Under the consolidation plan and according to agreements signed in December 2000, the Companywe sold several assets to Yanacocha, including assets formerly owned bythe Minas Conga project, the China Linda lime plant, mining rights, aerial land and other machinery and equipment and inventories. See "-Property, Plants and Equipment-Yanacocha's Properties-Operating Properties". The CompanyWe received approximately US$9 million in connection with this sale. Yanacocha and the CompanyWe also entered into an administration agreement with Yanacocha, setting forth that the Companywe 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 Companywe ceased to manage the China Linda plant. As a result of the termination, the Companywe received a payment of $ US$1,800,000 from Yanacocha.

On June 1, 2005, Cerro Verde conducted a capital increase whereby we subscribed 42,925,975 shares for US$154.8 million, increasing our interest in Cerro Verde from 9.17 percent to 18.21 percent. Phelps Dodge Corporation continues to retain a majority interest in Cerro Verde. See "-Intermediate Holding Companies; Subsidiaries and Equity Participations-Sociedad Minera Cerro Verde S.A.A.". As of December 31, 2005, Cerro Verde was 53.56 percent owned by Cyprus Climax Metals Company, a subsidiary of Phelps Dodge Corporation, 21.0 percent owned by Sumitomo Group and 18.5 percent owned by us.

Redesignation of the Company'sour Shares and ADSs

At aour shareholder meeting of the Company held on April 30, 2002, following special meetings of the Company'sour Series A shareholders and Series B shareholders on the same date, (the "Special Meetings"),or the Special Meetings, amendments to the Company'sourestatutos (the "Company By-laws"), or 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").or the Redesignation. The Redesignation was effective May 3, 2002. At that date, the Companywe had 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 theour outstanding share capital of the Company.capital. The Investment Shares have no voting rights and are not, under Peruvian law and accounting rules, characterized as share capital.

The Company'sOur ADSs have traded on the New York Stock Exchange Inc. (the "New, or the New York Stock Exchange")Exchange, since May 15, 1996. Prior to the Redesignation, each of the Company'sour ADSs represented two Series B Shares. In connection with the Redesignation, the Companywe submitted a technical original listing application to the New York Stock Exchange dated April 25, 2002, (the "Application")or the Application, for the redesignation of the Company'sour 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 on May 3, 2002, each of the Company'sour ADSs has represented two Common Shares. From and afterSince that date, the Company haswe have had Common Shares with a nominal par value of S/.4.00 per share. On November 3, 2003, the Companywe submitted a supplemental listing application to the New York Stock Exchange to modify theth e ratio of the Company'sour ADSs, and on November 12, 2003, the Company'sour ratio of Common Shares per ADSs was modified from two Common Shares per ADS to one Common Share per ADS.

Recent Developments

Effective December 30, 2005 and January 2, 2006, we acquired 50 percent and 25 percent, respectively, of the capital stock of Minas Poracota S.A., or Minas Poracota, for a purchase price of US$4.5 million. According to the shareholders agreement we executed with Teck Cominco Perú S.A., or Teck Cominco, if a preliminary study to be carried out by us and Teck Cominco indicates a probability of gold production that is greater than 300,000 ounces per year, Teck Cominco will have the right to increase its equity interest in Minas Poracota to 50 percent and operate the project. Teck Cominco will prepare a feasibility study with a production of 300,000 ounces of gold. However, if the preliminary study indicates that gold production is less than 300,000 ounces per year, we have the option to purchase the remaining 25 percent of the capital stock of Minas Poracota for US$2.25 million.

On March 15, 2005,the Company executed a joint venture agreementMay 3, 2006, we terminated our agreements with Río Narcea Gold Mines, S.A., Naraval Gold S.R.L. and Río Narcea Gold Mines, Ltd. (collectively "Grupo RN"), or Grupo RN, dated March 15, 2004, whereby the Company willwe agreed to acquire a 51 percent equity interest in the Santa Marina exploration project, which is located 2two kilometers north of the El Valle mine on the Río Narcea gold belt in Asturias, Spain, through itsour 100 percentpercent-owned subsidiary Minera Santa Marina del Norte S.L. ("Santa Marina"). The Santa Marina project is operated by, or Santa Marina. The Company has agreed, pursuant to the joint venture agreement, to invest 2,200,000 Euros by March 15, 2007 to develop the Santa Marina project. Upon such investment, Grupo RN will transfer certain mining rights with respect to the Santa Marina exploration project in exchange for a 49 percent interest in Santa Marina. In addition, upon receipt of notice by Grupo RN affirming the completion of the Company's initial investment, the Compa ny has a three month option to increase their equity interest in Santa Marina to 70 percent for an additional investment of 2,400,000 Euros over a two year period from such exercise.

On March 16, 2005, the Company, the Sumitomo Group, Phelps Dodge Corporation, Cyprus Amax Minerals Company, Cyprus Metals Company, Cyprus Climax Metals Company and Sociedad Minera Cerro Verde S.A.A. ("Cerro Verde") entered into an agreement whereby, subject to certain closing conditions, the Company agreed to increase its ownership interest in Cerro Verde up to 20 percent and the Sumitomo Group agreed to acquire an ownership interest in Cerro Verde of between 21 and 25 percent in connection with a US$850 million expansion of the Cerro Verde copper operations to mine a primary sulfide ore body. Phelps Dodge will retain a majority interest in Cerro Verde. Cerro Verde intends to effect the increase of the Company's and the Sumitomo Group's ownership interests pursuant to a capital increase. See "-Intermediate Holding Companies; Subsidiaries and Equity Participations-Sociedad Minera Cerro Verde S.A.A.".

