UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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, 2012              | 
|  | OR                                                       | 
| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE | 
|  | SECURITIES EXCHANGE ACT OF 1934                          | 
|  | OR                                                       | 
| ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)     | 
|  | OF THE SECURITIES EXCHANGE ACT OF 1934                   | 

Date of event requiring this shell company
report



For the transition period from          to



Commission file number 001-14370



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, LA VICTORIA, LIMA 13, PERU

(Address of principal executive offices)



Carlos E. Gálvez, Vice President
and Chief Financial Officer

Telephone: (511) 419-2540

Facsimile: (511) 471-7349

Address: Carlos Villarán 790, Santa
Catalina, La Victoria, Lima 13, Perú

(Name, telephone, e-mail and/or facsimile
number and address of company contact person)



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



|Title of each class                                                                                                                                                                             |  | Name of each exchange on which registered                                                              
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------
|Common shares, nominal (par) value of ten Peruvian Nuevos
        Soles per share (Common Shares)
        
        American Depositary Shares (ADSs) representing one Common
        Share each |  | New York Stock Exchange Inc.٭
        Lima Stock Exchange
        
        New York Stock Exchange Inc.






*Not for trading but only in
connection with the registration of ADSs pursuant to the requirements of the Securities and Exchange Commission.








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/.10.00 per share     |  |  | 274,889,924 | *
|----------------------------------------------------------- |  |  | ----------- | -
|Investment shares nominal (par) value of S/.10.00 per share |  |  | 744,640     |  



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



YesxNo ̈



If this report is
an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934.



Yes ̈Nox



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.



YesxNo ̈



Indicate by check
mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files).



Yes ̈No ̈



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.



Large
accelerated filerxAccelerated filer ̈Non-accelerated filer ̈



Indicate by check
mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:



|U.S. GAAP ̈ | International Financial Reporting Standards as issued by the International Accounting Standards Boardx | Other ̈
|---------- | ------------------------------------------------------------------------------------------------------ | ------



If “Other”
has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has
elected to follow.



Item 17 ̈Item 18 ̈



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).



Yes ̈Nox


















TABLE OF CONTENTS



|             |                                                                              | Page
|------------ | ---------------------------------------------------------------------------- | ----
|             |                                                                              |     
|INTRODUCTION |                                                                              | 1   
|             |                                                                              |     
|PART I       |                                                                              |     
|ITEM 1.      | Identity of Directors, Senior Management and Advisers                        | 3   
|             |                                                                              |     
|ITEM 2.      | Offer Statistics and Expected Timetable                                      | 3   
|             |                                                                              |     
|ITEM 3.      | Key Information                                                              | 3   
|             |                                                                              |     
|ITEM 4.      | Information on the Company                                                   | 23  
|             |                                                                              |     
|ITEM 4A.     | Unresolved Staff Comments                                                    | 82  
|             |                                                                              |     
|ITEM 5.      | Operating and Financial Review and Prospects                                 | 83  
|             |                                                                              |     
|ITEM 6.      | Directors, Senior Management and Employees                                   | 127 
|             |                                                                              |     
|ITEM 7.      | Major Shareholders and Related Party Transactions                            | 135 
|             |                                                                              |     
|ITEM 8.      | Financial Information                                                        | 137 
|             |                                                                              |     
|ITEM 9.      | The Offer and Listing                                                        | 140 
|             |                                                                              |     
|ITEM 10.     | Additional Information                                                       | 142 
|             |                                                                              |     
|ITEM 11.     | Quantitative and Qualitative Disclosures About Market Risk                   | 152 
|             |                                                                              |     
|ITEM 12.     | Description of Securities Other Than Equity Securities                       | 153 
|             |                                                                              |     
|PART II      |                                                                              |     
|ITEM 13.     | Defaults, Dividend Arrearages and Delinquencies                              | 155 
|             |                                                                              |     
|ITEM 14.     | Material Modifications to the Rights of Security Holders and Use of Proceeds | 155 
|             |                                                                              |     
|ITEM 15.     | Controls and Procedures                                                      | 155 
|             |                                                                              |     
|ITEM 16A.    | Audit Committee Financial Expert                                             | 157 
|             |                                                                              |     
|ITEM 16B.    | Code of Ethics                                                               | 157 
|             |                                                                              |     
|ITEM 16C.    | Principal Accountant Fees and Services                                       | 157 
|             |                                                                              |     
|ITEM 16D.    | Exemptions from the Listing Standards for Audit Committees                   | 158 
|             |                                                                              |     
|ITEM 16E.    | Purchases of Equity Securities by the Issuer and Affiliated Purchasers       | 158 
|             |                                                                              |     
|ITEM 16F.    | Change in Registrant’s Certifying Accountant                                 | 158 













|ITEM 16G. | Corporate Governance   | 158
|--------- | ---------------------- | ---
|          |                        |    
|ITEM 16H. | Mine Safety Disclosure | 159
|          |                        |    
|PART III  |                        |    
|ITEM 17.  | Financial Statements   | 159
|          |                        |    
|ITEM 18.  | Financial Statements   | 159
|          |                        |    
|ITEM 19.  | Exhibits               | 160











INTRODUCTION



Presentation of Financial Information



As used in this Annual
Report on Form 20-F, or Annual Report, unless the context otherwise requires, references to “we,” “us,”
“our,” “Company,” “BVN” and “Buenaventura” mean 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, or Peru.



Until December 31,
2010, we presented our consolidated financial statements, which we refer to as our Financial Statements, in conformity with accounting
principles generally accepted in Peru, or Peruvian GAAP. Effective January 1, 2011, we changed the accounting principles governing
the presentation of our consolidated financial statements from Peruvian GAAP to International Financial Reporting Standards, or
IFRS, as issued by the International Accounting Standards Board, or the IASB.



Pursuant to the rules
of the United States Securities and Exchange Commission, or the SEC, this Annual Report includes certain separate financial statements
and other financial information of Minera Yanacocha S.R.L., or Yanacocha, and Sociedad Minera Cerro Verde S.A.A., or Cerro Verde.
Yanacocha and Cerro Verde maintain their financial books and records in U.S. Dollars and present their financial statements in
accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, and IFRS as issued by the
IASB, respectively. See Note 9 to the Financial Statements.



We record our investments
in Yanacocha and Cerro Verde in accordance with the equity method as described in “Item 5. Operating and Financial Review
and Prospects—Buenaventura—General” and Note 2.3(e) to the Financial Statements. Our partnership interest in
Yanacocha was calculated at 43.65 percent for the years ended December 31, 2011 and 2012. As of December 31, 2011 and 2012, our
equity interest in Cerro Verde was 19.35 percent and 19.58 percent, respectively.



Forward-Looking Statements



Certain statements
contained in this Annual Report are “forward-looking statements” as defined in the U.S. Private Securities Litigation
Reform Act of 1995 and are intended to be covered by the safe harbor provided for under these sections. Our forward-looking statements
are based on management’s assumptions and beliefs in light of the information currently available to it and may include,
without limitation:



| | · | our, Yanacocha’s and Cerro Verde’s costs and expenses;
| | - | ------------------------------------------------------



| | · | estimates of future costs applicable to sales;
| | - | ----------------------------------------------



| | · | estimates of future exploration and production results;
| | - | -------------------------------------------------------



| | · | plans for capital expenditures;
| | - | -------------------------------



| | · | expected commencement dates of mining or metal production operations; and
| | - | -------------------------------------------------------------------------



| | · | estimates regarding potential cost savings and operating performance.
| | - | ---------------------------------------------------------------------



1







The words “anticipate,”
“may,” “can,” “plan,” “believe,” “estimate,” “expect,”
“project,” “intend,” “likely,” “will,” “should,” “to be”
and any similar expressions are intended to identify those assertions as forward-looking statements. In making any forward-looking
statements, we believe that the expectations are based on reasonable assumptions. We caution readers that those statements are
not guarantees of future performance and our actual results may differ materially from those anticipated, projected or assumed
in the forward-looking statements. Important factors that can cause our actual results to differ materially from those anticipated
in the forward-looking statements include:



| | · | our, Yanacocha’s and Cerro Verde’s results of exploration;
| | - | ----------------------------------------------------------



| | · | the results of our joint ventures and our share of the production of, and the income received from,
such joint ventures;
| | - | ------------------------------------------------------------------------------------------------------------------------



| | · | commodity prices;
| | - | -----------------



| | · | production rates;
| | - | -----------------



| | · | geological and metallurgical assumptions;
| | - | -----------------------------------------



| | · | industry risks;
| | - | ---------------



| | · | timing of receipt of necessary governmental permits or approvals;
| | - | -----------------------------------------------------------------



| | · | regulatory changes;
| | - | -------------------



| | · | political risks;
| | - | ----------------



| | · | inaccurate estimates of reserves or Mineralized Material Not in Reserve;
| | - | ------------------------------------------------------------------------



| | · | anti-mining protests or other potential issues with local community relationships;
| | - | ----------------------------------------------------------------------------------



| | · | labor relations;
| | - | ----------------



| | · | environmental risks; and
| | - | ------------------------



| | · | other factors described in more detail under “Item 3. Key Information—D. Risk Factors.”
| | - | ---------------------------------------------------------------------------------------



Many of the assumptions
on which our forward-looking statements are based are likely to change after our forward-looking statements are made, including,
for example, commodity prices, which we cannot control, and our, Yanacocha’s and Cerro Verde’s production volumes and
costs, some aspects of which we may or may not be able to control. Further, we may make changes to our business plans that could
or will affect our results. We do not intend to update our forward-looking statements, notwithstanding any changes in our assumptions,
changes in our business plans, our actual experience or other changes, and we undertake no obligation to update any forward-looking
statements more frequently than required by applicable securities laws.



2







PART I



ITEM 1.          Identity
of Directors, Senior Management and Advisers



Not applicable.



ITEM 2.          Offer
Statistics and Expected Timetable



Not applicable.



ITEM 3.          Key
Information



A. Selected Financial Data



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 Financial Statements, including the notes
thereto appearing elsewhere in this Annual Report. The selected financial information as of December 31, 2011 and 2012, and
for the years ended December 31, 2010, 2011 and 2012, is derived from the consolidated statement of financial position, consolidated
statements of income and statement of comprehensive income, respectively, included in the Financial Statements appearing elsewhere
in this Annual Report. The report of Medina, Zaldívar, Paredes & Asociados (a member firm of Ernst & Young Global)
on our 2010, 2011 and 2012 Financial Statements appears elsewhere in this Annual Report.Our 2010, 2011 and 2012 Financial
Statements are prepared and presented in accordance with IFRS as issued by the IASB, which differs in certain respects from U.S.
GAAP. For periods up to and including the year ended December 31, 2010, we prepared our financial statements in accordance with
Peruvian GAAP. Our consolidated financial statements for the year ended December 31, 2011 were the first that we prepared in accordance
with IFRS as issued by the IASB. The operating data presented below are derived from our 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—Buenaventura,” the Financial Statements and the related notes thereto and other financial information
included in this Annual Report.



3







|                                                                 |  | As of and for the year ended December 31, |            
|---------------------------------------------------------------- |  | ----------------------------------------- | -----------
|                                                                 |  | 2010                                      |            
|                                                                 |  | (In thousands of US$)(1)                  |            
|Income statement data:                                           |  |                                           |            
|IFRS(2)                                                          |  |                                           |            
|Net sales                                                        |  |                                           | 1,047,885  
|Royalty income                                                   |  |                                           | 55,883     
|Total income                                                     |  |                                           | 1,103,768  
|                                                                 |  |                                           |            
|Operating costs:                                                 |  |                                           |            
|Cost of sales, without considering depreciation and amortization |  |                                           | (347,129   
|Exploration in units in operation                                |  |                                           | (91,441    
|Depreciation and amortization                                    |  |                                           | (74,864    
|Royalties                                                        |  |                                           | (52,270    
|Total operating costs                                            |  |                                           | (565,704   
|Gross income                                                     |  |                                           | 538,064    
|                                                                 |  |                                           |            
|Operating expenses:                                              |  |                                           |            
|Administrative expenses                                          |  |                                           | (107,237   
|Exploration in non-operating areas                               |  |                                           | (36,105    
|Selling expenses                                                 |  |                                           | (9,375     
|Reversal (provision) for impairment of long-lived assets         |  |                                           | 13,135     
|Excess of workers’ profit sharing                                |  |                                           | -          
|Reimbursement of exploration expenses on projects                |  |                                           | 15,013     
|                                                                 |  |                                           |            
|Other, net                                                       |  |                                           | 10,653     
|Total operating expenses                                         |  |                                           | (113,916   
|Operating income                                                 |  |                                           | 424,148    
|                                                                 |  |                                           |            
|Other income (expenses), net:                                    |  |                                           |            
|Share in the results of associates under equity method           |  |                                           | 428,885    
|Interest income                                                  |  |                                           | 8,203      
|Interest expense                                                 |  |                                           | (12,271    
|Net gain (loss) from currency exchange difference                |  |                                           | (750       
|Total other income, net                                          |  |                                           | 424,067    
|                                                                 |  |                                           |            
|Income before income tax                                         |  |                                           | 848,215    
|Income tax                                                       |  |                                           | (123,326   
|Net income                                                       |  |                                           | 724,889    
|Net income attributable to non-controlling interest              |  |                                           | 64,068     
|                                                                 |  |                                           |            
|Net income attributable to Buenaventura                          |  |                                           | 660,821    
|                                                                 |  |                                           |            
|Basic and diluted earnings per share(3)(4)                       |  |                                           | 2.60       
|                                                                 |  |                                           |            
|Basic and diluted earnings per ADS(3)(4)                         |  |                                           | 2.60       
|Dividends per share                                              |  |                                           | 0.46       
|                                                                 |  |                                           |            
|Average number of shares outstanding                             |  |                                           | 254,442,328
|                                                                 |  |                                           |            
|Statement of financial position data:                            |  |                                           |            
|IFRS(2)                                                          |  |                                           |            
|Total assets                                                     |  |                                           | 3,279,346  
|Financial obligations                                            |  |                                           | 57,152     



4







|                                |  | As of and for the year ended December 31, |            
|------------------------------- |  | ----------------------------------------- | -----------
|                                |  | 2010                                      |            
|                                |  | (In thousands of US$)(1)                  |            
|Capital stock                   |  |                                           | 750,540    
|Shareholders’ equity            |  |                                           | 2,845,337  
|                                |  |                                           |            
|Operating data (unaudited):     |  |                                           |            
|Production(5)                   |  |                                           |            
|Gold (oz.)                      |  |                                           | 481,768    
|Silver (oz.)                    |  |                                           | 14,840,678 
|Proven and probable reserves(6) |  |                                           |            
|Gold (oz.)                      |  |                                           | 1,772,000  
|Silver (oz.)                    |  |                                           | 152,161,000








| | (1) | Except per share, per ADS, outstanding shares and operating data.
| | --- | -----------------------------------------------------------------

| | (2) | Effective January 1, 2011, we changed the accounting principles governing our presentation of our
consolidated financial statements from Peruvian GAAP to IFRS. Acccordingly, our financial information for the year ended December
31, 2010 has been presented in accordance with IFRS.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Income per share has been calculated for each year as
net income divided by average number of shares outstanding during the year. As of March 31, 2010, 2011 and 2012, we had 274,889,924
outstanding Common Shares, including 21,130,260 treasury shares. As of March 31, 2010, 2011 and 2012, we had 744,640 outstanding
Investment Shares, including 61,976 treasury shares as of March 31, 2010 and 2011 and 231,733 treasury shares as of March 31,
2012.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | We have no outstanding options, warrants or convertible securities that would have a dilutive effect
on earnings per share. As a result, there is no difference between basic and diluted earnings per share or ADS.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | The amounts in this table reflect the total production of all of our consolidated subsidiaries,
including Sociedad Minera El Brocal S.A.A., or El Brocal, in which we owned a 53.76% controlling equity interest, and Minera La
Zanja S.R.L., or La Zanja, in which we owned a 53.06% controlling equity interest, in each case as of December 31, 2012. The production
data in this table reflect 100% of El Brocal’s and La Zanja’s production. For the years ended December 31, 2010, 2011
and 2012, El Brocal produced 2.5 million, 2.9 million and 2.8 million ounces of silver, respectively, of which our equity share
was 1.2 million, 1.6 million and 1.4 million ounces of silver, and La Zanja produced 43,727, 134,190 and 112,387 ounces
of gold, respectively, of which our equity share was 23,201, 71,201 and 59,633 ounces of gold, and 38,155, 363,927
and 387,877 ounces of silver, respectively, of which our equity share was 20,245, 193,100 and 205,808 ounces of silver.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | The conceptual framework used to estimate proven and probable reserves for our wholly-owned mines as of
December 31, 2010 and 2011 were reviewed by an independent consultant, Algon Investment S.R.L. Algon Investment S.R.L. is in the
process of reviewing the framework used to estimate proven and probable reserves for our wholly-owned mines as of December 31,
2012. The conceptual framework used to estimate proven and probable reserves for El Brocal’s mines as of December 31, 2010
and 2011 were reviewed by independent consultants, AMEC plc and MINTEC Inc., respectively. MINTEC Inc. is in the process of reviewing
the conceptual framework used to estimate proven and probable reserves for El Brocal’s mines as of December 31, 2012.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5







Yanacocha
Selected Financial Information and Operating Data



The following table
presents selected financial information and operating data for Yanacocha at the dates and for each of the periods indicated. This
information should be read in conjunction with, and is qualified in its entirety by reference to, Yanacocha’s audited consolidated
financial statements as of December 31, 2011 and 2012 and for the years ended December 31, 2010, 2011 and 2012, or the
Yanacocha Financial Statements. The report of Dongo-Soria Gaveglio y Asociados on the Yanacocha Financial Statements appears elsewhere
in this Annual Report. The selected financial information as of December 31, 2008, 2009 and 2010 and for the years ended December
31, 2008 and 2009 has been derived from balance sheets and statements of income, respectively, which are not included in this Annual
Report. The Yanacocha Financial Statements are prepared and presented in accordance with U.S. GAAP, which differ in certain respects
from IFRS. See Note 9(e.1) to the Financial Statements for a reconciliation to U.S. GAAP of net income and shareholders’
equity as of and for the years ended December 31, 2010, 2011 and 2012. The operating data presented below, which are based on 100
percent of Yanacocha’s production and reserves, are derived from Yanacocha’s records and have 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,” the Yanacocha Financial Statements and the related notes thereto and other financial information included
in this Annual Report.



6







|                                                                       |  | As of and for the year ended December 31, |          
|---------------------------------------------------------------------- |  | ----------------------------------------- | ---------
|                                                                       |  | 2008                                      |          
|                                                                       |  | (In thousands of US$)(1)                  |          
|                                                                       |  |                                           |          
|Income statement data:                                                 |  |                                           |          
|U.S. GAAP                                                              |  |                                           |          
|                                                                       |  |                                           |          
|Revenues                                                               |  |                                           | 1,612,618
|                                                                       |  |                                           |          
|Costs and expenses:                                                    |  |                                           |          
|Costs applicable to sales                                              |  |                                           | (659,867 
|Depreciation, depletion and amortization                               |  |                                           | (169,131 
|Reclamation and remediation                                            |  |                                           | (11,174  
|Exploration costs                                                      |  |                                           | (28,151  
|Write-down of long-lived assets                                        |  |                                           | (442     
|General and administrative costs                                       |  |                                           | (3,168   
|Other expenses                                                         |  |                                           | (71,808  
|Total operating expenses                                               |  |                                           | (943,741 
|Operating income                                                       |  |                                           | 668,877  
|Interest expense and other                                             |  |                                           | 3,642    
|Pre-tax income                                                         |  |                                           | 672,519  
|Income tax provision                                                   |  |                                           | (196,057 
|Net income before cumulative effect of change in accounting principles |  |                                           | 476,462  
|Cumulative effect of change in accounting principle, net               |  |                                           | -        
|Net income and comprehensive income                                    |  |                                           | 476,462  
|                                                                       |  |                                           |          
|Statement of financial position data:                                  |  |                                           |          
|U.S. GAAP                                                              |  |                                           |          
|Total assets                                                           |  |                                           | 1,891,963
|Total debt                                                             |  |                                           | 205,618  
|Partners’ equity                                                       |  |                                           | 1,212,787
|Operating data (unaudited):                                            |  |                                           |          
|Gold produced (oz.)                                                    |  |                                           | 1,810,338
|Gold proven and probable reserves (thousands of oz.)                   |  |                                           | 24,850   










| | (1) | Except operating data.
| | --- | ----------------------



7







Cerro Verde Selected Financial Information and Operating
Data



The following table
presents selected financial information and operating data for Cerro Verde 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, Cerro Verde’s audited
financial statements as of December 31, 2011 and 2012 and for the years ended December 31, 2010, 2011 and 2012, or the
Cerro Verde Financial Statements. The selected financial information as of December 31, 2010 has been derived from a balance sheet
that is not included in this Annual Report. The report of Medina, Zaldívar, Paredes & Asociados on Cerro Verde’s
financial statements appears elsewhere in this Annual Report. The Cerro Verde Financial Statements are prepared and presented in
accordance with IFRS as issued by the IASB, which differs in certain respects from U.S. GAAP. Until December 31, 2010, Cerro Verde
presented its financial statements in conformity with Peruvian GAAP. The operating data presented below, which are based on 100
percent of Cerro Verde’s production and reserves, are derived from Cerro Verde’s records and have not been subject
to audit. The financial information presented below should be read in conjunction with “Item 5. Operating and Financial Review
and Prospects—Cerro Verde,” the Cerro Verde Financial Statements and the related notes thereto and other financial
information included in this Annual Report.



8







|                                            |  | As of and for the year ended December 31, |            
|------------------------------------------- |  | ----------------------------------------- | -----------
|                                            |  | 2010(2)                                   |            
|                                            |  | (In thousands of US$)(1)                  |            
|Income statement data:                      |  |                                           |            
|IFRS(2)                                     |  |                                           |            
|Net sales                                   |  |                                           | 2,368,988  
|Total revenues                              |  |                                           | 2,368,988  
|Costs of sales                              |  |                                           |            
|Total costs of sales                        |  |                                           | (645,959   
|Gross margin                                |  |                                           | 1,723,029  
|Operating expenses                          |  |                                           |            
|Selling expenses                            |  |                                           | (76,638    
|Excess of workers’ profit sharing           |  |                                           | (34,427    
|Expenses related to water plant             |  |                                           | (4,300     
|Voluntary contribution                      |  |                                           | (41,081    
|Other operating expenses                    |  |                                           | (10,749    
|Total operating expenses                    |  |                                           | (167,195   
|Operating income                            |  |                                           | 1,555,834  
|Other income (expenses), net                |  |                                           |            
|Financial expense                           |  |                                           | (101       
|Financial income                            |  |                                           | 1,261      
|Exchange Difference, net                    |  |                                           | 669        
|Total other income (expenses), net          |  |                                           | 1,829      
|                                            |  |                                           |            
|Profit before income tax                    |  |                                           | 1,557,663  
|                                            |  |                                           |            
|Income tax                                  |  |                                           | (483,270   
|Net income                                  |  |                                           | 1,074,393  
|                                            |  |                                           |            
|Basic and diluted earnings per share        |  |                                           | 3.069      
|Dividends per share                         |  |                                           | 2.714      
|                                            |  |                                           |            
|Average number of shares outstanding        |  |                                           | 350,056,012
|                                            |  |                                           |            
|Statement of financial position data:       |  |                                           |            
|IFRS(2)                                     |  |                                           |            
|Total assets                                |  |                                           | 2,294,078  
|Total debt                                  |  |                                           | -          
|Capital stock                               |  |                                           | 990,659    
|Shareholders’ equity                        |  |                                           | 1,599,239  
|                                            |  |                                           |            
|Operating data (unaudited):                 |  |                                           |            
|Production:                                 |  |                                           |            
|Copper (in thousands of recoverable pounds) |  |                                           | 667,363    
|Proven and probable reserves:               |  |                                           |            
|Copper (in thousands of metric tons)        |  |                                           | 3,571,531  








| | (1) | Except per share and operating data
| | --- | -----------------------------------

| | (2) | Effective January 1, 2011, Cerro Verde changed the accounting principles governing the presentation
of its consolidated financial statements from Peruvian GAAP to IFRS. Accordingly, Cerro Verde’s financial information for
the year ended December 31, 2010 has been presented in accordance with IFRS. See Note 3 to the Cerro Verde Financial Statements.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



9







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 periods indicated, as published by the Superintendencia de Bancos y Seguros (Superintendent of Bank and
Insurance, or 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)



|Year |  | High(2) |       |  | Low(2) |  |       | Average(3) |  |  | Period end(4) | 
|---- |  | ------- | ----- |  | ------ |  | ----- | ---------- |  |  | ------------- | 
|     |  |         |       |  |        |  |       |            |  |  |               | 
|2008 |  |         | 3.141 |  |        |  | 2.690 |            |  |  | 2.922         | 
|2009 |  |         | 3.259 |  |        |  | 2.853 |            |  |  | 3.012         | 
|2010 |  |         | 2.856 |  |        |  | 2.787 |            |  |  | 2.826         | 
|2011 |  |         | 2.834 |  |        |  | 2.694 |            |  |  | 2.755         | 
|2012 |  |         | 2.710 |  |        |  | 2.551 |            |  |  | 2.640         | 



|         |  | High(5) |       |  | Low(5) |  |       | Average(6) |  |  | Period end(7) | 
|-------- |  | ------- | ----- |  | ------ |  | ----- | ---------- |  |  | ------------- | 
|2012     |  |         |       |  |        |  |       |            |  |  |               | 
|October  |  |         | 2.602 |  |        |  | 2.578 |            |  |  | 2.588         | 
|November |  |         | 2.616 |  |        |  | 2.579 |            |  |  | 2.599         | 
|December |  |         | 2.581 |  |        |  | 2.551 |            |  |  | 2.568         | 
|         |  |         |       |  |        |  |       |            |  |  |               | 
|2013     |  |         |       |  |        |  |       |            |  |  |               | 
|January  |  |         | 2.578 |  |        |  | 2.541 |            |  |  | 2.552         | 
|February |  |         | 2.587 |  |        |  | 2.567 |            |  |  | 2.579         | 
|March    |  |         | 2.604 |  |        |  | 2.586 |            |  |  | 2.595         | 










| | (1) | Expressed in nominal (not inflation adjusted) Nuevos Soles.
| | --- | -----------------------------------------------------------

| | (2) | Highest and lowest of the twelve month-end exchange rates for each year based on the offered rate.
| | --- | --------------------------------------------------------------------------------------------------

| | (3) | Average of month-end exchange rates based on the offered rate.
| | --- | --------------------------------------------------------------

| | (4) | End of period exchange rates based on the offered rate.
| | --- | -------------------------------------------------------

| | (5) | Highest and lowest of the exchange rates based on the offered rate on the last day of each month.
| | --- | -------------------------------------------------------------------------------------------------

| | (6) | Average of the exchange rates based on the offered rate on the last date of each day in the relevant month.
| | --- | -----------------------------------------------------------------------------------------------------------

| | (7) | The exchange rate based on the offered rate on the last day of each relevant month.
| | --- | -----------------------------------------------------------------------------------

Source:  SBS



On April 25, 2013,
the offered rate for Dollars as published by the SBS was S/.2.624 = US$1.00.



B. Capitalization and Indebtedness



Not applicable.



C. Reasons for the Offer and Use of Proceeds



Not applicable.



10







D. Risk Factors



Factors Relating to the Company



Our financial performance is highly dependent on the
performance of our partners under our mining exploration and operating agreements.



Our
participation in joint venture mining exploration projects and mining operations with other experienced mining companies is
an integral part of our business strategy. Our partners, co-venturers and other shareholders in these projects generally
contribute capital to cover the expenses of the joint venture or provide critical technological, management and
organizational expertise. The results of these projects can be highly dependent upon the efforts of our joint venture
partners and we rely on them to fulfill their obligations under our agreements. For example, our Yanacocha joint venture with
Newmont Mining Corporation, a Delaware corporation, or Newmont Mining, is dependent upon Newmont Peru Limited, Peruvian
Branch, or Newmont Peru, to provide management and other expertise to the Yanacocha project. If our counterparts do not carry
out their obligations to us or to third parties, or any disputes arise with respect to the parties’ respective rights
and obligations, the value of our investment in the applicable project could be adversely affected and we could incur
significant expense in enforcing our rights or pursuing remedies. There can be no assurance that our current or future
partners will fulfill their obligations under our agreements. In addition, we may be unable to exert control over strategic
decisions made in respect of such properties. For example, we currently depend on Newmont Peru to
conduct operations at Yanacocha and the Conga project, and should Yanacocha be unable to continue with the current
development plan at the Conga project, our mining partners in this project may reprioritize and reallocate capital
to development alternatives. See “Item 4. Information on
the Company—Yanacocha” and “Item 4. Information on the Company—Buenaventura—B.
Business Overview—Exploration.”



Our financial performance is highly dependent on the
prices of gold, silver, copper and other metals.



Our revenues are derived
primarily from the sale of ore concentrates containing gold and silver; the revenues of Yanacocha, in which we have a material
equity investment, are derived primarily from the sale of gold and silver; and the revenues of Cerro Verde, in which we have a
material equity investment, are derived primarily from copper sales. The prices that we, Yanacocha and Cerro Verde obtain for gold,
silver, copper and ore concentrates containing such metals, as applicable, are directly related to world market prices for such
metals. Such prices have historically fluctuated widely and are affected by numerous factors beyond our control, including the
overall demand for and worldwide supply of gold, silver, copper 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. We have in the past engaged in hedging activities,
such as forward sales and option contracts, to minimize our exposure to fluctuations in the prices of gold, silver and other metals;
however, we and our wholly-owned subsidiaries no longer hedge the price at which our gold and silver will be sold. In addition,
neither Yanacocha nor Cerro Verde engages in hedging activities. As a result, the prices at which we, Yanacocha and Cerro Verde
sell gold, silver, copper and ore concentrates, as applicable, are fully exposed to the effects of changes in prevailing market
prices.See “Item 11. Quantitative and Qualitative Disclosures About Market Risk” and Note 28 to the Financial
Statements. For information on gold and silver prices for each of the years in the five-year period ended December 31, 2011, see
“Item 4. Information on the Company—Buenaventura—B. Business Overview—Sales of Metal Concentrates.”



11







On December 31, 2012,
March 31, 2013 and April 24, 2013, the morning fixing price for gold on the London Bullion Market was US$1,664per ounce,
US$1,602 per ounce and US$1,451 per ounce, respectively.  On December 31, 2012 and March 31, 2013, the afternoon fixing spot
price of silver on the London market, or London Spot, was US$29.95per ounce and US$28.64per ounce, respectively. 
On December 31, 2012 and March 31, 2013, the London Metal Exchange Settlement price for copper was US$7,915,per metric
ton and US$7,582, per metric ton, respectively.



The world market prices
of gold, silver and copper have historically fluctuated widely and there is no assurance that the prices for these metals will
continue to maintain their current high historical levels. We cannot predict whether metal prices will rise or fall in the future.
A decline in the market price of one or more of these metals could adversely impact our revenues, net income and cash flows and
adversely affect our ability to meet our financial obligations.



In addition, sustained
low gold, silver or copper prices could reduce revenues further through production declines due to cessation of the mining of deposits,
or portions of deposits, that have become uneconomic at the then-prevailing market price; reduce or eliminate the profit that we
currently expect from reserves; halt or delay the development of new projects; reduce funds available for exploration; and reduce
existing reserves by removing ores from reserves that can no longer be economically processed at prevailing prices. Such declines
in price and/or reductions in operations could also cause significant volatility in our financial performance and adversely affect
the trading prices of our Common Shares and ADSs.



Economic, mining and other regulatory policies of the
Peruvian government, as well as political, regulatory and economic developments in Peru, may have an adverse impact on our, Yanacocha’s
and Cerro Verde’s businesses.



Our, Yanacocha’s
and Cerro Verde’s activities in Peru require us to obtain mining concessions or provisional permits for exploration and processing
concessions for the treatment of mining ores from the Peruvian Ministry of Energy and Mines, or MEM. Under Peru’s current
legal and regulatory regime, these mining and processing 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. Although we are, and Yanacocha and Cerro Verde have informed us that they are, current in the payment
of all amounts due in respect of mining and processing concessions, failure to pay such concession fees, processing fees or related
fines for two consecutive years could result in the loss of one or more mining rights and processing concessions, as the case may
be.



Mining companies are
also required to pay the Peruvian government mining royalties and/or mining taxes. See “Item 4. Information on the Company—Buenaventura—B.
Business Overview—Regulatory Framework—Mining Royalties and Taxes.” There can be no assurance that the Peruvian
government will not impose additional mining royalties or taxes in the future or that such mining royalties or taxes will not have
an adverse effect on our, Yanacocha’s or Cerro Verde’s results of operations or financial condition. Future regulatory
changes, changes in the interpretation of existing regulations or stricter enforcement of such regulations, including changes to
our concession agreements, may increase our compliance costs and could potentially require us to alter our operations. We cannot
assure you that future regulatory changes will not adversely affect our business, financial condition or results of operations.



12







Environmental and other laws and regulations may increase
our costs of doing business, restrict our operations or result in operational delays.



Our, Yanacocha’s
and Cerro Verde’s exploration, mining and milling activities, as well our and Yanacocha’s smelting and refining activities,
are 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.



We 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 our, Yanacocha’s and Cerro Verde’s operations
and require us, Yanacocha and Cerro Verde to make significant capital expenditures in the future. Although we believe that we are
substantially in compliance, and Yanacocha and Cerro Verde have advised us that they are 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 our, Yanacocha’s or Cerro Verde’s business or results of operations. See “Item 4. Information
on the Company—Buenaventura—B. Business Overview—Regulatory Framework—Environmental Matters” and
“—Permits” and “Item 4. Information on the Company—Yanacocha—B. Business Overview—Regulation,
Permit and Environmental Matters.”



Our and Yanacocha’s
ability to successfully obtain key permits and approvals to explore for, develop and successfully operate mines will likely depend
on our and Yanacocha’s ability to do so in a manner that is consistent with the creation of social and economic benefits
in the surrounding communities. Our and Yanacocha’s ability to obtain permits and approvals and to successfully operate in
particular communities or to obtain financing may be adversely impacted by real or perceived detrimental events associated with
our or Yanacocha’s activities or those of other mining companies affecting the environment, human health and safety or the
surrounding communities. Delays in obtaining or failure to obtain government permits and approvals may adversely affect our and
Yanacocha’s operations, including our and Yanacocha’s ability to explore or develop properties, commence production
or continue operations.



Our metals exploration efforts are highly speculative
in nature and may not be successful.



Precious metals exploration,
particularly gold exploration, is highly speculative in nature, involves many risks and frequently is unsuccessful. There can be
no assurance that our, Yanacocha’s or Cerro Verde’s 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 our or Yanacocha’s
exploration programs will result in the expansion or replacement of current production with new proven and probable ore reserves.



13







Advanced 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 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 operations to experience unexpected problems during the start-up phase.
See “Item 4. Information on the Company—Buenaventura—D. Property, Plants and Equipment—Our Properties—Reserves,”
“—Yanacocha—D. Property, Plants and Equipment—Yanacocha’s Properties—Reserves” and “Item
5. Operating and Financial Review and Prospects—Cerro Verde—A. Operating Results” for the price per ounce used
by us, Yanacocha and Cerro Verde, respectively, to calculate our respective proven and probable reserves.



Increased operating
costs could affect our 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 and electricity, as well as by the price of 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.



Our business is capital-intensive and we may not be able
to finance necessary capital expenditures required to execute our business plans.



Precious metals exploration
requires substantial capital expenditures for the exploration, extraction, production and processing stages and for machinery,
equipment and experienced personnel. Our estimates of the capital required for our projects may be preliminary or based on assumptions
we have made about the mineral deposits, equipment, labor, permits and other factors required to complete our projects. If any
of these estimates or assumptions change, the actual timing and amount of capital required may vary significantly from our current
anticipated costs. In addition, we may require additional funds in the event of unforeseen delays, cost overruns, design changes
or other unanticipated expenses. We may also incur debt in future periods or reduce our holdings of cash and cash equivalents in
connection with funding future acquisitions, existing operations, capital expenditures or in pursuing other business opportunities.
Our ability to meet our payment obligations will depend on our future financial performance, which will be affected by financial,
business, economic and other factors, many of which we are unable to control. There can be no assurance that we or Yanacocha will
generate sufficient cash flow and/or that we will have access to sufficient external sources of funds in the form of outside investment
or loans to continue exploration activities at the same or higher levels than in the past or that we will be able to obtain additional
financing, if necessary, on a timely basis and on commercially acceptable terms.



14







Estimates of proven and probable reserves are subject
to uncertainties and the volume and grade of ore actually recovered may vary from our estimates.



The proven and probable
ore reserve figures presented in this Annual Report are our, Yanacocha’s and Cerro Verde’s estimates, and there can
be no assurance that the estimated levels of recovery of gold, silver, copper and certain other metals will be realized. Such estimates
depend on geological interpretation and statistical inferences or assumptions drawn from drilling and sampling analysis, which
may prove to be materially inaccurate. Actual mineralization or formations may be different from those predicted. As a result,
reserve estimates may require revision based on further exploration development activity or actual production experience, which
could materially and adversely affect such estimates. No assurance can be given that our, Yanacocha’s or Cerro Verde’s
mineral resources constitute or will be converted into reserves. Market price fluctuations of gold, silver and 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 our or Yanacocha’s profitability in any particular accounting period. See “Item 4. Information
on the Company—Buenaventura—D. Property, Plants and Equipment—Our Properties—Reserves” and “Item
4. Information on the Company—D. Property, Plants and Equipment—Yanacocha—Yanacocha’s Properties—Reserves.”



We and Yanacocha may be unable to replace reserves as
they become depleted by production.



As we and Yanacocha
produce gold, silver, zinc and other metals, we and Yanacocha deplete our respective ore reserves for such metals. To maintain
production levels, we and Yanacocha must replace depleted reserves by exploiting known ore bodies and locating new deposits. Exploration
for gold, silver and the other metals produced is highly speculative in nature. Our and Yanacocha’s exploration projects
involve significant risks and are often unsuccessful. Once a site is discovered with mineralization, we and Yanacocha may require
several years between initial drilling and mineral production, and the economic feasibility of production may change during such
period. Substantial expenditures are required to establish proven and probable reserves and to construct mining and processing
facilities. Based on the current recovery rate and estimated gold production levels in 2012, Yanacocha’s proven and probable
reserves as of December 31, 2012 will be depleted by 2015 unless Yanacocha continues to add to its reserves. As a result, there
can be no assurance that current or future exploration projects will be successful and there is a risk that our depletion of reserves
will not be offset by new discoveries. See “Item 4. Information on the Company—Buenaventura—B. Business
Overview—Exploration,” “—Yanacocha—B. Business Overview—Exploration,” “—D.
Property, Plants and Equipment—Reserves,” “—Yanacocha’s Properties—Reserves” and “Item
5. Operating and Financial Review and Prospects—Cerro Verde—A. Operating Results” for a summary of our, Yanacocha’s
and Cerro Verde’s estimated proven and probable reserves as of December 31, 2012.



Our operations are subject to risks, many of which are
not insurable.



The business of mining,
smelting and refining gold, silver, copper and other metals is generally subject to a number of risks and hazards, including industrial
accidents, labor disputes, unavailability of materials and equipment, unusual or unexpected geological conditions, changes in the
regulatory environment, environmental hazards and weather and other natural phenomena such as earthquakes, most of which are beyond
our control. 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. We, Yanacocha and Cerro
Verde each maintain insurance against risks that are typical in the mining industry in Peru and in amounts that we and Yanacocha
believe to be adequate but which may not provide adequate coverage in certain circumstances. No assurance can be given that such
insurance will continue to be available at economically feasible premiums or at all. 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 us or Yanacocha or to other companies within the industry.



15







Increases in equipment costs, energy
costs and other production costs, disruptions in energy supply and shortages in equipment and skilled labor may adversely affect
our results of operations.



In recent years, there
has been a significant increase in mining activity worldwide in response to increased demand and significant increases in prices
of natural resources. The opening of new mines and expansion of existing mines has led to increased demand for, and increased costs
and shortages of, equipment, supplies and experienced personnel. These cost increases have significantly increased overall
operating and capital budgets of companies like ours, and continuing shortages could affect the timing and feasibility of expansion
projects.



Energy represents a
significant portion of our production costs. Our principal energy sources are electricity, purchased petroleum products, natural
gas and coal. An inability to procure sufficient energy at reasonable prices or disruptions in energy supply could adversely affect
our profits, cash flow and growth opportunities. Our production costs are also affected by the prices of commodities we consume
or use in our operations, such as sulfuric acid, grinding media, steel, reagents, liners, explosives and diluents. The prices of
such commodities are influenced by supply and demand trends affecting the mining industry in general and other factors outside
our control and such prices are at times subject to volatile movements. Increases in the cost of these commodities or disruptions
in energy supply could make our operations less profitable, even in an environment of relatively high copper prices. Increases
in the costs of commodities that we consume or use may also significantly affect the capital costs of new projects.



We may be adversely affected by labor disputes.



Our ability to achieve
our goals and objectives is dependent, in part, on maintaining good relations with our employees. A prolonged labor disruption
at any of our material properties could have a material adverse impact on our results of operations. We, Yanacocha and Cerro Verde
have all experienced strikes or other labor-related work stoppages in the past. Most recently, we experienced a 15-day work stoppage
at our Orcopampa mine due to strikes in May and June and a further 9-day work stoppage at Orcopampa due to strikes in October
2012. As of December 31, 2012, unions represented approximately 54 percent of our permanent employees. Although we consider
our relations with our employees to be positive, there can be no assurance that we will not experience strikes or other labor-related
work stoppages that could have a material adverse effect on our operations and/or operating results in the future.



Our and Yanacocha’s operations are subject to political
and social risks.



Our and Yanacocha’s
exploration and production activities are potentially subject to political and social risks. Over the past several years, we and
Yanacocha have been the target of local political protests. In recent years, certain areas in the south and northern highlands
of Peru with significant mining developments have experienced strikes and protests related to the environmental impact of mining
activities. Such strikes and protests have resulted in commercial disruptions and a climate of uncertainty with respect to future
mining projects. There can be no assurance that these incidents will not continue or that similar incidents will not occur in areas
in which we and Yanacocha operate, or that the continuation or intensification of community protests will not adversely affect
our or Yanacocha’s exploration and production activities or our or Yanacocha’s results of operations or financial condition.



In addition, during
2011, Peru enacted Law No. 29785, the Law of Prior Consultation for Indigenous and Native Communities(Ley del Derecho
a la Consulta Previa a los Pueblos Indígenas y Originarios, Reconocido en el Convenio 169 de la Organización Internacional
del Trabajo). Implementing regulations thereunder were approved by Supreme Decree No. 001-2012-MC, which became effective on
April 2, 2012. This law establishes a prior consultation procedure that the Peruvian government must undertake in concert with
local indigenous communities whose collective rights may be directly affected by new legislative or administrative measures, including
the granting of new mining concessions. The implementing regulations specify the form and circumstances of the required consultation
and the manner in which agreements will be formalized, and cap the consultation process at 120 calendar days. Under the law, the
Peruvian governmental body responsible for issuing or approving the administrative measure or decree in question, rather than the
affected local indigenous community, retains the right to approve or reject the relevant legislative or administrative matter following
such consultation. However, to the extent that any future projects operated by us, Yanacocha or Cerro Verde require legislative
or administrative measures that impact local indigenous communities, the required prior consultation procedure may result in delays,
additional expenses or failure to obtain approval for such new project.



16







We could face geotechnical challenges, which could adversely
impact our production and profitability.