Business Strategy

The Company'sOur strategy is to strengthen itsour position as one of Peru's leading gold and silver mining companies by expanding itsour reserves and production. The Company isWe are currently engaged in an active exploration and mine development program and participatesparticipate in several joint ventures.mining exploration projects with Newmont, Minera ABX Exploraciones S.A., or Barrick, Gold Fields Peru S.A., or Gold Fields, Southern Copper Corporation, or SCC, and Teck Cominco. Further, the Company seekswe seek to increase the efficiency and capacity of itsour mining operations. The Company isWe are aware of itsour social and environmental responsibilities and aimsaim to excel in the prevention, mitigation and rehabilitation of mining-related disturbances.

Maintaining an Active Exploration Program

The Company viewsWe view an active exploration program as itsour primary means to obtain new reserves. As of April 30, 2005,May 29, 2006, through an intensive exploration program, the Company holds,we hold, either directly or in conjunction with joint ventureexploration partners, 368,031480,530 hectares of mining rights, excluding an additional 151,742338,864 hectares in mining properties which consolidate production units, making itus a major holder of mining rights in Peru.

During 2004 the Company2005 we spent approximately US$14.4820.97 million primarily on "greenfield" and US$6.30 million on "brownfield" mining exploration-related investments in Peru, concentratingPeru. Our "greenfield" investments focused on the following exploration and development of precious metals deposits in the following mining projects: El Faique (previously known as El Papayo), Volcanicos Oyotun, Los Pircos, La Zanja, Mesa de Plata, Tantahuatay, Marcapunta,Cordillera Oriental, Pampa Andino, Aguas Verdes, Jatun Orcco, Huancavelica, JVMinasnioc, Cofradia, Puquio, Trapiche, Poracota, Soras, Altiplano Perú, Arenizo, CruceroSanta Marina and Patagonia.Argentina. In 2005, the Company intends2006, we intend to concentrate on the El Faique, Los Pircos, La Zanja, Mesa de Plata, Tantahuatay, Volcánicos Oyotún, Cordillera Orient al,Oriental, Pampa Andino, Huancavelica, Cofradía,Tinyaclla, El Milagro, Minasnioc, JV Puquio,Hueso Sur, Trapiche, Poracota, Soras, Arenizo, Altiplano Bolivia,and Argentina and Santa Marina exploration projects.projects with an approved budget of US$21.0 million. The 2004 explorations2005 exploration program was financed by internal funds as well as a US$5.422.5 million contribution by Newmont Minera ABX Exploraciones S.A. ("ABX")Peru S.R.L., Southern Peru Copper Corporation ("SPCC"),SPCC, Gold Fields Peru S.A. ("Gold Fields") and Minera Peñoles de Peru S.A. ("S .A., or Peñoles").oles.Our "brownfield" investments focused on the following exploration projects: Pozo Rico, Mallay, Anamaray, Layo and Shila. In 2006 we intend to invest US$11.8 million in the Pozo Rico, Mallay, Anamaray, Layo, Umachulco-Manto N and Shila brownfields exploration projects.

Participation in Joint VenturesMining Exploration Agreements

In addition to managing and operating precious metals mines, Buenaventura participateswe participate in mining exploration joint venturesagreements with mining partners to reduce risks, gain exposure to new technologies support high mine development costs and diversify revenues to include other metals. See "-Business Overview-Exploration". The Company believesWe believe that maintaining itsour focus on mining operations complements its joint-ventureour partnership strategy because the engineering and geological expertise gained from such operations enhances the Company'sour 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-Factors Relating to the Company-Hedging".projects.

Capital Expenditures

The Company'sOur capital expenditures in the past three years have related principally to the acquisition of new assets,mining properties, increasing our participation in the Cerro Verde mine, 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". Set forth below is information concerning capital expenditures incurred by the Companyus in respect toof each of itsour principal operating mines and by category of expenditure:

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The CompanyWe financed itsour capital expenditures in 2002, 2003, 2004 and 20042005 with internally-generated funds and borrowings under itsour lines of credit. Seecredit.See Notes 1715 and 2018 to the Company Financial Statements.

The Company hasWe have budgeted approximately US$2330.4 million and US$1039.9 million for capital expenditures in 20052006 and 2006,2007, respectively. Exploration expenses in non-operating units are expected to be US$16.533.9 million and US$16.528.0 million in 20052006 and 2006,2007, respectively. To fund itsour planned capital expenditures program, the Company planswe plan to use internally-generated funds. See "Item 5. Operating and Financial Review and Prospects-The Company-Liquidity and Capital Resources".

The Company'sOur ongoing projects include (i)include(i) a complementary facility of the construction of a new cyanidation plant at the Uchucchacua mining unitto treat oxide ore, at an estimated cost of US$8.83.6 million and the deepening of the Master Shaft from level 4060 to level 3900 which will lead to deepening of the Carmen and Socorro mines, at an expected investment of US$10.6 million at Uchucchacua and (ii) the extension of the Nazareno and Prometida area drilling projectsramps and the construction of an auxiliary shaft to provide access to 0.7 million ounces of goldimprove ventilation and ore transport at lower levels of the Prosperidad, Lucy Piso, Prometida and Nazareno veins at an estimated cost of US$8.7 million. The significant increase inOrcopampa.

Our capital expenditures forwere lower in 2005 than in 2004 was mainly due to an investment of US$7.6 million for the construction of the tailing dam at Antapite and the Callalli-Ares transmission line US$3.6 million for the construction of the Orcopampa tailing dam and US$3.0 million for the construction of the Antapite tailing dam.by Conenhua in 2004.

The CompanyWe continuously evaluatesevaluate opportunities to expand itsour business within Peru, as well as in other countries as opportunities arise, and expectsexpect to continue to do so in the future. The CompanyWe 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 Companyus or in related other businesses. However, there can be no assurance that the Companywe will decide to pursue any such new activity or transaction.

Business Overview

Production

The CompanyWe principally producesproduce refined gold and different types of metal concentrates that it distributeswe distribute and sellssell 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 ceasedresumed operations effective March 2001)in April 2004), Ishihuinca, Paula Huallanca (which was sold in March 30, 2002)(as of January 1, 2005, Paula's operating data has been consolidated with Shila's operating data), Colquijirca and Shilamines 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.

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Exploration

The Company viewsWe view exploration as itsour primary means of generating growth value for shareholders and typically maintainsmaintain a portfolio of active exploration projects at various stages of exploration for mineral resources in Peru,Peru. In addition, we occasionally operate exploration projects in Argentina, Bolivia, Mexicoand Spain at various stages of investigation. The CompanySpain. We currently holds,hold, either directly or in conjunction with joint ventureexploration partners, 368,031480,530 hectares of mining rights as part of itsour exploration program; this areafigure excludes an additional 151,742338,864 hectares in mining properties which consolidateare involved in consolidating production units. The CompanyWe invested approximately US$14.4820.97 million in exploration for mineral resourcesMineralized Material not in Reserve, or NRM, during 2004,2005, including 24,45519,351 meters of exploratory diamond drilling primarilyand 3,404 meters of exploratory underground workings in the La Zanja, Los Pircos, Pampa Andino, Jatun Orcco, Arenizo, Poracota, Soras, Minasnioc, Cofradia and Chilacocha prospects.Oyotunprojects. In addition, the joint ventureour exploration partners invested US$5.422.5 million in 11,619 meters of exploratory diamond drilling in the Puquio, Aguas Verdes, Marcapunta, IncapachaTantahuatay and MinasniocLa Zanja prospects.

Relying on itsour 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 hasor INGEMMET, we have shifted itsour exploration focus inside Peru to the central eastern Andean Region called Cordillera Oriental. As a result, while the Company continueswe continue exploration in Cajamarca, Cerro de Pasco and Huancavelica as its high-priorityour highest-priority target regions, it hasduring 2005 we renewed prospecting and exploration efforts during 2004 for gold and silver in Ayacucho, for gold and copper in Apurímac and Cusco, for copper, gold and zinc in Piura, Lambayeque and La Libertdad,Libertad,and for gold in Junin.The Company isJunin.We are also exploring for precious metal epithermal deposits in the Altiplano region in southeastern Peru and continuescontinue evaluating prospects in Mexico, Bolivia, Argentina and Spain.

In 2005 the Company expects2006, we expect to invest a minimum of approximately US$15.033.9 million respectively, in explorationgreenfield and developmentbrownfield exploration activities. All exploration and development programs at the Company'sour principal mines are separateindividual 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 we allocate, subject to board approval, the Company allocates, through approval of the board, anproper amount to finance suchfor each particular exploration and development activities in those projectsactivity considered worthwhile. In light of the nature of mining exploration and in order to maintain flexibility to take advantage of opportunities, the Company allocateswe allocate budgeted amounts by property or project only in the case of high geological prospectivityexpectation as de cideddecided by management. The Companymanagement.We also allocatesallocate non-budgeted amounts over the course of the year to new projects based on the Company'sour needs and itsour geologists' periodic evaluations of the progress of each opportunity and its potential for development.further exploration activities.

An integral part of the Company'sour exploration program is the participation in joint venturesmining exploration agreements with affiliates of experienced mining companies, including Newmont Peru ABX,S.R.L., Barrick, SPCC, Teck Cominco, Metals Ltd. ("TCL"), Gold Fields and Peñoles, as well as certain of their affiliates.oles. The benefits of these joint venturesexploration projects include greater investment in the exploration of the Company'sour mining rights from the funds contributed by the partners, 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 mining exploration joint ventures, the Companyagreements, we may be either the designated operator, an equity participant, the manager or a combination of these and other functions. The Company doesWe do not generally conduct significant research and development activities other than investments in exploration as described herein. Funding has provi dedWe have provided funding for university-based research and training of geological staff, with the objective of improving the appraisal of the Company'sour properties, presently carried out at the Mineral Deposit Research Unit, University of British Columbia, with research on mineral zoning at Uchucchacua, and at the Research School of Earth Sciences, Australian National University, with research on metallogenetic fertility of Circumpacific magmas, and at the Universidad Politécnica de Madrid, with research on regional distribution of coopercopper deposits in northern Peru. In addition, we have three geologists studying to receive their M.Sc.degree in the Red DESIR program promoted by the Universidad Politecnica de Madrid in Lima, which is funded by the European Union and supported by the Universidad Nacional Mayor de San Marcos and the Universidad Nacional de Ingenieria.