No assurances can be
given that unanticipated adverse geotechnical and hydrological conditions, such as landslides and pit wall failures, will not occur
in the future or that such events will be detected in advance. Geotechnical instabilities can be difficult to predict and are often
affected by risks and hazards outside of our control, such as severe weather and considerable rainfall, which may lead to periodic
floods, mudslides, wall instability and seismic activity, which may result in slippage of material.



Geotechnical failures
could result in limited or restricted access to mine sites, suspension of operations, government investigations, increased monitoring
costs, remediation costs, loss of ore and other impacts, which could cause one or more of our projects to be less profitable than
currently anticipated and could result in a material adverse effect on our results of operations and financial position.



We rely on contractors to conduct a
significant portion of our operations and mine development projects.



A significant portion
of our operations and mine development projects are currently conducted by contractors. As a result, our operations are subject
to a number of risks, some of which are outside our control, including:



| | · | failure of a contractor to perform under its agreement;
| | - | -------------------------------------------------------



| | · | interruption of operations or increased costs in the event that a
contractor ceases its business due to insolvency or other unforeseen events;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------



| | · | failure of a contractor to comply with applicable legal and regulatory
requirements, to the extent it is responsible for such compliance; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------



| | · | problems of a contractor with managing its workforce, labor unrest
or other employment issues.
| | - | ----------------------------------------------------------------------------------------------



In addition, we may
incur liability to third parties as a result of the actions of our contractors. The occurrence of one or more of these risks could
adversely affect our results of operations and financial position.



We are not, and do not intend to
become, regulated as an investment company under the U.S. Investment Company Act of 1940, as amended, or the Investment Company
Act, and if we were deemed an “investment company” under the Investment Company Act, applicable restrictions could
make it impractical for us to operate as contemplated.



As of December 31,
2012, we owned a 43.65 percent partnership interest in Yanacocha and a 19.58 percent equity interest in Cerro Verde. These interests
may constitute “investment securities” for purposes of the Investment Company Act.



17







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 SEC and are subject to substantial regulations with respect to capital structure, operations, transactions with affiliates
and other matters. If we were deemed to be an investment company and did not qualify for an exemption from the provisions of the
Investment Company Act, we would be required to register with the SEC and would be subject to such regulations, which would be
unduly burdensome and costly for us and possibly adversely impact us.



We received an order
from the SEC on April 19, 1996 declaring us 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. We intend to conduct our operations
and maintain our investments in a manner, and will take appropriate actions as necessary, to ensure we will not be deemed to be
an investment company in the future. The SEC, 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.



Our or Yanacocha’s
inability to maintain positive relationships with the communities in which we operate may affect our or Yanacocha’s reputation
and financial condition.



Our and Yanacocha’s
relationships with the communities in which we operate are critical to ensuring the future success of our existing operations and
the construction and development of our projects. Adverse publicity generated by non-governmental organizations or local communities
related to extractive industries generally, or our or Yanacocha’s operations specifically, could have an adverse effect on
our reputations or financial condition and may impact our relationships with the communities in which we operate. In addition,
following the enactment of Law No. 29785, the Law of Prior Consultation for Indigenous and Native Communities in 2011, the Peruvian
government must undertake a prior consultation procedure in concert with local indigenous communities whose collective rights may
be directly affected by new legislative or administrative measures, including the granting of new mining concessions. Implementing
regulations under Law No. 29785 were approved by Supreme Decree No. 001-2012-MC, which became effective on April 2, 2012. The implementing
regulations specify the form and circumstances of the required consultation and the manner in which agreements will be formalized,
and cap the consultation process at 120 calendar days. Our and Yanacocha’s national reputation for maintaining positive relationships
with the communities in which we operate may affect the outcome of any such prior consultation process involving approvals that
we or Yanacocha seek for new projects. While we and Yanacocha are committed to operating in a socially responsible manner, there
is no guarantee that our efforts in this regard will mitigate this potential risk. We and Yanacocha have implemented extensive
community relations and security and safety initiatives to anticipate and manage social issues that may arise at our operations.
See “Item 4. Information on the Company—Yanacocha—B. Business Overview—Social Development.”



In November 2011, construction
activities at the Conga project were suspended at the request of Peru’s central government following increasing protests
in Cajamarca by anti-mining activists led by the regional president. At the request of the Peruvian central government, the environmental
impact assessment, or EIA, prepared in connection with the project, which was previously approved by the central government in
October 2010, was reviewed by independent experts in an effort to resolve allegations surrounding the environmental viability of
the Conga project. Construction was suspended for the duration of the review, except for sediment control work conducted in the
project area. The report was released in April 2012. As of the date of this Annual Report, Yanacocha is evaluating the report’s
findings. Progress continues on engineering and procurement work.



18







The Conga project is
located within close proximity of existing operations at Yanacocha. Due to local political and community protests, construction
and development activities at the Conga project were largely suspended in November 2011. The results of the Peruvian central government-initiated
EIA independent review, announced on April 20, 2012, confirmed that Yanacocha’s initial EIA met Peruvian and international
standards. The review made recommendations to provide additional water capacity and social funds, which Yanacocha has largely accepted.
Yanacocha announced its decision to move the project forward on a “water first” basis on June 22, 2012, which consists
of building the originally planned community water reservoirs prior to resuming any mine development. As a result, during 2013,
the project will be focused on building water reservoirs, completing the remaining engineering activities, and accepting delivery
of the main equipment purchases. Should Yanacocha be unable to continue with the current development plan at Conga, we or our mining
partners in this project may reprioritize and reallocate capital to development alternatives, which may result in a potential accounting
impairment. See “Item 4. Information on the Company—Yanacocha—B. Business Overview—Exploration.”



Factors Relating to Peru



Peruvian political
conditions may have an adverse impact on our, Yanacocha’s and Cerro Verde’s business.



All of our, Yanacocha’s
and Cerro Verde’s operations are conducted in Peru. Accordingly, our, Yanacocha’s and Cerro Verde’s business,
financial condition or results of operations 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 limitations on imports, restricted the ability of companies to dismiss employees, expropriated private sector assets
(including mining companies) and prohibited the remittance of profits to foreign investors.



In the second quarter
of 2011, Presidential and Congressional elections resulted in a change in government in Peru. During the third quarter of 2011,
the new government enacted four new tax laws. During 2012, the new administration, under President Ollanta Humala, largely supported
mining as a driver for the continued growth and future development of Peru. However, we are unable to predict whether the central
government will continue to take similar positions in the future. Furthermore, the regional government in Cajamarca actively opposed
the Conga project in 2012 and continues to reject the viability of its development. We cannot predict the future positions of either
the central government or regional governments on foreign investment, mining concessions, land tenure or other regulation. Any
change in government positions or laws on these issues could adversely affect the assets and operations of us, Yanacocha or Conga,
which could have a material adverse effect on our business, results of operations and financial position. Regulatory changes may
include increased labor regulations, environmental and other regulatory requirements, and additional taxes and royalties, and we
may experience future protests, community demands and road blockages. Additionally, any inability to continue to develop the Conga
project or operate at Yanacocha could have a material adverse impact on our business, results of operations and financial position
if Yanacocha is not able to replace its expected production.



19







Inflation, reduced economic growth and fluctuations in
the Nuevo Sol exchange rate may adversely affect our financial condition and results of operations.



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 the Indice de Precios al Consumidor, or IPC, and published by Instituto
Nacional de Estadística e Informática, orINEI,
has fallen from a high of 7,649.7 percent in 1990 to 2.6 percent in 2012. 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 a revaluation of 5.5
percent in 2012. 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, our financial position and results of operations,
and the market price of our Common Shares and 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, 2012 were US$64.0 billion as compared to US$48.8 billion at December 31, 2011. 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—A. Selected Financial Data—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, Peru and other emerging market countries could affect the prices of our Common Shares and American Depositary Receipts.



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. Within Peru, news of Ollanta Humala’s June 5, 2011 victory in the
presidential election was followed by a 12 percent decline in both the Lima stock exchange (Bolsa de Valores de Lima, or
BVL) and BVL’s mining sub-index the following day. The price of our American Depositary Receipts, or ADRs, fell 15 percent.
A number of banking analysts lowered their recommendations on Peruvian mining companies following the election as a result of concerns
of higher taxes and delays in mining projects.



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 regard 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.



20







Peruvian exchange and investment control policies could
affect dividends paid to holders of Common Shares and ADRs.



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 our 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 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—D. Exchange Controls.”



U.S. securities laws do not require us to disclose as much
information to investors as a U.S. issuer is required to disclose, and you may receive less information about us than you might
otherwise receive from a comparable U.S. company.



The corporate disclosure
requirements applicable to us may not be equivalent to the requirements applicable to a U.S. company and, as a result, you may
receive less information about us than you might otherwise receive in connection with a comparable U.S. company. We are subject
to the periodic reporting requirements of the United States Securities Exchange Act of 1934, as amended, or the Exchange Act, that
apply to “foreign private issuers.” The periodic disclosure required of foreign private issuers under the Exchange
Act is more limited than the periodic disclosure required of U.S. issuers.



Holders of our securities may find it difficult to enforce
judgments against us outside of Peru.



We are organized under
the laws of Peru. A significant majority of our 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 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 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. We have been advised by our 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 States federal securities laws.



Factors Relating to the Common Shares and ADSs



The concentration of our capital stock ownership with
the Benavides Family will limit our stockholders’ ability to influence corporate matters.



The aggregate percentage
of the economic interest of our outstanding share capital controlled by Alberto Benavides de la Quintana, our former Chairman and
Chief Executive Officer, and held by certain members of his immediate and extended family and their spouses, or the Benavides Family,
as of March 31, 2013 was 27.22 percent (including outstanding Common Shares and Investment Shares). Because of the significant
ownership interest the Benavides Family holds in common 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 significant influence
over the outcome of substantially all matters to be decided by a vote of shareholders.



21







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 us, The Bank of New York Mellon (formerly The Bank of New York), as depositary, or the Depositary, and the owners and beneficial
owners of ADSs, or the Amended and Restated Deposit Agreement, relating to our ADSs, if holders of ADSs 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 us, which will likely be Alberto Benavides de la Quintana, a discretionary proxy to vote such shares,
unless we inform the Depositary that we do not wish such proxy to be given.



Shareholders’ rights under Peruvian law may be
fewer and less well-defined than shareholders’ rights in other countries, including the United States.



Our 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. For example, Peruvian law does not provide for proceedings by
which non-controlling shareholders may file class action lawsuits or shareholder derivative actions against controlling shareholders
or officers and directors, and the procedural requirements to file shareholder actions in Peru differ from those of the United
States. As a result, holders of our shares may face difficulty enforcing their rights.



A sale of a substantial number of shares by the Benavides
Family could have an adverse impact on the price of our Common Shares and ADSs.



Sales of a substantial
number of our shares by members of the Benavides Family, or a market perception of the intention of members of the Benavides Family
to sell a substantial number of shares, 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 our share capital by our shareholders, including the
Benavides Family. Furthermore, under the Ley General de Sociedades Peruana, or Peruvian Companies Law, any restriction on
the free sale of shares in a sociedad anónima abierta(open stock company) such as we are, is null and void.



Holders of ADSs may be unable to exercise preemptive
rights and accretion rights available to the Common Shares underlying the ADSs.



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 us 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, or the Securities Act, is effective with respect
to such rights or an exemption from the registration requirement thereunder is available. Any such rights offering would have a
dilutive effect upon shareholders who are unable or unwilling to exercise their rights. We intend to evaluate, at the time of any
rights offering, the costs and potential liabilities associated with any registration statement as well as the associated benefits
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 we will file any such registration statement. 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 us will be diluted proportionately. The Depositary has discretion to make rights available to holders of ADSs or to
dispose of such rights and to make any net proceeds available to such holders. If, by the terms of any rights offering or for any
other reason, the Depositary is not able to make such rights or such net proceeds available to any holder of ADSs, the Depositary
may allow the rights to lapse.



22







ITEM 4.          Information
on the Company



In this
Item 4, we present information first with respect to Buenaventura, followed by information with respect to Yanacocha, in which
we have a 43.65 percent partnership interest.



BUENAVENTURA



A. History and Development



Overview



We are Peru’s
largest publicly traded precious metals company and are engaged in the exploration, mining and processing of gold, silver and,
to a lesser extent, other metals in Peru. We currently operate the Julcani, Recuperada, Orcopampa, Poracota, Uchucchacua, Antapite,
Ishihuinca, Shila-Paula, Mallay and Breapampa mines and have controlling interests in three other mining companies which operate
the Colquijirca, Marcapunta, Tantahuatay and La Zanja mines.We also own an electric power
transmission company and an engineering services consulting company and have non-controlling interests in several other mining
companies, including a significant ownership interest in Yanacocha, a Peruvian partnership that operates South America’s
largest gold mine, and Cerro Verde, a Peruvian company that operates a copper mine located in the south of Peru. For the year ended
December 31, 2012, our consolidated net sales were US$1,496 million and our consolidated
net income was US$684.7million. The tables below summarize the total production and our equity
share of production for the Julcani, Recuperada, Orcopampa, Poracota, Uchucchacua, Antapite, Ishihuinca, Shila-Paula, Mallay, Breapampa,
Colquijirca-Marcapunta, La Zanja, Tantahuatay, Yanacocha and Cerro Verde mines for the year ended December 31, 2012:



|                         |  | TOTAL
    PRODUCTION            |       |   | BUENAVENTURA’S
                                                                                                                           EQUITY
                                                                                                                           SHARE
                                                                                                                           OF PRODUCTION | 
|------------------------ |  | ------------------------------- | ----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|UNIT                     |  | Buenaventura’s Equity Ownership |       |   | Silver Oz                                                                                                                                                                                                                                                                                                                                                                                                                  | 
|                         |  |                                 |       |   |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Orcopampa                |  |                                 | 100   | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Poracota                 |  |                                 | 100   | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Uchucchacua              |  |                                 | 100   | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Julcani                  |  |                                 | 100   | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Recuperada               |  |                                 | 100   | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Antapite                 |  |                                 | 100   | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Ishihuinca               |  |                                 | 100   | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Shila-Paula              |  |                                 | 100   | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Mallay                   |  |                                 | 100   | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Breapampa                |  |                                 | 100   | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Colquijirca & Marcapunta |  |                                 | 53.76 | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|La Zanja                 |  |                                 | 53.06 | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Tantahuatay              |  |                                 | 40.06 | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Yanacocha                |  |                                 | 43.65 | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Cerro Verde              |  |                                 | 19.58 | % |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|                         |  |                                 |       |   |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|TOTAL
    PRODUCTION     |  |                                 |       |   |                                                                                                                                                                                                                                                                                                                                                                                                                            | 



Compañía
de Minas Buenaventura S.A.A., a sociedad anónima abierta (open stock company) under the laws of Peru,was
originally established in 1953 as a sociedad anónima (company) under the laws of Peru, and currently operates under
the laws of Peru. Our registered office is located at Carlos Villarán 790, Santa Catalina, La Victoria, Lima 13, Perú,
telephone no. 5-11-419-2500. Our Internet website address is http://www.buenaventura.com. The information on our website is not
a part of, and is not incorporated into, this document.



23







History



During the first several
decades of our operations, we focused on the exploration and development of silver mines in Peru, including our Julcani, Orcopampa
and Uchucchacua mines. Beginning in the early 1980s, we began to explore for gold and other metals in Peru to diversify our business
and reduce our dependence on silver. We expanded our mineral reserves through property acquisition and intensive exploration programs
designed to increase reserves and production of gold. We also conducted exploration leading to the discovery of gold mineralization
and subsequent production of gold at our Orcopampa, Shila, Ishihuinca and Antapite mines. In addition, we made significant equity
investments in Yanacocha, which operates South America’s largest gold mine, and Cerro Verde, which operates an open-pit copper
mine in Peru. As a result of these initiatives, the majority of our revenues are now derived from the production of gold. In 2012,
gold, copper, silver and other metals accounted for 59 percent, 19 percent, 18 percent and 4 percent, respectively, of our equity
share of revenues from our consolidated subsidiaries and our equity investees, Yanacocha, Cerro Verde and Compañía
Minera Coimolache S.A., or Coimolache.



Business Strategy



Our strategy is to
sustain our position as Peru’s largest, publicly-traded gold and silver mining company by expanding our reserves and production.
We are currently engaged in an active exploration and mine development program and participate in several mining exploration projects
with Newmont Mining, Minera Gold Fields Peru S.A., or Gold Fields, and Southern Copper Corporation, or SCC. In addition, we seek
to increase the efficiency and capacity of our mining operations. We are aware of our social and environmental responsibilities
and aim to excel in the prevention, mitigation and rehabilitation of mining-related disturbances.



Maintaining an Active Exploration Program



We view an active
exploration program as our primary means to obtain new reserves. As of December 31, 2012, we hold and currently evaluate, either
directly or in conjunction with exploration partners, 230,896 hectares of mining rights, excluding an additional 443,393hectares
in mining properties which are consolidated in our production units, including our La Zanja, Compañía Minera Colquirrumi
S.A., or Colquirrumi, and Compañía de Exploraciones, Desarrollo e Inversiones Mineras S.A.C., or Cedimin, subsidiaries
and our equity investee, Coimolache.



During 2012, we spent
approximately US$95.5 million on “greenfield” and US$153.0 million on “brownfield” exploration-related
investments primarily in Peru and, to a lesser extent, in Chile and Mexico. Our “greenfield” investments mainly focused
on the following exploration projects: Trapiche, Tambomayo, San Gregorio, Chancas, Hualgayoc, Marcapunta, Colquemayo, Surichata
and El Faique. Our “brownfield” investments were mainly focused in the Orcopampa, Poracota, Uchucchacua, Antapite,
Mallay, Recuperada and Julcani areas. We financed our 2012 exploration program with internal funds.



In 2013, we intend
to invest approximately US$100 to US$120 million in brownfield exploration projects. In 2013, we expect to invest approximately
US$70 to US$80 million, mainly in the following greenfield exploration projects: Tambomayo, Trapiche, San Gregorio, Hualgayoc,
Colquemayo and El Faique, among others.



24







Participation in Mining Exploration Agreements



In addition to managing
and operating precious metals mines, we participate in mining exploration agreements with mining partners to reduce risks, gain
exposure to new technologies and diversify revenues to include other base metals, such as copper and zinc. See “—B.
Business Overview—Exploration.” We believe that maintaining our focus on mining operations complements our partnership
strategy because the engineering and geological expertise gained from such operations enhances our ability to participate in and
contribute to those projects.



Capital Expenditures



Our capital expenditures
in the past three years have related principally to the acquisition of new mining properties, construction of new facilities and
renewal of plant and equipment. Capital expenditures relating to exploration are not included in the table below and are discussed
separately in “—B. Business Overview—Exploration.” Set forth below is information concerning capital expenditures
incurred by us in respect of each of our principal operating mines (not including capital expenditures for administrative purposes
or other non-mining subsidiaries) and by category of expenditure:



|                              |  | Year Ended December 31, |        
|----------------------------- |  | ----------------------- | -------
|                              |  | 2010                    |        
|                              |  |                         |        
|Julcani                       |  | US$                     | 853    
|Uchucchacua                   |  |                         | 11,781 
|Orcopampa(a)                  |  |                         | 17,490 
|Recuperada                    |  |                         | 1,284  
|Ishihuinca                    |  |                         | 17     
|Shila-Paula                   |  |                         | 1,429  
|Colquijirca and Marcapunta(a) |  |                         | 70,974 
|Antapite                      |  |                         | 302    
|Conenhua                      |  |                         | 3,204  
|Mallay                        |  |                         | 7,735  
|Breapampa                     |  |                         | -      
|La Zanja                      |  |                         | 48,998 
|Huanza                        |  |                         | 62,828 
|Río Seco                      |  |                         | -      
|Total                         |  | US$                     | 226,895



|                        |  | Year Ended December 31,(a) |        
|----------------------- |  | -------------------------- | -------
|                        |  | 2010                       |        
|                        |  |                            |        
|Machinery and equipment |  | US$                        | 12,658 
|Infrastructure          |  |                            | 187,534
|Mining                  |  |                            | 7,624  
|Milling                 |  |                            | 13,754 
|Transportation          |  |                            | 1,108  
|Communications          |  |                            | 309    
|Environmental           |  |                            | 249    
|Other                   |  |                            | 3,659  
|Total                   |  | US$                        | 226,895










25







| | (a) | For 2010, 2011 and 2012, includes US$57.4 million, US$43.8 million and US$103.6 million, respectively,
for the expansion of El Brocal plant from 6,000 metric tons per day to 18,000 metric tons per day. For 2010, includes $2.0 million
for the development of the Orcopampa tailing dam retreatment project. For 2011 and 2012, includes US$55.6 million and US$57.6 million,
respectively, for the construction of the Huanza hydroelectrical plant, US$20.3 million and US$37.0 million, respectively, for
the construction of the Breapampa mine and facilities, US$36.1 million and US$18.7 million, respectively, for the construction
of the Mallay mine and facilities and US$27.6 million and US$56.7 million, respectively, for the construction of the Rio Seco processing
plant.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We financed our capital
expenditures in 2010, 2011 and 2012 with internally-generated funds and a US$119 million financial lease agreement, which was used
to finance construction of the Huanza hydroelectric power station. See “Item 5. Operating and Financial Review and Prospects—Buenaventura—B.
Liquidity and Capital Resources—Long-Term Debt.”



We have budgeted approximately
US$300 million for capital expenditures for 2013. We continuously evaluate opportunities to expand our business within Peru, as
well as in other countries as opportunities arise, and expect to continue to do so in the future. We may in the future decide to
acquire part or all of the equity of, or undertake other transactions with, other companies involved in the same business as us
or in other related businesses. However, there can be no assurance that we will decide to pursue any such new activity or transaction.



B. Business Overview



Production



We principally produce
refined gold and silver, either as concentrates or doré bars, and other metals such as lead, zinc and copper as concentrates
that we distribute and sell locally and internationally. The following table sets forth the production of the Antapite, Julcani,
Uchucchacua, Orcopampa, Poracota, Recuperada, Mallay, Breapampa, Ishihuinca, Colquijirca, Marcapunta, La Zanja and Shila-Paula
mines 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. Production from Cerro Verde, Yanacocha and Tantahuatay are not included in these production figures.



|              |  | Year Ended December 31,(1) |           
|------------- |  | -------------------------- | ----------
|              |  | 2010                       |           
|Gold (oz.)(2) |  |                            | 481,768   
|Silver (oz.)  |  |                            | 14,840,678
|Zinc (ST)(3)  |  |                            | 49,151    
|Lead (ST)     |  |                            | 27,145    
|Copper (ST)   |  |                            | 19,012    










| | (1) | The amounts in this table reflect the total production of all of our consolidated subsidiaries,
including El Brocal and La Zanja, in which we owned a 53.76% and 53.06% controlling equity interest, respectively, as of December
31, 2012. The production data in this table reflect 100% of El Brocal’s and 100% of La Zanja’s production. For the
years ended December 31, 2010, 2011 and 2012, El Brocal produced 2.5, 2.9 and 2.8 million ounces of silver, respectively, of which
our equity share was 1.2, 1.6 and 1.4 million ounces of silver. For the years ended December 31, 2010, 2011 and 2012, La Zanja
produced 43,727, 134,190 and 112,387 ounces of gold, respectively, of which our equity share was 23,201, 71,201 and 59,633 ounces
of gold, and 38,155, 363,927 and 387,877 million ounces of silver, respectively, of which our equity share was 20,045, 193,100
and 205,808 million ounces of silver.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Throughout this Annual Report, “oz.” refers to troy ounces of a fineness of 999.9 parts
per 1,000, equal to 31.0135 grams.
| | --- | --------------------------------------------------------------------------------------------------------------------------

| | (3) | Throughout this Annual Report, “ST” refers to short tons, each weighing 2,000 avoirdupois
pounds.
| | --- | -------------------------------------------------------------------------------------------------



26







Exploration



We view exploration
as our primary means of generating growth value for shareholders and typically maintain a portfolio of active exploration projects
at various stages of exploration for mineral resources in Peru. We currently hold, either directly or in conjunction with exploration
partners, 230,896 hectares of mining rights as part of our exploration program. We hold an additional 443,393 hectares in mining
properties which are consolidated in our production units. We invested approximately US$95.4 million in exploration for Mineralized
Material Not in Reserve, or NRM,during 2012, including exploration related to the Trapiche, Tambomayo, San Gregorio, Chancas,
Hualgayoc, Marcapunta, Colquemayo, Surichata and El Faique projects.



In 2013, we expect
to invest approximately US$170.0 to US$200.0 million in greenfield exploration and brownfield exploration activities. Exploration
programs at our principal operating mines are not included in our exploration budget and are accounted for as part of the operating
costs for each mine. Exploration expenditures in greenfield and brownfield projects include all of the costs associated with geologists,
contractors, engineering, drilling equipment, metallurgical testing and environmental, social, engineering and economic feasibility
studies. Our exploration team prepares programs and budgets for individual projects each year and we allocate, subject to board
approval, the proper amount to finance each particular exploration activity considered worthwhile. In light of the nature of mining
exploration and in order to maintain flexibility to take advantage of opportunities, we allocate budgeted amounts by property or
project only in the case of high geological expectation as decided by management.We also allocate non-budgeted amounts
over the course of the year to new projects based on factual results, our needs and our geologists’ periodic evaluations
and opinions regarding the progress of each opportunity and its potential for further exploration of minerals.



An integral part of
our exploration program is the participation in mining exploration agreements with affiliates of experienced mining companies,
including Newmont Peru S.R.L., Compañía Minera Barrick Chile Limitada, Southern Copper Corporation, Gold Fields La
Cima and Minera Gold Fields Peru S.A. The benefits of these joint exploration projects include greater investment in the exploration
of our 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 management, geologists and engineers. In these mining exploration agreements, we may be the designated operator, an equity participant,
the manager or a combination of these and other functions.



We generally do not
conduct significant research and development activities other than our investments in geological research and exploration as described
herein.



The following table
lists our current mine development projects, our effective participation in each project, our partners with respect to each project,
the total hectares in each project, observed mineralization of each project and exploration expenditures for each project during
2010, 2011 and 2012.



27







|Exploration Projects     |  | Buenaventura’s Effective Participation                                                                                   |        |   | Principal Partners |      | Property Hectares                                                                                                                                                                                                                                                                                                                                                                                                          |  |        | Observed Mineralization |  | Total
                                                                                                       Exploration Expenditures
                                                                                                                                                                                                                                                        During 2010 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Total
                                                                                                       Exploration Expenditures
                                                                                                                                                                                                                                                        During 2011 |              |  | Total
                                                                                                       Exploration Expenditures
                                                                                                                                                                                                                                                        During 2012 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|------------------------ |  | ------------------------------------------------------------------------------------------------------------------------ | ------ | - | ------------------ | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | ----------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                         |  | At
                                                                                                       March 31, 2013 |        |   |                    |      | Total (Buenaventura and
                                                                                                                                                                                                                                                                                                                                                                                         Partners) |  |        | Buenaventura            |  |                                                                                                                                                                                                                                                                                                                                                                                                           | Total (Buenaventura and
                                                                                                                                                                                                                                                                                                                                                                                         Partners) |  |                                                                                                                                                                                                                                                                                                                                                                                                           | Buenaventura |  |                                                                                                                                                                                                                                                                                                                                                                                                           | Total (Buenaventura and
                                                                                                                                                                                                                                                                                                                                                                                         Partners)
|                         |  |                                                                                                                          |        |   |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                           |              |  |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                           
|                         |  |                                                                                                                          |        |   |                    |      | (US$ in millions)                                                                                                                                                                                                                                                                                                                                                                                                          |  |        | (US$ in millions)       |  |                                                                                                                                                                                                                                                                                                                                                                                                           | (US$ in millions)                                                                                                                                                                                                                                                                                                                                                                                                          | 
|                         |  |                                                                                                                          |        |   |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Buenaventura’s Projects: |  |                                                                                                                          |        |   |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                           |              |  |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                           
|                         |  |                                                                                                                          |        |   |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                           |              |  |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                           
|Breapampa(1)             |  |                                                                                                                          | 100.00 | % |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 41,866 |                         |  | Gold & silver                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 1.05                                                                                                                                                                                                                                                                                                                                                                                                      |              |  |                                                                                                                                                                                                                                                                                                                                                                                                           | 1.05                                                                                                                                                                                                                                                                                                                                                                                                                      
|Mallay(2)                |  |                                                                                                                          | 100.00 | % |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 7,030  |                         |  | Silver, lead & zinc                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 9.78                                                                                                                                                                                                                                                                                                                                                                                                      |              |  |                                                                                                                                                                                                                                                                                                                                                                                                           | 9.78                                                                                                                                                                                                                                                                                                                                                                                                                      
|                         |  |                                                                                                                          |        |   |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 99,459 |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 12.74                                                                                                                                                                                                                                                                                                                                                                                                     |              |  |                                                                                                                                                                                                                                                                                                                                                                                                           | 11.84                                                                                                                                                                                                                                                                                                                                                                                                                     












| | (1) | Prior to 2010, Breapampa was classified as a greenfield exploration project.
| | --- | ----------------------------------------------------------------------------

| | (2) | Prior to 2010, Mallay was classified as a brownfield exploration project. Includes 2010 Tinta, Condorsenja and Isguiz exploration
costs.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------



The following table lists our current greenfield
exploration projects, our effective participation in each project, our partners with respect to each project, the total hectares
in each project, observed mineralization of each project and the exploration expenditures for each project during 2010, 2011 and
2012.



|Exploration Projects(1)(2)  |  | Buenaventura’s Effective Participation                                                                                   |       |   | Principal Partners |             | Property Hectares                                                                                                                                                                                                                                                                                                                                                                                                          |  |        | Observed Mineralization |  | Total
                                                                                                       Exploration Expenditures
                                                                                                                              During 2010 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Total
                                                                                                       Exploration Expenditures
                                                                                                                              During 2011 |              |  | Total
                                                                                                       Exploration Expenditures
                                                                                                                              During 2012 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|--------------------------- |  | ------------------------------------------------------------------------------------------------------------------------ | ----- | - | ------------------ | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | ----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                            |  | at
                                                                                                       March 31, 2013 |       |   |                    |             | Total (Buenaventura and
                                                                                                                                                                                                                                                                                                                                                                                         Partners) |  |        | Buenaventura            |  |                                                                                                                                                                                                                                                                                 | Total (Buenaventura and
                                                                                                                                                                                                                                                                                                                                                                                         Partners) |  |                                                                                                                                                                                                                                                                                 | Buenaventura |  |                                                                                                                                                                                                                                                                                 | Total (Buenaventura and
                                                                                                                                                                                                                                                                                                                                                                                         Partners)
|                            |  |                                                                                                                          |       |   |                    |             |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                 |              |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|                            |  |                                                                                                                          |       |   |                    |             | (US$ in millions)                                                                                                                                                                                                                                                                                                                                                                                                          |  |        | (US$ in millions)       |  |                                                                                                                                                                                                                                                                                 | (US$ in millions)                                                                                                                                                                                                                                                                                                                                                                                                          | 
|                            |  |                                                                                                                          |       |   |                    |             |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Joint
    Venture Projects: |  |                                                                                                                          |       |   |                    |             |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                 |              |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|                            |  |                                                                                                                          |       |   |                    |             |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                 |              |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|Hualgayoc                   |  |                                                                                                                          | 50.00 | % |                    | Gold Fields |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 15,417 |                         |  | Silver, zinc & lead                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 0.65                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 0.32                                                                                                                                                                                                                                                                                                                                                                                                                      
|Lucanas                     |  |                                                                                                                          | 60.00 | % |                    | Sumitomo    |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 0      |                         |  | Copper & gold                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 0.19                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 0.12                                                                                                                                                                                                                                                                                                                                                                                                                      



28







|Exploration Projects(1)(2)   |  | Buenaventura’s Effective Participation                                                                                   |        |   | Principal Partners |      | Property Hectares                                                                                                                                                                                                                                                                                                                                                                                                          |  |         | Observed Mineralization |  | Total
                                                                                                       Exploration Expenditures
                                                                                                                              During 2010 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Total
                                                                                                       Exploration Expenditures
                                                                                                                              During 2011 |              |  | Total
                                                                                                       Exploration Expenditures
                                                                                                                              During 2012 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|---------------------------- |  | ------------------------------------------------------------------------------------------------------------------------ | ------ | - | ------------------ | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------- | ----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                             |  | at
                                                                                                       March 31, 2013 |        |   |                    |      | Total (Buenaventura and
                                                                                                                                                                                                                                                                                                                                                                                         Partners) |  |         | Buenaventura            |  |                                                                                                                                                                                                                                                                                 | Total (Buenaventura and
                                                                                                                                                                                                                                                                                                                                                                                         Partners) |  |                                                                                                                                                                                                                                                                                 | Buenaventura |  |                                                                                                                                                                                                                                                                                 | Total (Buenaventura and
                                                                                                                                                                                                                                                                                                                                                                                         Partners)
|                             |  |                                                                                                                          |        |   |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |         |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                 |              |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|                             |  |                                                                                                                          |        |   |                    |      | (US$ in millions)                                                                                                                                                                                                                                                                                                                                                                                                          |  |         | (US$ in millions)       |  |                                                                                                                                                                                                                                                                                 | (US$ in millions)                                                                                                                                                                                                                                                                                                                                                                                                          | 
|                             |  |                                                                                                                          |        |   |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |         |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Buenaventura’s
    Projects: |  |                                                                                                                          |        |   |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |         |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                 |              |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|                             |  |                                                                                                                          |        |   |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |         |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                 |              |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|Chaje                        |  |                                                                                                                          | 100.00 | % |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 18,400  |                         |  | Gold                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 1.05                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 1.05                                                                                                                                                                                                                                                                                                                                                                                                                      
|Colquemayo                   |  |                                                                                                                          | 100.00 | % |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 28,800  |                         |  | Gold, silver & copper                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 2.46                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 2.46                                                                                                                                                                                                                                                                                                                                                                                                                      
|El Faique                    |  |                                                                                                                          | 100.00 | % |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 13,209  |                         |  | Copper, zinc & gold                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 0.49                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 0.49                                                                                                                                                                                                                                                                                                                                                                                                                      
|Pachuca
    Norte            |  |                                                                                                                          | 100.00 | % |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 31,000  |                         |  | Silver & gold                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | -                                                                                                                                                                                                                                                                               |              |  |                                                                                                                                                                                                                                                                                 | -                                                                                                                                                                                                                                                                                                                                                                                                                         
|Pisqahuanca(3)               |  |                                                                                                                          | 70.00  | % |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 0       |                         |  | Silver & gold                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 0.18                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 0.18                                                                                                                                                                                                                                                                                                                                                                                                                      
|Surichata                    |  |                                                                                                                          | 100.00 | % |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 700     |                         |  | Silver, zinc & lead                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | -                                                                                                                                                                                                                                                                               |              |  |                                                                                                                                                                                                                                                                                 | -                                                                                                                                                                                                                                                                                                                                                                                                                         
|Terciopelo(4)                |  |                                                                                                                          | 100.00 | % |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 0       |                         |  | Gold & copper                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 1.36                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 1.36                                                                                                                                                                                                                                                                                                                                                                                                                      
|Trapiche                     |  |                                                                                                                          | 100.00 | % |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 37,291  |                         |  | Copper & molybdenum                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 1.39                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 1.39                                                                                                                                                                                                                                                                                                                                                                                                                      
|Others(5)                    |  |                                                                                                                          | 100.00 | % |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 172,577 |                         |  | Gold &
    polymetallic                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | -                                                                                                                                                                                                                                                                               |              |  |                                                                                                                                                                                                                                                                                 | -                                                                                                                                                                                                                                                                                                                                                                                                                         
|                             |  |                                                                                                                          |        |   |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 301,977 |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 28.95                                                                                                                                                                                                                                                                           |              |  |                                                                                                                                                                                                                                                                                 | 17.75                                                                                                                                                                                                                                                                                                                                                                                                                     










| | (1) | This table does not include projects abandoned by us, consolidated mining units or those placed on hold prior to 2010.
| | --- | ----------------------------------------------------------------------------------------------------------------------

| | (2) | In addition to these projects, we continue to conduct exploration at all of our operating mines and our subsidiaries.
| | --- | ---------------------------------------------------------------------------------------------------------------------

| | (3) | This project was terminated in 2011.
| | --- | ------------------------------------

| | (4) | This project was terminated in 2012.
| | --- | ------------------------------------

| | (5) | Includes generative exploration in new areas.
| | --- | ---------------------------------------------



29







The following table lists our current brownfield
exploration projects, our effective participation in each project, the total hectares in each project, observed mineralization
of each project and the exploration expenditures for each project during 2010, 2011 and 2012.



|Exploration Projects     |  | Buenaventura’s Effective Participation |        |    | Principal Partners |      | Property Hectares                                                                                                                                                                                                                                                                                                                                                                                                          |  |        | Observed Mineralization |  | Total
                                                                                                       Exploration Expenditures
                                                                                                                              During 2010 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Total
                                                                                                       Exploration Expenditures
                                                                                                                              During 2011 |              |  | Total
                                                                                                       Exploration Expenditures
                                                                                                                              During 2012 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|------------------------ |  | -------------------------------------- | ------ | -- | ------------------ | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | ----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                         |  | at
March 31, 2013                      |        |    |                    |      | Total (Buenaventura and
                                                                                                                                                                                                                                                                                                                                                                                         Partners) |  |        | Buenaventura            |  |                                                                                                                                                                                                                                                                                 | Total (Buenaventura and
                                                                                                                                                                                                                                                                                                                                                                                         Partners) |  |                                                                                                                                                                                                                                                                                 | Buenaventura |  |                                                                                                                                                                                                                                                                                 | Total (Buenaventura and
                                                                                                                                                                                                                                                                                                                                                                                         Partners)
|                         |  |                                        |        |    |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                 |              |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|                         |  |                                        |        |    |                    |      | (US$ in millions)                                                                                                                                                                                                                                                                                                                                                                                                          |  |        | (US$ in millions)       |  |                                                                                                                                                                                                                                                                                 | (US$ in millions)                                                                                                                                                                                                                                                                                                                                                                                                          | 
|                         |  |                                        |        |    |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Buenaventura’s Projects: |  |                                        |        |    |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                 |              |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|                         |  |                                        |        |    |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                 |              |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|Orcopampa                |  |                                        | 100.00 | %1 |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 18,000 |                         |  | Gold & silver                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 2.91                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 2.91                                                                                                                                                                                                                                                                                                                                                                                                                      
|                         |  |                                        |        |    |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                 |              |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|Yumpag(1)                |  |                                        | 100.00 | %  |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 1,847  |                         |  | Silver, lead & zinc                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 0.75                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 0.75                                                                                                                                                                                                                                                                                                                                                                                                                      
|Anamaray(1)              |  |                                        | 100.00 | %  |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 4,380  |                         |  | Zinc, lead & silver                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 0.64                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 0.64                                                                                                                                                                                                                                                                                                                                                                                                                      
|Mallay                   |  |                                        | 100.00 | %  |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 2,300  |                         |  | Zinc, lead & silver                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 9.78                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 9.78                                                                                                                                                                                                                                                                                                                                                                                                                      
|Chanca(2)                |  |                                        | 100.00 | %  |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 3,880  |                         |  | Silver                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 1.40                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 1.40                                                                                                                                                                                                                                                                                                                                                                                                                      
|Julcani-Recuperada(3)    |  |                                        | 100.00 | %  |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 3,213  |                         |  | Silver                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 0.72                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 0.72                                                                                                                                                                                                                                                                                                                                                                                                                      
|Antapite                 |  |                                        | 100.00 | %  |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 22,075 |                         |  | Gold                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 0.14                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 0.14                                                                                                                                                                                                                                                                                                                                                                                                                      
|Poracota(4)              |  |                                        | 100.00 | %  |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 6,680  |                         |  | Gold & silver                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 0.78                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 0.78                                                                                                                                                                                                                                                                                                                                                                                                                      
|Shila-Paula(6)           |  |                                        | 100.00 | %  |                    | None |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 30,318 |                         |  | Gold & silver                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 1.90                                                                                                                                                                                                                                                                            |              |  |                                                                                                                                                                                                                                                                                 | 1.90                                                                                                                                                                                                                                                                                                                                                                                                                      
|                         |  |                                        |        |    |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |        |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                 |              |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                           
|                         |  |                                        |        |    |                    |      |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 96,865 |                         |  |                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 19.01                                                                                                                                                                                                                                                                           |              |  |                                                                                                                                                                                                                                                                                 | 19.01                                                                                                                                                                                                                                                                                                                                                                                                                     








30







| | (1) | Includes part of brownfield exploration costs of Uchucchacua (Yumpag, San Francisco and Anamaray mines).
| | --- | --------------------------------------------------------------------------------------------------------

| | (2) | Includes exploration costs of Candelaria and Santa Rosa (part of our brownfield explorations of the Mallay mine).
| | --- | -----------------------------------------------------------------------------------------------------------------

| | (3) | Includes exploration costs of Escopeta, Carmela and Patara prospects (part of our brownfield explorations of the Recuperada
mine).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------

| | (4) | Includes exploration costs of Huamanihuayta Oeste (part of our brownfield explorations of the Poracota mine).
| | --- | -------------------------------------------------------------------------------------------------------------

| | (5) | Includes exploration costs of Pucay (through option agreement with SCC) and Pariguanas (through joint venture with Minera Ares),
in addition to our own Saya, Aseruta, Ocoruro and Quello projects.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Includes exploration and development costs of Tambomayo (formerly known as the Tuyumina project) and Japotani (part of our
brownfield explorations of the Shila-Paula mine).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



31







The following is a
brief summary of current mine development and exploration activities conducted by us directly and through joint exploration agreements,
which we believe represent the best prospects for discovering new reserves. There can be no assurance, however, that any of our
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 our ore reserves. Non-reserve mineralization has been included in our 2012 Annual Report from
the Tantahuatay, Chucapaca, Tambomayo, Parihuanas, Breapampa, Mallay and Yumpag exploration and mine development projects.Set
forth below is a map of all of our mine development and exploration projects in Peru as of December 31, 2012:







32







Greenfield Exploration
Projects



Chucapaca. The
Chucapaca project is a gold-copper-silver greenfield exploration project wholly owned by Canteras del Hallazgo S.A.C., or CDH,
which is 51 percent-owned by Minera Gold Fields Peru S.A. and 49 percent-owned by us. The project encompasses a total of 12,900
hectares of mining concessions owned by CDH, which are located in the Moquegua region in southern Peru. Our preliminary exploration
activities at the Chucapaca project have included geophysical magnetic surveys, induced polarization surveys and diamond drilling,
which resulted in the discovery of gold mineralization. During 2012, our equity investment in CDH was US$32.4 million, which was
mainly for the preparation of a feasibility study. During 2013, CDH intends to conduct infill diamond drilling in the underground
areas. As of December 31, 2012, CDH estimated NRM for the Chucapaca project to be 132.7 million tons, with an average grade of
1.4 grams per ton of gold and 10.8 grams per ton of silver. Exploration expenses related to this project are not consolidated in
Buenaventura’s financial results, but are reflected in “Share in the results of associates” in Buenaventura’s
Consolidated Income Statement. See Note 9 to the Financial Statements.



Trapiche. The
Trapiche project is wholly owned by us and encompasses 29,798 hectares of mining concessions owned by us, with porphyry copper
and skarn mineralization in the Apurimac region. The Apurimac region is part of a mineralized belt known as the Abancay Batholith,
where several iron, copper and gold deposits have been identified. Our exploration activities at the Trapiche project have included
diamond drilling and magnetic and induced polarization surveys. In 2011, we negotiated and obtained a 30-year lease with the Mollebamba
community for 2,300 hectares of surface rights to conduct infill and additional diamond drilling and other engineering studies.
We invested US$3.1 million in payments to the local community, to start preliminary engineering studies and to restart drilling
at the end of 2011. We created a new company to operate the Trapiche project, El Molle Verde S.A.C, which is wholly owned by us,
and we leased all mining properties to the new company. In 2012, we invested US$16.1 million to conduct 26,000 meters of diamond
drilling, both into the copper oxide zone and as an infill program into the porphyry area, and to conduct 3,714 meters of diamond
drilling for metallurgical testing. Independent consultant AMEC plc also conducted a preliminary engineering study of this area.
We currently do not plan to make further investments in the Trapiche project in 2013. As of December 31, 2012, we estimated NRM
for the Trapiche project to be 571 million tons, with an average grade of 0.46 percent of copper and 0.075 percent of molybdenum
into the Trapiche porphyry and Millocucho skarn.



Hualgayoc. Hualgayoc
is a silver, zinc and lead exploration project, with copper and gold potential, owned by Consolidada de Hualgayoc S.A., or Consolidada,
which is 50 percent owned by Colquirrumi, our 99.99 percent-owned subsidiary, and 50 percent owned by Gold Fields La Cima S.A.A.,
a wholly-owned subsidiary of Gold Fields. Colquirrumi has been the operator of the project since 2011. Consisting of 15,417 hectares
of mining concessions owned by Consolidada, the project is located in the Hualgayoc district, Cajamarca region. During 2012, we
invested US$5.7 million to conduct 7,143 meters of diamond drilling and, in 2013, we intend to invest US$1.0 million to continue
our drilling campaign.



El Faique. The El Faique project is wholly owned and operated by us. The project encompasses 13,209 hectares of mining concessions owned
by us and is located in the Sechura desert of northern Peru in the Piura region. The El Faique project consists of a deep massive
sulfide deposit evidenced by diamond drilling. Pursuant to our exploration program, we have invested in social infrastructure and
support for local communities in order to obtain surface permits and properties. In 2012, we invested US$1.0 million to continue
our efforts to negotiate with local communities. In 2013, we plan to invest US$2.5 million to conduct a diamond drilling campaign.
We are working to obtain community consent and environmental permits in the second half of 2013.



33







Colquemayo.The Colquemayo project is wholly owned by us and encompasses 28,800 hectares of mining concessions located in the Moquegua
region in southern Peru, 70 kilometers southwest of the Chucapaca project. The project is located in tertiary volcanic rocks covered
by younger volcanic events. The high sulfidation alteration system covers an area of 40 square kilometers. During 2012, we invested
US$4.0 million to conduct 5,319 meters of diamond drilling and, during 2013, we intend to invest US$1.5 million to continue drilling.



Surichata. Surichata
is a new exploration project located in the Puno region of southern Peru, consisting of 17,800 hectares of mining concessions,
of which we own 15,900 hectares and lease 1,900 hectares from Minera Joncijirca S.A.C. The Surichata project shows evidence of
epithermal silver enriched polymetallic veins. In 2012, we invested US$1.1 million to conduct 2,932 meters of diamond drilling
as part of a first-pass drilling campaign. In 2013, we plan to invest US$3.1 million in a second drilling campaign.



Brownfield Exploration Projects



Uchucchacua.
The Uchucchacua brownfield exploration project is located throughout 8,430 hectares of our mining and exploration properties and
1,500 hectares of property owned by a joint venture between us and Minera Focus S.A.C. We are currently focusing our exploration
efforts on three prospects: Anamaray, Yumpag and Chanca.



The Anamaray prospect
is considered an epithermal deposit of silver, lead and zinc in a setting of tectonic breccias and veins in cretaceous limestone.
In 2012, we invested US$2.19 million to explore the parallel veins close to the Falla longitudinal fault and explore the San Francisco
mineralized structure in greater depth with 5,253 meters of diamond drilling and 2,205 meters of underground tunnels. We decided
to halt our exploration of the Anamaray prospect at the end of 2012 due to disappointing results, and do not plan to invest further
in this prospect in 2013.



The Yumpag prospect
consists of 1,847 hectares located 4 kilometers northeast of the Uchucchacua mine. The Yumpag prospect is an epithermal deposit
of silver, lead, zinc and manganese structurally influenced by the Cachipampa geological fault, which also influences significant
areas of silver mineralization at the Uchucchacua mine. During 2012, we invested US$0.41 million, mainly to complete mine audits
and obtain necessary permits. In 2013, we plan to invest approximately US$5.74 million to complete 2,150 meters of tunnels and
undertake 1,500 meters of diamond drilling in an effort to continue exploration of the Yumpag prospect. As of December 31, 2012,
we had estimated NRM of 147,096 dry short tons, or DST, with 9.26 ounces per ton of silver, 0.016 ounces per ton of gold, 1.68
percent lead and 1.23 percent zinc.



Mallay. Our
exploration efforts in this area include the old Chanca silver mine and surrounding area of Chanca, which encompasses the Candelaria,
Santa Rosa and Chiptaj brownfield exploration areas.



The Chanca prospect
is located in the province of Oyón, department of Lima, about 15 kilometers northwest of Mallay-Isguiz and adjacent to the
old Chanca silver mine. The Chanca prospect consists of about 3,880 hectares, including the Chiptaj exploration area, and 1,500
hectares of what has historically been a joint venture between us and Minera Focus S.A.C. During 2012, we invested US$10.00 million
and completed 10,421 meters of diamond drilling and 3,906 meters of exploration tunnels, focusing primarily on the Shirley, Tarazca,
Poderoso, Candelaria and Santa Rosa veins. In 2013, we plan to invest US$4.80 million to complete 4,200 meters of exploration tunnels
and 7,200 meters of diamond drilling.



34







Orcopampa.
The Orcopampa brownfield exploration project is located on a total of 18,000 hectares of our mining and exploration concessions
and 6,850 hectares of property to which we have access as a result of option agreements with SCC (in respect of Pucay) and Compañía
Minera Ares S.A.C., or Minera Ares (in respect of Pariguanas). We are currently focusing our exploration efforts on Pariguanas,
Ocoruro, Quello and Aseruta.



The Pariguanas project
is located 24 kilometers northeast of Chipmo and consists of 4,440 hectares, 2,240 hectares of which we own and 2,200 hectares
to which we have access as a result of a joint venture agreement with Minera Ares. Pariguanas is considered an epithermal low sulfidation
deposit mainly of silver and gold. During 2012, we invested US$2.69 million in diamond drilling works.



The Ocoruro project
consists of 2,085 hectares and is located 2 kilometers west of the Chipmo mine. In 2012, we continued the diamond drilling campaign
to define a mineralized vein system with gold and silver deposits, which we classified as low sulphidation epithermal deposits.
In 2012, we invested US$2.75 million, mainly in diamond drilling. In 2013, we plan to invest US$1.40 million to complete a diamond
drilling program and conduct geophysical surveys.



The Quello project
consists of 1,118 hectares and is located 3.3 kilometers northwest of the Chipmo mine. This project consists of a system of veins
that contain gold. In 2012, we performed a geophisycal survey which showed two interesting geophisycal anomalies that may be related
to the mineralized structures Sausa Norte and Sausa Centro. During 2012, we invested US$0.77 million mainly in geological surveys.
In 2013, we plan to invest US$1.5 million to explore mineralized structures that were evidenced by our geophysical survey.



The Aseruta-Allhuire
project consists of 2,925 hectares and is located 8 kilometers southeast of the town of Orcopampa. It consists of a system of veins
with mainly silver content. We performed geophysical studies, which showed mapped veins and probable hydrothermal breccia body
at depth. During 2012, we invested US$0.29 million, mainly to perform geological mapping and sampling. In 2013, we plan to invest
US$1.50 million to develop a diamond drilling program at the main veins.



Poracota.The
Poracota brownfield exploration project currently encompasses 6,680 hectares of mining concessions owned and operated by us and
is located 20 kilometers west of the Orcopampa mine in southern Peru. The mineral deposit is considered an epithermal high sulfidation
system, hosted in volcanic rocks, mainly tuffs. The deposit is comprised of two main areas, Huamanihuayta and Perseverancia.



The Huamanihuayta
Oeste project consists of 440 hectares and is located 1 kilometer southwest of the Poracota mine. In 2012, we invested
US$2.07 million in diamond drilling, focusing primarily in the southwest extension of the main veins María Fe, Silvana
and Malena. We also explored additional veins that are part of the vein system for the Poracota mine. In 2013, we plan to
invest US$1.0 million to continue exploration of these veins and the Faculla and Soras projects, which consist of 1,102
hectares.



Julcani-Recuperada.The Julcani-Recuperada brownfield exploration project currently encompasses
3,213 hectares of mining concessions and is wholly owned and operated by us. During 2012, we invested US$0.84 million to perform
geological surveys, outcrops sampling and 792 meters of diamond drilling. In 2013, we expect to invest US$1.4 million, mainly on
diamond drilling in the Escopeta and Patara prospects.



Tambomayo.Tambomayo
project is wholly owned and operated by us. The project encompasses a total of 27,900 hectares, of which 25,700 hectares are
owned by us and 2,200 hectares are optioned by Minera Ares. This option contract expires in 2015.



35







Tambomayo project
is located 20 kilometers east of the Paula mine.  The project is considered a low sulfidation epithermal deposit with significant
gold and silver mineralization in a vein system.  During 2012, we continued the underground exploration tunnels to explore
the Mirtha and Paola veins.  As of December 31, 2012, we had estimated NRM of 1,269,296 DST, with 0.323 ounces per ton of
gold, 7.69 ounces per ton of silver, 1.5 percent lead and 2.86 percent zinc.  In 2012, we invested US$16.77 million in the
exploration and development of the Mirtha vein and a diamond drilling campaign.  In 2013, we plan to invest US$38.0 million,
mainly for preparation and construction of basic infrastructure, underground exploration and tunnel development.



Competition



We believe that competition
in the metals market is based primarily upon cost. We also compete with other mining companies and private individuals for the
acquisition of mining concessions and leases in Peru and for the recruitment and retention of qualified employees.



Sales of Metal Concentrates



All of our metal production
is sold to smelters, traders and banks, either in concentrate or metal form, such as gold-silver concentrate, silver-lead concentrate,
zinc concentrate, lead-gold-copper concentrate and gold and silver bullion. Our concentrates sales are made under one- to three-year,
U.S. Dollar-denominated contracts, pursuant to which the selling price is based on world metal prices as follows: generally,
in the case of gold and silver-based concentrates, the London Spot settlement prices for gold, less certain allowances, and the
London Spot or the United States Commodities Exchange settlement price for silver, less certain allowances; and, in the case of
base-metal concentrates, such as zinc, lead and copper, the London Metals Exchange, or LME, settlement prices for the specific
metal, less certain allowances. Sales prices vary according to formulas that take into account agreed contractual average prices
for a quotational period, generally being the month of, the month prior to, or the month following the scheduled month of shipment
or delivery according to the terms of the contracts.



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



|                              |  | Gold                                                                                                                                                                                                                   |          |  | Silver                                                                                                                                                                                                                  | 
|----------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|                              |  | Average
                                                                                      Annual Market
                                                                                                     Price |          |  | Our
                                                                                      Average Annual
                                                                                                      Price(1) | 
|                              |  | US$/oz. (2)                                                                                                                                                                                                            |          |  | US$/oz.                                                                                                                                                                                                                 | 
|2008                          |  |                                                                                                                                                                                                                        | 871.71   |  |                                                                                                                                                                                                                         | 
|2009                          |  |                                                                                                                                                                                                                        | 972.98   |  |                                                                                                                                                                                                                         | 
|2010                          |  |                                                                                                                                                                                                                        | 1,224.66 |  |                                                                                                                                                                                                                         | 
|2011                          |  |                                                                                                                                                                                                                        | 1,568.58 |  |                                                                                                                                                                                                                         | 
|2012                          |  |                                                                                                                                                                                                                        | 1,668.98 |  |                                                                                                                                                                                                                         | 
|2013 (through March 31, 2013) |  |                                                                                                                                                                                                                        | 1,631.77 |  |                                                                                                                                                                                                                         | 










| | (1) | Our average annual price includes only the consolidated average annual price from the Julcani, Uchucchacua, Orcopampa, Antapite,
Recuperada, Colquijirca, Marcapunta, Ishihuinca and Shila mines.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Average annual gold prices are based on the London PM fix as provided by Metals Week.
| | --- | -------------------------------------------------------------------------------------

| | (3) | Average annual silver prices are based on London Spot prices.
| | --- | -------------------------------------------------------------



Most of the sales contracts
we enter into with our customers state a specific amount of metal or concentrate the customer will purchase. We have sales commitments
from various parties for nearly all of our estimated 2013 production; however, concentrates not sold under any of our contracts
may be sold on a spot sale basis to merchants and consumers.



36







Sales and Markets



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



|        |  | Year ended December 31(1) |        
|------- |  | ------------------------- | -------
|Product |  | 2010                      |        
|        |  | (In thousands of US$)     |        
|Gold    |  |                           | 578,582
|Silver  |  |                           | 274,624
|Lead    |  |                           | 46,913 
|Zinc    |  |                           | 92,884 
|Copper  |  |                           | 129,444








(1) Does not include
refinery charges and penalties incurred in 2012, 2011 and 2010 of US$147,930, US$127,957and US$112,254,
respectively.



We sold our concentrates
to 20 customers in 2012. Approximately 54 percent, 57 percent and 62 percent of our concentrate sales in 2010, 2011 and 2012, respectively,
were sold outside Peru. Set forth below is a table that shows the percentage of sales of concentrate from our mines and gold bullion
that were sold to our various customers from 2010 to 2012.



|                                         |  | Percentage of Concentrates and Gold Bullion Sales |      
|---------------------------------------- |  | ------------------------------------------------- | -----
|                                         |  | 2010                                              |      
|Export Sales:                            |  |                                                   |      
|Johnson Matthey Limited                  |  |                                                   | 49.90
|Glencore International AG                |  |                                                   | 0.75 
|N.V. Umicore SA                          |  |                                                   | 2.18 
|Transamine Trading SA                    |  |                                                   | -    
|J.P. Morgan Chase Bank                   |  |                                                   | -    
|MRI Trading AG                           |  |                                                   | 0.13 
|MK Metal Trading GMBH                    |  |                                                   | 0.19 
|Lois Dreyfus Commodities Metal Suisse SA |  |                                                   | -    
|Standard Bank PLC                        |  |                                                   | 0.04 
|Korea Zinc Company Ltd.                  |  |                                                   | -    
|Mintrade Ltd.                            |  |                                                   | 0.39 
|Xstrata Commodities                      |  |                                                   | 0.39 
|Total Export Sales                       |  |                                                   | 53.97
|                                         |  |                                                   |      
|Domestic Sales:                          |  |                                                   |      
|Doe Run Perú SRL                         |  |                                                   | -    
|Glencore Peru S.A.C.                     |  |                                                   | 7.76 
|Consorcio Minero SA                      |  |                                                   | 10.62
|Votorantim Metais – Cajamarquilla SA     |  |                                                   | 3.33 
|Sudamericana Trading SRL                 |  |                                                   | 1.15 
|Ays SA                                   |  |                                                   | 10.50
|MK Metal Trading Perú SAC                |  |                                                   | 0.88 
|Louis Dreyfus Peru SAC                   |  |                                                   | 10.54
|Traxxys Peru SAC                         |  |                                                   | 1.25 
|Cia.  Minera Casapalca S.A.              |  |                                                   | -    
|Total Domestic Sales                     |  |                                                   | 46.03
|Total Sales                              |  |                                                   | 100  



37







The following table
shows our committed sales volumes of silver-lead, gold-silver and zinc concentrates from 2013 to 2015:



|                          |  | Wet metric tons |        |  | Wet metric tons |  |        | Wet metric tons | 
|------------------------- |  | --------------- | ------ |  | --------------- |  | ------ | --------------- | 
|Concentrate               |  | 2013            |        |  | 2014            |  |        | 2015            | 
|Recuperada’s Silver-Lead  |  |                 | 6,000  |  |                 |  | 6,000  |                 | 
|Recuperada’s Zinc         |  |                 | 9,600  |  |                 |  | -      |                 | 
|Uchucchacua’s Silver-Lead |  |                 | 31,900 |  |                 |  | 21,500 |                 | 
|Uchucchacua’s Zinc        |  |                 | 25,000 |  |                 |  | 25,000 |                 | 
|Poracota’s Gold-Silver    |  |                 | -      |  |                 |  | -      |                 | 
|Julcani’s Silver-Lead     |  |                 | 6,800  |  |                 |  | -      |                 | 



Note: The price of the concentrate supplied under the contract
is based on specified market quotations minus deductions.



We also sell refined
gold, which is derived from our operations at Orcopampa, Shila-Paula, Antapite, Ishihuinca and La Zanja and processed at a local
smelter in Lima, to Johnson Matthey Public Limited Company, or Johnson Matthey, which further refines the gold. Pursuant to our
agreement with Johnson Matthey, we supplied Johnson Matthey, at our option, with gold assaying in excess of 75 percent gold and
approximately 25 percent silver, monthly from January 1, 2012 to December 31, 2012. The price of the gold supplied was determined
based on, for the gold content, the quotation for gold at the London Gold Market PM fixing in U.S. Dollars, and for the silver
content, the quotation for silver at the London Silver Market spot fixing in U.S. Dollars or at spot prices, minus, in each case,
certain minimum charges, as well as charges for customs clearance and treatment of the gold (which varies depending on its gold
and silver content). We may elect to have our material toll refined at Johnson Matthey’s Brampton, Canada works and returned
to our account for sale to third parties. Pursuant to our agreement, we are responsible for delivering the gold to Johnson Matthey’s
designated flight at the Lima airport.



Hedging/Normal Sales
Contracts



We and our wholly-owned
subsidiaries are completely unhedged as to the price at which our gold and silver will be sold. See “Item 3. Key Information—D.
Risk Factors—Factors Relating to the Company—Our financial performance is highly dependent on the prices of gold, silver,
copper and other metals.”



El Brocal has not entered
into any new hedging transactions since 2010 and has no outstanding hedging commitments.



Yanacocha and Cerro
Verde have not engaged in, and are currently not engaged in, gold or copper price hedging activities, such as forward sales or
option contracts, to minimize their respective exposures to fluctuations in the price of gold and copper.



38







Regulatory Framework



Mining and Processing Concessions



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



Pursuant to the General
Mining Law, filers of mining claims must obtain a mining concession before they may explore the areas claimed. Applications for
mining concessions must be filed with the regional mining directors of each regional government and with INGEMMET (Instituto
Geológico Minero y Metalúrgico, or the Geological, Mining and Metallurgical Institute of Peru).



Mining concessions
granted since October 2008 have an indefinite term, subject to payment of an annual concession fee per hectare claimed and achievement
of minimum annual production for each hectare. Failure to achieve annual production targets will result in a fine. Failure to pay
concession fees or fines for two consecutive years could result in the loss of one or more of the mining rights. Failure to satisfy
minimum annual production thresholds for a specified period of time could result in cancellation of the concessions.



Our and Yanacocha’s
processing concessions enjoy the same duration and tenure as our mining rights, subject to payment of a fee based on nominal capacity
for the applicable processing plant. Failure to pay processing fees or fines for two consecutive years could result in the loss
of the processing concessions.



As of December 31,
2012, we owned and administered, directly or indirectly, through subsidiaries or in conjunction with joint venture partners, approximately
1,194,021 hectares of mining concessions devoted to mineral exploration and mining operations. Mining rights and processing concessions
are in full force and effect under applicable Peruvian laws. We believe that we are in compliance with all material terms and requirements
applicable to the mining rights and processing concessions and that we are not subject to any condition, occurrence or event that
would cause the revocation, cancellation, lapse, expiration or termination thereof, except that we may, from time to time, allow
to lapse, revoke, cancel or terminate mining rights and processing concessions that are not material to the conduct of our business.



In addition to obtaining
mining rights from the Peruvian government, applicable Peruvian regulations require us to obtain easements or other rights from
private landowners that own the surface land above the mineral resources that we intend to explore or mine. Supreme Decree 020-2008-EM
requires us to obtain such easements or other rights prior to commencing exploration activities. We have been actively seeking
to acquire land surface, easements to land containing prospective geological exploration target sites, deposits that can be exploited
in the future and areas suitable as plant or facility sites.



The Law Regulating
Mining Concessions in Urban Areas and Urban Expansion Areas and related regulations set forth procedures for the granting of mining
rights in urban and urban expansion areas. In order to grant a mining concession in an urban or urban expansion area, the MEM is
required to receive the approval of the council of the applicable provincial municipality. Mining concessions in urban areas are
granted for 10-year terms, which may be renewed by the MEM subject to the approval of municipal authorities.



39







Law No. 28964, which
became effective on January 25, 2007, created the Organismo Supervisor de la Inversión en Energía y Minería(OSINERGMIN) as the government agency in charge of regulating and auditing the electricity, hydrocarbon and mining activities
of companies. Law No. 28964 provides that the overview and audit of activities related to the environment, mining safety and health
regulations may be performed by companies duly certified and approved by OSINERGMIN. However, pursuant
to Supreme Decree 001-2010-MINAM, OSINERGMIN has transferred its environmental supervisory functions to the Environmental Evaluation
and Oversight Agency, or OEFA. Beginning July 22, 2010, OEFA assumed the authority to carry out unexpected audits and levy fines
on companies if they fail to comply with prescribed environmental standards.



Law No. 28964 has been
abrogated by Law No. 29783 with respect to employee safety and employer liability, which matters are audited by the Ministerio
de Trabajo y Promoción del Empleo. Law No. 29783 establishes rules designed to prevent employee safety risks and allocate
liabilities in relation to such risks. This legislation entitles labor inspectors to inspect commercial facilities and, under certain
circumstances, suspend operations.



Environmental Matters



In 2005, Peru enacted
the General Environmental Law (Law No. 28611), which establishes the main environmental guidelines and principles applicable in
Peru. Pursuant to the General Environmental Law, the MEM has issued regulations mandating environmental standards for the mining
industry and reviews and approves environmental studies for mining operations. OEFA has the authority to inspect mining operations
and fine companies that fail to comply with prescribed environmental standards.



The MEM has issued
regulations that establish maximum permissible levels of (i) emissions of liquid effluents and (ii) elements and compounds present
in gaseous emissions resulting from the mining activities. Generally, holders of mining rights and processing plants that were
in operation prior to May 1993 are required to comply with maximum permissible levels within 10 years. In the interim, mining operators
are required to prepare Environmental Adaptation and Management Programs, or PAMAs, that set forth plans to ensure compliance with
more stringent maximum permissible levels.



In addition, each mining
company that initiated operations prior to May 1993 was required to file a Preliminary Environmental Evaluation, or EVAP, for each
of its mining units to disclose any pollution problems in its operations and, thereafter, to submit a follow-up PAMA aimed at implementing
measures in order to solve problems identified in the EVAP. Companies must correct the pollution problems relating to their mining
activities within five years, while smelters must comply within ten years. These companies must allocate no less than 1 percent
of their annual sales to redress the problems identified in their EVAPs and contemplated in their PAMAs.



Since May 1993, new
mining and processing activities have been required to file and obtain approval for an EIS before being authorized to commence
operations. New mining and plant processing activities are required to comply with the maximum permissible levels for liquid effluents
from the initiation of their operations.



Many of our mining
rights and processing plants were in operation prior to May 1993, and we are in substantial compliance with the maximum permissible
levels set forth in the MEM’s regulations. EVAPs for Julcani, Uchucchacua, Orcopampa, Recuperada, Ishihuinca and Shila were
all accepted between August and September 1995. Between November 2002 and April 2003, the MEM approved and verified the PAMAs for
all these entities, issuing and approving resolution for each respective mining unit. The EISs for Paula, Antapite, Esperanza,
Poracota and Pozo Rico were approved in 2001, 2001, 2006, 2007 and 2008, respectively.



40







EISs for capacity expansion
at the Orcopampa, Uchucchacua and Antapite mines were approved in 2004, 2006 and 2008, respectively.



The MEM approved the
EISs for the Huancarama-Chipmo-Poracota and La Zanja transmission lines and their substations in 2006 and 2008, respectively. This
connection to the national grid should result in lower energy costs.



In May 2008, the Environmental
Ministry of Peru was established by legislative decree. The principal functions of the Environmental Ministry include formulating
and implementing policies and regulations relating to environmental matters and controlling pollution, including regulating air
and water quality standards, through supervision and education. In 2009, the MEM approved the EISs for the La Zanja, Mallay, Tantahuatay
and Esperanza projects. In 2010, the MEM approved the EISs for the Angélica Rublo Chico project. In 2011, the MEM approved
the EISs for our Orcopampa and Breampampa projects. The MEM approved the modified EIS for the Mallay mine and the second modified
EIS for the Shila cyanidation circuit in 2012.



In 2012, Peru enacted
Supreme Decree N° 020-2012, which requires all activities to start and re-start exploration, development, preparation and exploitation
to obtain the approval of the Mining Department of the Ministry of Energy and Mines. With regard to water regulation, all Peruvian
mining companies were required to submit their updated environmental management plans to comply with water quality standards and
the new maximum permissible levels for liquid effluents by August 31, 2012. Buenaventura and its associated companies submitted
our plans. We expect that we will be required to implement these plans and be in compliance with the new maximum permissible levels
for liquid effluents and water quality standards by 2014 and 2015, respectively.



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



Regulations
governing mining explorations. In May 2008, the Peruvian government enacted DS 020-2008-EM, which governs mining exploration
activities and related matters. Under DS 020-2008-EM, exploration activities are divided into 2 categories, Category I and Category
II. Category I exploration activities are those involving no more than 20 drilling platforms and environmentally affecting no more
than 10 hectares, while Category II exploration activities are those involving more than 20 drilling platforms and environmentally
affecting more than 10 hectares. For Category I exploration activities, an Environmental Impact Declaration, or EID, is required.
For Category II exploration activities, a Semi-detailed Environmental Impact Study, or EISsd, is required, which incorporates technical,
environmental and social matters. Exploration activities must start within twelve months following the date that an EID or EISsd
is approved. The commitments assumed by mining companies in their EID, EISsd and EIS are mandatory; if they are not fulfilled,
OSINERGMIN has the authority to fine these companies.



Also in May 2008,
MEM enacted DS 028-2008, which establishes the right of every person to participate in the process of making decisions related
to the sustainable development of mining activities on government territory. The EID, EIS and EISsd require local communities to
have an opportunity to actively participate in this process.



41







The following EIDs
and EISsd were approved in 2012:



|Buenaventura
|------------
|Mine/Project
|Escopeta    
|Aguila      
|San Lorenzo 
|Surichata   
|Esperanza   
|Pariguana   
|Yumpag      
|Santa Rosa  



|La Zanja SRL
|------------
|Mine/Project
|La Zanja    



|Mollé Verde S.A.C.
|------------------
|Mine/Project      
|Trapiche          



Regulations governing
mine closures. In 2003, Law No. 28090, Ley que Regula el Cierre de Minas (Law that Regulates the Closing of Mines),
established the obligations and procedures that mining companies must follow to prepare, submit and execute plans for the closing
of mines, or Closure Plans, and the granting of environmental guarantees to secure compliance with Closure Plans. We are required
to submit a Closure Plan for new projects to the MEM within one year following approval of an EIS or PAMA; inform the MEM semi-annually
of any progress on the conditions established in the Closure Plan; perform the Closure Plan consistent with the schedule approved
by the MEM during the life of the concession; and grant an environmental guarantee that covers the estimated amount of the Closure
Plan.



In
addition, Supreme Decree No. 020-2008-EM requires mining companies that perform exploration activities to conduct certain closing
activities in accordance with the applicable environmental study approved by the relevant authority, subject to deferral under
certain circumstances, and contemplates a Closure Plan to be submitted by the mining companyfollowing the terms and conditions
of Supreme Decree No 033-2005-EM.



42







We have presented Closure
Plans to the MEM for all of our mines and advanced explorations. To date, the MEM has approved our Closure Plans for Julcani, Recuperada,
Uchucchacua, Orcopampa, Poracota, Antapite, Caravelí, Shila, Esperanza, Pozo Rico, Mallay, Trapiche, Angélica Rublo
Chico and Anamaray-Jancapata.



The follow Closure
Plan Studies were approved in 2012:



|Buenaventura
|------------
|Mine/Project
|Orcopampa   
|Antapite    
|Caravelí    
|Breapampa   



|CEDIMIN SAC 
|------------
|Mine/Project
|Shila       



On November 9, 2009
Supreme Decree No. 078-2009-EM became effective, creating additional environmental obligations for the holders of mining concessions.
Under this provision, holders of mining concessions that have performed mining activities, including mining exploration, exploitation
and processing activities or related activities, without having an Environmental Certification will be required to prepare and
perform an Environmental Remediation Plan to cure the environmental impact in the areas in which such activities have been conducted.
The Environmental Remediation Plan will contain a detailed description of all the mining items and activities performed without
the correspondent Environmental Certification, including maps and related information, a detailed description of the environmental
impacts created by such activities, a detailed description of the remediation actions, a detailed description of the compensation
that is proposed to be made, a budget and schedule of the remediation activities, including their costs, a bond in favor of MEM
for the cost of the execution of the measures contained in the Environmental Remediation Plan.



Law No. 28271, Ley
que Regula los Pasivos Ambientales de la Actividad Minera (Law that Regulates the Environmental Liabilities of Mining Activities),
became effective on July 7, 2004 to regulate the identification of liabilities in mining activities and financial responsibility
for remediation, in each case to mitigate any negative impact mining may have with respect to the health of the population, environment
and property. Pursuant to Law No. 28271, as amended, the technical branch of the MEM will identify environmental liabilities, mining
companies responsible for abandoned mining facilities, mining works and residue deposits that may be linked to such environmental
liabilities and holders of inactive mining concessions with mining liabilities. Holders of inactive mining concessions with environmental
mining liabilities will be required to submit a Closure Plan and enter into environmental remediation agreements with the MEM to
perform any studies and work necessary to control and mitigate the risk and effects of any contamination. Regulations under Law
No. 28271, Reglamento de Pasivos Ambientales de la Actividad Minera (Regulations of Environmental Liabilities of Mining
Activities), were approved by Supreme Decree No. 059-2005-EM.



43







We have presented Closure
Plans to the MEM for all our mining concessions with environmental mining liabilities. To date, the MEM has approved the mining
liabilities for Hualchocopa, Lircay, Bella Unión-Pucaray and Chaquelle, and all of these concessions have been closed.



We 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 our operations, and we would be required to make significant
additional capital expenditures in the future. Although we believe that we are substantially in compliance with all applicable
environmental regulations of which we are now aware, there is no assurance that future legislation or regulatory developments will
not have an adverse effect on our business or results of operations.



Prior Consultation
with Local Indigenous Communities



In 2011, Peru enacted
Law No. 29785, the Law of Prior Consultation for Indigenous and Native Communities (Ley del Derecho a la Consulta Previa a los
Pueblos Indígenas y Originarios, Reconocido en el Convenio 169 de la Organización Internacional del Trabajo).
This law establishes a prior consultation procedure that the Peruvian government must undertake in concert with local indigenous
communities whose collective rights may be directly affected by new legislative or administrative measures, including the granting
of new mining concessions. Under the law, the Peruvian governmental body responsible for issuing or approving the administrative
measure or decree in question, rather than the affected local indigenous community, retains the right to approve or reject the
relevant legislative or administrative matter following such consultation. However, to the extent that any future projects of us,
Yanacocha or Cerro Verde require legislative or administrative measures that impact local indigenous communities, the required
prior consultation procedure may result in delays, additional expenses or failure to obtain approval for such new project.



Regulations
under Law No. 29785 were approved by Supreme Decree No. 001-2012-MC, which became effective on April 2, 2012. These regulations
specify the form and circumstances of the required consultation and the manner in which agreements will be formalized, and cap
the consultation process at 120 calendar days.



Permits



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



44







Insurance



We maintain a comprehensive
insurance program designed to address specific risks associated with our operations, in addition to covering the insured risks
common to major mining companies. Our insurance program is provided through the local Peruvian insurance market and includes employers’
liability, comprehensive third party general liability, comprehensive automobile liability, all risk property on a replacement
basis, including transit risks, business interruption insurance and mining equipment.



Mining Royalties and
Taxes



Under Peruvian law,
holders of mining concessions are required to pay the Peruvian government a mining royalty (regalia minera) for the exploitation
of metallic and non-metallic resources. In accordance with Law No. 28258, as amended by Law No. 29788, mining royalties shall be
payable either as a specified percentage of operating profit or 1 percent of revenues, whichever is higher. If the mining royalty
is calculated as a percentage of operating profit, marginal rates ranging from 1 percent to 12 percent, increasing progressively
for companies with higher operating margins, will apply.



Mining
companies that are party to mining stabilization agreements will not be required to pay a mining royalty during the tenure of their
stabilization agreements. Although we are not party to a stabilization agreement, Yanacocha currently has effectivestabilization
agreements for the Yanacocha, La Quinua and Maqui mines.



In addition to mining
royalties, pursuant to Law No. 29789, effective from October 1, 2011, mining operations in Peru are subject to a new extraordinary
mining tax. Mining companies that do not have taxation stability agreements with the Peruvian government, such as Buenaventura,
will pay the “Special Mining Tax” (Impuesto Especial de Minería). The Special Mining Tax is calculated
as a percentage of operating profit. Marginal rates range from 2 percent to 8.4 percent, increasing progressively for companies
with higher operating margins. Mining companies that have stability agreements with the Peruvian government will pay the “Special
Mining Duty” (Gravamen Especial de Minería). The Special Mining Duty is calculated as a percentage of operating
profit, with marginal rates ranging from 4 percent to 13.12 percent, increasing progressively for companies with higher operating
margins.



Safety



The safety and health
of our employees is our highest priority. We believe that we have implemented robust safety measures and work continuously to improve
our occupational health and safety training and performance. We regularly monitor occupational health and safety performance and
compliance through safety training programs, review and analysis of accident reports and other routine safety measures at our operating
mines. Our Uchucchacua, Julcani, Antapite, Orcopampa and Shila-Paula mining units are Occupational Health and Safety Assessment
Series 18001 certified.



Our safety program
includes the following core components:



| | · | Risk Detection Training and Log Book: to train workers to detect, identify and record job-related
hazards.
| | - | ----------------------------------------------------------------------------------------------------------



| | · | Safety Performance Indicators: to regularly monitor the performance of each operating unit and
target safety efforts and training.
| | - | ----------------------------------------------------------------------------------------------------------------------------------



45







| | · | Specialized Safety Training: to provide training related to safety techniques and tools tailored
to the risks associated with each employee’s job.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Mine School: to provide on-site theoretical and practical training to employees in different fields
of work.
| | - | ------------------------------------------------------------------------------------------------------------



| | · | Implementation of International Safety Standards: to establish and comply with internationally
accepted safety standards.
| | - | -------------------------------------------------------------------------------------------------------------------------



| | · | Safety Audits: to regularly audit safety procedures and systems at each operating mine by certified
auditors.
| | - | -------------------------------------------------------------------------------------------------------------



During 2012, we experienced
117 total reportable injuries, 115 lost-time injuries and 2 fatal injuries, as compared to 105 total reportable injuries, 101 lost-time
injuries and 4 fatal injuries for the year ended December 31, 2011. Under Peruvian law, the number of lost-time injuries recorded
includes days away from work as a result of injury, restricted duty injuries and certain medical treatment injuries. The total
number of reportable injuries includes lost-time injuries, as well as other minor and major first aid injuries and fatal injuries.



C. Organizational Structure



As of March 31,2013, we conducted our mining operations, explorations projects and other activities directly and through various majority-owned
subsidiaries, controlled companies and other affiliated companies as described in the following organizational chart.



46


















| | † | All entities in this chart, with the exception of Minera Julcani S.A. de C.V. and Compañía de Minas Buenaventura
Chile Limitada (which are organized in Mexico and Chile, respectively), are incorporated in Peru.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | * | Compañía Minera Condesa S.A. also holds 21,222,236 treasury shares of Compañía
de Minas Buenaventura S.A.A., or approximately 7.68 percent of our outstanding equity.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



47







Intermediate Holding Companies, Subsidiaries and Equity
Participations



Compañía Minera Condesa S.A.



Condesa, which is wholly
owned by us, is a mining and facilities holding company with direct and indirect ownership participation in two mining-related
entities, Cedimin and Yanacocha, and in exploration projects conducted by Minas Conga and Conenhua (as defined below). See “—B.
Business Overview—Exploration.” As a partner in Yanacocha, Condesa shares responsibility for the investments made in
the Yanacocha mine. In addition, Condesa holds an equity interest in Chaupiloma, and, as a result, receives a portion of the royalty
revenues paid by Yanacocha to Chaupiloma equal to such ownership interest. See “—S.M.R.L. Chaupiloma Dos de Cajamarca”
below. Condesa also holds a 7.68 percent interest in us.



Compañía de Exploraciones, Desarrollo e
Inversiones Mineras S.A.C.



Cedimin,
wholly owned by us, is a mining and facilities holding company that operates the Shila-Paula mine and conducts explorations at
the Tambomayo project. At our annual shareholders’ meeting on March 26, 2013, the shareholders approved the merger of Cedimin
with and into Buenaventura, with Buenaventura as the surviving entity of the merger, and accordingly, in 2013, Cedimin will be
merged with and into Buenaventura.



S.M.R.L. Chaupiloma Dos de Cajamarca



S.M.R.L. Chaupiloma
Dos de Cajamarca, or Chaupiloma, is a Peruvian limited liability company that holds all of the mining rights for the areas mined
by Yanacocha and Minas Conga. Chaupiloma receives a royalty that is calculated as a percentage of the total revenues of Yanacocha.
We own, directly and indirectly, through our interest in Condesa, a 60 percent interest in Chaupiloma. Newmont Peru owns the remaining
40 percent equity interest.



Consorcio Energético Huancavelica S.A.



Consorcio Energético
Huancavelica S.A., or Conenhua, is an electrical transmission and generation company that provides a significant portion of our
electrical needs through its transmission facilities. We own 100 percent of Conenhua and manage its operations. Conenhua obtained
the concession for power transmission in the Huancavelica area in 1983 and subsequently obtained concessions in the Cajamarca and
Arequipa regions, enabling us to buy energy from Electro Perú and to transmit electric power to certain of our mining units
and affiliates, including Uchucchacua, Orcopampa, Poracota, Shila-Paula, Antapite, Yanacocha, La Zanja and Coimolache, as well
as to other mining companies and municipalities in the area, through our own facilities.



In order to secure
a reliable energy supply from a clean and renewable source for our direct operations and projects at competitive prices, Conenhua,
through its subsidiary Empresa de Generación Huanza S.A., or Huanza, was commissioned to construct a 90.6 megawatt, or MW,
capacity hydroelectric power plant in the valley of Santa Eulalia.  The construction of the 90.6 MW Huanza Hydroelectric Power
Plant is in progress and should be completed by the end of the second quarter of 2013. This US$180-200 million project commenced
in March 2010 and has been partially financed through a US$119 million finance lease obtained from Banco de Crédito
del Peru.



48







Buenaventura Ingenieros S.A.



Buenaventura Ingenieros
S.A., or BISA, one of our wholly-owned subsidiaries, has provided geological, engineering, design and construction consulting services
to the mining sector for over 30 years. During this time, BISA has consulted in Peru, Chile, Argentina, Mexico and Ecuador on a
range of projects, operations and expansions. BISA owns a 99.99 percent interest in Contacto Corredores de Seguros S.A., an insurance
brokerage company that provides insurance brokerage and related services to us and our affiliates.



Minera Julcani S.A. de C.V.



Minera Julcani S.A.
de C.V., or Minera Julcani, is a wholly-owned subsidiary created for the purpose of conducting exploration pursuant to our joint
venture agreement with Solitario México S.A. de C.V., or Solitario. Under this agreement, Solitario granted us the exclusive
right to conduct exploration within its properties situated in Hidalgo, Mexico. In January 2012, we terminated the agreement with
Solitario.



Currently we are conducting
due diligence on the Guadalupe project, an exploration property owned by First Mexican Gold Corp.



Inversiones Colquijirca S.A. / Sociedad Minera El Brocal
S.A.A.



Sociedad Minera El
Brocal S.A.A., or El Brocal, owns the Colquijirca and Marcapunta Norte mines. El Brocal was formed in 1956 and is engaged in the
extraction, concentration and sale of concentrates of polymetallic minerals, mainly zinc, lead and silver. On July 22, 2011, we
completed the purchase of all of the outstanding equity of Inversiones Colquijirca S.A., which, in turn, owns 51.06 percent of
El Brocal. As a result of this transaction, we increased our equity holding of El Brocal from 46.08 percent to a 53.76 percent
controlling interest, including shares held directly by us and indirectly through our wholly-owned subsidiary, Inversiones Colquijirca
S.A.



Minera La Zanja S.R.L.



Minera La Zanja S.R.L.,
or La Zanja, controls 32,070 hectares of mineralized ground in the La Zanja project, which is located 35 kilometers northwest of
the city of Cajamarca.  La Zanja, which is currently 53.06 percent owned by us and 46.94 percent owned by Newmont Peru, began
operations in September 2010 as an open-pit mine producing gold and silver.



Compañía
Minera Coimolache S.A.



Compañía
Minera Coimolache S.A., or Coimolache, is a mining company that owns the Tantahuatay project, which is located in the province
and district of Hualgayoc in the Cajamarca region, 35 kilometers northwest of the Yanacocha mine. We, SCC and other third parties
hold a 40 percent interest, a 40 percent interest and a 20 percent interest, respectively, in Coimolache. Construction of mining
infrastructure at the Tantahuatay mine commenced in July 2010. Gold mining operations commenced in mid-2011.



49







Canteras del Hallazgo
S.A.C.



Canteras del Hallazgo
S.A.C. holds mining rights to the Chucapaca project. We and Gold Fields hold a 49 percent interest and a 51 percent interest, respectively,
inthis company.



Ferrovías Central
Andino S.A.



We hold 10 percent
of Ferrovías Central Andino S.A., or Ferrovías, a railroad company, pursuant to a concession granted to a consortium
of several companies in April 2000. Among the other companies holding interests in the share capital of Ferrovías are Railroad
Development Corporation, Cemento Andino S.A., Commonwealth Development Corporation and others. Ferrovías provides transportation
for concentrates from El Brocal’s mining operations.



Sociedad Minera Cerro
Verde S.A.A.



We currently hold a
19.58 percent interest in Cerro Verde, which owns the Cerro Verde copper deposit located approximately 1,100 kilometers southeast
of Lima. For more detail, see “Item 5. Operating and Financial Review and Prospects—Buenaventura” and “Item
5. Operating and Financial Review and Prospects—Cerro Verde.”



50







YANACOCHA



A. History and Development of the Company



Founded in Peru in
1992, Yanacocha is the largest gold producer in South America. Yanacocha produced 1,345,992ounces of gold in 2012. Yanacocha’s
operations are located in the Andes Mountains in Northern Peru in the area of Cajamarca, located approximately 900 kilometers north
of Lima and north of the city of Cajamarca at an altitude of 4,000 meters above sea level. The Yanacocha property consists of six
open-pit mines: Carachugo, Chaquicocha, Maqui Maqui, San José, Cerro Yanacocha and La Quinua. As of December 31, 2012, the
Chaquicocha, Cerro Yanacocha and La Quinua mines were in operation.



Yanacocha continues
to develop the Conga project, which is located approximately 24 kilometers northeast of the Yanacocha operating mine in the provinces
of Celendin, Cajamarca and Hualgayoc. The project consists of two gold-copper porphyry deposits that are estimated to more than
double Yanacocha’s proven and probable reserves.  However, since the middle of 2012, the development of Conga has been
based on a “water first” approach, which consists of building the originally planned community water reservoirs prior
to resuming any mine development. At the end of 2012, the first of these reservoirs in San Nicolás and associated roads
were under construction. Activity relating to design and procurement continued throughout 2012 and will be completed in early 2013,
with the majority of equipment having already been delivered to the Yanacocha mine site. Work to ensure the economic viability
as well as the social acceptance of the project continues in parallel with the site reservoir construction activities.