The following table lists the Company'sour current greenfield exploration projects, itsour effective participation in each project, itsour partners with respect to each project, the total hectares as of April 30, 2005,May 8, 2006, observed mineralization of each project and the total exploration expenditures (in millions of US$) during 2002, 2003, 2004 and 2004.2005.

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(10) Includes Generative Exploration, Marcapunta, Estrella del Norteexploration in new areas, Hueso Sur, Tinyaclla, El Milagro, Incapacha, Titanica and others.

*(11) The Arenizo project is owned by Inminsur, which is 78.04 percent owned by the Companyus and 21.96 percent owned by Brandon Properties Inc., a Panamanian corporation.

The following table lists our current brownfield exploration projects, our effective participation in each project, the total hectares as of May 8, 2006, observed mineralization of each project and the total exploration expenditures (in millions of US$) during 2003, 2004 and 2005.

The following is a brief summary of current greenfield and brownfield exploration activities conducted by the Companyus directly and through joint venturesexploration agreements 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'sour 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'sour ore reserves. Non-reserve mineralization or mineral resources as indicated by diamond drilling havehas been included in the Company'sour 2005 Annual Report 2004 from the Los Pircos, La Zanja, Tantahuatay, Marcapunta, JatunHatun Orcco, Pampa Andino and Poracota exploration projects.projects.Set forth below is a map of all our exploration activities in Peru as of December 31, 2005:

Joint Venture

Greenfield Exploration Projects

Colquirrumi. The Colquirrumi, project, a silver, zinc and lead project, is wholly owned by Compañía Minera Colquirrumi S.A. ("Colquirrumi")., or Colquirrumi. Consisting of 11,728 hectares, the project is located in the Hualgayoc district, Cajamarca region, and commenced operations in March 1973 with mining and drillingmilling for zinc and lead ore. Since 1991, the project has engaged in astopped mining and mineral exploration program.programs. 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.shareholders meeting. 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 iswe are the sole shareholder of the Series A Common Shares and holdshold a 99.99 percent interest in Colquirrumi. On February 24, 2005, the Company executed a joint venturewe signed an agreement with Gold Fields to explore the Hualgayoc district, including cer taincertain areas within the ColquirrumiColquirrum i project. During 2005, Gold Fields invested US$206,952 to drill 2,474 meters in eight holes. Low grade copper-gold mineralization of porphyry style was found in the Cerro Jesus area. In 2006, we plan to invest US$1.5 million in 2,040 meters of underground workings to generate silver, lead and zinc reserves. In addition, Gold Fields plans to continue superficial exploration efforts centered on porphyry gold-copper targets, including 6,000 meters of diamond drilling in four targets for a budget of US$1.5 million.

La Zanja. Sociedad Minera Coshuro S.A. ("Coshuro")La Zanja S.R.L., or La Zanja, controls 23,904 hectares and the Company controls 8,59632,070 hectares of mineralized ground in the La Zanja project, which is located 35 kilometers north-west of Cajamarca.Cajamarca city. Originally, the La Zanja project was part of the Northern Peru joint venturemining exploration project, which was 35 percent owned by the Companyus and 65 percent owned by Newmont Peru. The CompanyWe executed a carve-out agreement with Newmont Peru on August 1, 2000, providing for the eventual dilution of Newmont Peru's interest in the project. The project, which is operated by the Company,us, consists of the San Pedro Sur and Pampa Verde superficial gold and silver oxide deposits, amenable to low-strip open pits and heap-leach operation. Reserves are drill proven, indicated and inferred atNRM is 18.8 million metric tons with an average grade of 1.1 grams per ton of gold per ton. The Company has not yet testedgold. We have started to test for deep oxide nor sulfide ore potential in other prospects within the property. 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 Companywe acquired an additional 910 hectares inof surface rights, conducted an airborne electromagnetic survey of 30,000 hectares , and conducted a drilling campaign at the Pampa Verde oxide-gold deposit, the Alcaparrosa prospect and the San Pedro Norte deposit. During 2004, the Companywe invested US$5.8 million in the La Zanja project to conduct metallurgical and feasibility studies, to drill 4,504 meters at the Pampa Verde deposit, 2,933 meters at the Turmalina prospect, 1,113 meters at the Campana prospect, 1,194 meters at the San Pedro Sur deposit, 458 meters at the Pampa Verde Sur prospect and 190 meters at the C.C' Buitre prospect, and to conduct 3,268 meters of sterilization drilling in the Pampa Bramadero area with mineralization outarea. As of reserves indicated at 18.1 million of metric tons with an average grade of 1.1 grams of gold per ton. As o f December 31, 2004, the Company owned2005, we own a 53.06 percent interest in La Zanja and Newmont Peru's interest was diluted to 46.94 percent. Newmont Peru elected to maintain a 46.94 percent interest in La Zanja for 2003, 2004 and 2004.2005. On November 16, 2004, during a community protest at the La Zanja project, a warehouse was set on fire, which resulted in the loss of 25 km of drill cores worth US$150,000 that were stored in the warehouse. As a result, in 2005 we downgraded r eserves to NRM. In addition, we invested a total of US$2.6 million to address social issues and to conduct 18,050 meters of geophysical surveys and to drill 1,674 meters at the Cerro La Zanja deep sulfide prospect. We are drill-testing a transition zone between a porphyry copper to an epithermal gold system. In 2005, surface rock sampling at the Turmalina prospect identified a new oxide-related gold occurrence with an average content of 0.42 grams per ton of gold. In 2006, we plan to invest US$5.1 million on a 8,200-meter drilling campaign at the deep copper-gold sulfide deposit at the Cerro La Zanja prospect and a 3,000-meter drilling campaign at the superficial oxide gold Turmalina prospect.