As of December 31,
2012, Yanacocha’s proven and probable reserves (excluding the Conga project’s proven and probable reserves) were estimated
to be 5.9million ounces of gold, representing a 23percent decrease over Yanacocha’s proven and probable
reserves as of December 31, 2011, which were estimated to be 7.7million ounces of gold. As of December 31, 2012, the
Conga project’s proven and probable reserves were estimated to be 12.6 million ounces of gold and 3.3 billion pounds
of copper, unchanged from the estimated 2011 gold and copper reserves. As of December 31, 2012, Yanacocha’s total proven
and probable reserves (including the Conga project) were estimated to be 18.5 million ounces of gold, representing a 9 percent
decrease over Yanacocha’s total proven and probable reserves as of December 31, 2011, which were estimated to be 20.3 million
ounces of gold. Yanacocha’s total proven and probable reserves of copper were 3.3 billion pounds as of December 31,
2012.



Proven and probable reserves are based
on extensive drilling, sampling, mine modeling and metallurgical testing from which economic feasibility has been determined. Under
the Management Contract (as defined below), Newmont Mining, in conjunction with Yanacocha, calculates Yanacocha’s reserves
by methods generally applied within the mining industry and in accordance with SEC Industry Guide 7. Reserves represent estimated
quantities of proven and probable ore that, under present and anticipated conditions, may be economically mined and processed.



In 2012, Yanacocha
produced 1,345,992 ounces of gold, compared to 1,293,123 ounces in 2011. The increase in gold production
in 2012 as compared to 2011 was mainly attributable tohigher production at the gold mill facility at Yanacocha, or theYanacocha
Gold Mill, due to high ore grades from El Tapado pit.



Silver production was
1,348,004 ounces in 2011 and 553,092 ounces in 2012. The decrease in silver production in 2012 as compared
to 2011 was mainly attributable tolower ounces placed due to Yanacocha’s decision not to conduct silver mining activities
at the Yanacocha mine, which has high grade silver.



51







Yanacocha is owned
51.35 percent by Newmont Mining, through its wholly-owned subsidiary Newmont Second, 43.65 percent by us through our wholly-owned
subsidiary Condesa and 5 percent by IFC. Yanacocha is managed by Newmont Peru. See “—Management of Yanacocha—General
Manager/Management Agreement.” Although Yanacocha has no fixed dividend policy, there is an understanding among the partners
that the net income not required for sustaining capital expenditures or future development projects should be distributed after
agreement between the two major shareholders, Newmont Mining and us.



Capital Expenditures



Yanacocha’s capital
expenditures from its formation in 1992 through 2012 have related principally to the construction of the Carachugo, Maqui Maqui,
San José, Cerro Yanacocha and La Quinua mining operations, the construction of two plants at Carachugo and Yanacocha, each
of which includes a leach solution processing facility and a smelter at each plant, the construction of four carbon column plants
at Cerro Yanacocha and La Quinua, the acquisition of both new and used mining equipment, the construction of two dams, the construction
of one agglomeration plant at La Quinua, the construction of the Yanacocha Gold Mill, and several expansions of the leach pads
located at the Carachugo, Maqui Maqui, Cerro Yanacocha and La Quinua mining operations. Yanacocha’s capital expenditures
from its formation through December 31, 2012 totaled approximately US$5,393 million, including capital expenditures of US$1,094
million in 2011 and US$1,148 million in 2012. In 2012, Yanacocha’s principal capital expenditures included US$498 million
for engineering, construction and equipment at the Conga project, US$338 million for mine development at El Tapado Oeste, the Western
Oxides and the Eastern Oxides deposits, US$30 million for equipment components, US$25 million for water treatment plant studies
and construction, US$18 million for gold mill tailings improvements, US$17 million for bio-leach studies and plant construction
and US$15 million for the standardization of information technology systems.



Yanacocha anticipates
that its capital expenditures for 2013 will be approximately US$566 million, of which it plans to use approximately US$300 million
in connection with the construction of the Conga project.  The remaining capital expenditure budget has been allocated for
investment in current operations and development of future operations.



Yanacocha expects that
it will meet its working capital, capital expenditure and exploration requirements for the next several years from internally-generated
funds, cash on hand and financing from banks and financial institutions.There can be no assurance that sufficient funding
will be available to Yanacocha from internal or external sources to finance future working capital, capital expenditures and exploration
and construction requirements, or that external funding will be available for such purposes on terms or at prices favorable to
Yanacocha. A very significant decline in the price of gold would be reasonably likely to affect the availability of such sources
of liquidity. See “Item 5. Operating and Financial Review and Prospects—Yanacocha—B. Liquidity and Capital Resources—Exploration
Costs; Capital Expenditures.”



B. Business Overview



Description of Yanacocha’s Operations



The Yanacocha property
consists of the following open-pit mines: Carachugo, Chaquicocha, Maqui Maqui, San José, Cerro Yanacocha, La Quinua Complex
(La Quinua, El Tapado, Tapado Oeste), Cerro Negro Este, Western Oxide pits (La Quinua Sur and Cerro Negro Oeste), Eastern Oxide
pits (Quecher Norte and Marleny) and Carachugo Alto.



52







Leach pads are located
at Carachugo (410 million ton capacity), Maqui Maqui (70 million ton capacity), Cerro Yanacocha
(470 million ton capacity) and La Quinua (640 million ton capacity, including the Western Oxides). Each of these leach
pads includes at least two leach solution storage ponds and storm water ponds located down gradient from each leach pad. The Cerro
Yanacocha site has two additional solution ponds for the segregation of solution generated from the treatment of transition ores.
A raw water pond is used both for storm containment and to store excess solution during the wet season.



Yanacocha has four
processing facilities: Pampa Larga, Yanacocha Norte, La Quinua and the Yanacocha Gold Mill. The processing facilities can be used
to process gold-bearing solutions from any of the leach pads through a network of solution pumping facilities located adjacent
to the solution storage ponds or, in the case of the Yanacocha Gold Mill, to process high-grade gold ore to produce a gold-bearing
solution for treatment at the La Quinua processing plant. The Yanacocha Gold Mill commenced operations in March 2008, and its total
annual production is between 5.5 and 6.0 million dry metric tons, or DMT. Production at the Yanacocha Gold Mill is expected to
significantly impact Yanacocha’s future production capabilities, with total production measured in life-of-mine ounces at
the Yanacocha Gold Mill representing 38 percent of the total ounces produced by Yanacocha. In
order to balance mining production and Yanacocha Gold Mill total production capacity, Yanacocha has established ore stockpiles
in which it deposits most of the ore from the pits, and feeds a small portion directly to the plant. The Yanacocha Gold Mill sources
mill ore from the Yanacocha, Chaquicocha, El Tapado and Tapado Oeste pits.



Mining consists of
a sequence of drilling, blasting, loading and hauling. Ore containing gold is transported from each mine to the nearest active
leach pad while waste is taken to specially designed storage facilities. Ore is then leached by introducing diluted solutions of
cyanide through an irrigation system placed on top of the ore. This solution percolates through the ore, dissolving gold and silver
as AuCN and AgCN complexes respectively, and results in a “pregnant” solution which drains to solution storage ponds
to be transferred to the nearest recovery facility. The end product is doré bars currently assaying approximately 52 percent
gold and 45 percent silver. The doré bars are transported from the processing plant by an outside security firm to be refined
outside of Peru. See “—Transportation and Refining.” The solution from which the gold is removed (barren solution)
is recycled to the leach pads for further heap-leaching after having been reconstituted with cyanide. The leaching process is generally
a closed system. However, during periods of high rainfall, excess water must be treated at the facilities located at Yanacocha
Norte and Pampa Larga, which have been designed to meet or exceed standards for drinking water and for agriculture and livestock
as set out by the Peruvian Ministry of Health, the U.S. Environmental Protection Agency, the State of Nevada Regulations and World
Bank guidelines. See “Regulation, Permit and Environmental Matters.”



Electric power for
Yanacocha’s operations is currently provided by local power companies via two separate networks from the Cajamarca Norte
substation in 60 kilovolts, or kV, and 220 kV, respectively. Yanacocha also maintains diesel generation capacity for emergency
requirements, which have an aggregate power generation capacity of 33.75 MW. In addition, Yanacocha has been connected to the Peruvian
national electricity grid since the end of 1997. Yanacocha currently receives its supply of electric power through a 220 kV power
line originating in Trujillo, which is owned by Buenaventura and has the capacity to provide up to 150 MW to Yanacocha (although
current contracted demand is limited to 70 MW). In addition, a 60 kV power line routed through Cajamarca permits Yanacocha to receive
up to 10 MW. This power line is used only in emergencies. See “Item 5. Operating and Financial Review and Prospects.”



Water for Yanacocha’s
operations is collected from rainfall and wells. All excess water used by Yanacocha undergoes treatment at the facilities described
above.



53







Set forth below are
certain unaudited operating data for the years shown for each of Yanacocha’s mining operations that were then in operation:



|                                                |  | 2010 |            |  | 2011 |  |            | 2012 | 
|----------------------------------------------- |  | ---- | ---------- |  | ---- |  | ---------- | ---- | 
|Mining Operations:                              |  |      |            |  |      |  |            |      | 
|Ore mined (DST):                                |  |      |            |  |      |  |            |      | 
|Cerro Yanacocha                                 |  |      | 28,817,797 |  |      |  | 1,434,279  |      | 
|Carachugo                                       |  |      | 23,455,796 |  |      |  | 31,494,122 |      | 
|Maqui Maqui                                     |  |      | 1,267      |  |      |  | 542,447    |      | 
|La Quinua                                       |  |      | 26,348,322 |  |      |  | 27,161,711 |      | 
|San José                                        |  |      | 5,090,528  |  |      |  | 3,556,183  |      | 
|Cerro Negro                                     |  |      | —          |  |      |  | 24,231     |      | 
|Total ore mined (DST)                           |  |      | 83,713,710 |  |      |  | 64,212,973 |      | 
|Average gold grade of ore mined (oz./DST):      |  |      |            |  |      |  |            |      | 
|Cerro Yanacocha                                 |  |      | 0.032      |  |      |  | 0.011      |      | 
|Carachugo                                       |  |      | 0.028      |  |      |  | 0.034      |      | 
|Maqui Maqui                                     |  |      | 0.007      |  |      |  | 0.010      |      | 
|San José                                        |  |      | 0.016      |  |      |  | 0.019      |      | 
|La Quinua                                       |  |      | 0.019      |  |      |  | 0.030      |      | 
|Cerro Negro                                     |  |      | —          |  |      |  | 0.004      |      | 
|Total average gold grade of ore mined (oz./DST) |  |      | 0.025      |  |      |  | 0.031      |      | 
|                                                |  |      |            |  |      |  |            |      | 
|Gold production (oz.):                          |  |      |            |  |      |  |            |      | 
|Cerro Yanacocha                                 |  |      | 659,080    |  |      |  | 659,996    |      | 
|Carachugo                                       |  |      | 344,698    |  |      |  | 274,723    |      | 
|Maqui Maqui                                     |  |      | 12,701     |  |      |  | 9,906      |      | 
|San José                                        |  |      | 54,570     |  |      |  | 45,271     |      | 
|La Quinua                                       |  |      | 390,571    |  |      |  | 303,226    |      | 
|Cerro Negro                                     |  |      | —          |  |      |  | —          |      | 
|Total gold (oz.)                                |  |      | 1,461,620  |  |      |  | 1,293,123  |      | 



Exploration



Yanacocha’s mining
activities encompass 313,049 hectares covered by 439 mining concessions. Of these 313,049 hectares, Chaupiloma holds the mining
rights related to 105,666 hectares, covered by 144 mining concessions. Chaupiloma has assigned these mining concessions to Yanacocha
pursuant to several assignments of mining rights, each with an initial term of 20 years, which are renewable at Yanacocha’s
request for an additional 20-year term.



Yanacocha has three
processing concessions from the MEM for its processing plants: Cerro Yanacocha (Yanacocha Gold Mill, Cerro Negro, La Quinua and
Yanacocha), Yanacocha (Carachugo and Pampa Larga) and China Linda. The processing concessions have indefinite terms, subject to
the payment of an annual fee based on nominal capacity for the processing plant. An additional processing concession is pending
for the Conga project.



Exploration expenditures
amounted to approximately US$24.0 million and US$40.0 million in 2011 and 2012, respectively.  These expenditures have been
used to identify deep sulfide mineralization beneath the oxide deposits at Tapado Oeste North, Yanacocha Sur, La Quinua Sur and
Cerro Negro, to reevaluate and advance the Chaquicocha Sulfides and Yanacocha Verde projects and to complete additional drilling
designed to increase ore grade and resources and continue exploration in the Yanacocha district and surrounding areas. In 2013,
exploration efforts will focus on continuing the development of the Chaquicocha Sulfides project, testing the extension of the
Yanacocha Verde deposit, continuing exploration in the Yanacocha district and conducting an exploration program in the Yanacocha
concession block outside of the operation district.



54







Yanacocha’s exploration
expenditures include all of the costs associated with exploration activities such as drilling, geological and metallurgical testing.
In addition, exploration costs cover engineering and project development costs on advanced stage projects. Yanacocha prepares a
budget for each year and allocates an amount for exploration activities based on specific projects or regions.



Yanacocha intends to
continue to develop the Cerro Yanacocha, La Quinua and Chaquicocha gold deposit projects and the Conga gold-copper deposit project
over the next several years, while continuing to explore the remainder of the Yanacocha district along with the adjacent Minas
Conga and Solitario mineral holdings. The Conga project currently consists of two gold-copper porphyry deposits that are estimated
to more than double Yanacocha’s proven and probable reserves. The Conga project is located approximately 24 kilometers northeast
of Yanacocha’s operating mine in the provinces of Celendin, Cajamarca and Hualgayoc. This project, incorporated into reserves
beginning in 2004 and 2005, reported 12.6 million ounces of gold reserves and 3.3 billion pounds of copper reserves as of December
31, 2012.



Due to local political
and community protests, construction and development activities at the Conga project were largely suspended in November 2011. The
results of the Peruvian central government-initiated EIA independent review were announced on April 20, 2012 and confirmed that
our initial EIA met Peruvian and international standards. The review made recommendations to provide additional water capacity
and social funds, which Yanacocha has largely accepted. Yanacocha announced its decision to move the project forward on a “water
first” approach on June 22, 2012. As a result, investment on the project will be reduced in 2013 to approximately US$250
million to US$300 million, and focus on building water reservoirs, completing the last engineering activities and accepting delivery
of the main equipment purchases. Construction of Conga and the implementation of the independent EIA review recommendations will
continue provided it can be done in a safe manner with risk-adjusted returns that justify future investment. Should Yanacocha be
unable to continue with the current development plan at Conga, we or our mining partners in the project may reprioritize and reallocate
capital to development alternatives which may result in a potential accounting impairment.



For 2013, Yanacocha
estimates expenditures of US$19.8 million for exploration, and an additional US$1.2 million related to delineation, characterization
and sterilization activities for ore bodies that are currently classified as reserves. Both expenditure estimates are exclusive
of significant development engineering charges. This budgeted amount will be expended mainly on sulfide development at Yanacocha
and an extensive exploration program in district and regional properties that Yanacocha controls.



As of December 31,
2012, the Yanacocha district’s proven and probable reserves (excluding the Conga project’s proven and probable reserves)
were estimated to be 5.9 million ounces of gold, a 23 percent decreasefrom the Yanacocha district’s proven and probable
reserves as of December 31, 2011, which were estimated to be 7.7 million ounces of gold.  The decreasein reserves
of gold was mainly due to mine depletion, and to a lesser extent, to reserve revisions and leach and stockpile inventory changes.



As of December 31,
2012, the Conga project’s proven and probable reserves were estimated to be 12.6 million ounces of gold and 3.3 billion pounds
of copper, unchanged from the 2011 gold and copper reserves.



55







Transportation and Refining



The doré bars
produced by Yanacocha are transported to refineries outside of Peru and, accordingly, Yanacocha has entered into pre-established
transportation contracts. Yanacocha has engaged Hermes Transportes Blindados S.A., or Hermes, to service its local transportation
requirements. Under the terms of Yanacocha’s agreement with Hermes, the risk of loss with respect to the doré bars
is assumed in its entirety by Hermes during the transportation of the doré bars from the mines to Jorge Chávez Airport
in Lima. Thereafter, the responsibility for the doré bars shifts to the refiner, which has entered into a contract with
an outside security firm to provide offshore transportation. The doré bars are melted, weighed and sampled in refineries
abroad, which store the doré bars in strong-room vaults and assume responsibility there for the doré bars. Yanacocha
pays a predetermined fee for the refining service. The final output from refineries, known as London Good Delivery gold and silver,
is credited to Yanacocha’s London bullion accounts until transferred to purchasers.



Sales of Gold



Yanacocha’s gold
sales are made through a monthly open-bidding process in which Yanacocha auctions its production corresponding to the next four
to five weeks. This bidding process is set up by Yanacocha with approximately 10 financial institutions and trading firms prior
to each month. Yanacocha collects bids and confirms sales. The gold is typically sold on the date of departure from Jorge Chávez
Airport in Lima. If a portion of gold remains unsold, it is sold on the spot market within a few days. Silver is sold on the spot
market approximately once a month to financial institutions or trading firms. The cash from such sales is received into a collection
account in London against orders to the London bullion bank for deliveries of the gold and silver to the purchasers.



Delivery is made once
a week and payments are collected on the day of confirmation. The payment price for the gold consists of either (i) the market
price at the confirmation of the sale, or (ii) the average London PM Fixing price over the tendered period plus a small premium
established pursuant to the bidding process. Since 1994, Yanacocha has consistently sold to five or six financial institutions
and trading firms at each auction. Such buyers are market makers and active participants in precious metal markets.



Employees



As of December 31,
2012, Yanacocha had 2,647 employees.Compensation received by Yanacocha’s employees includes base salary and other
non-cash benefits such as a health program and term life insurance. In addition, pursuant to the profit sharing plan mandated by
Peruvian labor legislation, employees at Yanacocha are entitled to receive 8 percent of Yanacocha’s annual pre-tax profits,
or the Employee Profit Sharing Amount, with 50 percent of such profits to be distributed based on the number of days each employee
worked during the preceding year and the remaining 50 percent of such profits to be distributed among the employees based on the
aggregate annual salary of each employee.



Yanacocha has entered
into arrangements with independent contractors that are responsible for the security services and staffing for several operational
and administrative areas. As of December 31, 2012, independent contractors employed 9,790 persons who worked at Yanacocha’s
operations. In 2004, Yanacocha entered into its first collective bargaining agreement with a union representing certain of its
employees, which was created on December 9, 2003. The Department of Industrial Relations meets regularly with union leaders to
address labor problems in the organization and to promote the creation of a productive and harmonious labor environment. The parties
address their issues through open and transparent dialogue. In 2012, a new union was established, and in 2013, a new collective
bargaining agreement process will occur with both the new union and existing unions.



56







Social Development



Since its formation,
Yanacocha has been attentive to social development and its relationships with local communities.



During 2012, Yanacocha
invested a total of US$40.5 million for social development at various projects, including the Conga project and The Associaiton
Los Andes of Cajamarca (ALAC), of which US$24.4 million was used for farming activities, promotion of community capabilities, education
and public infrastructure. Additionally, Yanacocha invested US$16.1 million for social impact mitigation related to the implemention
of social development projects, farming, construction of irrigation infrastructure, development of a former landowner families
program and completion of pending commitments with the surronding communitties.



In addition, Yanacocha
also invested US$10.1 million in contributions for social investment through the Cajamarca Mining Solidarity Fund in 2012.



Since 1993, Yanacocha
has invested nearly US$395.5 million in social development programs including education, health, social infrastructure (schools
and medical posts), productive infrastructure projects, rural electrification, roads, business promotion programs, local tourism
programs and agricultural assistance programs.



Security



Yanacocha
has 51 security employees on its payroll, including 7 employees responsible for the security of the region as a whole.  In
addition, Yanacocha has a contracted security force of over 221 persons assigned to rotating shifts at its mine, its Lima offices,
the city of Cajamarca, checkpoints along the road to the coast of Peru and residential areas in Cajamarca. The Conga project has
a total of 130 security personnel responsible for patrolling the project, including Yanacocha’s offices in the city of Cajamarca.



As
of March 31, 2013, none of Yanacocha’s employees, the properties on which it conducts mining operations or its Lima headquarters
had been the target of a terrorist incident.



Mining and Processing Concessions



Yanacocha’s mining
activities encompass 313,049 hectares covered by 439 mining concessions. Of these 313,049 hectares, Chaupiloma holds the mining
rights related to 105,666 hectares, covered by 144 mining concessions. Chaupiloma has assigned these mining concessions to Yanacocha
pursuant to several assignments of mining rights, each with an initial term of 20 years, which are renewable at Yanacocha’s
request for an additional 20-year term. The rights to four additional concessions are currently pending, one of which relates to
the Conga project.



Yanacocha believes
that the mining concessions assigned to it are in full force and effect under applicable Peruvian laws and that it is in compliance
with all material terms and requirements applicable to the mining concessions. Yanacocha is not experiencing any condition, occurrence
or event known to it that would cause the revocation, cancellation, lapse, expiration or termination thereof, except that Yanacocha
and Chaupiloma may, from time to time, remake, cancel, terminate or allow to lapse mining concessions assigned to Yanacocha that
are not material to the conduct of Yanacocha’s business.



57







Yanacocha has been
actively pursuing the acquisition of the land surface rights or obtaining easements relating to land positions containing prospective
geological exploration target sites, deposits that can be developed in the future or areas that would be considered for plant or
facility sites. To date, Yanacocha has acquired all the surface rights with respect to 24,502 hectares of the surface land covering
its Carachugo, Chaquicocha, Maqui Maqui, Haussing, Laboratorio, Línea de Alta Tensión, Presas, Museo, Sorpresa Mishacocha,
San José, Cerro Yanacocha, Las Lagunas, the Conga project, China Linda, Amaru, Chasu and La Quinua (which includes the Cerro
Negro deposit) mining operations, and a majority of the Cerro Quilish deposit and Calera China Linda.



In addition, as of
December 31, 2012, Yanacocha had acquired 24,692 hectares, including 5,804 hectares of surface rights with respect to the
Conga deposit, 3,589 hectares for Carachugo/San José/Chaquicocha, 2,154 hectares for Yanacocha and 1,651 hectares for Quilish.
See “Yanacocha—A. History and Development of the Company.”



Regulation, Permit and Environmental Matters



Yanacocha is subject
to a full range of governmental regulation and supervision generally applicable to companies engaged in business in Peru, including
mining laws, labor laws, social security laws, public health, consumer protection laws, environmental laws, securities laws and
antitrust laws. See “—Buenaventura—B. Business Overview—Regulatory Framework—Mining and Processing
Concessions” and “—Buenaventura—B. Business Overview—Regulatory Framework—Environmental Matters”
for a general description of Peruvian regulations of mining companies and environmental obligations. See “—Mining and
Processing Concessions” above for a discussion of Peruvian regulations relating to the mining and processing concessions
utilized by Yanacocha in its mining operations.



Yanacocha is required
to submit certain documentation with respect to its plans and operations for the review and approval of various Peruvian government
entities, including the MEM, the Ministry of Agriculture, the Water National Authority, and the Ministry of Health. Yanacocha is
required to file and obtain approval of an EIS with a Benefit Concession Permit for each of its mining operations before being
authorized to operate such mine. EISs for the Carachugo, Maqui Maqui, San José, Cerro Yanacocha, La Quinua (including Cerro
Negro) mining operations and China Linda lime plant have been approved. Pursuant to current Peruvian regulations, Yanacocha also
submits supplemental EISs each time a project’s production rate or disturbed area used is expanded by more than 50 percent.
In 2006, Yanacocha filed an EIS to expand its operations at the Yanacocha and La Quinua areas. After an EIS and the Benefit Concession
Permit are approved and construction activities are initiated, a governmental-accredited environmental auditing firm is required
to audit the operation. Each of the Carachugo, Maqui Maqui, San José, Cerro Yanacocha, La Quinua (including Cerro Negro)
mining operations and China Linda lime plant has been and continues to be audited as required with no pollution problems identified.



Yanacocha’s corporate
policy is tooperate in compliance with all applicable laws and regulations and adopt
and adhere to standards that are protective of both human health and the environment at the facilities it builds and operates.



Yanacocha has informed
us that its management believes that its operations are conducted in accordance with applicable laws and regulations. Audits and
corrective action plans are used to assure compliance. Future exploration, expansion and new projects will require a variety of
permits. Although procedures for permit applications and approvals have been historically faster in Peru than in the United States,
current procedures and the existing regulatory environment are more complex, time-consuming and susceptible to potential delays.



58







Yanacocha has informed
us that as a result of the enactment of the new Water Resources Law and the new Rule for Exploration Activities,new environmental
quality standards for water and new maximum permissible limits will require the adoption of new technologies for the adjustment
of water treatment and management systems. In 2010, Yanacocha implemented a Water Management Project to improve its treatment system
and water management in order to comply with the new water regulations.



Yanacocha has informed
us that its management believes that it is in compliance with all applicable regulations and international standards concerning
safety. For the year ended December 31, 2012, Yanacocha experienced 119 injuries compared to 67 during the year ended December
31, 2011.



Insurance



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



Yanacocha’s insurance
program consists of a “Primary Program” and an “Umbrella/Excess Program.” Coverage under the Primary Program
is provided through the local Peruvian insurance market and includes employers’ liability, comprehensive third party general
liability, comprehensive automobile liability, and all risk property on a replacement basis, including transit risks, business
interruption insurance and mining equipment. Coverage under the Umbrella/Excess Program is provided through Newmont Mining’s
master worldwide insurance program and addresses claims that the Primary Program cannot, or will not, cover. Yanacocha received
an additional US$14.4 million settlement in 2008 from its insurance program in connection with a mercury spill.



By-Laws of Yanacocha



Yanacocha is governed
by the Peruvian Companies Law and the estatutos (the combined articles of incorporation and by-laws) of Yanacocha, or the
Yanacocha By-Laws.



Control Over Major Corporate Events



Pursuant to the Peruvian
Companies Law and the Yanacocha By-Laws (including applicable quorum requirements), without the affirmative vote of the partners
of Yanacocha representing at least 51 percent of the voting shares, none of the following may occur: (i) an increase or decrease
in Yanacocha’s capital, (ii) the issuance of any debentures, (iii) any sale of an asset whose book value is at least 50 percent
of the paid-in capital relating to such asset, (iv) any amendment to the Yanacocha By-Laws in order to change its business form,
(v) the merger, consolidation, dissolution or liquidation of Yanacocha or (vi) any other amendment of the Yanacocha By-Laws.



Pursuant to the Shareholders
Agreement among Newmont Second, Condesa, Compagnie Miniére Internationale Or S.A.and IFC, dated as of August 16,
1993, as amended by a General Amendment Letter, dated August 17, 1994, any member of the Executive Committee of Yanacocha who wishes
to propose that Yanacocha’s Executive Committee authorize Yanacocha to take a Significant Action (as defined below) must
(i) give written notice to each partner of such proposal prior to consideration thereof at a meeting of the Executive Committee
and (ii) refrain from voting to approve such Significant Action until (x) the Executive Committee has received the consent of 80
percent of the partners of Yanacocha (a partner is deemed to have consented if no objection is received from such partner within
30 days after being notified) or (y) the Executive Committee has received the consent of at least 51 percent of the partners
of Yanacocha and 45 days have elapsed since the member of the Executive Committee who proposed the Significant Action has responded
in writing to objections received from objecting partners. “Significant Action” means (i) a disposal or sale of more
than 20 percent by value of Yanacocha’s fixed assets, (ii) any planned shutdown or cessation of Yanacocha’s mining
activities that is planned to last for more than one year, (iii) any capital expenditure by Yanacocha exceeding US$20 million,
(iv) any disposal or sale by Yanacocha of the mining rights covered by certain concessions or (v) the approval of the construction
of a project in the area owned by Yanacocha (other than the Carachugo mine and processing facilities).



59







Preemptive Rights



The Peruvian Companies
Law and the Yanacocha By-Laws provide preemptive rights to all partners of Yanacocha. In the event of a capital increase, any partner
has a preemptive right to pay its pro rata share of such increase in order to maintain such partner’s existing participation
in Yanacocha.



In the event of a proposed
transfer, exchange or sale, either voluntary or involuntary, of participation, collectively referred to as the Offered Participation,
of one or more partners, any partner has a right to acquire the Offered Participation in proportion to its holdings of partners’
capital. In the event that not all of the partners wish to exercise this right or some indicate their decision to acquire a smaller
share than that to which they are entitled, the other partners will be entitled to an increase, and consequently, the remaining
participation will be distributed among them in proportion to such partners’ capital participation and within the maximum
limit of the participation they have stated their intention to acquire. Finally, any Offered Participation remaining unsubscribed
by the partners must first be offered to Yanacocha before they may be offered to third parties.



Legal Proceedings



For a discussion of
legal proceedings, see Note 19 to the Yanacocha Financial Statements.



Other than the legal
proceedings described in the Yanacocha Financial Statements, Yanacocha is also involved in certain legal proceedings arising in
the normal course of its business, none of which individually or in the aggregate is material to Yanacocha or its operations.



Management of Yanacocha



Executive Committee



Pursuant to the Yanacocha
By-Laws, Yanacocha’s Executive Committee consists of six members, all of whom are appointed by the partners of Yanacocha.
Richard T. O’Brien, President and Chief Executive Officer of Newmont Mining Corporation, has been appointed Chairman of Yanacocha’s
Executive Committee, and Alberto Benavides, our former Chairman, serves as the Vice Chairman of Yanacocha’s Executive Committee
through 2013. The Vice Chairman has the power to preside over the meetings of Yanacocha’s Executive Committee in the Chairman’s
absence. The members of the Executive Committee are elected for a three-year term but may continue in their positions until the
next election takes place and the newly elected members accept their positions. Alternate members are elected in the same manner
as members and can act in place of and with all the authority of members when a member is unavailable, except that an alternate
member may not act as either Chairman or Vice Chairman of Yanacocha’s Executive Committee. The Chairman has the right to
cast the deciding vote in the event of a deadlock among Yanacocha’s Executive Committee.



60







General Manager/Management Agreement



The Yanacocha By-Laws
provide that the Yanacocha Partners’ Meeting has the power to appoint and remove the Manager of Yanacocha; the Executive
Committee has the power to appoint and remove other officers of Yanacocha, determine their duties and compensation and grant and
revoke powers of attorney. Newmont Peru was named as Yanacocha’s Manager according to a publicly filed deed, and it continues
to hold that position. Newmont Peru’s duties as Manager are defined in the Management Contract dated February 28, 1992, as
amended, between Yanacocha and Newmont Peru. Pursuant to the Management Contract, Newmont Peru is responsible for managing, conducting
and controlling the day-to-day operations of Yanacocha and keeping Yanacocha’s Executive Committee informed of all operations
through the delivery of various written reports. The Management Contract was amended as of December 19, 2000. The amendment extends
the term of the Management Contract for a period of 20 years starting at the date of amendment and provides that it may be extended
for additional terms of 20 years upon request by Newmont Peru. Newmont Peru, however, may cancel the Management Contract by giving
six months’ prior notice to Yanacocha. The Management Contract will be deemed terminated if, due to reasons attributable
to the bad management of Yanacocha, except for reasons beyond its control, Newmont Peru is unable to substantially complete the
agreed work programs. In exchange for its services as Manager, Newmont Peru receives remuneration of US$2 per ounce of gold production
and its equivalent for copper production paid on a quarterly basis, which amount is expected to cover the overhead and administrative
expenses for the management of the operations. Also, Newmont Peru may charge Yanacocha for the salaries of employees of Newmont
Peru or its affiliates who are directly involved in the operation of Yanacocha. In 2012, Yanacocha accrued fees of US$88 million
owed to Newmont Peru and its affiliates under the Management Contract.



Control Over Major Corporate Events



See “—By-Laws
of Yanacocha” above for a description of certain provisions of Peruvian law and of the Yanacocha By-Laws relating to control
over major corporate events.



Preemptive Rights and Rights of First Refusal



See “—By-Laws
of Yanacocha” above for a description of certain provisions of Peruvian law and of the Yanacocha By-Laws relating to preemptive
rights and rights of first refusal.



61







D.Property,
Plants and Equipment



Our Properties



Introduction



We operate ten mines:
Julcani, Recuperada, Uchucchacua, Orcopampa, Poracota, Mallay, Breapampa, Antapite, Ishihuinca and Shila-Paula. We also have controlling
interests in two mining companies which operate the Colquijirca, Marcapunta and La Zanja mines. We also own an electric power transmission
company and an engineering services consulting company and have non-controlling interests in several other mining companies, including
a significant ownership interest in companies that own and operate the Yanacocha, Cerro Verde and Tantahuatay mines. See “—Buenaventura—Organizational
Structure” and “—Intermediate Holding Companies, Subsidiaries and Equity Participations.” Set forth below
is a map of our principal mining operations as of April 30, 2013.







62







Operating Properties



Orcopampa



The Orcopampa mine
is wholly owned and operated by us. We lease the rights to the mining concessions of Orcopampa from a group of private investors.
This lease, which expires in 2043, requires a payment from us equal to 10 percent of production value, subject to certain conditions.
Operations started in the Orcopampa mine in 1965. In 2012, we made lease payments of US$38.39million. We operated Orcopampa
as a silver mine until the late 1990s, when we also began to mine gold-bearing veins. At December 31, 2012, the net total
fixed assets of Orcopampa were approximately US$60.3 million.



The Orcopampa mine
is located in the province of Castilla, department of Arequipa, approximately 1,350 kilometers southeast of the city of Lima, at
an altitude of between 3,800 and 4,500 meters above sea level. Access is by a 192-kilometer unpaved public road, which connects
to the Pan American highway, and by airstrip.



The Orcopampa mining
property consists of an epithermal gold telluride deposit hosted by early Miocene to Holocene calc-alkaline to high potassium calc-alkaline
lava flows and domes of the Sarpane Complex, which forms part of the tertiary metallogenic (Au-Ag) belt of Southern Peru.



Mining at Orcopampa
is conducted underground using the mechanized cut-and-fill method. Ore is processed at a mill located at Orcopampa. Electric power
is generated and supplied by a 3,900 kW hydroelectric plant that is owned by us and a power line, which is connected to the Peruvian
national electricity grid. Water for operations at Orcopampa is obtained from a lake and three rivers. When water is scarce, electric
power for the Orcopampa mine can be provided by a 3,976 kW diesel generator. In 2012, we completed construction of a new tailing
dam to extend the life of this mine. The 4A tailing dam has a capacity of 2.5 million cubic meters and is expected to be operational
until 2016.



During
2012, we focused our geological exploration below the 3,440-meter level on the Nazareno, Esperanza, Prosperidad, Lucia Angela and
Concepción veins and below the 3,540-meter level on the Natividad-Ocoruro vein system. We completed 13,283 meters of underground
mining exploration works and 33,630 meters of diamond drilling. We also deepened the Nazareno and Prometida shafts, which
will improve our exploration of the lower levels of the Chipmo mine. In 2013, we plan to continue exploration of the lower levels
of the Chipmo mine. We also plan to explore the southeast extension of mineralized structures at Pucay and Natividad-Ocoruro at
the 3,540-meter level through underground tunnel development and diamond drilling.



As of December 31,
2012, we calculated proven ore reserves of 673,722 DST, with 0.53 ounces per ton of silver and 0.43 ounces per ton of gold, and
probable ore reserves of 417,169 DST, with 0.56 ounces per ton of silver and 0.40 ounces per ton of gold. We have estimated NRM
of 420,030 DST, with 5.05 ounces per ton of silver and 0.435 ounces per ton of gold.



Set forth below are
certain unaudited operating data for the periods shown for Orcopampa, calculated on the basis of 100 percent of the mine’s
production.



|                              |  | Year Ended December 31,(1) (2) |        
|----------------------------- |  | ------------------------------ | -------
|                              |  | 2010                           |        
|Mining Operations:            |  |                                |        
|Ore mined (ST)                |  |                                | 484,767
|Average gold grade (oz./ST)   |  |                                | 0.625  
|Average silver grade (oz./ST) |  |                                | 0.30   
|Production:                   |  |                                |        
|Gold (oz.)                    |  |                                | 319,694
|Silver (oz.)                  |  |                                | 104,400
|Recovery rate (gold) (%)(3)   |  |                                | 95.9   
|Recovery rate (silver) (%)(3) |  |                                | 53.5   



63












| | (1) | Incorporates losses for mining dilution and recovery.
| | --- | -----------------------------------------------------

| | (2) | Incorporates gold and silver production from final tail treatment. During 2012, 20,245 ounces of gold and 314,574 ounces of
silver were recovered.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Only reflects recovery rate of gold and silver from Chipmo ore.
| | --- | ---------------------------------------------------------------



Poracota



Poracota is an underground
mine that is wholly owned and operated by us. Poracota is located in the province of Condesuyos, department of Arequipa, at an
altitude of between 4,500 and 5,000 meters above sea level. Access to the mine is available by means of a 33-kilometer unpaved
road connected to the Orcopampa mine. Operations at our Poracota mine commenced in February 2007. As of December 31, 2012, Poracota’s
net total fixed assets were approximately US$2.4 million.



Gold mineralization
at Poracota has been classified as an epithermal high sulfidation system, which is formed by two main areas, Huamanihuayta and
Perseverancia. The more important veins are María Fé, Silvana, Rocio and Malena, which are hosted by the tertiary
rocks of the Huamanihuayta volcano.



Ore from the Poracota
mine is treated by flotation at the Orcopampa concentrator plant.



During 2012, we conducted
9,554 meters of underground exploration tunnels and 34,361 meters of diamond drilling. In 2013, we plan to continue our exploration
efforts in Huamanihuayta Oeste and evaluate three new structures, Juliana, Milagros and Marely, as well as the southwest extension
of the Malena, Silvana and Paoloa veins.



As of December 31,
2012, we calculated Poracota’s proven reserves of 29,741 DST, with 0.332 ounces per ton of gold and 0.096 ounces per ton
of silver, and probable reserves of 6,746 DST, with 0.330 ounces per ton of gold and 0.004 ounces per ton of silver. The NRM for
sulfides and oxides was 29,212 DST, with 0.386 ounces per ton of gold and 4,093,924 DST, with 0.037 ounces per ton of gold, respectively.



Set forth below are
certain unaudited operating data for the periods shown for Poracota, calculated on the basis of 100 percent of the mine’s
production.



|                              |  | Year Ended December 31, |        
|----------------------------- |  | ----------------------- | -------
|                              |  | 2010                    |        
|Mining Operations:            |  |                         |        
|Ore mined (ST)                |  |                         | 245,041
|Average gold grade (oz./ST)   |  |                         | 0.290  
|Average silver grade (oz./ST) |  |                         | 0.15   
|Production:                   |  |                         |        
|Gold (oz.)                    |  |                         | 59,803 
|Silver (oz.)                  |  |                         | 27,169 
|Recovery rate (gold) (%)      |  |                         | 84.2   
|Recovery rate (silver) (%)    |  |                         | 73.8   



64







Uchucchacua



The Uchucchacua mine
is wholly owned and operated by us. Operations started in 1975, and Uchucchacua is currently our largest producer of silver. Uchucchacua
is located in the province of Oyón, department of Lima, approximately 265 kilometers northeast of the city of Lima at an
altitude of between 4,000 and 5,000 meters above sea level. At December 31, 2012, the net total fixed assets of Uchucchacua were
approximately US$55.1 million.



Uchucchacua’s
mineral structures are hosted by Mesozoic limestone of the Jumasha Formation and are classified as a mesothermal polymetallic deposit
of silver-lead-zinc with important contents of manganese. The main mineralized structures are veins and ore bodies with high-grade
silver mineralization.



Mining at Uchucchacua
is conducted underground utilizing cut-and-fill stopping, shrinkage stopping, and sublevel stopping methods. Ore is processed at
a mill located at Uchucchacua. The mill has a rated capacity of 3,000 DST per day, and utilizes differential flotation to obtain
a lead-silver concentrate and a zinc concentrate. Electric power is generated by a 3,400 kW hydroelectric plant that we own and
by a 3,025 kW diesel generator. We utilize a power line connecting Uchucchacua to the Peruvian national electricity grid and have
electrical distribution facilities within the Uchucchacua mine. Water for operations at Uchucchacua is obtained from three lakes.
In 2012, we continued construction of a manganese sulfate plant located in Sayan, Lima which will treat Uchucchacua’s mine
concentrate, improve silver recovery and increase the average realized price for silver concentrates produced at this mine. We
will begin opearating the manganese sulfate plant in May 2013.



In 2012, we conducted
exploration efforts on three mines: Socorro, Carmen and Huantajalla. We completed 52,494 meters of diamond drilling and constructed
23,236 meters of underground exploration tunnels. During 2013, we plan to focus our exploration efforts mainly on Huantajalla and
Socorroto to incease our reserves with high grades of silver-maganese.



At December 31, 2012,
proven ore reserves were 3,498,580 DST, with 12.6 ounces per ton of silver, 1.21 percent lead and 1.77 percent zinc, and probable
ore reserves were 2,186,410 DST, with 12.8 ounces of silver per ton, 1.32 percent lead and 1.78 percent zinc. Total NRM was 3,815,346
DST, with 13.2 ounces per ton of silver, 1.66 percent lead and 2.20 percent zinc.



Set forth below are
certain unaudited operating data for the periods shown for Uchucchacua, calculated on the basis of 100 percent of the mine’s
production.



|                              |  | Year Ended December 31,(1) |          
|----------------------------- |  | -------------------------- | ---------
|                              |  | 2010                       |          
|Mining Operations:            |  |                            |          
|Ore mined (ST)                |  |                            | 1,013,395
|Average silver grade (oz./ST) |  |                            | 12.93    
|Average zinc grade (%)        |  |                            | 1.47     
|Average lead grade (%)        |  |                            | 0.98     
|Production:                   |  |                            |          
|Silver (oz.)                  |  |                            | 9,269,718
|Zinc (ST)                     |  |                            | 7,702    
|Lead (ST)                     |  |                            | 8,687    
|Recovery rate (silver) (%)    |  |                            | 70.7     








| | (1) | Incorporates losses for mining dilution and recovery.
| | --- | -----------------------------------------------------

| | (2) | Incorporates total Socorro, Carmen and Huantajalla mine production.
| | --- | -------------------------------------------------------------------



65







Julcani



Julcani is an underground
mine that is wholly owned and operated by us. We acquired Julcani in 1953 as our first operating mine. Julcani is located in the
province of Angaraes, department of Huancavelica, approximately 500 kilometers southeast of Lima at an altitude of between 4,200
and 5,000 meters above sea level. As of December 31, 2012, the net total fixed assets of Julcani were approximately US$6.2million.



Julcani is a large
polymetallic deposit in Central Peru, which principally produces silver that occurs mainly as tetrahedrite and sulfosalts in a
multitude of mineralogically complex veins hosted by dacite domes, surge deposits and other tertiary volcanic rocks.



Ore is processed in
a concentrator plant located adjacent to the mine entrance. The ore is crushed and ground, and bulk flotation is used thereafter
to obtain a silver-gold-lead concentrate. The plant has a rated capacity of 500 DST per day and had a 79 percent utilization rate
in 2012. Electric power is generated by three Conenhua hydroelectric plants. Power generation capacity from these plants is 800
kW, 1,200 kW and 760 kW, respectively. We also rely on the Peruvian national electricity grid for the mine’s remaining electrical
power. Water for operations of Julcani is obtained from a creek, two springs and a lake.



During 2012, our exploration
activities were focused on deepening the main mineralized structures of our Acchilla and Estela mines, where we completed 12,668
meters of underground exploration tunnels and 12,830 meters of diamond drilling. In 2013, we plan to perform intense underground
mining exploration in Acchilla and Estela, exploring, at the 610-meter, 660-meter and 710-meter levels, all recognized veins of
Acchilla, and at the 560-meter, 610-meter and 660-meter of Estela, complemented by a diamond drilling program.



At December 31, 2012,
total proven ore reserves were 261,405 DST, with 18.5 ounces per ton of silver, 0.021 ounces per ton of gold, 1.8 percent lead
and 0.52 percent copper, and total probable ore reserves were 163,200 DST, with 18.7 ounces per ton of silver, 0.012 ounces per
ton of gold, 1.9 percent lead and 0.44 percent copper. Total estimated NRM was 315,475 DST, with 19.1 ounces per ton of silver,
0.034 ounces per ton of gold, 2.0 percent lead and 0.60 percent copper.



Set forth below are
certain unaudited operating data for the periods shown for Julcani, calculated on the basis of 100 percent of the mine’s
production.



|                              |  | Year Ended December 31,(1) |          
|----------------------------- |  | -------------------------- | ---------
|                              |  | 2010                       |          
|Mining Operations:            |  |                            |          
|Ore mined (ST)                |  |                            | 127,500  
|Average gold grade (oz./ST)   |  |                            | 0.024    
|Average silver grade (oz./ST) |  |                            | 18.96    
|Average lead grade            |  |                            | 1.89     
|Average copper grade (%)      |  |                            | 0.27     
|Production:                   |  |                            |          
|Gold (oz.)                    |  |                            | 2,118    
|Silver (oz.)                  |  |                            | 2,237,063
|Lead (ST)                     |  |                            | 2,202    
|Copper (ST)                   |  |                            | 3.5      
|Recovery rate (gold) (%)      |  |                            | 76.1     
|Recovery rate (silver) (%)    |  |                            | 92.5     








| | (1) | Incorporates losses for mining dilution and recovery.
| | --- | -----------------------------------------------------

| | (2) | Incorporates total Acchilla and Estela mine production.
| | --- | -------------------------------------------------------



66







Recuperada



The Recuperada mine
is wholly owned and operated by us. Recuperada is located in the province of Huancavelica, department of Huancavelica, approximately
540 kilometers southeast of Lima at an altitude of between 4,300 and 4,800 meters above sea level. Access is by a 242-kilometer
unpaved public road, which connects to the Pan-American Highway. Electricity is supplied by access to the Peruvian national electricity
grid via a 50-kilometer power line, which has a capacity of 22 kilovolts and 4,000 kilowatts. At December 31, 2012, the net total
fixed assets of Recuperada were approximately US$3.8million.



The Recuperada mining
district mainly contains polymetallic mineralization in veins of zinc, lead and silver (including the Teresita, Esperanza and Angelica
deposits), as well as some silver-rich veins (including the María Luz, Nancy Luz and Rico Antimonio deposits).



Recuperada is an underground
mine that uses the conventional cut and fill mining method. Mine ore is processed at a concentrator plant on site with a processing
capacity rate of 600 stpd. The tailing dam on site currently provides us with approximately 3.0 years of storage capacity based
on current production rates.



During 2012, we completed
9,494 meters of exploration tunnels and 7,995 meters of diamond drilling. We focused on searching for silver mineral in the Germana,
Esperanza and Nancy Luz areas and completing exploration at the 40-meter level of the Teresita mine. In 2013, we plan to continue
exploration, focusing mainly in mines with silver mineralization, such as Germana Este, Nancy Luz, Acchisayhua and Escopeta.



At December 31, 2012,
total proven ore reserves were 66,480 DST, with 8.3 ounces per ton of silver, 4.51 percent lead and 7.64 percent zinc, and total
probable ore reserves were 48,005 DST, with 9.5 ounces per ton of silver, 3.39 percent lead and 6.24 percent zinc. Total estimated
NRM was 121,560 DST, with 8.50 ounces per ton of silver, 4.67 percent lead and 6.74 percent zinc.



Set forth below are
certain unaudited operating data for the periods shown for Recuperada, calculated on the basis of 100 percent of the mine’s
production.



|                              |  | Year Ended December 31,(1) |        
|----------------------------- |  | -------------------------- | -------
|                              |  | 2010                       |        
|Mining Operations:            |  |                            |        
|Ore mined (ST)                |  |                            | 120,800
|Average silver grade (oz./ST) |  |                            | 5.03   
|Average lead grade (%)        |  |                            | 3.10   
|Average zinc grade (%)        |  |                            | 2.54   
|Production:                   |  |                            |        
|Silver (oz.)                  |  |                            | 571,189
|Lead (ST)                     |  |                            | 3,488  
|Zinc (ST)                     |  |                            | 2,494  
|Recovery rate (silver) (%)    |  |                            | 94.1   










| | (1) | Incorporates losses for mining dilution and recovery.
| | --- | -----------------------------------------------------

| | (2) | Incorporates total Teresita, Esperanza and Angélica mine production.
| | --- | --------------------------------------------------------------------



67







Antapite



Antapite
is an underground mine that is wholly owned and operated by us. Antapite is located in the province of Huaytará, department
of Huancavelica, approximately 434 kilometers southeast of the city of Lima at an altitude of approximately 3,400 meters above
sea level. The Antapite mine consists of an epithermal low sulfidation gold deposit in veins hosted by calc-alkaline volcanic rocks.
At December 31, 2012, the net total fixed assets of Antapite were approximately US$2.0million.



Mining is conducted
underground utilizing the conventional cut-and-fill stopping method. Ore is processed at a cyanidation plant located at Antapite.
The plant has a capacity of 600 DST per day and had a 52.0 percent utilization rate in 2012.



The Antapite mine obtains
substantially all of its electric power through the Peruvian national electricity grid. Water for operations at Antapite is obtained
from an underground drainage system.



During 2012, we focused
our exploration efforts on the Antapite, Euriosa, Soledad, Olvidada, Pampeñita 1, Pucarumi, Fabiola, Nidia, Verónica
and Alicia veins. We completed 9,117 meters of exploration tunnels and 20,830 meters of diamond drilling. In 2013, we plan to continue
our exploration efforts for ore reserves in the southeastern region over the mineralized alignments formed by the Soledad, Carolina,
Amatista, Furiosa, Pucarumi and Zorro Rojo veins.



As of December 31,
2012, total proven ore reserves were 29,951 DST with 0.330 ounces per ton of gold and 0.22 ounces per ton of silver, and total
probable ore reserves were 17,794 DST with 0.210 ounces per ton of gold and 0.22 ounces per ton of silver. Total estimated NRM
was 6,790 DST, with 0.280 ounces per ton of gold and 0.20 ounces per ton of silver.



Set forth below are
certain unaudited operating data for the periods shown for Antapite, calculated on the basis of 100 percent of the mine’s
production.



|                              |  | Year Ended December 31,(1)(2) |        
|----------------------------- |  | ----------------------------- | -------
|                              |  | 2010                          |        
|Mining Operations:            |  |                               |        
|Ore mined (ST)                |  |                               | 145,915
|Average gold grade (oz./ST)   |  |                               | 0.254  
|Average silver grade (oz./ST) |  |                               | 0.34   
|Production:                   |  |                               |        
|Gold (oz.)                    |  |                               | 35,803 
|Silver (oz.)                  |  |                               | 36,870 
|Recovery rate (gold) (%)      |  |                               | 96.8   
|Recovery rate (silver) (%)    |  |                               | 74.0   










| | (1) | Incorporates losses for mining dilution and recovery.
| | --- | -----------------------------------------------------

| | (2) | Data reflect only mining operations at the Antapite mine.
| | --- | ---------------------------------------------------------



Shila-Paula



Shila
and Paula are underground mines that are wholly owned and operated by Cedimin, our wholly-owned subsidiary. Shila and Paula encompass
an aggregate of41,152 hectares of mining concessions, which are owned by Cedimin. At December
31, 2012, the net total fixed assets of the Shila and Paula mining operations were approximately US$3.5 million.



68







The Shila mine is located
in the province of Castilla, department of Arequipa, approximately 1,350 kilometers southeast of Lima and 25 kilometers south of
the Orcopampa mining operation, at an altitude of between 4,650 and 5,400 meters above sea level. Access is by a 250-kilometer
unpaved road. The Shila mine is currently not operating due to a lack of ore reserves.



The Paula mine is located
in the province of Castilla, department of Arequipa, approximately 1,400 kilometers southeast of the city of Lima and 40 kilometers
south of the Orcopampa mining operation, at an altitude of between 5,000 and 5,400 meters above sea level.



Gold mineralization
deposits in Shila-Paula have been classified as epithermal low sulfidation of the Quartz-Adularia-Sericite type. The veins are
hosted in tertiary volcanic rocks associated with the Chinchón and Huayta calderas.



Mining operations are
currently conducted only in the Paula mine. Mining is conducted underground using the cut-and-fill ascending method. Ore is processed
at a metallurgical plant located at the Shila mine with a rated capacity of 230 DST per day. The plant had an approximately 72
percent utilization rate in 2012. The cyanidation plant at the Shila mine has a net capacity of 3,200 metric tons per year.



Electric power for
Shila-Paula is currently provided by the Peruvian national electricity grid. Four diesel generators with a total installed capacity
of 3,850 kW ensure the availability of electric power. The water for operations at Paula is obtained from runoff from snow peaks.



During 2012, we completed
11,397 meters of underground mining explorations and 27,201 meters of diamond drilling, mainly below the 4,830-meter level, on
the Nazareno, Ramal Crucero, Nazareno 3, Angélica Maria, Lucia, Ramal Chapi, Liliana, Maria Belen and Juliana veins. In
2013, we plan to continue our exploration efforts.



As of December 31,
2012, our proven ore reserves were 5,971 DST, with 0.410 ounces per ton of gold and 0.910 ounces per ton of silver and our probable
ore reserves were 2,400 DST, with 0.364 ounces per ton of gold and 0.950 ounces per ton of silver. Total NRM was 31,427 DST, with
0.373 ounces per ton of gold and 0.91 ounces per ton of silver. All ore reserves and NRM are in the Paula mine.



Set forth below are
certain unaudited operating data for Shila-Paula, calculated on the basis of 100 percent of both mines’ combined production.



|                              |  | Year Ended December 31,(1)(2) |       
|----------------------------- |  | ----------------------------- | ------
|                              |  | 2010                          |       
|Mining Operations:            |  |                               |       
|Ore mined (ST)                |  |                               | 64,047
|Average gold grade (oz./ST)   |  |                               | 0.234 
|Average silver grade (oz./ST) |  |                               | 0.96  
|Production:                   |  |                               |       
|Gold (oz.)                    |  |                               | 14,157
|Silver (oz.)                  |  |                               | 46,578
|Recovery rate (gold) (%)      |  |                               | 94.4  
|Recovery rate (silver) (%)    |  |                               | 75.9  








| | (1) | Incorporates losses for mining dilution and recovery.
| | --- | -----------------------------------------------------

| | (2) | Data reflect 5,166 ST, 11.4 ounces per ton of silver and 0.163 ounces per ton of gold (48,677 ounces
of silver and 701 ounces of gold) based on metallurgical tests conducted at the Tambomayo mine.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Ishihuinca



The
Ishihuinca mine is wholly owned by us. We lease the rights to the mining concessions of Ishihuinca from a third party. The lease
agreement, which expires in 2015, requires payment by Inminsur to the lessor of a royalty of 7 percent of the price of the
concentrates sold.At December 31, 2012, the net total fixed assets of Ishihuinca were approximately US$0.2million.



69







The Ishihuinca mine
is located in the province of Caravelí, department of Arequipa, approximately 780 kilometers southeast of the city of Lima
at an altitude of 2,200 meters above sea level. Access is by the Pan-American Highway.



Mining is conducted
underground utilizing the conventional cut-and-fill stopping method. Ore is processed at a metallurgical plant located at Ishihuinca.
The metallurgical plant, which has a rated capacity of 220 DST per day, utilizes bulk flotation and gravity concentration processes.
The bulk flotation process produces a copper/gold concentrate. The gravity concentrates and gold-bearing concentrates are treated
by cyanidation in vats and agitator tanks, respectively. The dissolved gold obtained from the cyanidation of both concentrates
is precipitated using zinc dust. The resulting precipitate is refined in Lima and then sold to Johnson Matthey.



Electric power is provided
by three electric generators with total installed capacity of 2,315 kW. Water for operations at Ishihuinca is obtained from underground
wells.



During 2012, we completed
1,156 meters of underground exploration tunnels. In 2013, we plan to continue our exploration efforts to increase our reserves
of gold ore by conducting exploration in surrounding areas.



As of December 31,
2012, our proven ore reserves were 8,620 DST, with 0.330 ounces per ton of gold, and probable ore reserves were 4,327 DST, with
0.342 ounces per ton of gold. Total NRM was 2,938 DST, with 0.369 ounces per ton of gold.



Set forth below are
certain unaudited operating data for the periods shown for Ishihuinca, calculated on the basis of 100 percent of the mine’s
production.



|                            |  | Year Ended December 31,(1) |      
|--------------------------- |  | -------------------------- | -----
|                            |  | 2010                       |      
|Mining Operations:          |  |                            |      
|Ore mined (ST)              |  |                            | 4,708
|Average gold grade (oz./ST) |  |                            | 0.223
|Average copper grade (%)    |  |                            | 0.53 
|Production:                 |  |                            |      
|Gold (oz.)                  |  |                            | 917  
|Copper (ST)                 |  |                            | 16   
|Recovery rate (gold) (%)    |  |                            | 80.3 
|Recovery rate (copper) (%)  |  |                            | 68.7 










| | (1) | Incorporates losses for mining dilution and recovery.
| | --- | -----------------------------------------------------



La Zanja



The La Zanja mine is
located in the district of Pulan, province of Santa Cruz, department of Cajamarca in northern Peru. La Zanja consists of approximately
37,000 hectares of mining concessions and is located 48 kilometers northwest of the Yanacocha gold mine, at an average altitude
of 3,500 meters above sea level. We hold a 53.06 percent interest in La Zanja and Newmont holds a 46.94 percent interest.



70







La Zanja is located
within a large area of hydrothermal alteration, mainly related to epithermal gold deposits in high sulfidation environments, in
addition to some vein systems of intermediate to low sulfidation. We have recognized two ore deposits: San Pedro Sur and Cerro
Pampa Verde.



Mining operations are
conducted through the open-pit method and carbon-in-column circuits are utilized to recover gold from heap leach operations. The
gold-laden carbon is then transported to Yanacocha to continue processing into doré bars.



During 2012, we completed
26,026 meters of diamond drilling in areas around San Pedro Sur, Pampa Verde and Cocan. In 2013, we plan to perform 20,000 meters
of diamond drilling at the Pampa Verde, San Pedro Sur and Cocan projects. We plan to start mining at Pampa Verde in July 2013.



Total proven and probable
ore reserves at December 31, 2012 were 24,795,233 DST, with 0.018 ounces per ton of gold and 0.208 ounces per ton of silver. Total
NRM was 12,131,615 DST, with 0.015 ounces per ton of gold and 0.211 ounces per ton of silver.



Set forth below are
certain unaudited operating data for La Zanja, calculated on the basis of 100 percent of the mine’s production.



|                              |  | Year Ended December 31,(1) |       
|----------------------------- |  | -------------------------- | ------
|                              |  | 2010                       |       
|Mining Operations:            |  |                            |       
|Ore mined (ST)                |  |                            | 64,047
|Average gold grade (oz./ST)   |  |                            | 0.234 
|Average silver grade (oz./ST) |  |                            | 0.96  
|Production:                   |  |                            |       
|Gold (oz.)                    |  |                            | 14,157
|Silver (oz.)                  |  |                            | 46,578








| | (1) | Data reflect mining operations at the San Pedro Sur deposit only.
| | --- | -----------------------------------------------------------------



Tantahuatay



Tantahuatay is a gold-copper
mine located in the district and province of Hualgayoc, department of Cajamarca, in northern Peru, at an average altitude of 3,900
meters above sea level. The project includes a total of 17,721 hectares of mining claims. The Tantahuatay mine is wholly owned
by Coimolache, in which we hold a 40 percent equity interest.



Geologically, the Tantahuatay
deposits are located at diatremes, or volcanic necks, in a predominantly sequence volcano magmatic hydrothermal manifestation,
linked to the regional sector north of Peru. We have identified several geologic targets with gold mineralization and have conducted
detailed studies of the Tantahuatay 2, Ciénaga Norte and Mirador Norte deposits.



Tantahuatay 2 consists
of hydrothermal breccia bodies, formed by silicified tuff fragments in a matrix of quartz-alunite-pyrophyllite, with iron oxides
inside fractures and cavities, which contain free gold and electrum as submicroscopic particles.



Ciénaga Norte
and Mirador Norte consist of hydrothermal breccia bodies, formed in facies of vuggy silica and sandy silica, hosted in tuffs and
hornblende lavas, which contain free submicroscopic gold mainly in iron oxides.



In August 2011, we
received approval to commence operations at the Tantahuatay processing plant and began to produce gold and silver at Tantahuatay
2.



71







In 2012, we launched
a new smelting furnace and completed the expansion in the capacity of our Merrill-Crowe-type ore processing facility from 800 to
1,100 cubic meters per hour. We also completed 6,763 meters of reverse circulation drilling to explore ore deposits and conduct
metallurgical tests. In 2013, we expect to complete infrastructure construction to allow for mining of the Ciénaga Norte
deposit in the fourth quarter of 2013.



Total proven and probable
ore reserves at December 31, 2012 were 24,427,771 DST, with ore grades of 0.019 ounces per ton of gold and 0.24 ounces per ton
of silver. Total NRM in oxides was 105,884,751 DST, with ore grades of 0.012 ounces per ton of gold and 0.17 ounces per ton of
silver. Total NRM in sulfides was 422,318,006 DST, with ore grades of 0.007 ounces per ton of gold, 0.18 ounces per ton of silver
and 0.67 percent copper.



Set forth below are
certain unaudited operating data for the Tantahuatay mine, calculated on the basis of 100 percent of the mine’s production.



|                              |  | Year Ended December 31,(1)(2) |          
|----------------------------- |  | ----------------------------- | ---------
|                              |  | 2011                          |          
|Mining Operations:            |  |                               |          
|Ore mined (ST)                |  |                               | 3,963,580
|Average silver grade (oz./ST) |  |                               | 0.63     
|Average gold grade (oz./ST)   |  |                               | 0.017    
|Production:                   |  |                               |          
|Silver (oz.)                  |  |                               | 260,073  
|Gold (oz.)                    |  |                               | 46,164   








| | (1) | Incorporates losses for mining dilution and recovery.
| | --- | -----------------------------------------------------

| | (2) | Data reflect mining operations at the Tantahuatay 2 deposit only.
| | --- | -----------------------------------------------------------------



Breapampa



The Breapampa mine,
is wholly owned and operated by us and encompasses 38,690 hectares of mining concessions. It is located in the district of Chumpi,
province Parinacochas, department of Ayacucho. The ore deposit consists of gold and silver mineralization in an epithermal system
high-sulfidation, emplaced into breccias of tertiary volcanic rocks. We located higher concentrations of gold-silver in oxides
in the Cerro Parccaorcco, Senccata, Pucagallo, Andrea, Ccaccapaqui, Sancos and Grace prospects. In July 2012, we began the production
phase at Cerro Parccaorcco, having disseminated gold in silica-oxides.



We performed 10,387
meters of diamond drilling to update model ore distribution and explore around the Parccaorcco open pit, where we have recognized
an ore body that is part of current reserves. In Senccata and Pucagallo, we performed a geophisycal survey of induced polarization
that confirmed the existence of two silicified bodies to over 50 meters deep.



Proven ore reserves
as of December 31, 2012 were 4,542,614 DST, with 0.041 ounces per ton of gold and 0.77 ounces per ton of silver. Probable ore reserves
were 590,683 DST, with 0.017 ounces per ton of gold and 0.40 ounces per ton of silver. Total NRM in oxides were 1,692,792 DST,
with 0.038 ounces per ton of gold and 0.11 ounces per ton of silver, 56.8% of which were derived from the Pucagallo prospect and
43.2% of which derived from the Senccata prospect. In 2013, we plan to conduct an intense drilling program, focusing primarily
in new areas, and also complete modeling of the Senccata and Pucagallo prospects.



72







Set forth below are
certain unaudited operating data for the Breapampa mine, calculated on the basis of 100 percent of the mine’s production.



|                              |  | Year Ended December 31,(1)(2) |  
|----------------------------- |  | ----------------------------- | -
|                              |  | 2011                          |  
|Mining Operations:            |  |                               |  
|Ore mined (ST)                |  |                               | -
|Average silver grade (oz./ST) |  |                               | -
|Average gold grade (oz./ST)   |  |                               | -
|Production:                   |  |                               |  
|Silver (oz.)                  |  |                               | -
|Gold (oz.)                    |  |                               | -








| | (1) | Incorporates losses for mining dilution and recovery.
| | --- | -----------------------------------------------------

| | (2) | Data reflect mining operations at the Parccaorcco deposit only.
| | --- | ---------------------------------------------------------------



Mallay



The Mallay mine is
wholly owned and operated by us and is located 21 kilometers southwest of the Uchucchacua mine in the district of Mallay, province
of Oyón, department of Lima. The project is comprised of approximiately 2,300 hectares of mining concessions. Mallay is
considered an epithermal deposit of silver, lead, zinc and gold. We have recognized the following major ore structures: Isguiz,
Pierina, María and Fortuna Body.



The metallurgical
processing plant began operations in mid-July 2012 with an average of 450 DST/day. During 2012, we constructed 9,389 meters of
exploration tunnels and 20,380 meters of diamond drilling, focused mainly on mineralized structures of the Isguiz mine.



As of December 31,
2012, the proven ore reserves were 192,679 DST, with ore grades of 0.025 ounces per ton of gold, 10.29 ounces per ton of silver,
6.50 percent lead and 7.50 percent zinc, and the probable reserves were 95,434 DST, with ore grades of 0.028 ounces per ton of
gold, 12.05 ounces per ton of silver, 5.71 percent lead and 6.26 percent zinc. Total NRM was 179,639 DST, with ore grades of 0.060
ounces per ton of gold, 11.56 ounces per ton of silver, 4.62 percent lead and 5.12 percent zinc. In 2013, we will focus exploration
efforts on the Isguis and María-Dana vein systems, mainly at the 4370-meter and 4090-meter levels, as well as continue exploration
of the Pierina vein at the 4310-meter and 4250-meter levels.



Set forth below are
certain unaudited operating data for the Mallay mine, calculated on the basis of 100 percent of the mine’s production.



73







|                              |  | Year Ended December 31,(1)(2) |  
|----------------------------- |  | ----------------------------- | -
|                              |  | 2011                          |  
|Mining Operations:            |  |                               |  
|Ore mined (ST)                |  |                               | -
|Average silver grade (oz./ST) |  |                               | -
|Average gold grade (oz./ST)   |  |                               | -
|Average lead grade (%)        |  |                               | -
|Average zinc grade (%)        |  |                               | -
|Production:                   |  |                               |  
|Silver (oz.)                  |  |                               | -
|Gold (oz.)                    |  |                               | -
|Lead (ST.)                    |  |                               | -
|Zinc (ST.)                    |  |                               | -
|Recovery rate silver (%)      |  |                               | -








| | (1) | Incorporates losses for mining dilution and recovery.
| | --- | -----------------------------------------------------

| | (2) | Data reflects mining operations at the Mallay deposit only.
| | --- | -----------------------------------------------------------



Colquijirca and Marcapunta Norte



The Colquijirca (also
known as Tajo Norte) and Marcapunta Norte mines are wholly owned by El Brocal. El Brocal was founded in 1956 and is engaged in
the extraction, concentration and sale of concentrates of polymetallic minerals—mainly zinc, copper, lead and silver. Our
aggregate direct and indirect equity interest in El Brocal was 53.76 percent at December 31, 2012. At December 31, 2012 the net
total fixed assets of Colquijirca and Marcapunta Norte were approximately US$343 million.



The Colquijirca and
Marcapunta Norte mines are adjacent and are located 285 kilometers east of the city of Lima and 10 kilometers south of the city
of Cerro de Pasco. El Brocal produces zinc and lead/silver concentrates from the Colquijirca mine and copper concentrates from
the Marcapunta Norte mine. The Colquijirca mine consists of three important polymetallic deposits: (1) Tajo Norte, which contains
zinc, silver and lead ore; (2) Marcapunta, which contains an auriferous mineralization in breccia oxides and an arsenic copper
enargite mineralization as a continuation of the mineralized mantles of the Marcapunta Norte mine; and (3) San Gregorio, which
contains zinc.



Mining at Colquijirca
is conducted through the open-pit method from which zinc and lead concentrates are produced. El Brocal’s zinc concentrate
typically contains 50 percent zinc, while its lead concentrate typically contains 51 percent lead. The concentrates are sold to
local smelters and traders depending on market conditions. Mining at Marcapunta Norte is conducted through the room and pillars
method, from which copper concentrates are produced. El Brocal’s copper concentrates typically contains 25 percent copper,
7 ounces of silver and 8 percent arsenic. The concentrates are sold to local traders.



The
Huaraucaca concentrator plant processes ore from both mines. In 2012, average treated ore at the plant reached up to 10,634metric
tons per day. The Colquijirca mine primarily relies on a power line connected to the Peruvian national
electricity grid.



El Brocal has conducted
an exploration program at the Marcapunta deposit to confirm mineralization and find possible extensions, as well as to increase
reserves at the Colquijirca and Marcapunta Norte mines. This program will continue throughout 2013.



74







In 2012, we invested
US$103.7 million to expand the project, and have invested a total of US$278.0 million since 2008. We also continued exploration
in prospective areas such as San Gregorio, Marcapunta Oeste and other areas, at a cost of US$18.4 million. We also continued the
construction and implementation of the crushing, milling and floatation processes under our expansion program, as well as construction
of the Huachuacaca tailings facility.



In 2013, we plan to
conduct an initial exploration program in Huancavelica at the Yanamina Millocucho zone to continue with prospecting activities.
The expansion project, which will enable us to increase treatment capacity to up to 18,000 tpd of ore, should be completed during
the second half of 2013.



Total proven and probable
reserves of Colquijirca as of December 31, 2012 were 63,333,000 DST, with 0.76 ounces of silver per ton, 2.4 percent of zinc and
0.8 percent of lead. Total proven and probable reserves of Marcapunta Norte as of December 31, 2012 were 20,016,145 DST, with 0.47
ounces of silver per ton, 0.010 ounces of gold per ton and 1.99 percent copper. Total NRM as of December 31, 2012 for Colquijirca
was 45,532,188 DST, with 0.42 ounces per ton of silver, 1.76 percent zinc and 0.52 percent lead. Total NRM for Marcapunta Norte
was 56,430,044 DST, with 0.57 ounces per ton of silver, 0.013 ounces per ton of gold and 1.71 percent copper.



Set forth below are
certain unaudited operating data for the Colquijirca mine, calculated on the basis of 100 percent of the mine’s production.



|                              |  | Year Ended December 31,(1) |          
|----------------------------- |  | -------------------------- | ---------
|                              |  | 2010                       |          
|                              |  |                            |          
|Mining Operations:            |  |                            |          
|Ore mined (ST)                |  |                            | 1,150,527
|Average silver grade (oz./ST) |  |                            | 2.30     
|Average zinc grade (%)        |  |                            | 4.69     
|Average lead grade (%)        |  |                            | 1.68     
|Production:                   |  |                            |          
|Silver (oz.)                  |  |                            | 1,901,661
|Zinc (ST)                     |  |                            | 38,955   
|Lead (ST)                     |  |                            | 12,768   
|Recovery rate (silver) (%)    |  |                            | 69.1     
|Recovery rate (zinc) (%)      |  |                            | 72.17    
|Recovery rate (lead) (%)      |  |                            | 66.00    










| | (1) | Incorporates losses for mining dilution and recovery.
| | --- | -----------------------------------------------------



Set forth below are
certain unaudited operating data for the Marcapunta Norte mine, calculated on the basis of 100 percent of the mine’s production.



|                                     |  | Year Ended December 31,(1) |        
|------------------------------------ |  | -------------------------- | -------
|                                     |  | 2010                       |        
|                                     |  |                            |        
|Mining Operations:                   |  |                            |        
|Ore mined (ST)                       |  |                            | 946,659
|Average silver grade (oz./ST)        |  |                            | 1.06   
|Average gold grade (%)               |  |                            | 0.013  
|Average copper grade (%)             |  |                            | 2.30   
|Production:                          |  |                            |        
|Silver (oz.)                         |  |                            | 608,438
|Gold (oz)                            |  |                            | 5,549  
|Copper (ST)                          |  |                            | 18,707 
|Recovery rate (silver) in copper (%) |  |                            | 60.81  
|Recovery rate (gold) in copper (%)   |  |                            | 45.79  
|Recovery rate copper (%)             |  |                            | 85.86  










| | (1) | Incorporates losses for mining dilution and recovery.
| | --- | -----------------------------------------------------



75







Reserves



We calculate our ore
reserves by methods generally applied within the mining industry and in accordance with Commission Industry Guide 7. All mineral
reserves are estimated quantities of proven and probable ore that under present conditions may be economically mined and processed.



The proven and probable
ore reserve figures presented in this Annual Report are estimates, and no assurance can be given that the level of recovery of
gold, silver and certain other metals will be realized. See “Item 3. Key Information—D. Risk Factors—Factors
Relating to the Company—Estimates of proven and probable reserves are subject to uncertainties and the volume and grade of
ore actually recovered may vary from our estimates.”



The term “reserves”
refers to mineral deposits that could be economically and legally extracted or produced at the time of reserve determination. The
term “proven reserves” means ore reserves for which (a) quantity is computed from dimensions revealed in outcrops,
trenches, workings or drill holes, and grade and/or quality are computed from the results of detailed sampling, and (b) the sites
for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape,
depth and mineral content of reserves are well established. The term “probable reserves” means ore reserves for which
quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection,
sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than
that for proven reserves, is high enough to assume continuity between points of observation.



As of December 31,
2012, our total proven and probable reserves were estimated to be 1,385 million ounces of gold, representing a 7% decrease over
our total proven and probable reserves as of December 31, 2011, which were estimated to be 1,485 million ounces of gold. The decrease
in reserves of gold was mainly due to mine depletion and the lack of replacements for gold production at La Zanja.



As of December 31,
2012, our total proven and probable reserves were estimated to be 154,606 million ounces of silver, representing a 1% decrease
over our total proven and probable reserves as of December 31, 2011, which were estimated to be 155,437 million ounces of silver.
The decrease in reserves of silver was mainly due to mine depletion and the lack of replacements for silver production at El Brocal.



The following table
lists the proven and probable ore reserves, and the average grade of such ore, as of December 31, 2012, for each of our consolidated
mining operations and the Tantahuatay mine, in which we have a 40 percent equity interest, calculated on the basis of 100 percent
of each mine’s reserves and US$1,400 per ounce of gold and US$30.00 per ounce of silver.



76







Proven and Probable Ore Reserves at December 31,
2012(1)(2)(3)



|                  |  | Julcani(4) |           |  | Uchucchacua(5) |  |            | Orcopampa(6) |  |  | Recuperada(7) |  |  | Mallay(8) |           |  | Colquijirca(9)(10) |  |           | Marcapunta(9)(11) |  |  | Ishihuinca |  |  | Antapite(12) |            |  | Shila-
Paula(13) |  |        | Poracota(14) |  |  | Breapampa(15) |  |  | Tantahuatay(16) |       |  | La Zanja(17) |  |        | Total/
    Average | 
|----------------- |  | ---------- | --------- |  | -------------- |  | ---------- | ------------ |  |  | ------------- |  |  | --------- | --------- |  | ------------------ |  | --------- | ----------------- |  |  | ---------- |  |  | ------------ | ---------- |  | ---------------- |  | ------ | ------------ |  |  | ------------- |  |  | --------------- | ----- |  | ------------ |  | ------ | ------------------ | 
|Ore Reserves (ST) |  |            | 424,605   |  |                |  | 5,684,990  |              |  |  | 1,090,891     |  |  |           | 114,485   |  |                    |  | 288,113   |                   |  |  | 63,333,221 |  |  |              | 20,016,327 |  |                  |  | 12,947 |              |  |  | 47,745        |  |  |                 | 8,371 |  |              |  | 36,487 |                    | 
|Grade:            |  |            |           |  |                |  |            |              |  |  |               |  |  |           |           |  |                    |  |           |                   |  |  |            |  |  |              |            |  |                  |  |        |              |  |  |               |  |  |                 |       |  |              |  |        |                    | 
|Gold (oz./ST)     |  |            | 0.017     |  |                |  | -          |              |  |  | 0.421         |  |  |           | -         |  |                    |  | 0.026     |                   |  |  | -          |  |  |              | 0.010      |  |                  |  | 0.334  |              |  |  | 0.300         |  |  |                 | 0.397 |  |              |  | 0.332  |                    | 
|Silver (oz./ST)   |  |            | 18.56     |  |                |  | 12.68      |              |  |  | 0.54          |  |  |           | 8.80      |  |                    |  | 10.87     |                   |  |  | 0.76       |  |  |              | 0.47       |  |                  |  | -      |              |  |  | 0.22          |  |  |                 | 0.92  |  |              |  | 0.079  |                    | 
|Copper (%)        |  |            | 0.50      |  |                |  | -          |              |  |  | -             |  |  |           | -         |  |                    |  | -         |                   |  |  | -          |  |  |              | 1.99       |  |                  |  | -      |              |  |  | -             |  |  |                 | -     |  |              |  | -      |                    | 
|Zinc (%)          |  |            | -         |  |                |  | 1.77       |              |  |  | -             |  |  |           | 7.05      |  |                    |  | 7.09      |                   |  |  | 2.40       |  |  |              | -          |  |                  |  | -      |              |  |  | -             |  |  |                 | -     |  |              |  | -      |                    | 
|Lead (%)          |  |            | 1.88      |  |                |  | 1.25       |              |  |  | -             |  |  |           | 4.04      |  |                    |  | 6.24      |                   |  |  | 0.80       |  |  |              | -          |  |                  |  | -      |              |  |  | -             |  |  |                 | -     |  |              |  | -      |                    | 
|Content:          |  |            |           |  |                |  |            |              |  |  |               |  |  |           |           |  |                    |  |           |                   |  |  |            |  |  |              |            |  |                  |  |        |              |  |  |               |  |  |                 |       |  |              |  |        |                    | 
|Gold (oz.)        |  |            | 7,398     |  |                |  | -          |              |  |  | 459,265       |  |  |           | -         |  |                    |  | 7,596     |                   |  |  | -          |  |  |              | 204,333    |  |                  |  | 4,326  |              |  |  | 14,324        |  |  |                 | 3,323 |  |              |  | 12,114 |                    | 
|Silver (oz.)      |  |            | 7,879,249 |  |                |  | 72,097,949 |              |  |  | 589,081       |  |  |           | 1,007,468 |  |                    |  | 3,132,941 |                   |  |  | 48,262,200 |  |  |              | 9,442,435  |  |                  |  |        |              |  |  | 10,504        |  |  |                 | 7,732 |  |              |  | 2,882  |                    | 
|Copper (ST)       |  |            | 2,102     |  |                |  | -          |              |  |  | -             |  |  |           | -         |  |                    |  | -         |                   |  |  | -          |  |  |              | 398,325    |  |                  |  | -      |              |  |  | -             |  |  |                 | -     |  |              |  | -      |                    | 
|Zinc (ST)         |  |            | -         |  |                |  | 100,345    |              |  |  | -             |  |  |           | 8,071     |  |                    |  | 20,427    |                   |  |  | 1,519,997  |  |  |              | -          |  |                  |  | -      |              |  |  | -             |  |  |                 | -     |  |              |  | -      |                    | 
|Lead (ST)         |  |            | 7,990     |  |                |  | 71,139     |              |  |  | -             |  |  |           | 4,625     |  |                    |  | 17,978    |                   |  |  | 506,666    |  |  |              | -          |  |                  |  | -      |              |  |  | -             |  |  |                 | -     |  |              |  | -      |                    | 








| | (1) | Algon Investment S.R.L., an independent consultant, is in the process of reviewing the framework used
to estimate proven and probable reserves for our wholly-owned mines as of December 31, 2012. MINTEC Inc., an independent consultant,
is in the process of reviewing the conceptual framework used to estimate proven and probable reserves for El Brocal’s mines
as of December 31, 2012.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The metallurgical recovery factors used to calculate reserves for each of our mines include ore
quality, gradation of ore (which impacts the effectiveness of reagents in releasing valuable particles), quality of water used
to treat ore (recycled water contains impurities that can interfere with the chemical reaction of the reagents) and quality of
reagent used to treat ore.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | For the year ended December 31, 2012, reserves for our wholly-owned and operated mines (which include
all of the mines listed above other than Colquijirca, Marcapunta, Tantahuatay and La Zanja) were calculated using the following
prices: US$1,400 per ounce of gold, US$30 per ounce of silver, US$2,028 per metric ton of zinc, US$2,000 per metric ton of lead
and US$6,600 per metric ton of copper.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | The metallurgical recovery factors that impacted the calculated reserves for Julcani at December
31, 2012 were whether the ore contained iron sulfide (Pirite) higher than 8% and the quality of water.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | The metallurgical recovery factors that impacted the calculated reserves for Uchucchacua at December
31, 2012 were the complexity of the ore, the variation of ore grade and the high manganese content.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | The metallurgical recovery factors that impacted the calculated reserves for Orcopampa at December
31, 2012 were water quality (recycled water contains impurities that can interfere with the chemical reaction of the reagents)
and lower than estimated or expected ore grade.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | The metallurgical recovery factors that impacted the calculated reserves for Recuperada at December
31, 2012 were the high variation in ore grade and the quality of water.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (8) | The metallurgical recovery factors that impacted the calculated reserves for Mallay at December
31, 2012 were the high variation in ore grade and the variation in the hardness of the host rocks.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (9) | El Brocal, in which we owned a 53.76% controlling equity interest at December 31, 2012, owns the
Colquijirca and Marcapunta mines. The reserves shown for Colquijirca and Marcapunta are the total reserves of the Colquijirca and
Marcapunta mines and do not indicate our equity share. They were calculated using the following metal prices: US$1,400 per ounce
of gold, US$30 per ounce of silver, US$2,028 per metric ton of zinc, US$2,000 per metric ton of lead and US$6,600 per metric ton
of copper.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (10) | The metallurgical recovery factors that impacted the calculated reserves for Colquijirca at December
31, 2012 were the high content of clay, and soluble salts in the ore.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (11) | The metallurgical recovery factors that impacted the calculated reserves for Marcapunta at December
31, 2012 were the high content of arsenic in the ore and the hardness of the host rocks.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (12) | The metallurgical recovery factors that impacted the calculated reserves for Antapite at December
31, 2012 were the high variation in ore grade and the quality of water.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (13) | The metallurgical recovery factors that impacted the calculated reserves for Shila-Paula at December
31, 2012 was the high variation in ore grade.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------

| | (14) | The metallurgical recovery factors that impacts the calculated reserves for Poracota at December
31, 2012 were the high variation of the ore grade and the presence of coal content in the ore.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (15) | The metallurgical recovery factors that impacted the calculated reserves for Breapampa at December
31, 2012 were the clay content in ore being higher than 10% and the iron sulfide (Pirite) content in ore being higher than 3%.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (16) | The reserves shown for Tantahuatay, in which we owned a 40% of equity interest at December 31,
2012, are the total reserves for the mine and do not indicate our equity share. They were calculated using the following prices:
US$1,200 per ounce of gold and US$ 22.0 per ounce of silver. The metallurgical recovery factors that impacted the calculated reserves
were the clay content in ore being higher than 10% and the iron sulfide (Pirite) content in ore being higher than 3%.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



77







| | (17) | The reserves shown for La Zanja, in which we owned a 53.06% of equity interest at December 31,
2012, are the total reserves of the mine and do not indicate our equity share. They were calculated using the following metal prices:
US$1,400 per ounce of gold and US$ 30 per ounce of silver. The metallurgical recovery factors that impacted the calculated reserves
were the clay content in ore being higher than 10% and the high copper content in the ore.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



78







We operate ten underground
mines and four open pit mines. The following table sets forth the aggregate amount of production of ore, gold and silver and the
average grade of gold and silver for each of our fourteen mines for the ten-year period ended December 31, 2012, calculated
in each case on the basis of 100 percent of the relevant mine’s production.



|                              |  | Julcani |            |  | Uchucchacua |  |             | Orcopampa(1) |  |  | Recuperada |  |  | Mallay |           |  | Colquijirca(2)(6) |  |         | Marcapunta(2) |  |  | Ishihuinca |  |  | Antapite |           |  | Shila -Paula(3) |  |         | Poracota |  |  | Breapampa(6) |  |  | Tantahuatay(4) (6) |           |  | La Zanja(5) (6) |  |           | Total | 
|----------------------------- |  | ------- | ---------- |  | ----------- |  | ----------- | ------------ |  |  | ---------- |  |  | ------ | --------- |  | ----------------- |  | ------- | ------------- |  |  | ---------- |  |  | -------- | --------- |  | --------------- |  | ------- | -------- |  |  | ------------ |  |  | ------------------ | --------- |  | --------------- |  | --------- | ----- | 
|Ore
    mined (ST)            |  |         | 957,120    |  |             |  | 9,239,911   |              |  |  | 4,693,309  |  |  |        | 682,640   |  |                   |  | 114,166 |               |  |  | 16,397,908 |  |  |          | 5,690,763 |  |                 |  | 368,511 |          |  |  | 1,611,585    |  |  |                    | 634,734   |  |                 |  | 1,124,909 |       | 
|Gold
    produced (oz.)       |  |         | 6,942      |  |             |  | -           |              |  |  | 2,612,923  |  |  |        | -         |  |                   |  | 107     |               |  |  | -          |  |  |          | 31,300    |  |                 |  | 125,096 |          |  |  | 611,405      |  |  |                    | 250,031   |  |                 |  | 242,563   |       | 
|Average gold grade (oz./ST)   |  |         | 0.011      |  |             |  | -           |              |  |  | 0.556      |  |  |        | -         |  |                   |  | 0.011   |               |  |  | -          |  |  |          | 0.012     |  |                 |  | 0.402   |          |  |  | 0.399        |  |  |                    | 0.416     |  |                 |  | 0.262     |       | 
|Silver
    produced (oz.)     |  |         | 16,266,407 |  |             |  | 101,784,006 |              |  |  | 1,458,349  |  |  |        | 3,718,219 |  |                   |  | 682,708 |               |  |  | 42,636,134 |  |  |          | 2,379,792 |  |                 |  | -       |          |  |  | 667,609      |  |  |                    | 2,278,745 |  |                 |  | 130,660   |       | 
|Average silver grade (oz./ST) |  |         | 18.25      |  |             |  | 14.97       |              |  |  | 0.30       |  |  |        | 5.79      |  |                   |  | 6.65    |               |  |  | 3.71       |  |  |          | 0.75      |  |                 |  | -       |          |  |  | 0.60         |  |  |                    | 4.36      |  |                 |  | 0.15      |       | 








| | (1) | Includes a cumulative total of 116,146 ounces of gold and 587,961 ounces of silver from final tail
treatment.
| | --- | -------------------------------------------------------------------------------------------------------------

| | (2) | El Brocal, in which we own a 53.76 % controlling equity interest as of December 31, 2012, owns
the Colquijirca and Marcapunta mines. The production data shown for Colquijirca and Marcapunta are the total production data of
the Colquijirca and Marcapunta mines and do not indicate our equity share.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Includes a cumulative total of 701 ounces of gold and 48,677 ounces of silver from metallurgical
test treatments to ore from the Tambomayo mine.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | The production data shown for Tantahuatay, in which we
own a 40.0 % controlling equity interest, are the total production data of the mine and do not indicate our equity share.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | The production data shown for La Zanja, in which we own
a 53.06 % controlling equity interest, are the total production data of the mine and do not indicate our equity share.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Colquijirca, Breapampa, Tantahuatay and La Zanja are
open pit mines.
| | --- | --------------------------------------------------------------------



79







Yanacocha’s Properties



Operating Properties



For operating
data (including ore mined, average gold grade of ore mined and gold production) for each of Yanacocha’s operating
properties and a description of how ore is processed and the source of electricity and water for each of Yanacocha’s
operating properties, see “—Yanacocha—Business Overview” and “—Description of
Yanacocha’s Operations.”