Lancones. The Lancones project was a joint venture which ismining exploration project that was 40 percent owned by Cía. Minera Totoral S.A. (", or Minera Totoral")Totoral, and 60 percent owned by BHP BILLITON World Exploration Inc. ("BHP-B"). Consisting of approximately 4,600 hectares of mineralized land, the, or BHP-B. The project was located in northern Peru and southern Ecuador. At March 11, 2004,BHP-B decided not to pursue further exploration work in the Lancones project and terminated the mining exploration agreement. We have decided not to terminate the joint venture agreement. The Company did not developconduct further exploration efforts in the Lancones project in 2004.area and to abandon the mining properties.

Los Pircos. The Los Pircos project was a joint venturemining exploration project with Meridian Gold Company, ("MDG").or MDG. Consisting of 11,808 hectares, the project is located east of Chiclayo in the Western Cordillera of Cajamarca, approximately 690 kilometers northwest of the city of Lima. On March 25, 2004 MDG withdrew from project and, since that time, the Company has operated the project with the primary objective of exploring and developing 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 average 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 thickne ss 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 kilometers18.5-kilometer electromagnetic survey of the Los Pircos vein system to define vein continuity at depth. On March 25, 2004, MDG withdrew from the depthproject and, since that time, we have operated the project with the primary objective of exploring precious metal veins of epithermal character. To date, we have located, mapped and sampled five principal veins, which have shown strong anomalous gold and silver values. The principal vein, continuity.the Diana vein, has a 380-meter long central section with average widths of 2.10 meters and grades of 8 grams per ton of gold and 300 grams per ton of silver. First pass drilling with a total 3,566 meters in 2002 over the Diana vein system showed mineralization 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 two meters. During 2004, the Companywe focused on renewing itsour surface rights permits and negotiated a three-year agreement with the Santa Rosa de Sexi and Corral Viejo neighborhoods, which were securedwas signed in MarchApril 2005, to ensure the continuation of itsour exploration activities at the Diana and Maribel veins. We are currently driving two crosscuts into the Diana vein system at levels of 2,000 meters and 2,050 meters. In 2006 and 2007, we intend to generate high-grade gold and silver ore reserves.

Minasnioc. The Minasnioc project wasis a joint venturemining exploration project with ABXBarrick and Compañía Minera Ares S.A.C., a company owned by the Hochschild Group, ("MHC").or MHC. In August 2004, ABXBarrick withdrew as operator of the Minasnioc project and since that date, the Company's haswe have been the operator of the project. The CompanyIn addition, MHC withdrew from the project in 2004. We currently hashave a 60 percent interest and isare in the process of acquiring additional interests in the project thereby diluting ABX's interest. Theto dilute Barrick's interest.The Minasnioc project is aencompasses 23,600 hectares of high sulfidation epithermal prospectterrain located in southern Peru, in the Huancavelica region, 310 kilometers southeast of Lima. The first-pass 2003 drilling campaign by ABXBarrick confirmed the presence of low-grade uneconomic gold mineralization hosted in volcanic rocks, mainly following a stratabound pattern. In the last quarter of 2004, the Companywe invested US$205,555 in exploration and the construction of new camp facilities. The CompanydetectedIn 2005, we invested US$861,768 in 1,802 meters of diamond drilling and additional studies to confirm the presence of gold enriched veinsveins. The results of the 2005 campaign indicated poor evidence of gold mineralization at depth. In 2006, our exploration efforts will focus on exploring additional areas not previously explored in detail by Barrick and plans to conduct additi onal drilling and underground activity as well as increase itsdefine our interest in the Minasnioc Project in 2005.Project.

Patagonia.The Patagonia project was a joint venturemining exploration project between the Company,us, 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, ("MHC"))or MHC). The project consisted of 127,927 hectares and was 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 had two main prospective areas identified; namely Martinetas and La Paloma. During 2003, the Company and MHC invested US$1.4 million in a 2,020 meter diamond drilling campaign over two sets of gold bearing veins in the Martinetas prospect, which indicated resources of 141,300 metric tons at 15.6 grams per ton of gold with an average thickness of 1.1 meters, and a 2,172 meter diamond drilling campaign in the La Paloma prospect, which indicated resources of 206,250 metric tons at 9.8 grams per ton of gold with an average thickness of 1.8 meters. In 2004 the Company conducted an intensive survey to discover new prospective areas in the regions outside the Martinetas and La Paloma prospects, which had negative results. In August 2004, the Companywe decided to discontinue itsour investment in the Patagonia project and withdrew from this project due to insufficient grade and tonnage generated by trenching and drilling the joint venture.Martinetas and La Paloma prospects. We are currently pursuing new opportunities for exploration in this region.