Carachugo - Chaquicocha



Chaquicocha Sur is
an 85-hectare gold deposit (ultimate pit) which lies in the east-central part of the Yanacocha district, approximately 1 kilometer
southeast of the mined out Carachugo deposit and 300 meters south of the Chaquicocha Norte pit.



Carachugo is a 90-hectare
gold deposit with a leach pad that covers approximately 306 hectares.  Carachugo, Yanacocha’s first mine, commenced
operations in August 1993.  Mining is conducted by the open-pit method.  The Carachugo open-pit mine ceased mining operations
in 2004, although one ore processing facility remains in operation.



Maqui Maqui



Maqui Maqui is a 75-hectare
gold deposit with a leach pad covering 67 hectares, located five kilometers northeast of the Carachugo pit.  Mining operations
at Maqui Maqui began in October 1994 and used the open-pit mining method.  Although mining operations at Maqui Maqui ceased
in September 2000, gold recovery from the leach pad continues.  The Maqui Maqui East expansion commenced operations in 2010
and will finish in February 2014.



San José



San José is
a 100-hectare gold deposit, located 1.5 kilometers southwest of the Carachugo pit, that shares the leach pad located at Carachugo. 
Mining operations at San José began in January 1996 using the open-pit mining method.  Mining operations at San José
temporarily ceased during the fourth quarter of 2002 and reopened in 2005 to complete San José East.  San José
West started operations in early 2010 and ceased operations in November 2012.



Cerro Yanacocha



Cerro Yanacocha is
a 247-hectare gold deposit (ultimate pit) with a leach pad covering approximately 310 hectares.  The Cerro Yanacocha pit is
located two kilometers northwest of the Carachugo pit.  Operations began in the fourth quarter of 1997 using the open-pit
mining method.  Cerro Yanacocha includes a carbon column gold recovery plant and a Merrill-Crowe-type ore processing facility. 
Cerro Yanacocha temporarily ceased operations in October 2010 and expects to reopen in 2017.



La Quinua



La
Quinua is a 450-hectare gold deposit (ultimate pit) with a leach pad covering 426 hectares.  The La Quinua, El Tapado and
El Tapado Oeste pits are located three kilometers southwest of the Cerro Yanacocha pit.  Operations began in the fourth quarter
of 2001 using the open-pit mining method.  All solution processing occurs at the Cerro Yanacocha plant following treatment
at the La Quinua leach pad and carbon column facility.



80







The
La Quinua mining operation included Cerro Negro Este, a 15-hectare gold deposit (ultimate pit) which is located six kilometers
southwest of the La Quinua pit.  Cerro Negro Este utilized the La Quinua leach pad.  Operations began in April 2004 using
the open-pit mining method and all solution processing occurred at the Cerro Yanacocha plant following treatment at the La Quinua
leach pad and carbon column facility.  Mining operations at Cerro Negro Este ceased in March 2005.



Western Oxides



The
Western Oxides are comprised of the Cerro Negro Oeste and La Quinua Sur open-pit mines.  Cerro Negro Oeste, a 40-hectare gold
deposit, is located 6.5 kilometers southwest of the La Quinua pit.  This pit utilizes the La Quinua leach pad as its ore facility. 
La Quinua Sur, a 110-hectare gold deposit, is located south of the Tapado Oeste pit and is completely covered by La Quinua gravel. 
La Quinua Sur is scheduled to commence mining activities in May 2014 and finish in 2015.  The ore mined from this pit will
be processed at the La Quinua leach pad.



Eastern Oxides



The
Eastern Oxides consist of the Marleny open-pit mine.  The Marleny pit, an 8-hectare deposit, is located to the west of the
Carachugo backfill.  Marleny is scheduled to commence mining operations in May 2013 and complete operations in 2015.



Carachugo Alto



The
Carachugo Alto pit, a 9-hectare deposit, is located to the east of the Carachugo backfill.  Carachugo Alto commenced mining
operations in July 2010, and its second phase will finish in August 2013.



China Linda



Yanacocha owns and operates the China Linda lime plant, which
is located in Cajamarca, 12 kilometers to the northeast of the Yanacocha installations.  Access to the plant from Yanacocha
is by a ten-kilometer private, unpaved road.  Lime is used in the gold and silver mining process to regulate the alkalinity
of the cyanide solutions in the leaching process and for pH control in water treatment applications.  Currently, the plant
has a production capacity of 78,000 tons of lime per year.



Reserves



Proven and probable
reserves are based on extensive drilling, sampling, mine modeling and metallurgical testing from which economic feasibility is
determined. Under the Management Contract, Newmont Mining, in conjunction with Yanacocha, calculates Yanacocha’s reserves
by methods generally applied within the mining industry and in accordance with SEC Industry Guide 7. Reserves represent estimated
quantities of proven and probable ore that under present and anticipated conditions may be economically mined and processed.



The following table
lists proven and probable reserves and the average grade of ore as of December 31, 2012 for Yanacocha and the Conga project. Calculations
with respect to the estimates of proven and probable reserves are based on a gold price of US$1,400 per ounce as of December 31,
2012. Calculations with respect to the Conga project’s copper reserves were calculated at a price of US$3.25 per pound
as of December 31, 2012. The proven and probable reserves presented below represent the total quantity of ore to be extracted from
the deposits, allowing for mining efficiencies and ore dilution. Ounces of gold and pounds of copper in the districts of Yanacocha’s
and the Conga project’s proven and probable reserves are calculated prior to any losses during metallurgical treatment.



81







|                             |  | Proven and Probable Reserves at December 31, 2012 |        
|---------------------------- |  | ------------------------------------------------- | -------
|                             |  | Tonnage (thousands of DST)                        |        
|Maqui Maqui                  |  |                                                   | 10,181 
|Carachugo                    |  |                                                   | 11,297 
|San José                     |  |                                                   | -      
|Giuliana                     |  |                                                   | -      
|Marleny                      |  |                                                   | 8,873  
|Cerro Yanacocha              |  |                                                   | 4,122  
|La Quinua                    |  |                                                   | -      
|Tapado                       |  |                                                   | -      
|Corimayo                     |  |                                                   | 48,674 
|La Quinua Sur                |  |                                                   | 71,549 
|Cerro Negro                  |  |                                                   | 33,021 
|In process                   |  |                                                   | 33,061 
|Subtotal Yanacocha/avg       |  |                                                   | 220,778
|Subtotal Conga project/avg.* |  |                                                   | 590,855
|Total/average                |  |                                                   | 811,633








* The Conga project’s proven
and probable reserves as of December 31, 2012 included 0.6 billion ST of 0.28 percent grade copper.



As of December 31,
2012, the Yanacocha district’s proven and probable reserves (excluding the Conga project’s proven and probable reserves)
were estimated to be 5.9 million ounces of gold, a 23 percent decreasefrom the Yanacocha district’s proven and probable
reserves as of December 31, 2011, which were estimated to be 7.7 million ounces of gold.  The decreasein reserves
of gold was mainly due to mine depletion, and to a lesser extent, to reserve revisions and leach and stockpile inventory changes.



As of December 31,
2012, the Conga project’s proven and probable reserves were estimated to be 12.6 million ounces of gold and 3.3 billion
pounds of copper, unchanged from reserves reported in 2011.



As of December 31,
2012, Yanacocha’s total proven and probable reserves (including the Conga project) were estimated to be 18.5million
ounces of gold, representing a 9percent decreaseover Yanacocha’s total proven and probable reserves as of
December 31, 2011, which were estimated to be 20.3 million ounces of gold. Yanacocha’s total proven and probable reserves
of copper were 3.3 billion pounds as of December 31, 2012, the same as reported as of December 31, 2011.



Based on the current
recovery rate and estimated gold production levels in 2012, Yanacocha’s proven and probable reserves as of December 31, 2012
will be depleted by 2015 unless Yanacocha continues to add to its reserves.  Yanacocha’s management believes that its
prospective land positions and mining concessions provide it with potential for future exploration and additions to its reserves.



| | ITEM 4A. | Unresolved Staff Comments
| | -------- | -------------------------



None.



82







| | ITEM 5. | Operating and Financial Review and Prospects
| | ------- | --------------------------------------------



In this
Item 5, we present information first with respect to Buenaventura, followed by information with respect to Yanacocha, in which
we have a 43.65 percent partnership interest, followed by information with respect to Cerro Verde, in which we have a 19.58 percent
equity interest.



BUENAVENTURA



Introduction



The
following discussion should be read in conjunction with the Financial Statements as of December 31, 2011 and 2012 and for the years
ended December 31, 2010, 2011 and 2012 and the related notes thereto included elsewhere in this Annual Report. The Financial Statements
are prepared and presented in accordance with IFRS as issued by the IASB.For periods
up to and including the year ended December 31, 2010, we prepared our financial statements in accordance with Peruvian GAAP. Our
consolidated financial statements for the year ended December 31, 2011 were the first that we prepared in accordance with IFRS.
We present our financial statements in U.S. Dollars.



A. Operating Results



General



Overview.We
were established in 1953 and are one of Peru’s leading producers of gold, silver and other metals. Our consolidated financial
statements comprise all of our accounts and those of our subsidiaries, which include: (i) the Julcani, Mallay, Breapampa, Recuperada,
Uchucchacua, Orcopampa, Poracota, Antapite and Ishihuinca mining units; (ii) the Colquijirca, Marcapunta, Shila-Paula and La Zanja
mines, which are owned through consolidated subsidiaries; (iii) Chaupiloma, which receives a royalty payment from Yanacocha; (iv)
Condesa, which is mainly a holding company for investments in us, Yanacocha and other affiliated mining companies; (v) Conenhua,
which is mainly engaged in the transmission of electric power to Yanacocha and other mining companies; and (vi) other minor subsidiaries.
We also have material equity investments in (i) Yanacocha, which is an equity investee engaged in the exploitation and commercialization
of gold, (ii) Cerro Verde, which is an equity investee engaged in the exploitation and commercialization of copper and (iii) Tantahuatay,
which is an equity investee engaged in the exploitation and commercialization of gold and silver. We account for these investments
under the equity method.



Yanacocha.A
substantial part of our net income before income tax was derived from our equity interest in Yanacocha. We have a 43.65 percent
equity participation in Yanacocha, which is held through our wholly-owned subsidiary, Condesa. Our partnership interest in Yanacocha
is accounted for under the equity method and is included under the caption “Investment in associates” on our consolidated
balance sheets. Although Yanacocha has no fixed dividend policy, there is an understanding among the partners that the net income
not required for sustaining capital expenditures or future development projects should be distributed after agreement between the
two major shareholders, Newmont Mining and us.



Cerro Verde.As
of December 31, 2012, we had a 19.58 percent equity participation in Cerro Verde, which allows us to exercise significant influence
over this company. As a result, we account for our investment in Cerro Verde using the equity method. Although Cerro Verde has
no fixed dividend policy, there is an understanding that earnings not required for capital expenditures or future development projects
are expected to be distributed.



Results of operations. The primary factors affecting our results of operations are (i) the amount of gold, silver, zinc and copper produced and sold
by us; (ii) prevailing world market prices for gold, silver, zinc and copper; (iii) commercial terms with respect to the sale of
ore concentrates; and (iv) our operating expenses.



83







Gold and silver
price hedging. Our revenues and earnings are strongly influenced by world market prices for gold, silver, zinc and copper that
fluctuate widely and over which we have no control. Depending upon the metal markets and other conditions, we may from time to
time hedge our gold and silver sales in order to decrease our exposure to fluctuations in the prices of these metals. We and our
wholly-owned subsidiaries are currently completely unhedged as to the price at which our gold and silver will be sold. As a result,
we are fully exposed to the effects of changes in prevailing market prices of gold and silver.



Operating costs
and expenses. Operating costs and expenses consist of (i) operating costs, which are direct production costs, the major component
of operating expenses; (ii) exploration costs in operational mining sites; (iii) depreciation and amortization expenses; (iv) exploration
costs in non-operational mining areas; (v) administrative expenses, which principally consist of personnel expenses; (vi) royalties,
which consist of payments to third parties and the Peruvian government to operate leased mining rights; and (vii) selling expenses,
which principally consist of freight expenses.



Reserves. We
utilize geological mapping, projection of ore-bearing structures, diamond drilling, core logging and chemical assaying, in addition
to drifting along previously indicated mineralization, to replace and grow reserves. In addition, we use metallurgical test-work
of core and bulk samples as a follow-up activity to prove the amenability of any previously indicated mineralization to certain
methods available on site. We continuously analyze this information with respect to tonnage, precious-metals average grades, metallurgical
recoveries and economic value and allocate funds preferentially to those projects that have the best potential to sustain or enhance
profitable mine production in the near-term. Our mining operations are primarily conducted underground and consist of deposits
that are difficult to explore and measure in advance of mining and in which the value or prospects for ore based on geologic evidence
exceeds the value based on proved reserves throughout most of the life of mines supported by them, or extramensurate deposits.



In addition, underground
mine infrastructure, such as declines, shafts and/or dewatering/ore haulage crosscuts, that facilitate access to ore reserves are
constructed and categorized as mine development. We consider such underground mine infrastructure vital to assure sustainable mine
production and reserve production. The design, construction and implementation of our underground mine infrastructure are presented
and supervised by our Operations Manager with the Board of Directors’ approval. We capitalize mine development and mineral
land costs incurred after we have identified proven and probable reserves. Upon commencement of production, we amortize these costs
over the expected life of the mining area, based on proven and probable reserves and other factors.



Our other mining operations
are smaller and have variable fluctuations in production and reserves due to complexities of the ore located in certain mining
operations (such as the Colquijirca mine); the sale of certain mining operations (such as the Huallanca mine); partial and temporary
closures of mining operations (such as the Shila-Paula and Recuperada mines); and the production of silver only as by-product of
gold (such as the Orcopampa, Antapite and Shila-Paula mines).



Net income and net
distributable income. Under Peruvian law, each company is required to establish a legal reserve
of at least 20 percent of its paid-in capital on an unconsolidated basis. An annual contribution of at least 10 percent of net
income must be made until such legal reserve equals 20 percent of paid-in capital. The legal reserve may offset losses or be capitalized.
However, following any instance in which the reserve is used, Peruvian law calls for mandatory replenishment of the reserve.



84







Royalties.Royalty
expenses consist mainly of payments made by us pursuant to lease agreements relating to mining rights for the Orcopampa and Ishihuinca
mines. Specifically, we pay the applicable lessor a royalty of 10 percent of the value of the concentrates produced in the Orcopampa
mine and 7 percent of the value of the concentrates produced in the Ishihuinca mine. We are also required to pay the Peruvian government
mining royalties and taxes. In addition to mining royalties, pursuant to Law No. 29789, effective October 1, 2011, mining operations
in Peru are subject to a new extraordinary mining tax. See “Item 4. Information on the Company—Buenaventura—B.
Business Overview—Regulatory Framework—Mining Royalties and Taxes.”



Environmental protection
laws and related regulations. Our business is subject to Peruvian laws and regulations relating to the exploration and mining
of mineral properties, as well as the possible effects of such activities on the environment. We conduct our operations substantially
in accordance with such laws and regulations.



Critical Accounting
Policies and Estimates



The following is a
discussion of our application of critical accounting policies that require our management, or Management, to make certain assumptions
about matters that are highly uncertain at the time the accounting estimate is made, and where different estimates that Management
reasonably could have used in the current period, or changes in the accounting estimate that are reasonably likely to occur from
period to period, would have a material impact on our financial statements. Management has identified the following accounting
estimates and policies as critical:



| | § | mineral reserves and resources;
| | - | -------------------------------



| | § | mine development costs;
| | - | -----------------------



| | § | impairment of non-financial assets;
| | - | -----------------------------------



| | § | deferred income tax asset and recoverability;
| | - | ---------------------------------------------



| | § | inventories;
| | - | ------------



| | § | accrual for mine closing costs;
| | - | -------------------------------



| | § | fair value of derivative instruments;
| | - | -------------------------------------



| | § | fair value of the liability related to share-based payment transactions;
| | - | ------------------------------------------------------------------------



| | § | contingencies;
| | - | --------------



| | § | production start date;
| | - | ----------------------



| | § | unit-of-production depreciation; and
| | - | ------------------------------------



| | § | expected recovery rates used to estimate mineral contained in in-process inventories.
| | - | -------------------------------------------------------------------------------------



Other significant accounting
policies include:



| | § | deferred stripping costs;
| | - | -------------------------



| | § | useful life of property, plant and equipment;
| | - | ---------------------------------------------



85







| | § | fair value of embedded derivative for concentrates sales; and
| | - | -------------------------------------------------------------



| | § | revenues.
| | - | ---------



We also have certain
accounting policies that we consider to be important, such as our policies for investments carried at fair value, revenue recognition
and exploration costs, that do not meet the definition of critical accounting estimates as they do not require Management to make
estimates or judgments that are subjective or highly uncertain.



Management has discussed
the development and selection of our critical accounting estimates with the Audit Committee of the Board of Directors.



Mineral reserves and
resources



Recoverable proven
and probable reserves are the part of a mineral deposit that can be economically and legally extracted or produced at the time
of the reserve determination. The determination of reserves involves numerous uncertainties with respect to the ultimate geology
of the ore bodies, including quantities, grades and recovery rates. Estimating the quantity and grade of reserves requires us to
determine the size, shape and depth of our ore bodies by analyzing geological data, such as samplings of drill holes, tunnels and
other underground workings. In addition to the geology of our mines, assumptions are required to determine the economic feasibility
of mining these reserves, including estimates of future commodity prices and demand, the mining methods we use and the related
costs incurred to develop and mine our reserves. The conceptual framework used to estimate proven and probable reserves for our wholly-owned mines as of
December 31, 2010 and 2011 were reviewed by an independent consultant, Algon Investment S.R.L. Algon Investment S.R.L. is in the
process of reviewing the framework used to estimate proven and probable reserves for our wholly-owned mines as of December 31,
2012. The conceptual framework used to estimate proven and probable reserves for El Brocal’s mines as of December 31, 2010
and 2011 were reviewed by independent consultants, AMEC plc and MINTEC Inc., respectively. MINTEC Inc. is in the process of reviewing
the conceptual framework used to estimate proven and probable reserves for El Brocal’s mines as of December 31, 2012.



Changes in estimated
reserves could affect mainly the depreciation of fixed assets related directly to mining activity, the provision for mine closure,
the assessment of the deferred asset’s recoverability and the amortization period for development costs.



Mine development costs



We review and evaluate
our accounting policy regarding mine development costs, which requires judgment in determining whether it is likely that future
exploitation will result in future economic benefits. The determination of reserves and mineral resources is a complex estimation
that entails varying degrees of uncertainty depending on sub-classification, and these estimates directly impact the point of deferral
of exploration and mine development costs and the amortization method for development costs. The deferral policy requires us to
make certain estimates and assumptions about future events or circumstances—in particular, whether an economically viable
extraction operation and mineral sale can be established. Estimates and assumptions made may change as new information becomes
available. If, after the expenditure is capitalized, information becomes available suggesting that we are unlikely to recover the
expenditure, the amount capitalized is written off in our profit and loss statement for the period in which the new information
becomes available.



86







Impairment of non-financial
assets



We determine whether
the operations of each mining unit are cash generating units, considering each mining unit operation independently. We assess at
each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, we estimate the
asset’s recoverable amount. An asset’s recoverable amount is the higher of the asset’s fair value less costs
to sell and its use value and is determined for an individual asset (cash-generating unit) unless the asset does not generate cash
inflows that are clearly independent of those from other assets or groups of assets. These assessments require the use of estimates
and assumptions such as long-term commodity prices, discount rates, operating costs, and others.



A cash-generating unit
is the smallest identifiable group of assets that generates cash inflows from continuing use that are independent of the cash inflow
generated by other assets or groups of assets.



In assessing use value,
the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset.



During the fourth quarter
of 2010, we updated our assessment of the recoverability of the book value of our long-term assets under the procedures established
by IAS 36 – “Impairment of Assets” and reversed the impairment of the Antapite, Recuperada and Poracota mining
units as of December 31, 2010 following positive changes in the assumptions used to calculate the impairment provision recorded
in order to determine the recovery carrying amount of our long-lived assets. The impairment reversed as of December 31, 2010 amounted
to US$13.1 million.



During the fourth quarter
of 2011, we updated our assessment of the recoverability of the book value of our long-term assets under the procedures established
by IAS 36 – “Impairment of Assets” and identified no impairment indication in our long-lived assets.



During the fourth quarter
of 2012, we updated our assessment of the recoverability of the book value of our long-term assets under the procedures established
by IAS 36 – “Impairment of Assets” for three of our mining units (Recuperada, Poracota and Antapite), which resulted
in the recognition of asset impairment charges of US$3.6 million (recognized as operating expense). These impairment charges had
no impact on our operating cash flows. Cash flows used to assess recoverability of our long-lived assets and measure the carrying
value of our mining operations were derived from current business plans using near-term price forecasts reflective of the current
environment and Management’s projections for long-term average metal prices and operating costs.



Our asset impairment
evaluations required us to make several assumptions in the discounted cash flow valuation of (i) our individual mining operations,
including near and long-term metal price assumptions, production volumes, estimates of commodity-based and other input costs and
(ii) proven and probable reserve estimates, including any costs to develop the reserves and the timing of producing the reserves,
as well as the appropriate discount rate. Our December 31, 2011 and 2012 impairment evaluation was based on price assumptions reflecting
prevailing metals prices for the following four years.



We believe events that
could result in additional impairment of our long-lived assets include, but are not limited to, (i) decreases in future metal prices,
(ii) decreases in estimated recoverable proven and probable reserves and (iii) any event that might otherwise have a material effect
on mine site production levels or costs.



87







Deferred income tax
asset and recoverability



In preparing our annual
consolidated financial statements, we estimate the actual amount of taxes currently payable or receivable as well as deferred tax
assets and liabilities attributable to temporary differences between the tax and book bases of assets and liabilities. Deferred
income tax assets and liabilities are measured using tax rates applicable to taxable income in the years in which these temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
and laws is recognized in income in the period in which such changes are enacted.



All deductible temporary
differences and loss carry-forwards generate the recognition of deferred assets to the extent that it is probable that they can
be used in calculating taxable income in future years. Deferred income tax liability is recognized for all deductible temporary
differences and tax loss carry-forwards, to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences and unused tax losses can be utilized. The carrying amount of the deferred income tax asset
is reviewed at each consolidated statement of financial position date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred asset to be utilized. Unrecognized deferred assets
are reassessed at each consolidated statement of financial position date.



Deferred assets and
liabilities are offset if there is a legal right to set them off and the taxes deferred relate to the same entity and the same
tax authority.



Deferred tax assets,
including those resulting from unused tax losses, require that we assess the likelihood that we would generate taxable earnings
in future periods to apply the deferred tax assets. Estimated future taxable income is based on projections of cash flow from operations
and application of the tax law existing in each jurisdiction. To the extent to which actual future cash flows and taxable income
differ significantly from those estimated, our ability to realize the deferred tax assets posted as of the reporting date may be
affected.



In addition, future
changes in the tax law in jurisdictions where we operate could limit our ability to obtain tax deductions in future periods.



At December 31, 2012,
2011 and 2010, our valuation allowance totaled US$5.3 million, US$3.8 million and US$2.6 million, respectively.



Inventories



Inventories are classified
as short-term or long-term depending on the length of time that management estimates will be needed to reach the production state
of concentrate extraction for each mining unit.



Net realizable value
tests are performed at least annually and represent the estimated future sales price of the product based on prevailing spot metals
prices at the reporting date, less estimated costs to complete production and bring the product to sale. Additionally, management
also considers the time value of money in calculating the net realizable value of our long-term inventories.



Classified minerals,
which are materials with metal content that were removed from the pit of the Colquijirca mining unit for treatment at the expansion
operation plant, contain lower grade ore than the average of treated minerals and are available to continue in the process of recovery
of mineral and concentrates. Because it is generally impracticable to determine the mineral contained in the classified mineral
located in the deposit field near Tajo Norte by physical count, reasonable estimation methods are employed. The quantity of minerals
delivered to classified mineral is based on surveyed volumes of mined material and daily production records. Sampling and assaying
of blasthole cuttings determine the estimated copper, lead and zinc grades of material delivered to classified minerals.



88







For minerals outside
leach platform inventories, finished and in-progress goods are measured by estimating the number of tons added and removed. The
number of contained gold ounces is based on assay data, and the estimated recovery percentage is based on the expected processing
method. Tonnages and ounces of mineral are verified by periodic surveys.



For minerals inside
leach platform inventories, reasonable estimation methods are employed because it is generally impracticable to determine the mineral
contained in leach platforms by physical count. The quantity of material delivered to leach platforms are based on surveyed volumes
of mined material and daily production records. Sampling and assaying of blasthole cuttings determine the estimated ore grades
of material delivered to leach platforms.



Accrual for mine closing
costs



We record a provision
for mine closure when a legally enforceable obligation arises, which is independent of the full depletion of the mine reserves.
Once such an obligation has been appropriately measured, it is recorded by creating a liability equal to the amount of the obligation
and recording a corresponding increase to the carrying amount of the related long-lived asset (mine development cost and property,
plant and equipment). Over time, the amount of the obligation changes, impacting recording and accretion expenses. Additionally,
the capitalized cost is depreciated and/or amortized based on the useful lives of the related assets.



Any difference in the
settlement of the liability will be recorded in the results of the period in which such settlement occurs. The changes in the fair
value of an obligation or the useful life of the related assets that occur from the revision of the initial estimates should be
recorded as an increase or decrease in the book value of the obligation and related asset.



Following our accounting
treatment, we have recorded an accrual for mine closure costs of US$99.4 million, as of December 31, 2012 in order to comply with
governmental requirements for environmental remediation.



We assess our provision
for closure of mining units annually. It is necessary to make significant estimates and assumptions in determining this provision
because there are a number of factors that will affect the ultimate liability for this obligation. These factors include estimating
the scope and costs of closing activities, technological changes, regulatory changes, increases in costs compared to inflation
rates and changes in the discount rates. Such estimates or assumptions may result in actual expenses in the future that differ
from the amounts provisioned at the time the provisions were established. The provision at the date of this report presents our
best estimate of the present value of future costs for the closure of mining units.



89







Fair value of derivative financial instruments



Outstanding derivative contracts.We
recognize derivative instruments as assets or liabilities, measured at their fair value, in our consolidated statements of financial
position pursuant to IAS 39, “Financial Instruments — Recognition and Measurement.”



Subsidiary derivative
contracts. During 2010 and 2011, our indirect subsidiary, El Brocal, entered into price-hedging option
contracts at zero cost to protect future cash flows derived from sales in 2011 and 2012. Derivative contracts are recognized
as assets and liabilities at fair value in the consolidated financial statements. El Brocal applies hedge accounting for those
transactions that meet the specific criteria applicable in accordance with IAS-39. As of December 31, 2012, El Brocal was not a
party to any hedging transactions and had no outstanding hedging commitments.



Our derivative contracts.
As of December 31, 2010, 2011 and 2012, neither we nor any of our wholly-owned subsidiaries held gold derivative contracts.



Fair value of the
liability related to long-term officer compensation



Our senior executive
officers are granted share appreciation rights, which can only be settled in cash, if the executive is working for us at each program’s
settlement date. These programs are mainly structured in a ten-year term, allocated in several programs with progressive maturities.
The average price of the granted share appreciation rights is assigned based on last quarter market quotation of the shares before
the grant date and the settlement price is determined based on the variation of the market prices at the maturity date as compared
to the price at the date of the grant.



We used the Turnbull
& Wakeman Method to estimate the fair value of this liability and the principal assumptions made are as follows: the historical
volatility, risk-free interest rate, dividend yield, period covered by the program and market value of the shares at closing. See
Note 14 to the Financial Statements.



Contingencies



Contingent liabilities,
when identified, are assessed as either remote, possible or probable. Contingent liabilities are recorded in the consolidated financial
statements when it is probable that future events will confirm them and when their amount can be reasonably estimated. Contingent
liabilities deemed as possible are only disclosed, together with a possible debit range, when determinable, in notes to the Financial
Statements.



Contingent assets are
not recognized in the financial statements; however, they may be disclosed in notes to the financial statements if it is probable
that such contingent assets will be realized. See Note 30 to the Financial Statements.



Determining contingencies
inherently involves the exercise of judgment and calculation of the estimated outcomes of future events.



Production start date



We assess the stage
of each mine under development to determine when a mine moves into the production stage. The criteria used to assess the start
date are determined based on the nature of each mining project, the complexity of a plant and its location. We consider various
relevant criteria for assessing when the mine is substantially complete and ready for its planned use. Some of these criteria are
the level of capital expenditure compared to development cost estimates, a reasonable testing period for the mine’s plant
and equipment and the ability to produce ongoing production of metal.



90







When a mine development
project moves into the production stage, the capitalization of certain costs ceases, and they are considered as inventory or expenses,
except for costs that qualify for capitalization relating to mining asset additions or improvements, underground mine development
or mineable reserve development. It is also at this point that depreciation or amortization commences.



Unit-of-production
depreciation



Reserves are used in
determining the depreciation and amortization of mine-specific assets. This results in a depreciation or amortization charge proportional
to the depletion of the anticipated remaining life of mine production. Each mine’s life is assessed annually to evaluate:
(i) physical life limitations and (ii) present assessments of economically recoverable reserves of the mine property. These calculations
require the use of estimates and assumptions, including the amount of recoverable reserves. Changes are recorded prospectively.



Depreciation and amortization
of assets whose useful life is longer than the life of the mine is calculated on a unit-of-production basis over the economically
recoverable reserves of the mine. Depreciation and amortization of assets whose useful life is shorter than the life of the mine
is calculated using the straight-line method.



The units of production
are measured in recoverable metric tons of concentrate. The unit-of-production rate for depreciation and amortization takes into
account expenditures incurred to date.



Expected recovery
rates used to estimate mineral contained in in-process inventories



For determining the
quantity of mineral contained in the products in process we use a reasonable methodology to estimate the mineral content that is
treated at the date of the consolidated financial statement. The amount of mineral added in the products in process is determined
by the sampling of mill volumes and the daily production records. The sampling and assays determine the head grade of the mineral
added to the products in process.



The recovery rates
for leach platforms in process are determined by metallurgical sampling. The mineral recoverability of the leach platforms, once
the production process begins, can be reasonably estimated. The rate is determined using pilot laboratory tests, historic trends
and others factors. Process and recovery rates are monitored continuously, and recovery rates are adjusted periodically as additional
information becomes available and as related technology changes.



Deferred stripping
cost



Stripping costs incurred
in the development of a mine before production commences are capitalized as part of the cost of constructing the mine and subsequently
amortized over the life of the mine on a unit-of-production basis.



Where a mine operates
several open pits that are regarded as separate operations for the purpose of mine planning, stripping costs are accounted for
separately by reference to the ore from each separate pit. If, however, the pits are highly integrated for the purpose of the mine
planning, the second and subsequent pits are regarded as extensions of the first pit in accounting for stripping costs. In such
cases, the initial stripping (i.e., overburden and other waste removal) of the second and subsequent pits is considered to be production-phase
stripping relating to the combined operation.



91







Deferred stripping
cost is included in “Mining rights, development cost and property, plant and equipment, net” caption in the consolidated
statement of financial position. These form part of the total investment in the relevant cash generating units, which are reviewed
for impairment if events or changes of circumstances indicate that the carrying value may not be recoverable.



The stripping costs
incurred during the production phase are recognized as an operating expense when they are incurred. Theses costs of products are
included as part of the cost of inventory.



Useful life of property,
plant and equipment



Straight-line method



Depreciation is calculated
under the straight-line method of accounting considering the lower of estimated useful lives of the asset or estimated reserves
of the mining unit. The useful lives are the following:



|Property, Plant and Equipment     |  | Estimated Years of Useful Life |                 
|--------------------------------- |  | ------------------------------ | ----------------
|                                  |  |                                |                 
|Buildings, construction and other |  |                                | Between 6 and 20
|Machinery and equipment           |  |                                | Between 5 and 10
|Transportation units              |  |                                | 5               
|Furniture and fixtures            |  |                                | 10              
|Computer equipment                |  |                                | 4               



An item of property,
plant and equipment is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any
gain or loss arising from de-recognizing an asset (calculated as the difference between the proceeds from the sale and the book
value of the asset) is included in the consolidated income statement in the year the asset is de-recognized.



The asset’s residual
value, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.



Fair value of embedded derivative for
concentrates sales



Substantially all of
our concentrate sales contracts provide final copper pricing in a specified period (generally one to four months from the shipment
date) based on quoted LME prices. We ultimately receive market prices based on prices in the specified future period; however,
the accounting rules applied to these sales result in changes recorded as revenue until the specified future period. We record
revenues and invoice customers at the time of shipment based on the current LME prices, which result in an embedded derivative
on our provisional priced concentrate sales that are adjusted to fair value through earnings of each period until the date of final
pricing. To the extent final prices are higher or lower than what was recorded on a provisional basis, an increase or decrease
to revenues is recorded each reporting period until the date of final pricing. See Notes 18 and 27(c) to the Financial Statements.



Revenues



According to our accounting
policies, revenue is recognized to the extent that it is probable that the economic benefits will flow to us. Revenue is measured
at the fair value of the consideration received, excluding discounts and other sales taxes or duty.



92







Revenues from sales
of concentrates, gold and silver are recognized when the significant risks and rewards of ownership have been transferred, which
is considered to occur when title passes to the customer. This generally occurs when the product is physically transferred to the
buyer.



Revenues for engineering
services rendered by Buenaventura Ingenieros S.A. are recognized based on the progress of the current service contracts.



Revenues for construction
services are recognized when the outcome of a contract can be estimated reliably. Contract revenue associated with a construction
contract is recognized by reference to the stage of completion of the contract activity at the end of the reporting period.



Results of Operations
for the Years Ended December 31, 2012 and 2011



Net
sales. Net salesincreased by 0.16 percent, from US$1,493.9 million in 2011 to US$1,496.3 million in 2012, principally
due to an increase in the average realized prices of gold and increases in the volume of silver, lead
and zinc sold, partially offset by lower volumes of gold and copper sold. The following
tables reflect the average realized price and volume sold of gold, silver, lead, zinc and copper during the years ended December
31, 2011 and 2012:



|Average Realized Price |  | Year ended December 31, |          |  |      |    
|---------------------- |  | ----------------------- | -------- |  | ---- | ---
|                       |  | 2011                    |          |  | 2012 |    
|                       |  |                         |          |  |      |    
|Gold (US$/oz.)         |  | US$                     | 1,574.45 |  |      | US$
|Silver (US$/oz.)       |  |                         | 35.36    |  |      |    
|Lead (US$/MT)          |  |                         | 2,262.34 |  |      |    
|Zinc (US$/MT)          |  |                         | 2,199.72 |  |      |    
|Copper (US$/MT)        |  |                         | 8,567.64 |  |      |    



|Volume Sold  |  | Year ended December 31, |            |  |      | 
|------------ |  | ----------------------- | ---------- |  | ---- | 
|             |  | 2011                    |            |  | 2012 | 
|             |  |                         |            |  |      | 
|Gold (oz.)   |  |                         | 505,894    |  |      | 
|Silver (oz.) |  |                         | 14,843,193 |  |      | 
|Lead (MT)    |  |                         | 18,192     |  |      | 
|Zinc (MT)    |  |                         | 33,307     |  |      | 
|Copper (MT)  |  |                         | 23,231     |  |      | 



(a)          Gold
sales. The average sales price for gold increased from US$1,574.45 per ounce in 2011 to US$1,678.92 per ounce in 2012. Gold
sales volume decreased from 505,894ounces in 2011 to 439,816 ounces in 2012, primarily due to decreased gold production
at our Poracota and Antapite mining units. These combined effect of these changes resulted in a US$52.9 million decrease in income
from sales of gold in 2012 compared to 2011.



(b)          Silver
sales. Average realized silver prices decreased from US$35.36 per ounce in 2011 to US$31.25 per ounce in 2012. The volume
of silver sales increased from 14,843,193 ounces in 2011 to 17,474,113 ounces in 2012, primarily due to increased silver production
at our Uchucchacua and Colquijirca mining units. These combined effect of these changes resulted in a US$18.6 million increase
in income from sales of silver in 2012 compared to 2011.



93







(c)          Lead
sales. Average realized lead prices decreased from US$2,262.34 per
metric ton in 2011 to US$2,064.65 per metric ton in 2012. Additionally, the volume of lead sold increased from 18,192 metric tons
in 2011 to 25,589 metric tons in 2012, primarily due to increased lead production at our Colquijirca mining unit. The combined
effect of these changes resulted in a US$15.9 million increase in income from sales of lead in 2012 compared to 2011.



(d)          Zinc
sales.Average realized zinc prices decreased from US$2,199.72 per metric ton in 2011 to US$1,919.04 per metric ton in 2012.
The volume of zinc sold increased from 33,307 metric tons in 2011 to 43,180 metric tons in 2012, primarily due to increased zinc
production at our Uchucchacua and Mallay mining units. The combined effect of these changes resulted in a US$10.8 million increase
in income from sales of zinc in 2012 compared to 2011.



(e)          Copper
sales.Average copper prices decreased from US$8,567.64 per metric ton in 2011 to US$7,937.08 per metric ton in 2012. The
volume of copper sold decreased from 23,231 metric tons in 2011 to 22,373 metric tons in 2012, largely due to decreased copper
production at our Colquijirca mine. These changes resulted in a US$15.6 million decrease in income from sales of copper in 2012
compared to 2011.



The revenues from gold,
silver, lead, zinc and copper mentioned above do not include refinery charges and penalties incurred, which amounted to US$147.9
million in 2012, compared to US$127.9million in 2011.



Royalty
income. In 2012, royalty income received by our subsidiary, Chaupiloma, amounted to US$67.2 million, representing a7percent increase from the US$62.7million of royalty income
received in 2011. This increase is attributed to increased sales by Yanacocha in 2012, which resulted primarily from an increase
in the average realized price of gold and an increase in Yanacocha’s production. See Note 31(a) to the Financial Statements.
Yanacocha pays Chaupiloma, in which we directly and indirectly hold a 60 percent interest, a royalty equal to 3 percent of Yanacocha’s
net sales.



Total
operating costs. Total operating costsincreased by32percent, from US$712.2million in 2011to US$943.2 in 2012,
due to the following:



(a)
Cost of sales, without considering depreciation and amortization,increased by41percent, from US$446.2 million in 2011to US$629.5 million in 2012, mainly due to a US$100.9
million increase in services provided by third parties and a US$32.9 million increase as a result of spare parts and supplies.
The increase was mainly due to: (i) a US$54.6 million increase in the cost of the inventories held at the beginning of 2012 as
compared to the beginning of 2011 (ii) a US$44.3 million increase reflecting the impact of costs incurred in connection with commencing
operations at our Mallay and Breapampa mining units; and (iii) a US$36.6 million increase reflecting an increase in the services
and raw materials provided by contractor suppliers at our Orcopampa and Uchucchacua mining units due to an increase in exploration
activities and diamond drilling works in order to maintain our ore reserves level and an increase in cost related to the higher
volume of mineral treated in 2012.



(b)
Exploration in units in operation increasedby 40 percent, from US$109.4million in 2011to US$153.0 million in 2012. These increased costs
were principally due to anincrease in exploration projects at our Orcopampa, Poracota, Uchucchacua, Mallay and Antapite
mines. See Note 20 to the Financial Statements.



(c)
Depreciation and amortization costsincreasedby28percent,
from US$96.4million in 2011to US$123.0 million in 2012,
mainly due to: (i) a US$13.4 million increase inthe depreciation and amortization of the tailing areas put into operation
at our Colquijirca mining unit during 2012 and (ii) a US$9.9 million increase in acquired assets
put into operation during 2012 at our La Zanja mining unit.



94







(d) Royalty
expenses to third parties and the Peruvian governmentdecreasedby37percent, from US$60.3million in 2011to US$37.7 million in 2012.
Royalties paid to third parties amounted to US$32.0 million and US$35.2 million in 2011 and 2012, respectively. Royalties paid
to the Peruvian government amounted to US$28.2 million and US$2.5million in 2011 and 2012, respectively. Thedecrease in
royalties paid to third parties and the Peruvian government was mainly due to Peruvian legislative changes. Peruvian legislation
requires owners of mining concessions to pay the Peruvian government for the exploitation of metallic and non-metallic resources.
Prior to October 1, 2011, mining royalties were calculated with rates ranging from 1 to 3 percent of the value of mineral concentrates
or the equivalent, according to the quoted market price published by the Ministry of Energy and Mines. Beginning on October 1,
2011, the Peruvian government instituted a new mining royalty and tax regime. See “Item
4. Information on the Company—Buenaventura—B. Business Overview—Regulatory Framework—Mining Royalties and
Taxes” for additional information regarding the mining royalties and taxes now applicable to us.



Total
operating expenses. Operating expensesincreasedby44percent, from US$140.1million in 2011to US$202.1 million in 2012,
due to changes in the following components:



(a)
Administrative expensesincreasedby32percent, from US$75.2
million in 2011to US$99.3 million in 2012, mainly due to (i) a US$7.7
million increase in expenses recorded for long-term officers’ compensation (stock appreciation rights) and (ii) a US$5.7
million increase in other management expenses related to foreign engineering consulting services.See Note 22 to the Financial
Statements.



(b)
Exploration in non-operational areasincreasedby92percent,
from US$49.6million in 2011to US$95.5 million in 2012,
due to higher expenditures in exploration areas, primarily Shila, Trapiche, San Gregorio and Chancas.See Note 23 to the
Financial Statements.



(c)
Impairment of long-lived assets resulted in a loss of US$3.6million being recorded in 2012.
We evaluated our long-lived assets for impairment as of December 31, 2012, which resulted in a reduction in the carrying amount
of mining concessions, development costs and property, plant and equipment to their recoverable amount. See Note 11 to the Financial
Statements.



Operating
income. As a result of the foregoing, operating incomedecreasedby41percent, from US$704.4million in 2011to US$418.2 million in 2012.



Share
in the results of related parties under equity method. Income from equity investments in related partiesdecreasedby1percent, from US$468.4million in 2011to US$464.2
million in 2012, principally due to decreases in income from our equity investments in Yanacocha
and Cerro Verde, partially offset by the effect of an increase in income from our equity investment in Coimolache. Income from
our interest in Yanacocha decreased by 2percent, from US$279.7 million in 2011 to US$272.9 million
in 2012.Income from our interest in Cerro Verde decreased by 28percent,
from US$208.7 million in 2011 to US$151.2 million in 2012. Income from our interest in Coimolache increased
from US$9.6 million in 2011 to US$40.2 million in 2012, due to the impact of increased gold production at the Tantahuatay mine.



Income
tax. Provision for income taxdecreasedfrom US$211.6million
in 2011to US$142.6 million in 2012, principally due to a US$286.7 million decrease in pre-tax
income, from US$1,172.1 million in 2011 to US$885.4 million in 2012.



95







Non-controlling
interest. Non-controlling interest expense decreased by 43 percent, from US$101.6 million in 2011 to US$58.1 million in 2012,
mainly due to a decrease in contribution of profits from El Brocal and La Zanja, partially offset an increase in contribution of
profits from Chaupiloma.



Net income.
As a result of the foregoing, net income decreased by 20 percent, from US$858.9 million in 2011 to US$684.7 million in 2012. As
a percentage of net sales, net income was 44 percent in 2012 as compared to 55 percent in 2011.



Results of Operations
for the Years Ended December 31, 2011 and 2010



Net
sales. Net salesincreased by 43 percent, from US$1,047.9 million in 2010 to US$1,493.9 million in 2011, principally
due to an increase in the average realized prices of gold and silver and increases in the volume of
gold, silver and copper sold, partially offset by lower volumes of other base metals sold.
The following tables reflect the average realized price and volume sold of gold, silver, lead, zinc and copper during the years
ended December 31, 2010 and 2011:



|Average Realized Price |  | Year ended December 31, |          |  |      |    
|---------------------- |  | ----------------------- | -------- |  | ---- | ---
|                       |  | 2010                    |          |  | 2011 |    
|                       |  |                         |          |  |      |    
|Gold (US$/oz.)         |  | US$                     | 1,253.35 |  |      | US$
|Silver (US$/oz.)       |  |                         | 20.86    |  |      |    
|Lead (US$/MT)          |  |                         | 2,106.41 |  |      |    
|Zinc (US$/MT)          |  |                         | 2,135.57 |  |      |    
|Copper (US$/MT)        |  |                         | 8,113.56 |  |      |    



|Volume Sold  |  | Year ended December 31, |            |  |      | 
|------------ |  | ----------------------- | ---------- |  | ---- | 
|             |  | 2010                    |            |  | 2011 | 
|             |  |                         |            |  |      | 
|Gold (oz.)   |  |                         | 461,817    |  |      | 
|Silver (oz.) |  |                         | 13,176,383 |  |      | 
|Lead (MT)    |  |                         | 22,970     |  |      | 
|Zinc (MT)    |  |                         | 43,562     |  |      | 
|Copper (MT)  |  |                         | 15,946     |  |      | 



(a)Gold sales.
The average sales price for gold increased from US$1,253.35 per ounce in 2010 to US$1,574.45 per ounce in 2011. Gold sales volume
increased from 461,817 ounces in 2010 to 505,894ounces in 2011, primarily due to the impact of a full year of gold production
at our La Zanja mining unit, partially offset by decreased gold production at our Orcopampa mining unit. These changes resulted
in a US$212.8 million increasein income from sales of gold in 2011 compared to 2010.



(b)         Silver sales.
Average realized silver prices increased from US$20.86 per ounce in 2010 to US$35.36 per ounce in 2011. The volume of silver sales
increased from 13,176,383 ounces in 2010 to 14,843,193 ounces in 2011, primarily due to increased silver production at our Julcani
and Colquijirca mining units. These changes resulted in a US$251.8 million increase in income from sales of silver in 2011 compared
to 2010.



(c)         Lead
sales. Average realized lead prices increased from US$2,106.41 per metric ton in 2010 to US$2,262.34 per metric ton in 2011.
Additionally, the volume of lead sold decreased from 22,970 metric tons in 2010 to 18,192 metric tons in 2011. The combined effect
of these changes resulted in a US$10.0 million decrease in income from sales of lead in 2011 compared to 2010.



96







(d)          Zinc sales.
Average realized zinc prices increased from US$2,135.57 per metric ton in 2010 to US$2,199.72 per metric ton in 2011. The volume
of zinc sold decreased from 43,562 metric tons in 2010 to 33,307 metric tons in 2011, primarily due to decreased zinc production
at our Colquijirca mining unit. The combined effect of these changes resulted in a US$20.8 million decrease in income from sales
of zinc in 2011 compared to 2010.



(e)          Copper sales.
Average copper prices increased from US$8,113.56 per metric ton in 2010 to US$8,567.64 per metric ton in 2011. The volume of copper
sold increased from 15,946 metric tons in 2010 to 23,231 metric tons in 2011, largely due to increased copper production at our
Colquijirca mine. The combined effect of these changes resulted in a US$63.8 million increase in income from sales of copper in
2011 compared to 2010.



The revenues from gold,
silver, lead, zinc and copper mentioned above do not include refinery charges and penalties incurred, which amounted to US$127.9million
in 2011, compared to US$112.3 million in 2010.



Royalty
income. In 2011, royalty income received by our subsidiary, Chaupiloma, amounted to US$62.7million,
representing a12percentincreasefrom the US$55.9 million
of royalty income received in 2010. This increase is attributed to increased sales by Yanacocha in 2011, which resulted primarily
from an increase in the average realized price of gold, partially offset by lower production. See Note 31(a) to the Financial
Statements. Yanacocha pays Chaupiloma, in which we directly and indirectly hold a 60 percent interest, a royalty equal to 3 percent
of Yanacocha’s net sales.



Total
operating costs. Total operating costsincreased by26percent, from US$565.7million in 2010 to US$712.2million
in 2011, due to the following:



(a)
Cost of sales, without considering depreciation and amortization,increased by29percent, from US$347.1 million in 2010 to US$446.2 million in 2011. The increase was mainly due
to: (i) a US$27.6 million increase due to the impact of a full year of gold productionat our
La Zanja mining unit; (ii) a US$22.2 million increase due to an increase in the services provided by contractor suppliers at our
Colquijirca mining unit, (iii) a US$16.9 million increase due to the acquisition of zinc concentrate from third parties as a result
ofdecreased zinc production at our Colquijirca mining unit and (iv) a US$14.5 million increase due to fixed costs at our
Orcopampa mining unit due to a decrease in gold production.



(b)
Exploration in units in operationincreasedby 20 percent, from US$91.4 million in 2010 to US$109.4million in 2011. Theseincreased costs were principally due to anincrease in exploration
projects at our Uchucchacua, Orcopampa, Shila-Paula and La Zanja mines. See Note 20 to the Financial Statements.



(c)
Depreciation and amortization costsincreasedby29percent,
from US$74.9 million in 2010 to US$96.4million in 2011, mainly due to: (i)the impact
of a full year of depreciation of the assets of La Zanja S.R.L. and (ii) the depreciation of the assets of a new plant put into
operation at our Colquijirca mining unit during 2011.



97







(d) Royalty
expenses to third parties and the Peruvian governmentincreasedby15percent, from US$52.3 million in 2010 to US$60.3million in 2011. Royalties paid to third parties
amounted to US$27.7 million and US$32.0 million in 2010 and 2011, respectively. Royalties paid to the Peruvian government amounted
to US$24.6 million and US$28.2million in 2010 and 2011, respectively. Theincreasein royalties paid to third parties and the Peruvian government was mainly due to the increased value of metals and concentrates
sold. Peruvian legislation requires owners of mining concessions to pay the Peruvian government for the exploitation of metallic
and non-metallic resources. Prior to October 1, 2011, mining royalties were calculated with rates ranging from 1 to 3 percent of
the value of mineral concentrates or equivalent, according to the quoted market price published by the Ministry of Energy and Mines.
Beginning on October 1, 2011, the Peruvian government instituted a new mining royalty and tax regime. See “Item 4. Information
on the Company—Buenaventura—B. Business Overview—Regulatory Framework—Mining Royalties and Taxes”
for additional information regarding the mining royalties and taxes now applicable to us.



Total
operating expenses. Operating expensesincreasedby23percent, from US$113.9 million in 2010 to US$140.1million in 2011, due to changes in the following
components:



(a)
Administrative expensesdecreasedby30percent, from US$107.2 million
in 2010 to US$75.2 million in 2011, mainly due to decreased expenses recorded for long-term officers’
compensation (stock appreciation rights).See Note 22 to the Financial Statements.



(b)
Exploration in non-operational areasincreasedby37percent,
from US$36.1 million in 2010 to US$49.6million in 2011, due to higher expenditures
in exploration areas, primarily Mallay, Breapampa, Trapiche, Colquemayo, Pachuca and Marcapunta.See Note 23 to the Financial
Statements.



(c) Reimbursement of
exploration expenses on projects. During 2010, US$15.0 million considered as an exploration expense from Coimolache was reversed
and capitalized on our balance sheet as an Investment in associates. No comparable amounts were received in 2011.



(d) Reversal for impairment
of long-lived assets resulted in a net recovery of US$13.1 million being recorded in 2010. We updated our assessment of the recoverability
of the book value of our long-lived assets and reversed the impairment of the Antapite, Recuperada and Poracota mining units as
of December 31, 2010 following positive changes in the assumptions used to calculate the impairment provision recorded in order
to determine the recovery carrying amount of our long-lived assets. The impairment reversed as of December 31, 2010 amounted to
US$16.2 million, with US$8.6 million recorded as “Mining concessions and property, plant and equipment” and US$7.6
million recorded as “Development costs.” We also recorded an impairment of our long-lived assets from the Shila-Paula
mining unit in the amount of US$3.1 million, with US$1.3 million recorded as “Mining concessions and property, plant and
equipment” and US$1.8 million recorded as “Development costs.” See Note 11 to the Financial Statements. During
2011, we updated our assessment of the value in use of our long-lived assets and concluded that there was no impairment indication.



Operating
income. As a result of the foregoing, operating incomeincreasedby66percent, from US$424.1 million in 2010 to US$704.4million in 2011.



Share
in the results of related parties by equity method. Income from equity investments in related partiesincreasedby9percent, from US$428.9 million in 2010 to US$468.4million
in 2011, principally due toincreases in income from our equity investments in Coimolache, Yanacocha and Cerro Verde. Income
from our interest in Yanacocha increased by 11percent, from US$251.5 million in 2010 to US$279.7
million in 2011. This increase is attributable to an increase in the average realized price of gold, partially offset by decreased
gold production. Income from our interest in Coimolache increased from a loss of US$15.9 million in 2010 to an income of US$9.6
million in 2011, due to the commencement of gold production at the Tantahuatay mine in mid-2011.



98







Income
tax. Provision for income taxincreasedfrom US$123.3 million in 2010 to US$211.6million in 2011, principally due to a US$323.9 million increase in pre-tax income, from US$848.2 million in 2010 to US$1,172.1
million in 2011.



Non-controlling
interest. Non-controlling interest expense increased by 59 percent, from US$64.1 million in 2010 to US$101.6 million in 2011,
mainly due to an increase in contribution of profits to non-controlling investors in La Zanja and Chaupiloma, partially offset
by a decrease in contribution of profits from El Brocal.



Net income.
As a result of the foregoing, net income increased by 30 percent, from US$660.8 million in 2010 to US$858.9 million in 2011. As
a percentage of net sales, net income was 55 percent in 2011 as compared to 60 percent in 2010.



B. Liquidity and Capital
Resources



As of December 31,
2012, we had cash and cash equivalents of US$186.7 million, compared to US$470.8 million at December 31, 2011.



Cash provided by
operating activities for the years ended December 31, 2012 and 2011. Net cash and cash equivalents provided by operating activities
were US$335.7 million in 2012 compared to US$567.5 million in 2011. The decrease in net cash flow provided
by operating activities was mainly attributable to (i)decreased proceeds from sales, from US$1,505.5 million in 2011 to
US$1,410.1 million in 2012; (ii) increased payments to third parties, from US$672.5 million in 2011 to US$838.3 million in 2012;
and (iii) increased income tax paid, from US$111.8 million in 2011 to US$136.3 million in 2012; partially offset by (i) increased
royalties received, from US$56.2 million in 2011 to US$76.1 million in 2012; (ii) increased dividends received from Coimolache,
from no dividends received in 2011 to US$16.5 million in 2012; (iii) an increase in value-added tax recovered, from US$22.6 million
in 2011 to US$40.9 million in 2012; and (iv) decreased royalty payments, from US$73.8 million in 2011 to US$38.9 million in 2012,
as a result of increased royalty payments to third parties and decreased payments to the Peruvian government.



Cash provided by
operating activities for the years ended December 31, 2011 and 2010. Net cash and cash equivalents provided by operating activities
were US$567.5 million in 2011 compared to US$537.6 million in 2010. The increase in net cash flow provided
by operating activities was mainly attributable to (i)increased proceeds from sales, from US$997.8 million in 2010 to US$1,505.5
million in 2011 and (ii) an increase in value-added tax recovered, from US$7.5 million in 2010 to US$22.6 million in 2011; partially
offset by (i) increased payments to third parties, from US$473.6 million in 2010 to US$672.5 million in 2011; (ii) decreased dividends
received from Yanacocha and Cerro Verde, from US$183.0 million received in 2010 to no dividends received in 2011; (iii) increased
income tax paid, from US$56.3 million in 2010 to US$111.8 million in 2011; and (iv) increased royalty payments, from US$55.3 million
in 2010 to US$73.8 million in 2011, as a result of increased royalty payments to third parties and increased payments to the Peruvian
government.



Cash used in investing
activities for the years ended December 31, 2012 and 2011. Net cash and cash equivalents used in investingactivities
were US$487.5 million in 2012 compared to US$354.3 million in 2011. The increase in net cash flowused
in investingactivities was mainly attributable to: an increase in mining concessions,
development cost and property, plant and equipment, from US$317.8 million in 2011 to US$442.9 million in 2012, in connection with
hydroelectric construction at our subsidiary, Huanza; and the expansion of the refining plant capacity at our subsidiary, El Brocal.



99







Cash used in investment
activities for the years ended December 31, 2011 and 2010. Net cash and cash equivalents used in investing activities were
US$340.1 million in 2010 compared to US$354.3 million in 2011. The increase in net cash flow
used in investing activities in 2011 compared with 2010 was mainly attributable to: an increase in payments for the purchase of
investment shares, from US$19.6 million in 2010 to US$52.2 million in 2011; an increase in mining concessions, development cost
and property, plant and equipment, from US$253.3 million in 2010 to US$317.8 million in 2011, in connection with hydroelectric
construction at Huanza; and the expansion of the refining plant capacity at El Brocal.



Cash used in financing
activities for the years ended December 31, 2012 and 2011. Net cash and cash equivalents used in financingactivities
were US$132.3 in 2012 compared to US$325.2 million in 2011. The decrease in net cash flowused
in financingactivities was mainly attributable to: a decrease
in payments for purchase of shares to non-controlling shareholder, from US$225.3 million in 2011 from nil in 2012; an increase
in financial obligations, from US$50.9 million in 2011 to US$74.3 million in 2012; and a decrease in the payment of dividends to
non-controlling shareholders, from US$66.7 million in 2011 to US$44.9 million in 2012;partially offset bya decrease in proceeds from the sale of investments, shares from US$60.4 million in 2011 to nil in 2012; and an increase in the
payment of dividends to shareholders, from US$142.5 million in 2011 to US$152.7 million in 2012.



Cash used in financing
activities for the years ended December 31, 2011 and 2010. Net cash and cash equivalents used in financing activities were
US$352.2 million in 2011 compared to net cash used in financing activities of US$329.1 million in 2010. The
decrease in net cash flow used in financing activities in 2011 compared with 2010 was mainly attributable to a decrease in payments
of financial obligations, from US$226.1 million in 2010 to US$2.0 million in 2011, and a decrease in financial obligations, from
US$53.3 million in 2010 to US$51.0 million in 2011, partially offset by an increase in the payment of dividends to shareholders,
from US$117.0 million in 2010 to US$142.5 million in 2011, an increase in the payment of dividends to non-controlling shareholders,
from US$39.2 million in 2010 to US$66.7 million in 2011, an increase of US$60.4 million in sales of investments related to sales
of El Brocal shares, and an increase in payments for the purchase of shares to non-controlling shareholders, from nil in 2010 to
US$225.3 million in 2011.



Long-Term Debt



On December 2, 2009,
Banco de Crédito del Peru executed a financial lease agreement with Conenhua, Huanza and us in the amount of US$119 million
for construction of a hydroelectric power station. The lease was executed in favor of Huanza as lessee, and commits us to act as
joint surety of Huanza to guarantee Huanza’s payment obligations. The term of the lease is 10 years and the interest rate
is (i) LIBOR plus 4 percent from the first disbursement until six months after the start of commercial operation of the power station
and (ii) LIBOR plus 4.1 percent from six months after the start of commercial operation of the power station until maturity. As
of December 31, 2012 and 2011, amounts outstanding under this lease were US$119.0 and US$105.1 million, respectively.



On August 22, 2012,
El Brocal entered into a medium-term loan contract with Banco de Crédito del Peru in the amount of US$120 million. This
loan is variable rate (three-month LIBOR plus 3 percent) and has a term of four years. The loan is guaranteed by a pledge of one
contract for the sale of copper concentrate and one contract for the sale of lead concentrate. As of December 31, 2012, US$60.0
million was outstanding under this loan. The interest expense related to this loan was US$0.3 million during the year ended December
31, 2012, which resulted in an increase in mining concessions, development cost and property, plant and equipment, net.



100







Exploration Costs;
Capital Expenditures



Capital expenditures
for 2013 are estimated to be approximately US$300 million. These budgeted capital expenditures include the following projects:
the expansion of El Brocal treatment plant, the construction of the Procesadora Industrial Rio Seco chemical plant to treat concentrates
from Uchucchacua and the construction of the Huanza hydroelectrical plant.



During 2012, we spent
approximately US$95.5million on “greenfield” and US$153.0 million on “brownfield” exploration-related
investments primarily in Peru and, to a lesser extent, in Chile and Mexico. Our “greenfield” investments mainly focused
on the following exploration projects: Trapiche, Tambomayo, San Gregorio, Chancas, Hualgayoc, Marcapunta, Colquemayo, Surichata
and El Faique. Our “brownfield” investments were mainly focused in the Orcopampa, Poracota, Uchucchacua, Antapite,
Mallay, Recuperada and Julcani areas. We financed our 2012 exploration program with internal funds.



In 2013, we intend
to invest approximately US$100 to US$120 million in brownfield exploration projects. In 2013, we expect to invest approximately
US$70 to US$80 million in greenfield exploration projects, mainly in the following greenfield exploration projects: Tambomayo,
Trapiche, San Gregorio, Hualgayoc, Colquemayo and El Faique, among others.



We expect that we will
meet our working capital, capital expenditure and exploration expense requirements for the next several years from internally generated
funds, cash on hand and dividends received from our investments in non-consolidated mining operations, including Yanacocha. Additional
financing, if necessary for the construction of any project, is expected to be obtained from borrowings under bank loans and the
issuance of debt securities. There can be no assurance, however, that sufficient funding will be available to us from the internal
or external sources to finance any future capital expenditure program, or that external funding will be available to us for such
purpose on terms or at prices favorable to us. A very significant decline in the prices of gold and silver would be reasonably
likely to affect the availability of such sources of liquidity. In addition, if we fund future capital expenditures from internal
cash flow, there may be less funds available for the payment of dividends.



Recent Accounting
Pronouncements



IFRS



Weprepare and present the Financial Statements in accordance withIFRS as issued by the IASB. For periods up to and including
the year ended December 31, 2010, we prepared our financial statements in accordance with Peruvian GAAP. Our consolidated financial
statements for the year ended December 31, 2011 are the first that we have prepared in accordance with IFRS. We have applied IFRS
1 “First-time Adoption of International Financial Reporting Standards” to the opening balance as of January 1, 2010,
the date of our transition to IFRS. The IFRS 1 application implies that all the standards are applied retrospectively at the transition
date, including certain mandatory exceptions and voluntary exemptions defined in the standard. In addition, as a foreign private
issuer in the United States, we are subject to less intensive reporting requirements and information regarding us may not be as
readily disseminated into the market.



Improvements and interpretations issued
as of December 31, 2012, include the following:



Effective the year 2012 –

There were no new standards and interpretations
that were applicable to us for 2012.



101







Effective as from January 1, 2013 -

| | - | IAS 1, Presentation of Financial Statements, effective for annual periods beginning on July 1,
2012. The amendments to IAS 1 change the grouping of items presented in the statement of comprehensive income.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IAS 27, Separate Financial Statements (revised in 2011), effective for annual periods beginning
on January 1, 2013. As a consequence of the new IFRS 10 and IFRS 12, what remains in IAS 27 is limited to accounting for subsidiaries,
joint arrangements and associates in separate financial statements.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IAS 28, Investments in associates and joint ventures (revised in 2011), effective for annual periods
beginning on January 1, 2013. As a consequence of the new IFRS 11 and IFRS 12, IAS 28 Investments in Associates and Joint Ventures,
describes the application of the equity method to investments in joint ventures in addition to associates.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 9, “Financial Instruments”, effective January 1, 2015, modifies the treatment
and classification of financial assets established by IAS 39, “Financial Instruments: Recognition and Measurement”.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 10, “Consolidated Financial Statements”, effective January 1, 2013, replaces the
consolidation requirements in SIC-12, “Consolidation—Special Purpose Entities” and IAS 27, “Consolidated
and Separate Financial Statements”.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 11, “Joint Arrangement”, effective January 1, 2013, addresses inconsistencies
in the reporting of joint arrangements by requiring a single method to account for interests in jointly controlled entities. The
guidance focuses on the rights and obligations of the joint arrangement, rather than its legal form (as is currently the case).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 12, “Disclosure of Interests in Other Entities”, effective January 1, 2013, is
a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries,
joint arrangements, associates and unconsolidated structured entities.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 13, “Fair Value Measurement”, effective January 1, 2013, defines fair value, sets
out a framework for measuring fair value and requires disclosures about fair value measurements.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRIC 20, “Stripping Costs in the Production Phase of a Surface Mine”, effective January
1, 2013, clarifies when the stripping cost in the production phase should be recognized as an asset and how that asset should be
measured, both initially and in subsequent periods.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Annual
improvements to IFRS (issued in May 2012) -



| | - | IAS 1, Presentation of Financial Statements, clarifies the difference between voluntary annual
comparative information and the minimum required of comparative period is the previous period.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



102







| | - | IAS 16, Property, Plant and Equipment, clarifies that major spare parts and servicing equipments
that meet the definition of property, plant and equipment are not inventories.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IAS 32, Financial Instruments: Presentation, clarifies that income taxes arising from distributions
to equity holders are accounted for in accordance with IAS 12.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



Such improvements are effective for annual
periods beginning on or after January 1, 2013.



Although we do not believe
the new pronouncements will have a significant impact on us, we are currently evaluating their impact, if any, on our consolidated
financial statements for 2013.



C. Research and Development



Not applicable.



D. Trend Information



Other than as disclosed
in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events which are reasonably likely
to have a material effect upon our net sales or revenues, income from continuing operations, profitability, liquidity or capital
resources, or that would cause reported financial information to be not necessarily indicative of future operating results or financial
condition.



For our exploration
activities, there is no production, sales or inventory in a conventional sense. Our financial success is dependent upon the extent
to which we are capable of discovering mineralization and the economic viability of exploration properties. The construction and
operation of such properties may take years to complete and the resulting income, if any, cannot be determined with certainty.
Further, the sales value of mineralization discovered by us is largely dependent upon factors beyond our control, including the
market value at any given time of the metals produced.



E. Off-Balance Sheet Arrangements



There are no off-balance
sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are
material to investors.



103







F. Tabular Disclosure
of Contractual Obligations



The following table
shows our contractual obligations as of December 31, 2012:



|                                           |  |       |       |  | Payments due by Period (US$ in millions) | 
|------------------------------------------ |  | ----- | ----- |  | ---------------------------------------- | 
|                                           |  |       |       |  | Less than                                | 
|                                           |  | Total |       |  | 1 year                                   | 
|Long-Term Debt (principal and interest)(*) |  |       | 188.5 |  |                                          | 
|Capital Lease Obligations                  |  |       | -     |  |                                          | 
|Open Purchase Orders                       |  |       | -     |  |                                          | 
|Other Long-Term Obligations                |  |       | -     |  |                                          | 
|Total Contractual Cash Obligations         |  |       | 188.5 |  |                                          | 










| | (*) | Long-term debt includes
US$119.0 million, which relates to a financial lease agreement between Banco de Crédito and Conenhua, Huanza and us for
construction of a hydroelectric power station.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As of December 31, 2012, we had no other
commercial commitments.



104







YANACOCHA



Introduction



The following discussion
should be read in conjunction with the Yanacocha Financial Statements as of December 31, 2011 and 2012 and for the years ended
December 31, 2010, 2011 and 2012 and the related Notes thereto included elsewhere in this Annual Report. The Yanacocha Financial
Statements are prepared and presented in accordance with U.S. GAAP and in U.S. Dollars.



A. Operating Results



Overview



Yanacocha, the largest
gold producer in South America, was established in Peru in January 1992, and commenced production activities in August 1993. Yanacocha’s
operations are located in the Andes mountains in Northern Peru, in the area of Cajamarca which is located approximately 900 kilometers
north of Lima and north of the city of Cajamarca, at an altitude of 4,000 meters above sea level. Yanacocha is 51.35 percent owned
by Newmont Mining, through its wholly-owned subsidiary Newmont Second, 43.65 percent by us through our wholly-owned subsidiary
Condesa, and 5 percent by IFC.Yanacocha is managed by Newmont Peru S.R.L. See “Item 4. Information on the Company—Yanacocha—B.
Business Overview—Management of Yanacocha—General Manager/Management Agreement.”



The table below highlights
Yanacocha’s key financial and operating results:



Summary of Financial
and Operating Performance



|                                      |  | Year Ended December 31, |          
|------------------------------------- |  | ----------------------- | ---------
|                                      |  | 2012                    |          
|Gold Sales (in thousands of US$)      |  |                         | 2,201,815
|Gold sold (oz.)                       |  |                         | 1,335,065
|Average gold price received (US$/oz.) |  |                         | 1,662    
|Costs applicable to sales (US$/oz.)   |  |                         | 517      
|Other expenses(in thousands of US$)   |  |                         | 147,641  
|Net income (in thousands of US$)      |  |                         | 626,540  
|Dividends paid (in thousands of US$)  |  |                         | -        



Gold sales.
Gold sales increased by 10 percent, or US$199.2 million, from 2011 to 2012, due principally to
an increase in the average realized price of gold combined with an increase in the number of ounces
sold. Yanacocha has 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.



Costs applicable
to sales. Costs applicable to sales decreased by 11 percent
from 2011 to 2012, due primarily to lower operating costs and lower production taxes, partially offset by higher third-party royalties
due to higher sales revenues and lower by-product metal and silver sales credit due to lower production.Costs applicable
to sales include: (i) operating costs, consisting primarily of direct production costs such as mining and treatment of the ore,
which are the most significant components of costs applicable to sales, (ii) employee profit sharing of 8 percent of pre-tax profits
calculated in accordance with Peruvian GAAP, (iii) royalties of 3 percent of the quarterly net sale value of all gold and silver
extracted from the mining concessions payable to Chaupiloma after deducting refinery and transportation costs, (iv) management
fees payable to Newmont Peru, the operator of Yanacocha, (v) selling expenses, (vi) credit from by-product sales, mainly in connection
with silver sales, (vii) government mining royalties in connection with the Carachugo mine, which resulted from the expiration
of its 15-year stability agreement on January 1, 2010 and (viii) other costs.



105







Other expenses.
Other expenses increased by 45 percent, or US$87.4 million, from 2011 to 2012, mainly due to an
employee severance program in order to align Yanacocha’s organization with future business needs and increased community
development and community affairs activities.



Income tax.Yanacocha’s
financial and operating results were impacted by a tax expense of US$361.9 million in 2012, as compared to US$293.0 million in
2011, which reflects Yanacocha’s increased profitability and the full year impact of a new mining tax payable to the Peruvian
government for extracting metallic and non-metallic resources.



Dividends.During
the years ended December 31, 2011 and 2012, Yanacocha did not pay dividends to its partners and did not reserve any money related
to reinvestment programs.



Critical Accounting
Policies



Yanacocha has furnished
us with a discussion of its critical accounting policies or methods used in the preparation of its financial statements. Critical
accounting policies are defined as those that are reflective of significant judgments and uncertainties and could potentially impact
results under different assumptions and conditions. Note 2to the Yanacocha Financial Statements includes a summary of the
significant accounting policies and methods used in the preparation of the Yanacocha Financial Statements. The following is a brief
discussion of the identified critical accounting policies and the estimates and judgments made by Yanacocha.



Principles of Consolidation



The Consolidated Financial
Statements include the accounts of Minera Yanacocha S.R.L. and the San José Reservoir Trust, or the Trust. In November 2008,
Yanacocha funded the Trust to ensure the continuous operation of the San José Reservoir after 2018. Yanacocha transferred
US$13 million to the Trust in 2008. No withdrawals are allowed until 2018 and Yanacocha is committed to a US$23 million fund as
of such date. This Trust is irrevocable and is a separate legal entity. The trustee is FiduPeru S.A. and Yanacocha is the grantor
and beneficiary. As a result, Yanacocha consolidates the Trust in the Yanacocha Financial Statements.



Use
of Estimates



The Yanacocha Financial
Statements have been prepared in accordance with U.S. GAAP. The preparation of the Yanacocha Financial Statements requires Yanacocha
to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent
assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during
the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to (i) mineral
reserves that are the basis for future cash flow estimates utilized in impairment calculations and unit-of-production amortization
calculations; (ii) environmental, reclamation and closure obligations; (iii) estimates of recoverable gold and other minerals in
stockpile and leach pad inventories; (iv) write-downs of inventory, ore on leach pads and stockpiles to net realizable value; (v)
employee benefit liabilities; (vi) valuation allowances for deferred tax assets; (vii) workers’ profit participation; (viii)
reserves for contingencies and litigation; and (ix) the fair value and accounting treatment of financial instruments. Yanacocha
bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.
Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.



106







Currency



TheYanacochaFinancial Statements are stated in U.S. Dollars, Yanacocha’s functional currency,
as most of its transactions are traded, collected and paid in such currency. Transactions in other currencies are recorded in
U.S. Dollars based on exchange rates prevailing at the time of such transactions. Monetary assets and liabilities denominated
in other currencies are translated into the U.S. Dollar at exchange rates prevailing at the statement of financial position dates,
and any resulting gains or losses are reflected in current earnings.



Cash and Cash Equivalents



Cash and cash equivalents
consist of all cash balances and highly liquid investments with an original maturity of three months or less. Because of the short
maturity of these balances, the carrying amounts approximate their fair value. Restricted cash is excluded from cash and cash equivalents
and is included in other current assets or long-term assets depending on restrictions.



Investments



Management determines
the appropriate classification of its investments in equity securities at the time of purchase and reevaluates such determinations
at each reporting date. Yanacocha accounts for its marketable security investments as available for sale securities in accordance
with FASB Accounting Standards Codification, or ASC, guidance on accounting for certain investments in debt and equity securities.
Yanacocha periodically evaluates whether declines in fair values of its investments below Yanacocha’s carrying value are
other-than-temporary in accordance with guidance for the meaning of other-than-temporary impairment and its application to certain
investments. Yanacocha’s policy is to generally treat a decline in the investment’s quoted market value that has lasted
continuously for more than six months as an other-than-temporary decline in value. Yanacocha also monitors its investments for
events or changes in circumstances that have occurred that may have a significant adverse effect on the fair value of the investment
and evaluates qualitative and quantitative factors regarding the severity and duration of the unrealized loss and Yanacocha’s
ability to hold the investment until a forecasted recovery occurs to determine if the decline in value of an investment is other-than-temporary.
Declines in fair value below Yanacocha’s carrying value deemed to be other-than-temporary are charged to earnings.



Stockpiles,
Ore on Leach Pads and Inventories



As described below,
costs that are incurred in or benefit the productive process are accumulated as stockpiles, ore on leach pads and inventories.
Stockpiles, ore on leach pads and inventories are carried at the lower of average cost or net realizable value. Net realizable
value represents the estimated future sales price of the product based on current and long-term metals prices, less the estimated
costs to complete production and bring the product to sale. Write-downs of stockpiles, ore on leach pads and inventories to net
realizable value are reported as a component of Costs applicable to sales. The current portion of stockpiles, ore on leach pads
and inventories is determined based on the expected amounts to be processed within the next twelve months. Stockpiles, ore on leach
pads and inventories not expected to be processed within the next twelve months are classified as long-term. The major classifications
are as follows:



107







Stockpiles.
Stockpiles represent ore that has been extracted from a mine and is available for further processing.
Stockpiles are measured by estimating the number of tons added and removed from the stockpile, the number of contained ounces (based
on assay data) and the estimated metallurgical recovery rates (based on the expected processing method). Stockpile ore tonnages
are verified by periodic surveys. Costs are allocated to stockpiles based on relative values of material stockpiled and processed
using current mining costs incurred up to the point of stockpiling the ore, including applicable overhead and amortization relating
to mining operations, and removed at each stockpile’s average cost per recoverable unit.



Ore on Leach Pads.
The recovery of gold from certain gold oxide ores is achieved through the heap leaching process. Under this method, ore is placed
on leach pads where it is treated with a chemical solution, which dissolves the gold contained in the ore. The resulting gold-bearing
solution is further processed in a plant where the gold is recovered. Costs are added to ore on leach pads based on current mining
costs, including applicable overhead and amortization relating to mining operations. Costs are removed from ore on leach pads as
ounces are recovered based on the average cost per recoverable ounce of gold on the leach pad.



The estimates of recoverable
gold on the leach pads are calculated from the quantities of ore placed on the pads (measured tons added to the leach pads), the
grade of ore placed on the leach pads (based on assay data) and a recovery percentage (based on ore type). In general, the leach
pads recover approximately 50 percent to 95 percent of the ultimate recoverable ounces in the first year of leaching, declining
each year thereafter until the leaching process is complete.



Although the quantities
of recoverable gold placed on the leach pads are reconciled by comparing the grades of ore placed on the pads to the quantities
of gold actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely
monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored and estimates are refined based
on actual results over time. Historically, Yanacocha’s operating results have not been materially impacted by variations
between the estimated and actual recoverable quantities of gold on its leach pads. Variations between actual and estimated quantities
resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for
on a prospective basis.



In-process
Inventory. In-process inventories represent materials that are currently in the process of beingconvertedto a saleable product. Yanacocha’s conversion processes vary depending on the nature of the ore and the specific processing
facility and include mill in-circuit and leach in-circuit. In-process material is measured based on assays of the material fed
into the process and the projected recoveries of the respective plants. In-process inventories are valued at the average cost of
the material fed into the process attributable to the source material coming from the mines, stockpiles and/or leach pads plus
the in-process conversion costs, including applicable amortization relating to the process facilities incurred to that point in
the process.



Precious
Metals Inventory. Precious metals include gold doré and/or gold bullion. Precious metals thatresultfrom Yanacocha’s mining, processing and refining activities are valued at the average cost of the respective in-process inventories
incurred prior to the refining process, plus applicable refining costs.



Concentrate
Inventory. Concentrate inventory represents silver, gold and copper concentrate available forshipment.
Yanacocha values concentrate inventory at the average cost, including an allocable portion of support costs and amortization. Costs
are added and removed to the concentrate inventory based on tons of concentrate and are valued at the lower of average cost or
net realizable value.



108







Materials and Supplies



Materials and supplies
are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight.



Property,
Plant and Mine Development



Facilities and Equipment.
Expenditures for new facilities or equipment and expenditures that extend the useful lives of existing facilities or equipment
are capitalized and recorded at cost. The facilities and equipment are amortized using the straight-line method at rates sufficient
to amortize such costs over the estimated productive lives, which do not exceed the related estimated mine lives, of such facilities
based on proven and probable reserves.



Mine Development.
Mine development costs include engineering and metallurgical studies, drilling and other related costs
to delineate an ore body and the removal of overburden to initially expose an ore body, at open-pit surface mines. Costs incurred
before mineralization is classified as proven and probable reserves are expensed and classified as an Exploration and Advanced
projects expense. Capitalization of mine development project costs that meet the definition of an asset begins once mineralization
is classified as proven and probable reserves.



Drilling and related
costs are capitalized for an ore body where proven and probable reserves exist, the activities are directed at obtaining additional
information on the ore body or converting non-reserve mineralization to proven and probable reserves. All other drilling and related
costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to
inventory costs and then included as a component of Costs applicable to sales.



The cost of removing
overburden and waste materials to access the ore body at an open-pit mine prior to the production phase is referred to as “pre-stripping
costs.” Pre-stripping costs are capitalized during the development of an open-pit mine. Where multiple open pits exist at
a mining complex utilizing common processing facilities, pre-stripping costs are capitalized at each pit. The removal and production
of de minimis saleable materials may occur during development and are recorded as Other income, net of incremental mining and processing
costs.



The production phase
of an open pit mine commences when saleable minerals, beyond a de minimis amount, are produced. Stripping costs incurred during
the production phase of a mine are variable production costs that are included as a component of inventory to be recognized in
Costs applicable to sales in the same period as the revenue from the sale of inventory.



Yanacocha’s definition
of a mine and the mine’s production phase may differ from that of other companies in the mining industry, resulting in incomparable
allocations of stripping costs to deferred mine development and production costs. Other mining companies may expense pre-stripping
costs associated with subsequent pits within a mining complex.



Mine development costs
are amortized using the unit-of-production method based on estimated recoverable ounces in proven and probable reserves. To the
extent that these costs benefit an entire ore body, they are amortized over the estimated life of the ore body. Costs incurred
to access specific ore blocks or areas that only provide benefit over the life of that area are amortized over the estimated life
of that specific ore block or area.

109







Mineral Interests



Mineral interests include acquired interests
in production, development and exploration stage properties. The mineral interests are capitalized at their fair value at the acquisition
date, either as an individual asset purchase or as part of a business combination.



The value of such assets
is primarily driven by the nature and amount of mineralized material believed to be contained in such properties. Production stage
mineral interests represent interests in operating properties that contain proven and probable reserves. Development stage mineral
interests represent interests in properties under development that contain proven and probable reserves. Exploration stage mineral
interests represent interests in properties that are believed to potentially contain mineralized material consisting of (i) mineralized
material such as inferred material within pits; measured, indicated and inferred material with insufficient drill spacing to qualify
as proven and probable reserves; and inferred material in close proximity to proven and probable reserves; (ii) around-mine exploration
potential such as inferred material not immediately adjacent to existing reserves and mineralization, but located within the immediate
mine area; (iii) other mine-related exploration potential that is not part of measured, indicated or inferred material and is comprised
mainly of material outside of the immediate mine area; (iv) greenfield exploration potential that is not associated with any other
production, development or exploration stage property, as described above; or (v) any acquired right to explore or extract a potential
mineral deposit. Yanacocha’s mineral rights generally are enforceable regardless of whether proven and probable reserves
have been established. Yanacocha has the ability and intent to renew mineral interests where the existing term is not sufficient
to recover all identified and valued proven and probable reserves and/or undeveloped mineralized material.



Asset
Impairment



Yanacocha reviews and
evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts
may not be recoverable. Impairment is considered to exist if the total of the assets’ estimated future cash flows on an undiscounted
basis are less than the carrying amount of the assets. Impairment loss is measured and recorded based on discounted estimated future
cash flows. Future cash flows are estimated based on quantities of recoverable minerals, expected gold and other commodity prices
(considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements
and reclamation costs, all based on life-of-mine plans. Existing proven and probable reserves and value beyond proven and probable
reserves, including mineralization that is not part of the measured, indicated or inferred resource base, are included when determining
the fair value of mine site reporting units at acquisition and, subsequently, in determining whether the assets are impaired. The
term “recoverable minerals” refers to the estimated amount of gold or other commodities that will be obtained after
taking into account losses during ore processing and treatment. Estimates of recoverable minerals from such exploration stage mineral
interests are risk adjusted based on management’s relative confidence in such materials. In estimating future cash flows,
assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash
flows from other asset groups. Yanacocha’s estimates of future cash flows are based on numerous assumptions and it is possible
that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals,
gold and other commodity prices, production levels and costs and capital are each subject to significant risks and uncertainties.



110







Revenue
Recognition



Revenue is recognized,
net of treatment and refining charges, from a sale when persuasive evidence of an arrangement exists, the price is determinable,
the product has been delivered, the title has been transferred to the customer and collection of the sales price is reasonably
assured. Revenues from silver and copper sales are credited to Costs applicable to sales as a by-product credit.



Income
and Mining Taxes and Profit Sharing



Yanacocha accounts
for income and mining taxes and legally required profit sharing using the liability method, recognizing certain temporary differences
between the financial reporting basis of Yanacocha’s liabilities and assets and the related income tax basis for such liabilities
and assets. This method generates a net deferred income tax liability and profit sharing liability or net deferred income tax asset
and profit sharing asset for Yanacocha, as measured by the statutory tax and profit sharing rates in effect as enacted. Yanacocha
derives its deferred income tax charge or benefit and profit sharing charge or benefit by recording the change in the net deferred
income tax liability and profit sharing liability or net deferred income tax asset and profit sharing asset balance for the year,
based on Peruvian income and mining tax and profit sharing rates.



Yanacocha’s deferred
income tax assets include certain future tax benefits. Yanacocha records a valuation allowance against any portion of those deferred
income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or
all of the deferred income tax asset will not be realized.



Reclamation
and Remediation Costs



Asset retirement obligations
are recognized when incurred and recorded as liabilities at fair value. The liability is accreted over time through periodic charges
to earnings. In addition, the asset retirement cost is capitalized as part of the asset’s carrying value and amortized over
the life of the related asset. Reclamation costs are periodically adjusted to reflect changes in the estimated present value resulting
from the passage of time and revisions to the estimates of either the timing or amount of the reclamation costs. The retirement
obligation is based on when spending for an existing environmental disturbance will occur. Yanacocha reviews, on an annual basis,
unless otherwise deemed necessary, the reclamation obligation at each mine site in accordance with ASC guidance for reclamation
obligations.



Future remediation
costs for inactive mines are accrued based on management’s best estimate at the end of each period of the costs expected
to be incurred at a site. Such cost estimates include, where applicable, ongoing care, maintenance and monitoring costs. Changes
in estimates at inactive mines are reflected in earnings in the period an estimate is revised.



Comprehensive Income



In addition to Net
income, Comprehensive income (loss) includes all changes in equity during a period, such as cumulative unrecognized changes in
fair value of marketable securities available-for-sale or other investments, except those resulting from investments by and distributions
to owners.



Recently Adopted Accounting Pronouncements



Fair
Value Accounting.In May 2011, ASC guidance was issued related to disclosures around fair value accounting.  The
updated guidance clarifies different components of fair value accounting, including the application of the highest and best use
and valuation premise concepts, measuring the fair value of an instrument classified in a reporting entity’s shareholders’
equity and disclosing quantitative information about the unobservable inputs used in fair value measurements that are categorized
in Level 3 of the fair value hierarchy.  Yanacocha’s January 1, 2012 adoption of the updated guidance had no impact
on Yanacocha’s consolidated financial position, results of operations or cash flows. Refer to note 6 for further details
regarding Yanacocha’s assets and liabilities measured at fair value.



111







Comprehensive
Income.In June 2011, ASC guidance was issued related to comprehensive income. Under the updated guidance, an entity
will have the option to present the total of comprehensive income either in a single continuous statement of comprehensive income
or in two separate but consecutive statements. In addition, the update requires certain disclosure requirements when reporting
other comprehensive income. The update does not change the items reported in other comprehensive income or when an item of other
comprehensive income must be reclassified to income. Yanacocha adopted the new guidance and its deferral and opted to present the
total of comprehensive income in two separate but consecutive statements effective for its fiscal year beginning January 1, 2011.
The early adoption had no impact on Yanacocha’s consolidated financial position, results of operations or cash flows.



Recently Issued Accounting Pronouncements



Reporting
of Amounts reclassified out of Accumulated Other Comprehensive Income.In February 2013, ASC guidance was issued related
to items reclassified from Accumulated Other Comprehensive Income. The new standard requires disclosure either in a single note
or parenthetically on the face of the financial statements as to: (i) the effect of significant amounts reclassified from each
component of accumulated other comprehensive income based on its source and (ii) the income statement line items affected by the
reclassification. The update is effective for Yanacocha’s fiscal year beginning January 1, 2013 with early adoption permitted.
Yanacocha does not expect the updated guidance to have a significant impact on the consolidated financial position, results of
operations or cash flows.