Poracota.The Poracota joint mining exploration project is currently operated by the Company pursuant to an agreement with Minas Poracota, S.A. ("Minas Poracota"). Minas, in which we have a 75 percent interest, and Teck Cominco owns the remaining 25 percent interest. The Poracota is a joint venture between Southwestern Resources Corp. ("SWG") and TCL. The project encompasses 6,674 hectares owned by Minas Poracota S.A. (a former subsidiary of Minera del Suroeste S.A.C.) and is located 20 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 hasPeru. On December 31, 2005, we exercised an option to acquirepurchase a 50 percent interestparticipation in Minas Poracota S.A. withfrom SWG for a US$4.6 million payment to SWG. The Company haspayment. We also agreed to invest and invested 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. The Company holds claims for 16,300 hectares in the Soras region, located between the Poracota project and the Orcopampa mine.Teck Cominco. The epithermal high sulfidation system comprises two main areas: Huamanihuayta and Perseverancia. In 2003, the Companywe invested US$1.5 million in the Poracota project, which included an 87.2 kilometer87.2-kilometer magnetic survey and a 7,314 meter7,314-meter diamond drilling campaign. DuringDurin g 2003 and 2004, the drilling campaign in the Huamanihuayta area indicated resources of 1,750,000 metric tons at 11 grams per ton of goldconfirmed two sub-horizontal structures, Manto Dorado and Manto Aguila, with an average thickness of 5 to 6 meters in two sub-horizontal veins, Manto Dorado and Manto Aguila.each. The Manto Dorado veinstructure included resourcesNRM of 693,785 metric tons at 10.6 grams per ton of gold with an average thickness of 6.0 meters and the Manto Aguila veinstructure included resources of 801,687 metric tons at 10.0 grams per ton of gold with an average thickness of 5.2 meters. In 2004, the Companywe invested US$2.45 million in 967 meters of underground workings and a 5,250 meter5,250-meter diamond drilling campaign. In addition, the Companywe invested US$2.95 million for the construction of a 30.5 kilometer30.5-kilometer gravel road to connect the Poracota project to the Orcopampa mine. In 2005, the Compan y plans to advance itswe advanced our exploration efforts with 1,6001,688 meters of underground workings conduct 5,300and 6,369 meters of diamond drilling and conductconducted metallurgical and pilot tests. We are currently preparing two scoping studies based on an updated ore reserve calculation.

Puquio. The Puquio generative project iswas a joint venturemining exploration project with Gold Fields that encompassesoriginally encompassed 18,073 hectares of hydrothermally altered and mineralized volcanic terrain in the Ayacucho region, 500 kilometers southeast of Lima. The project iswas operated by Gold Fields, which hashad a 60 percent effective participation. In 2003, US$370,000 was invested to review selected anomalies detected by rock-geochemistry and satellite imagery. In 2004, Gold Fields invested US$430,000 in the Incapacha prospect to conduct 2,500 meters of diamond drilling, 3,000 meters of reverse circulation drilling and an electromagnetic survey, which had negative results. In addition, Gold Fields also invested US$162,000 to evaluate the Titanca, Tampa Tampa, Condoray and Ñayca prospects in 2004. The Incapacha property was explored with 2,492 meters of drilling with disappointing results. In 2005, we and Gold Fields plans to conductinvested US$688,667 in 2,500 meters of a diamond drilling campaign at the Ñayca prospect.prospect and thereafter decided to abandon the project due to poor geochemical results. The joint exploration agreement was terminated in February 2006.

Salpo.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 hadWe negotiated an option to acquire a 51 percent interest of Minera Salpo S.A. if it investswe were to invest US$2.0 million in exploration. Salpo is a historical mining district characterized by epithermal veins rich in gold and 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 invested US$1.7 million in drilling and exploration activities, including 3,424 meters of diamond drilling and drifting of 731 meters, 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 Companyin diamond drilling and underground workings, we decided not to exercise i tsour option to acquire an additional 51 percent interest in Minera Salpo S.A. due to the disappointing results of exploration effortsresults and, on October 31, 2003, we withdrew from the joint venture. The Company hasthis project. We have performed environmental remediation efforts prior to returning the consolidated mining properties to Minera Salpo S.A. in September 2004.

Samana. The Samana project which iswas operated by the Company,us from 2001 to 2003 and is a carve-out of the former Ayacucho joint venture with Newmont Peru. The CompanyWe and Newmont Peru executed the carve-out agreement on December 6, 2000, providing for the eventual dilution of Newmont Peru's interest in the project. Following the Company'sour investment of US$884,000, Newmont Peru will decide whether to maintain its diluted participation in the project or repurchase its participation interest in the project.therein. 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, Newmont 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 e xploration campaign focused on accessing 200 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. During 2003, the Companywe invested US$0.2 million in 1,190 meters of diamond drilling over 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 hasfor our exploration campaign, in 2004 we decided to discontinue itsour investment in the Samana project. Mining claims relating to this project will lapse in June 2006.

Aguas Verdes. The Aguas Verdes project, operated by Peñoles, consists of 3,800 hectares in the Ayacucho region. The Company hasWe have a 20 percent interest and Peñoles has the remaining 80 percent interest in the project. During 2004, Peñoles decided not to conduct additional exploration in 2005 after having invested US$560,000 for an aggregate of US$710,000 in 3,267 meters of diamond drilling and 12,500 meters of geophysical lines over the Aguas Verdes and Molino copper and gold enrichedgold-enriched skarn bodies with high grades but disappointing tonnage results. Peñoles has decided not conduct additional exploration in 2005. The Company doesWe do not intend to conduct an exploration program in the Aguas Verdes project in 2005.2006.

Tantahuatay. The Tantahuatay project, a gold copper project, is wholly owned by Compañía Minera Coimolache S.A. ("Coimolache"), or Coimolache, an entity which is 40.1 percent owned by the Company,us, 44.2 percent owned by SPCC, and 15.7 percent owned by ESPRO S.A.C., a Peruvian-based holding company. Since January 2003, the project has been managed and operated by an independent mining engineer, Ing. Amado Yataco, appointed by the Company.us. 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 north 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.NRM. Tantahuatay 2 was infill-drilled during 2002 and hosts a measured and drill-indicated mineral resourceNRM of 274,000 ounces of gold. The studies have been focused in the oxide zone onl y.only. Cyanidation column tests have been realizedcompleted with encouraging results, which indicate rapid extractions in the order of 80 to 90 percent, by low-concentration cyanide leaching. The Tantahuatay 2 prospect is being evaluated for Feasibility and Environmental Impact Studies during 2006. After infill-drilling is finished in the Ciénaga deposit, a feasibility study will be finalized to address viability of a 15,000 tons15,000-ton per day open-pit/heap leach operation. The Company isWe are focusing itsour efforts on resolving community issues and obtaining permits and licenses to continue itsour explorationandenhance support of itsour infill drilling and feasibility studies for both oxides and sulfides targets.

Company Exploration Projects

Ccarhuarazo. The Ccarhuarazo project, located 40 kilometers north of Puquio, During 2005, Coimolache invested US$1.55 million in the department of Ayacucho in south-central Peru,Tantahuatay project.

El Faique Project.The El Faique project, previously known as El Papayo, is wholly-owned and consisting of 15,187 hectares was operated by us. The project encompasses 87,574 hectares and is located in the Company until December 2002. Inversiones Minera La Familia ownsSechura desert of northern Peru in the southern 3,201Piura region. This project includes 3,200 hectares ofsold to us by Cedimin on April 4, 2006. During 2005, we invested US$1.6 million to acquire the project.property from Manhattan Minerals and other third parties and to claim new areas. The Company had an agreement with La Familia to jointly develop the area, whichEl Faique project consists of a volcanic centerdeep massive sulfide deposit evidenced by diamond drilling 400 to 700 meters below the surface in the B5gravimetric anomaly. This deposit contains a higher-grade mineralization of 7.91 million tons with epithermal veins2.3 percent copper and breccias with copper-silver-gold mineralization. During 2002, 1,188 meterstraces of zinc and gold. In 2006, we intend to address social issues that may arise and invest in gravimetric reinterpretation and hydrogeologic studies to determine ground water resources.

Oyotun. The Oyotun project is wholly-owned and was operatedby us until 2005. Consisting of 11,400 hectares, the project is located on a prospective area of massive sulfide deposits in northern Peru in the coastal zone of Piura and the Lambayeque and La Libertad regions. In 2005, we invested US$236,237 in regional surveys at the Sican prospect, where we conducted a drilling campaign of 270 meters. Due to the lack of mineralization at this prospect, we do not intend to conduct additional field work in 2006.

Cordillera Oriental. The Cordillera Oriental project is wholly-owned and operatedby us. Consisting of 4,900 hectares, the project is located on three prospective areas in the eastern cordillera of Central Peru in the Pasco and Junin regions. These areas were drilledidentified after a regional stream sediment campaign was conducted by INGEMMET in 10 holesearly 2004. In 2005, we invested US$121,555 in the Cordillera Oriental project and identified and claimed mining properties over three mineralized areas. In 2006, we intend to continue field work over the veins systems. Dueclaimed prospects to disappointing results, the Company transferred its propertiesdefine mineralization and information in the Ccarhuarazo project to Minera Argento S.A.C. in 2003.The Company performed environmental remediation efforts prior to delivering the property to Minera Argento S.A.C.The agreement with Inversiones Mineras La Familia S.A.C. was terminated on January 10, 2003.consolidate our position.

Huancavelica Project.The Huancavelica project is wholly owned and operated by the Company.us. Consisting of 47,06848,915 hectares, the project is located incovers several prospects of the Huancavelica region. The CompanyWe initiated exploration efforts in 1994 with the purpose of identifying base-metal skarns and/or disseminated precious metal deposits along the Cenozoic volcanic belt.belt and underlying Mesozoic basement. During 2003, the Pampa Andino prospect was separated from the Huancavelica project. In 2004, the Companywe invested US$473,000 to evaluate several prospective areas, including the Cofradía, Yuracjasa, Dorita Sur and Llipina prospects. At the end of 2004, the Cofradía prospect was separated from the Huacavelica project, and at the end of 2005 and the beginning of 2006, the El Milagro and Tinyaclla prospects were separated from the Huancavelica project. The Company plansWe plan to continue to evaluate several prospective areas in 2005.2006 to identify potentially economic mineralization.

Cofradia Project.The Cofradia project is wholly-owned and operated by us. At the end of 2004, we agreed with Barrick to consolidate all mining rights at the Cofradia project to conduct a comprehensive reassessment of its precious metal potential. The Cofradia project encompasses 20,200 hectares and is located in the Huancavelica region, next to the Minasnioc project. It consists of epithermal high sulfidation structures in volcanic terrain of the Caudalosa Formation. During 2005, we invested US$517,603 in 1,587 meters of diamond drilling in eight holes, which depicted that the gold content at greater depths does not reflect values identified at the surface. We do not plan to conduct further exploration in this project in 2006.

Pampa Andino. ThePrior to 2005, the Pampa Andino project iswas owned by Minera Totoral S.A, ("Totoral"). Consistingor Totoral. In May 2005, we acquired mining rights from Totoral for US$1.9 million. The Pampa Andino project consists of 18,900 hectares and located 175 kilometers south eastsoutheast 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 Totoral owns the remaining 2,900 hectares, which the Company is in the process of acquiring.regions. 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. In 2003, the Companywe invested US$0.3 million in 2,726 meters of diamond drilling over the Rosita and Claudia veins. In 2004, the Companywe invested US$1.1 million in 300 meters of diamond drilling and 1,563 meters of underground workings, initially identifying NRM of 15,700 metric tons at 15.0 grams per ton of gold and 21 ounces per ton of silver at the Rosita vein. DuringIn 2005, we invested US$1.3 million in 3,036 meters of diamond drilling and 1,458 meters of underground workings at the Company plans t oRosita vein. Du ring 2006, we plan to continue diamond drilling and extendingto extend underground workings.workings at least another 500 meters.

JatunHatun Orcco. The JatunPrior to 2005, the Hatun Orcco project iswas wholly owned and operated by the Company.us. Consisting of 20,700 hectares of mining properties, the project is located 20 kilometers north of the Antapite mine in the headwaters of the Ica valley. The JatunHatun Orcco project is the outcome of a regional exploration program designed to focus on goldexplorationin Huancavelica. Epithermal veins, located in the JatunHatun Orcco Norte, JatunHatun Orcco Sur and Karla prospects, have sporadic high-grade gold and silver leakagegeochemical anomalies. During 2003, the Company'sour exploration efforts included a US$1.1 million investment in an advancedunderground exploration program of 1,276 meters to test for grade continuity along the Mercedes and Capicúa veins in the JatunHatun Orcco Sur prospect. The results indicated resourcesconfirmed NRM of 16,330 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 Companywe continued itsour exploration efforts, investing US$1.2 mil lionmillion in 1,7031,7 03 meters of tunneling and 1,710 meters of diamond drilling in the JatunHatun Orco Sur prospect. In March 2005, we decided to lease the Company transferred its miningland and mineral rights of the Hatun Orcco project to Inversiones Mineras del Sur S.A. ("Inminsur"), or Inminsur, who will operate the project going forward.forward due to the proximity to the Antapite mine and mill area. We do not intend to continue any work on this project.

Altiplano Peru. The Franja Sur project, renamed the Altiplano Peru project in 2004, is wholly owned and operated by the Company.us. Consisting of 36,5877,200 hectares, the project is located in the Apurimac, Arequipa, Cusco and Puno regions of volcanic rocks and carbonate terrains of south-eastern Peru. After regional reconnaissance and a selection of mineralized areas, the Companywe conducted initial mapping, sampling and drilling at several project sites, including the Pichacani prospect, which has demonstrated a strong mercury and tellurium anomaly in a high sulfidation epithermal system. During 2003, the Companywe invested US$0.6 million to explore the Pichacani prospect, which had disappointing results. In 2004, the Companywe conducted first pass drilling with a total of 591 meters drilled in the Chilacocha epithermal prospect located in the Apurimac region.region, investing US$0.4 million. Due to disappointing results, the Company haswe have decided to cease activity in the Chilacocha prospect after engaging in environmental remedia tionremediation efforts. In 2005,200 5, we invested US$0.2 million in a regional exploration program on gold stream sediment anomalies previously detected in the Company plansPuno region in the Armapampa prospect with disappointing results. In 2006, we plan to continue itsour exploration activities in the Apurimac, Cusco and Puno regions and Ayacucho region.in new areas, with a renewed effort to evaluate third-party properties.

Soras. The Soras project is wholly-owned by the Companyus and located adjacent, to the east, of the Poracota project. The Soras project encompasses 23,16722,323 hectares of hydrothermally altered and mineralized volcanic terrain in the Arequipa region. In 2004 the Companyand 2005, we identified two main mineralized structures, the Soraya and Soraya 1 veins, with surface ore grades of up to 26 grams per ton of gold. First passFirst-pass drilling at 347.5 meters identified two narrow gold interceptsveins with grades of 16 and 36 grams per ton of gold with highan average of 5.9 ounces of silver and copper grades.3.8 percent copper. In 2006, we plan to conduct underground workings and additional drilling to contour mineralization and generate new ore reserves.