Disclosures about
Offsetting Assets and Liabilities.In November 2011, ASC guidance was issued related to disclosures about offsetting assets
and liabilities. The new standard requires disclosures to allow investors to better compare financial statements prepared under
U.S. GAAP with financial statements prepared under IFRS. The update is effective for Yanacocha’s fiscal year beginning January
1, 2013, and interim periods within those annual periods. Retrospective application is required.





In January 2013, ASC
guidance was issued to clarify that the disclosure requirements are limited to derivatives, repurchase agreements, and securities
lending transactions to the extent that they are (i) offset in the financial statements or (ii) subject to an enforceable master
netting arrangement or similar agreement. Yanacocha does not expect the updated guidance to have an impact on the consolidated
financial position, results of operations or cash flows.



Results of Operations for the Years Ended December 31, 2012
and 2011



Sales



Sales increased by
10 percent from US$2,002.6 million in 2011 to US$2,201.8 million in 2012, due primarily to higher average
realized prices combined with an increase in the number of ounces sold. Production by mine was as follows:



|Mine            |  | 2012     |           |  | 2011 | 
|--------------- |  | -------- | --------- |  | ---- | 
|                |  | (ounces) |          
|Cerro Yanacocha |  |          | 662,577   |  |      | 
|Carachugo       |  |          | 300,368   |  |      | 
|Maqui Maqui     |  |          | 5,811     |  |      | 
|La Quinua       |  |          | 377,236   |  |      | 
|Total           |  |          | 1,345,992 |  |      | 



112







The increase in gold
produced in 2012 as compared to 2011 was mainly attributable to an increase of milling activities related to higher volume of tons
milled, which was 6.3 million DMT for the year ended December 31, 2012 as compared to 6.2 million DMT for the year ended December
31, 2011, and a higher gold grade and recovery rate of 3.89 grams per ton mined and 87.1%, respectively, for the year ended December
31, 2012 as compared to 2.92 and 82.3%, respectively, for the year ended December 31, 2011.



Costs applicable to
sales



Costs applicable to
sales decreased by 6 percent from 2011 to 2012 due primarily to lower operating costs and lower production taxes, partially offset
by higher third-party royalties due to higher sales revenues andlower by-product metal silverand coppersales
credit due to lower production.Costs applicable to sales per ounce of gold decreased by 11 percent, from US$581 in 2011
to US$517 in 2012, primarily due to lower direct mining cost per ounce of US$409 in 2012 as compared to US$497 in 2011, lower production
taxes per ounce of US$9 in 2012 as compared to US$4 in 2011, partially offset by a lower silver credit per ounce of US$13 in 2012
as compared to US$36 in 2011.



Operating costs decreased
by 11 percent from US$618.9 million in 2011 to US$549.9 million in 2012. Operating costs consist primarily of drilling, blasting,
loading, hauling and milling costs, which decreased in 2012 primarily as a result of a decrease in the volume of ore mined, which
was 42.6 million DST compared to 64.2 million DST for the year ended December 31, 2011.



Royalty expense was
US$66.6 million in 2012 as compared to US$60.8 million in 2011. The increase in the royalty expense paid to Chaupiloma, which equals
3 percent of Yanacocha’s net sales, was directly related to the increase in Yanacocha’s sales revenues.



Workers’ profit
participation increased by 2 percent, from US$79.1 million in 2011 to US$80.7 million in 2012. The increase in workers’ profit
participation expense is related to the increase in Yanacocha’s sales revenues. Workers’ profit participation expense
is calculated based on taxable net income and in accordance with Peruvian labor legislation. See “Item 4. Information on
the Company—Yanacocha—B. Business Overview—Employees.”



Depreciation, depletion and amortization



Depreciation, depletion
and amortization increased by 9 percent from US$231.5 million in 2011 to US$252.9 million in 2012. This increase was attributable
principally to higher depreciation from inventory variation expenses.



Exploration expenses



Exploration costs,
which include advanced projects, increased by 84 percent, from US$66.3 million in 2011 to US$121.7 million in 2012. This increase
was attributable principally to increased advanced project activities related to the Conga project, an increased number of exploration
works in the Yanacocha area and other regional/oxide development programs.



113







Other expenses



Other
expenses increased by 180 percent, or US$70.8 million, from 2011 to 2012, mainly due to the execution of an employee severance
program in order to align Yanacocha’s organization with future business needs, higher regional administration expenses and
higher community development and external affairs activities.



Income tax provision



The increase in income
tax provision was directly related to Yanacocha’s increase in taxable income and the full year impact of the new Peruvian
mining and income taxes. The net effective tax rate was 39.0 percent in 2012 compared to 32.2 percent in 2011. The statutory rate
for both years was a weighted average of 30 percent. The factors that most significantly impacted Yanacocha’s net effective
tax rate were related to higher non-deductible expenses and the full year impact of the Special Mining Tax (Impuesto Especial
de Minería), which applies to mines that are not party to a tax stabilization agreement and requires the payment of
rates ranging from 2 percent to 8.4 percent of operating profit, as determined in accordance with Peruvian GAAP, payable on a quarterly
basis, and the Special Mining Duty (Gravamen Especial a la Minería), which applies to companies that are party to
tax stability agreements and is calculated as a percentage of operating profit, with marginal rates ranging from 4 percent to 13.12
percent, increasing progressively for companies with higher operating margins.



Net income



As a consequence of
the foregoing, net income decreased by 2 percent, or US$15.8 million,from US$642.4 millionin 2011 to US$626.5 millionin 2012. As a percentage of sales, net income decreased from 32 percent in 2011 to 28 percent in 2012.



Results of Operations for the Years Ended December 31, 2011
and 2010



Sales



Sales increased by
13 percent from US$1,778.3 million in 2010 to US$2,002.6 million in 2011, due primarily to higher average
realized prices.This increase was partially offset by a decrease in the number of ounces
sold. Production by mine was as follows:



|Mine            |  | 2011     |           |  | 2010 | 
|--------------- |  | -------- | --------- |  | ---- | 
|                |  | (ounces) |          
|Cerro Yanacocha |  |          | 659,996   |  |      | 
|Carachugo       |  |          | 319,995   |  |      | 
|Maqui Maqui     |  |          | 9,906     |  |      | 
|La Quinua       |  |          | 303,226   |  |      | 
|Total           |  |          | 1,293,123 |  |      | 



The decrease in gold
produced in 2011 as compared to 2010 was mainly attributable to a decrease in the volume of leach tons placed, which was 39.2 million
DMT for the year ended December 31, 2011 as compared to 53.2 million DMT for the year ended December 31, 2010 and a higher waste
to ore ratio, which was 1.57 for the year ended December 31, 2011 as compared to 1.38 for the year ended December 31, 2010.



114







Costs applicable to
sales



Costs applicable to
sales increased by 14 percent from 2010 to 2011 due primarily to higher operating costs,higher third-party royalties due
to higher sales revenues andlower by-product metal silverand coppersales credit due to lower production,
partially offset by lower operating costs.Costs applicable to sales per ounce of gold increased by 30 percent, from US$448
in 2010 to US$581 in 2011, primarily due to the effect of lower ounces sold, higher direct mining cost per ounce of US$497 in 2011
as compared to US$391 in 2010, a higher royalty expense per ounce of US$48 in 2011 as compared to US$38 in 2010 and a higher workers’
profit participation expense per ounce of US$57 in 2011 as compared to US$53 in 2010.



Operating costs decreased
by 8 percent from US$669.1 million in 2010 to US$618.9 million in 2011. Operating costs consist primarily of drilling, blasting,
loading, hauling and milling costs, which decreased in 2011 primarily as a result of a decrease in the volume of ore mined, which
was 64.2 million DST compared to 83.7 million DST for the year ended December 31, 2010.



Royalty expense was
US$60.8 million in 2011 as compared to US$55.8 million in 2010. The increase in the royalty expense paid to Chaupiloma, which equals
3 percent of Yanacocha’s net sales, was directly related to the increase in Yanacocha’s sales revenues.



Workers’ profit
participation increased by 2 percent, from US$77.4 million in 2010 to US$79.1 million in 2011. The increase in workers’ profit
participation expense is directly related to the increase in Yanacocha’s sales revenues. Workers’ profit participation
expense is calculated based on taxable net income and in accordance with Peruvian labor legislation. See “Item 4. Information
on the Company—Yanacocha—B. Business Overview—Employees.”



Depreciation, depletion and amortization



Depreciation, depletion
and amortization increased by 44 percent from US$160.4 million in 2010 to US$231.5 million in 2011. This increase was attributable
principally to higher amortization from mine development and higher amortization from asset retirement costs.



Exploration expenses



Exploration costs,
which include advanced projects, increased by 92 percent, from US$34.6 million in 2010 to US$66.3 million in 2011. This increase
was attributable principally to increased perforation and advanced projects related to the Conga project, an increased number of
exploration works in connection with regional/oxide development programs and an increased number of advanced projects related to
water treatment and information solutions.



Other expenses



Other
expenses decreased by 13 percent, or US$9 million, from 2010 to 2011, mainly due to lower voluntary contribution as a result of
the expiration of the agreement requiring payment of the contribution during 2011.



115







Income tax provision



The increase in income
tax provision was directly related to Yanacocha’s increase in taxable income. The net effective tax rate was 32.2 percent
in 2011 compared to 31.4 percent in 2010. The statutory rate for both years was a weighted average of 30 percent. The factors that
most significantly impacted Yanacocha’s net effective tax rate were related to higher non-deductible expenses and the enactment
of the Special Mining Tax (Impuesto Especial de Minería), which applies to mines that are not party to a tax stabilization
agreement and requires the payment of rates ranging from 2 percent to 8.4 percent of operating profit, as determined in accordance
with Peruvian GAAP, payable on a quarterly basis, and the Special Mining Duty (Gravamen Especial a la Minería), which
applies to companies that are party to tax stability agreements and is calculated as a percentage of operating profit, with marginal
rates ranging from 4 percent to 13.12 percent, increasing progressively for companies with higher operating margins.



Net income



As a consequence of the foregoing, net income
increased by 9 percent, or US$52.5 million,from US$589.9 million in 2010 to US$642.4 millionin 2011. As a percentage
of sales, net income decreased from 33 percent in 2010 to 32 percent in 2011.



B. Liquidity and Capital Resources



As of December 31,
2012, Yanacocha had cash and cash equivalents of US$618.1million, substantially all of which were held in U.S. Dollars,
as compared to US$798.0million as of December 31, 2011.



Cash provided by operating
activities



Yanacocha’s operations
generated a net cash flow of US$936.7 million in 2012, US$911.6million in 2011 and US$621.7 in 2010. The net cash flow
in 2012 was essentially the same as in 2011 as the benefit from increased sales volumes and average realized prices in 2012 were
offset in part by increased costs driven in part by higher Peruvian tax rates and employee severance costs. The increase in net
cash flow provided by operating activities in 2011 was mainly due to higher sales revenues as a result of an increase in average
realized prices, partially offset by a lower volume of ounces sold and higher working capital.



Cash used in investing
activities



Net cash used in
investing activities was US$1.1 billion in 2012, US$992.5million in 2011 and US$296.7 in 2010. In 2012,
Yanacocha’s investing activities consisted primarily of US$498 million for engineering, construction and equipment at
the Conga project, US$338 million for mine development at El Tapado Oeste, the Western Oxides and the Eastern Oxides, US$30
million for equipment components, US$25 million for water treatment plant studies and construction, US$18 million for gold
mill tailings improvements, US$17 million for bio-leach studies and plant construction and US$15 million for the
standardization of information technology systems. In 2011, Yanacocha’s investing activities consisted primarily of
US$739 million for engineering, construction, equipment and off-site infrastructure at the Conga project, US$156.3 million
for mine development at El Tapado Oeste, the Western Oxides and the Maqui Maqui deposits, US$55 million for leach pad
expansions at La Quinua (area of the Western Oxides), US$24 million for land purchases, US$14.5 million for the
standardization of information technology systems across the Newmont Group and the selection of SAP as its global information
technology platform, US$9.9 million for water treatment project studies, US$9.6 million for La Quinua 2C studies of the
instability and failure of the pit, US$8.6 million for life extension of the haul trucks fleet and US$4.9 million for
construction of a new central warehouse.



116







Cash used in financing
activities



Net cash used in financing
activities was US$0 in 2012, US$2million in 2011 and US$176.7 million in 2010. In 2012, Yanacocha carried no debt and accordingly
had no financing costs. In 2011, Yanacocha’s financing activities consisted primarily of the last four installments of lease
payments for haul trucks.



Exploration Costs; Capital Expenditures



Exploration



Yanacocha’s basic
exploration and advanced project costs during the period from 1992 through 2012 were financed with a combination of internally
generated funds, advances from partners and loans from DEG and IFC. During 2010, 2011 and 2012,Yanacochaincurred US$34.6 million, US$66.3 million and US$121.7 million, respectively, in exploration costs.In 2013, exploration
efforts will focus on continued development of the Chaquicocha Sulfides project, testing the extension of the Yanacocha Verde deposit,
continued exploration in the Yanacocha district and conducting an exploration program in the Yanacocha concession block outside
of the operation district.



Capital Expenditures



Yanacocha’s
capital expenditures from its formation in 1992 through 2012 were financed with a combination of internally generated funds, advances
from partners, loans from DEG and IFC and proceeds from Yanacocha’s Receivables Securitization (see Note 11 to the Yanacocha
Financial Statements). Yanacocha’s capital expenditures from its formation in 1992 through 2012 have related principally
to the construction of the Carachugo, Maqui Maqui, San José, Cerro Yanacocha and La Quinua mining operations, the construction
of two plants at Carachugo and Yanacocha, each of which includes a leach solution processing facility and a smelter at each plant,
the construction of four carbon column plants at Cerro Yanacocha and La Quinua, the acquisition of both new and used mining equipment,
the construction of two dams, the construction of one agglomeration plant at La Quinua, the construction of the Yanacocha Gold
Mill, and several expansions of the leach pads located at the Carachugo, Maqui Maqui, Cerro Yanacocha and La Quinua mining operations.Yanacocha’s capital expenditures from its formation through December 31, 2012 totaled approximately US$5,393 million,
including capital expenditures of US$1,094 million in 2011 and US$1,148 million in 2012. In 2012, Yanacocha’s principal capital
expenditures included US$498 million for engineering, construction and equipment at the Conga project, US$338 million for mine
development at El Tapado Oeste, the Western Oxides and the Eastern Oxides deposits, US$30 million for equipment components, US$25
million for water treatment plant studies and construction, US$18 million for gold mill tailings improvements, US$17 million for
bio-leach studies and plant construction and US$15 million for the standardization of information technology systems.



Yanacocha anticipates
that its capital expenditures for 2013 will be approximately US$566 million, of which it plans to use approximately US$300 million
in connection with the construction of the Conga project.  The remaining capital expenditure budget has been allocated for
sustaining investment in current operations and development capital for upcoming operations.



C. Research and Development



Yanacocha is a mining
exploration and production company and does not engage in research and development activities.



117







D. Trend Information



Other than as disclosed
in this Annual Report, Yanacocha has informed us that it is not aware of any trends, uncertainties, demands, commitments or events
which are reasonably likely to have a material effect upon Yanacocha’s net sales or revenues, income from continuing operations,
profitability, liquidity or capital resources, or that would cause reported financial information to not necessarily be indicative
of future operating results or financial condition.



E. Off-Balance Sheet Arrangements



Yanacocha has informed
us that there are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on Yanacocha’s
financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures
or capital resources that are material to investors.



F. Tabular Disclosure
of Contractual Obligations



The following table
shows Yanacocha’s contractual obligations as of December 31, 2012:



|                                      |  |       |       |  | Payments due by Period (US$ in millions) | 
|------------------------------------- |  | ----- | ----- |  | ---------------------------------------- | 
|                                      |  |       |       |  | Less than                                | 
|                                      |  | Total |       |  | 1 year                                   | 
|Long-Term Debt                        |  |       | -     |  |                                          | 
|Capital Lease Obligations             |  |       | -     |  |                                          | 
|Reclamation and Remediation Liability |  |       | 529.4 |  |                                          | 
|Open Purchase Orders                  |  |       | -     |  |                                          | 
|Other Long-Term Obligations(*)        |  |       | 18.0  |  |                                          | 
|Total Contractual Cash Obligations    |  |       | 547.4 |  |                                          | 










| | (*) | Other long-term contracts include deferred workers’ compensation obligations, power and fuel
supply contract commitments and fuel and inventory obligations.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



118







CERRO VERDE



Introduction



The following discussion
should be read in conjunction with the Cerro Verde Financial Statements as of December 31, 2011 and 2012 and for the years ended
December 31, 2010, 2011 and 2012 and the related notes thereto included elsewhere in this Annual Report. The Cerro Verde Financial
Statements are prepared and presented in accordance with IFRS as issued by the IASB. Cerro Verde adopted IFRS effective January
1, 2010. The Cerro Verde Financial Statements for the year ended December 31, 2011 were the first that Cerro Verde prepared in
accordance with IFRS. We applied IFRS 1 “First-time Adoption of International Financial Reporting Standards” to the
opening balance as of January 1, 2010, Cerro Verde’s transition date to IFRS. The IFRS 1 application implies that all the
standards are applied retrospectively at the transition date, including certain mandatory exceptions and voluntary exemptions defined
in the standard. See Note 3 to the Cerro Verde Financial Statements for further details and a description of the exceptions and
exemptions applicable to first-time adopters.



A. Operating Results



Overview



We hold a 19.58 percent
interest in Cerro Verde, which operates an open-pit copper and molybdenum mining complex located 20 miles southwest of Arequipa,
Peru. The site is accessible by paved highway. The Cerro Verde mine has been in operation since 1976, and was previously owned
by the Peruvian government prior to its privatization in 1993. Freeport-McMoRan Copper & Gold Inc. holds a majority interest
in Cerro Verde.



The Cerro Verde mine
is a porphyry copper deposit that has leachable oxide and secondary sulfide mineralization, and millable primary sulfide mineralization.
The predominant oxide copper minerals are brochantite, chrysocolla, malachite and copper “pitch.” Chalcocite and covellite
are the most important secondary copper sulfide minerals. Chalcopyrite and molybdenite are the dominant primary sulfides.



Cerro Verde’s
current operations consist of an open-pit copper mine, a 120,000 metric ton-per-day concentrator and leaching facilities. Leach-copper
production is derived from a 39,000 metric ton-per-day crushed leach facility and a leach system. This leaching operation has a
capacity of approximately 200 million pounds of copper per year.



Cerro Verde has sufficient
equipment to move an average of 308,000 metric tons of material per day using a fleet of haul trucks. Copper cathodes and concentrate
production are transported approximately 70 miles by truck and rail to the Pacific Port of Matarani for shipment to international
markets.



Cerro Verde receives
electrical power under long-term contracts with electric utility companies. Water for Cerro Verde’s processing operations
comes from renewable sources through a series of storage reservoirs, which Cerro Verde believes will be sufficient to support its
currently planned operations.



Presented in the table
below are certain summary financial and operating data regarding Cerro Verde for the years ended December 31, 2010, 2011 and 2012:



119







|                                                              |  | As of and for the year ended December 31, |          
|------------------------------------------------------------- |  | ----------------------------------------- | ---------
|                                                              |  | 2010                                      |          
|Income statement data(1)                                      |  |                                           |          
|Total revenues (US$ in thousands)                             |  |                                           | 2,368,988
|Net income (US$ in thousands)                                 |  |                                           | 1,074,393
|                                                              |  |                                           |          
|Proven and Probable Reserves(2)                               |  |                                           |          
|Proven:                                                       |  |                                           |          
|Leachable ore reserves (metric tons in thousands)             |  |                                           | 145,302  
|Millable ore reserves (metric tons in thousands)              |  |                                           | 903,950  
|Probable:                                                     |  |                                           |          
|Leachable ore reserves (metric tons in thousands)             |  |                                           | 97,911   
|Millable ore reserves (metric tons in thousands)              |  |                                           | 2,424,368
|Average copper grade of leachable ore reserves (%)            |  |                                           | 0.41     
|Average copper grade of millable ore reserves (%)             |  |                                           | 0.40     
|                                                              |  |                                           |          
|Production(3)                                                 |  |                                           |          
|Cathodes (in thousands of recoverable pounds)                 |  |                                           | 183,426  
|Concentrates (in thousands of recoverable pounds)             |  |                                           | 483,937  
|Average realized price of copper sold (US$ per pound payable) |  |                                           | 3.42     










| | (1) | Derived from Cerro Verde’s financial statements filed with the Superintendencia del Mercado
de Valores, or the SMV. See the Cerro Verde Financial Statements, including the notes thereto, appearing elsewhere in this
Annual Report.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Reserve calculations are derived from the audited financial statements
filed by Cerro Verde with the SMV. Cerro Verde used US$2.00 per pound of copper to determine copper reserves as of December 31,
2012. See the Cerro Verde Financial Statements, including the notes thereto, appearing elsewhere in this Annual Report. The calculation
or estimation of proven and probable ore reserves for Cerro Verde may differ in some respects from the calculations of proven and
probable reserves for us and Yanacocha located elsewhere in this Annual Report. According to Cerro Verde, ore estimates for Cerro
Verde are based upon engineering evaluations of assay values derived from samplings of drill holes and other openings. Cerro Verde’s
ore estimates include assessments of the resource, mining and metallurgy, as well as consideration of economic, marketing, legal,
environmental, social and governmental factors, including projected long-term prices for copper and molybdenum and Cerro Verde’s
estimate of future cost trends.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Derived from Cerro Verde’s financial statements filed with the SMV. See the Cerro Verde Financial
Statements, including the notes thereto, appearing elsewhere in this Annual Report.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Cerro Verde Mining
Royalties



SUNAT, the Peruvian
national tax authority, has assessed mining royalties on materials processed by the Cerro Verde concentrator that commenced operations
in late 2006. These assessments cover the period from October 2006 to December 2007 and the years 2008 and 2009. SUNAT has issued
rulings denying Cerro Verde’s protest of the assessments. Cerro Verde has appealed these decisions and currently these cases
are pending before the Peruvian Tax Tribunal. Cerro Verde is challenging these royalties because it believes its stability agreement
provides an exemption for all minerals extracted from its mining concession, irrespective of the method used for processing those
minerals. Although Cerro Verde believes its interpretation of the stability agreement is correct, if Cerro Verde is ultimately
found responsible for these assessments, it will also be liable for interest, which accrues at rates that range from approximately
7 to 18 percent based on the year accrued and the currency in which the amounts would be payable. As of December 31, 2012, the
aggregate amount of the assessments, including interest and penalties, totaled US$218 million. SUNAT may continue to assess mining
royalties annually until this matter is resolved by the Peruvian Tax Tribunal.



120







Critical Accounting
Policies



Cerro Verde has furnished
us with a discussion of its critical accounting policies and methods used in the preparation of its financial statements. Critical
accounting policies are defined as those that are reflective of significant judgments and uncertainties and could potentially impact
results under different assumptions and conditions. Note 2to the Cerro Verde Financial Statements includes a summary of
the significant accounting policies and methods used in the preparation of the Cerro Verde Financial Statements. The following
is a brief discussion of the identified critical accounting policies and the estimates and judgments made by Cerro Verde.



Estimates of Ore Reserves and Resources



Ore reserves are estimates
of the ore quantity that can be economically and legally extracted from the mine properties. Cerro Verde estimates its ore reserves
based on information compiled by individuals qualified in reference to geological data about the size, depth and form of the ore
body, which requires complex judgments in order to interpret the data.



The estimation of recoverable
reserves is based on factors such as estimated exchange rates, commodity prices, future requirements of capital and production
costs, together with geological hypotheses and judgments made when estimating the size and quality of ore. Revisions in reserve
or resource estimates may have an impact on the value of mining properties, property, plant and equipment, provisions for cost
of mine closure, recognition of assets for deferred taxes and depreciation and amortization of assets.



Units of Production
(“UOP”) Depreciation



Estimates of recoverable
reserves are used in determining the depreciation and amortization of mine assets. This results in a depreciation/amortization
charge proportional to the depletion of the anticipated remaining life of mine production. Each item’s life, which is assessed
annually, takes into account its physical life limitations and the present assessments of economically recoverable reserves. These
calculations require the use of estimates and assumptions, including the amount of recoverable reserves that may be recovered.



Inventories



Net realizable value
tests are performed at least annually and represent the estimated future sales price of the product based on prevailing spot metals
prices, less estimated costs to complete production and bring the inventory to sale. Additionally, in calculating the net realizable
value of Cerro Verde’s long-term stockpiles, management also considers the time value of money.



Mill and leach stockpiles
generally contain lower grade ores that have been extracted from the ore body and are available for copper recovery. For mill stockpiles,
recovery is through milling and concentrating. For leach stockpiles, recovery is through exposure to acidic solutions that dissolve
copper and deliver it in solution form to extraction processing facilities.



Because it is generally
impracticable to determine copper contained in mill and leach stockpiles by physical count, reasonable estimation methods are employed.
The quantity of material delivered to mill and leach stockpiles is based on surveyed volumes of mined material and daily production
records. Sampling and assaying of blasthole cuttings determine the estimated copper grades of material delivered to mill and leach
stockpiles.



121







Expected copper recovery
rates for mill stockpiles are determined by metallurgical sampling. The recoverable copper in mill stockpiles, once entered into
the production process, can be produced into copper concentrate almost immediately.



Estimated copper recovery
rates for leach stockpiles are determined using small-scale laboratory tests, historical trends and other factors. Ultimate recovery
of copper contained in leach stockpiles can vary significantly depending on several variables, including the type of copper recovery,
mineralogy and particle size of the rock. Processes and recovery rates are monitored continuously, and recovery rates are adjusted
periodically as additional information becomes available and as related technology changes.



Mine Closure Provision



Cerro Verde assesses
its mine closure provision annually. It is necessary to make estimates and assumptions in determining this provision, including
cost estimates of activities that are necessary for the rehabilitation of the site, technological and regulatory changes, and interest
rates and inflation rates. As discussed in Note 2.3(h) to the Cerro Verde Financial Statements, estimated changes in the fair value
of the mine closure provision or the useful life of the related assets are recognized as an increase or decrease in the book value
of the provision and related asset retirement cost (ARC) in accordance with IAS 16, “Property, Plant and Equipment.”
If any change in the estimate results in an increase to the mine closure provision and related ARC, Cerro Verde will consider whether
or not this is an indicator of impairment of the assets and apply impairment tests in accordance with IAS 36, “Impairments
of Assets.”



Impairment of Long-lived Assets



Cerro Verde has determined
that its operation consists of one cash generating unit, which is the operation as a whole. Therefore, the Cerro Verde operation
is evaluated annually in order to determine if there are any impairment indicators. If any such indication exists, Cerro Verde
makes an estimate of the recoverable amount, which is the greater of the fair value less costs to sell and the value in use. These
assessments require the use of estimates and assumptions, such as long-term commodity prices, discount rates, operating costs and
others.



Fair value is defined
as the amount that would be obtained from the sale of the asset in an arm’s-length transaction between willing and knowledgeable
parties. The fair value of assets is generally determined as the current value of future cash flows derived from the continuous
use of the asset, which includes estimates, such as the cost of future expansion plans and eventual disposal, while applying assumptions
that an independent market participant may take into account. The cash flows are discounted by applying a discount rate that reflects
the current market, the time value of money and risks specific to the asset. See Note 2.3(g) to the Cerro Verde Financial Statements
for further discussion.



Contingencies



By their nature, contingencies
will only be resolved when one or more future events do or do not occur. Determining contingencies inherently involves the exercise
of judgment and calculation of the estimated results of future events.



Results of Operations
for the Years Ended December 31, 2012 and 2011



Net
sales. Net sales, including mark-to-market adjustments for pounds of copper pending settlement, decreased by
16 percent, from US$2,520.1 million in 2011 to US$2,127.0 million in 2012, principally due to a decrease in average realized copper
price during 2012 and lower volume of copper sold. The following table reflects the average realized price and volume sold of copper
(both cathode and concentrate) during the years ended December 31, 2011 and 2012:



122







|                |  | Year ended December 31, |         |  |      |    
|--------------- |  | ----------------------- | ------- |  | ---- | ---
|                |  | 2011                    |         |  | 2012 |    
|Average price   |  |                         |         |  |      |    
|Copper (US$/MT) |  | US$                     | 8,584   |  |      | US$
|                |  |                         |         |  |      |    
|Volume sold     |  |                         |         |  |      |    
|Copper (MT)     |  |                         | 293,581 |  |      |    



Average
realized copper prices per metric ton decreasedfrom US$8,584 in 2011 to US$7,965 in 2012. The
volume of copper solddecreasedfrom 293,581 metric tons in 2011 to 267,040 metric tons in 2012,
mainly due to a decrease in the volume of copper cathodes sold. The combined effect of these changes resulted in a US$393.0 million
decreasein income from sales of copper in 2012 compared to 2011.



Total
costs of sales. Total costs of sales decreasedby 3 percent, from US$824.7 million in 2011
to US$801.6 million in 2012, due mainly to the net effect of the following:



(a)
Material and supplies consumption costsincreasedby 15 percent, from US$315.5 million in 2011
to US$362.3 million in 2012, mainly due to the increase in price and quantity of fuel consumption used for the process of waste
removal;



(b)
Labor costs, including workers’ profit sharing, decreased by 25 percent, from US$256.2
million in 2011 to US$191.9 million in 2012, due mainly to lower workers’ profit sharing
to be paid to employees calculated in 2012 as lower income tax basis was obtained;



(c)The variation of in process inventories decreased from US$19.1 million in 2011 to US$48.1 million in 2012 as a result of
the current mining plan of processing high grade concentrates first and then low grade concentrates;



(d)
Depreciation and amortization costs increasedby 14 percent, from US$84.1 million in 2011 to
US$95.9 million in 2012, due mainly to an increase in depreciation charges as the level of fixed assets increased;



(e)Repair and maintenance services increased by 19 percent, from US$74.2 million in 2011 to US$88.5 million in 2012; and



(f)
Energy costsincreasedby 6 percent, from US$69.3 million in
2011 to US$73.1 million in 2012, mainly due to an increase in the unit cost per kilowatt during 2012.



Total
operating expenses. Operating expensesdecreasedby 21 percent, from US$136.1 million in
2011 to US$108.2 million in 2012, due mainly to changes in the following components:



(a)
Selling expenses decreasedby 6 percent, from US$83.6 million in 2011 to US$78.7 million in 2012,
due mainly to lower copper sales during 2012;and



(b)
Excess of workers’ profit sharing expensedecreasedfrom US$21.9 million in 2011 to US$0
million in 2012, due to lower profit and taxable income during 2012.



123







Operating
income.As a result of the foregoing, operating income decreasedby 22 percent,
from US$1,559.3 million in 2011 to US$1,217.3 million in 2012.



Income
tax. Income tax expense, including current and deferred expense,decreasedby 8 percent, from an expense of US$483.7 million in 2011 to an expense of US$443.3 million in
2012. Net current income tax expense decreaseddue to lower taxable income, partially offset
by (i) higher deferred taxes mainly related to the deduction of costs for construction of the water treatment plant, mark-to-market
adjustments and an increase of the effective tax rate from 30% to 32% beginning in 2014 pursuant to the New Tax Stability Agreement
executed in July 2012 and (ii) higher mining taxes expense due to new taxes in force since the fourth quarter of 2011.



Net
income. As a result of the foregoing, net income decreasedby 28 percent, from US$1,078.4
million in 2011 to US$772.0 million in 2012. As a percentage of net sales, net income was 36 percent in 2012, compared with 43
percent in 2011.



Results of Operations
for the Years Ended December 31, 2011 and 2010



Net
sales. Net sales, including mark-to-market adjustments for pounds of copper pending settlement,increased by
6 percent, from US$2,369.0 million in 2010 to US$2,520.1 million in 2011, mainly due to an increase in average realized copper
price during 2011. The following table reflects the average realized price and volume sold of copper (both cathode and concentrate)
during the years ended December 31, 2010 and 2011:



|                |  | Year ended December 31, |          |  |      | 
|--------------- |  | ----------------------- | -------- |  | ---- | 
|                |  | 2010                    |          |  | 2011 | 
|Average price   |  |                         |          |  |      | 
|Copper (US$/MT) |  |                         | US$7,981 |  |      | 
|                |  |                         |          |  |      | 
|Volume sold     |  |                         |          |  |      | 
|Copper (MT)     |  |                         | 296,821  |  |      | 



Average
realized copper prices per metric tonincreasedfrom US$7,981 in 2010 to US$8,584 in 2011. The
volume of copper solddecreasedfrom 296,821 metric tons in 2010 to 293,581 metric tons in 2011,
mainly due to a decrease in the volume of copper cathodes sold, partially offset by higher volumes of copper concentrates sold.
The combined effect of these changes resulted in a US$151.1 millionincreasein income from sales
of copper in 2011 compared to 2010.



Total
costs of sales. Total costs of salesincreasedby 28 percent, from US$646.0 million in 2010
to US$824.7 million in 2011, due to the following:



(a)
Material and supplies consumption costsincreasedby 14 percent, from US$276.3 million in 2010
to US$315.5 million in 2011, mainly related to increased utilization of materials and operating supplies, primarily in the concentrator
plant;



(b)
Depreciation and amortization costsdecreasedby 4 percent, from US$87.7 million in 2010 to US$84.1
million in 2011, due mainly to a decrease in depreciation charges;



124







(c)
Energy costsincreasedby 31 percent, from US$53.0 million
in 2010 to US$69.3 million in 2011, mainly due to increases in energy consumption during the milling process and in the unit cost
per kilowatt negotiated with the electricity supplier during 2011; and



(d)
Labor costs, including workers’ profit sharing,increased by 54 percent, from US$166.5
million in 2010 to US$256.2 million in 2011, due mainly to signing bonuses paid to employees
pursuant to the new collective bargaining agreement entered into with union employees and higher workers’ profit sharing
to be paid to employees calculated in 2011.



Total
operating expenses. Operating expensesdecreasedby 19 percent, from US$167.2 million in
2010 to US$136.1 million in 2011, due to changes in the following components:



(a)
Selling expensesincreasedby 9 percent, from US$76.6 million in 2010 to US$83.6 million in 2011,
due mainly to an increase in freight expenses relating to the transport of copper concentrates;



(b)
Other operating expensesincreasedby 57 percent, from US$10.7 million in 2010 to US$16.9 million
in 2011, principally due toan increase in costs incurred in connection with pre-feasibility studies for the expansion of
mining operations;



(c)
Voluntary contribution expensedecreasedfrom US$41.1 million in 2010 to US$0.0 in 2011. The
agreement mandating payment of the voluntary contribution expired as of December 31, 2010 as a result of Supreme Decree 071-2006
ME, and, as a result, Cerro Verde did not recognize any voluntary contribution expense for 2011; and



(d)
Excess of workers’ profit sharing expensedecreasedby 36 percent, from US$34.4 million
in 2010 to US$21.9 million in 2011, due to lower taxable income.



Operating
income.As a result of the foregoing, operating incomeincreasedby 0.22 percent,
from US$1,555.8 million in 2010 to US$1,559.3 million in 2011.



Income
tax. Income tax expense, including current and deferred expense,increasedby 0.1 percent, from an expense of US$483.3 million in 2010 to an expense of US$483.7 million
in 2011. Net current income tax expenseincreaseddue to higher taxable income, partially offset
by lower deferred taxes mainly related to mark-to-market adjustments.



Net
income. As a result of the foregoing, net incomeincreasedby0.4percent, from US$1,074.4 million in 2010 to US$1,078.4million in 2011. As a percentage of net
sales, net income was 43 percent in 2011, compared with 45 percent in 2010.



B. Liquidity and Capital
Resources



As of December 31,
2012, Cerro Verde had cash and cash equivalents of US$1,427.5 million, compared to US$1,383.6 million at December 31, 2011.



Cash provided by
operating activities for the years ended December 31, 2012 and 2011. Net cash and cash equivalents provided by operating activities
were US$644.7 million in 2012 and US$1,190.7 million in 2011. The decrease in net cash flow provided by operating activities in
2012 compared with 2011 was mainly attributable to the following factors: (i) decrease in proceeds
from sales from US$2,865 million in 2011 to US$1,961 million in 2012; (ii) decrease in payments to suppliers and salaries from
US$1,057 million in 2011 to US$805 million in 2012 and (iii) decrease in payment of income tax from US$622 million in 2011 to US$413
million in 2012.



125







Cash provided by
operating activities for the years ended December 31, 2011 and 2010. Net cash and cash equivalents provided by operating
activities were US$1,190.7 million in 2011 and US$1,256.9 million in 2010. The decrease in net cash flow provided by operating
activities in 2011 compared with 2010 was mainly attributable to the following factors: (i) increased proceeds from sales, from
US$2,301 million in 2010 to US$2,865.5 million in 2011 and (ii) an increase in value-added tax recovered, from US$56.3 million
in 2010 to US$61.5 million in 2011; partially offset by (i) increased payments to suppliers and of salaries, from US$505 million
in 2010 to US$708.5 million in 2011; (ii) increased payments to contractors, from US$238 million in 2010 to US$316.4 million in
2011; (iii) increased payments of income tax, from US$327.1 million in 2010 to US$626.9 million in 2011; and (iv) an increase
in other operating expenses, from US$52.4 million in 2010 to US$106.8 million in 2011.



Cash used in investing
activities for the years ended December 31, 2012 and 2011. Net cash used in investing activities increased from US$195.2 million
in 2011 to US$600.8 million in 2012, mainly due to the expansion of production at Cerro Verde.



Cash used in investing
activities for the years ended December 31, 2011 and 2010. Net cash used in investing activities increased from US$122.2 million
in 2010 to US$195.2 million in 2011, mainly due to an increase in the purchase of property, plant and equipment during 2011.



Cash used in financing
activities for the years ended December 31, 2012 and 2011.Net cash and cash equivalents used in financing activities
was US$0 in 2011 and 2012.



Cash used in financing
activities for the years ended December 31, 2011 and 2010. Net cash and cash equivalents used in financing activities decreased
from US$950.0 in 2010 to US$0 million in 2011. The decrease in net cash flow used in financing activities in 2011 compared with
2010 was mainly attributable to the non-payment of dividends during 2011.



Long-term Debt



As of December 31,
2012, Cerro Verde had no debt outstanding.



C. Research and Development



Not applicable.



D. Trend Information



Expansion of
operations



During 2010, Cerro
Verde completed its concentrator plant expansion to increase the treatment of copper concentrate from 108,000 to 120,000 metric
tons per day. During the second half of 2011, Cerro Verde completed the feasibility study for a major expansion of its concentrator
and leaching facilities. The approximately US$4.0 billion project will expand the processing capacity from 120,000 metric tons
per day of ore to 360,000 metric tons per day, targeting incremental annual production of approximately 600 million pounds of
copper and 15 million pounds of molybdenum beginning in 2016. Cerro Verde submitted the EIS to the Peruvian authorities for review
and approval in December 2011 and received approval from the MEM in December 2012. In 2012, Cerro Verde continued with the execution
of its unit of production expansion by undertaking detailed engineering studies and procuring long-lead items. Cerro Verde expects
to begin the construction phase of this project in 2013.



126







Other than as disclosed
in this Annual Report, Cerro Verde has informed us that it is not aware of any trends, uncertainties, demands, commitments or
events which are reasonably likely to have a material effect upon Cerro Verde’s net sales or revenues, income from continuing
operations, profitability, liquidity or capital resources, or that would cause reported financial information to not necessarily
be indicative of future operating results or financial condition.



E. Off-Balance Sheet Arrangements



Cerro Verde has informed
us that there are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on Cerro
Verde’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to investors.



F. Tabular Disclosure
of Contractual Obligations



The following table
shows Cerro Verde’s contractual obligations as of December 31, 2012:



|                                            |  |       |     |  | Payments due by Period (US$ in millions) | 
|------------------------------------------- |  | ----- | --- |  | ---------------------------------------- | 
|                                            |  |       |     |  | Less than                                | 
|                                            |  | Total |     |  | 1 year                                   | 
|Provision for Remediation and Mine Closure  |  |       | 80  |  |                                          | 
|Other Long-Term Contractual
    Obligations |  |       | 176 |  |                                          | 
|Total Contractual Cash Obligations          |  |       | 256 |  |                                          | 



| | ITEM 6. | Directors,
                                                                                             Senior Management and Employees
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------



A.  Board of Directors and Senior Management



Our Board of Directors
is responsible for policy decisions and our overall direction and other corporate matters in accordance with our By-laws and the
Peruvian Companies Law. Our executive officers oversee our business and are responsible for the execution of the policy decisions
of the Board of Directors. The Board of Directors, which must be comprised of seven members, is elected at the annual obligatory
meeting of shareholders, or the Annual Obligatory Meeting, for a three-year term. The last election took place in March 2011,
and the next election is scheduled for March 2014. See “Item 10. Additional Information—B. Memorandum and Articles
of Association.”



Our current directors
and executive officers are as follows:



|Name                     |  | Age |  | Position                                   |  | Date FirstAppointed |  | CurrentTerm Ends
|------------------------ |  | --- |  | ------------------------------------------ |  | ------------------- |  | ----------------
|Directors                |  |     |  |                                            |  |                     |  |                 
|Roque Benavides          |  | 58  |  | Chairman of the Board                      |  | 1980                |  | March 2014      
|Timothy Snider           |  | 63  |  | Director                                   |  | 2011                |  | March 2014      
|Jose Miguel Morales(1)   |  | 67  |  | Director                                   |  | 2012                |  | March 2014      
|Aubrey Laurence Paverd   |  | 74  |  | Director                                   |  | 2002                |  | March 2014      
|Felipe Ortiz-de-Zevallos |  | 65  |  | Director                                   |  | 2003                |  | March 2014      
|Carlos del Solar         |  | 72  |  | Director                                   |  | 2011                |  | March 2014      
|Germán Suárez            |  | 71  |  | Director                                   |  | 2005                |  | March 2014      
|                         |  |     |  |                                            |  |                     |  |                 
|Executive Officers       |  |     |  |                                            |  |                     |  |                 
|Roque Benavides(1)       |  | 58  |  | President and Chief Executive Officer      |  | 2001                |  |                 
|Carlos E. Gálvez         |  | 60  |  | Vice President and Chief Financial Officer |  | 2001                |  |                 
|Raúl Benavides(1)        |  | 57  |  | Business Development Vice President        |  | 1997                |  |                 
|Alejandro Hermoza        |  | 51  |  | Vice President Community Relations         |  | 2008                |  |                 
|Francois Muths           |  | 61  |  | Operations Vice President                  |  | 2007                |  |                 
|César E. Vidal           |  | 58  |  | Explorations Vice President                |  | 1996                |  |                 
|Gulnara la Rosa          |  | 48  |  | General Counsel                            |  | 2012                |  |                 
|Leandro Garcia           |  | 44  |  | General Comptroller and Compliance Officer |  | 2011                |  |                 








| | (1) | Roque Benavides is the brother of Raúl
                                                           Benavides, and José Miguel Morales is the brother-in-law of
                                                           Roque Benavides and Raúl Benavides.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



127







Set forth below is
biographical information concerning members of our management:



Roque Benavides,
Chairman of the Board, President and Chief Executive Officer and member of the Nominating Committee. Mr. Benavides
has been a director since July 2004 and was our Chief Financial Officer from 1985 to February 2001, when he was appointed President
and Chief Executive Officer. Prior to that time, he served as Assistant to our Chairman of the Board from 1980 to 1985 and as
a Project Engineer from 1977 to 1979. Mr. Benavides also has been an alternate member of the Executive Committee of Yanacocha
since 1992. In addition, he is an alternate board member of Cerro Verde and was the General Manager of Recuperada S.A., formerly
one of our majority-owned subsidiaries that has since merged into us, from 1981 to 1996. He currently is serving as an executive
officer and as a director of several of our related companies. He also has served as a director of the Sociedad Nacional de
Minería, Petróleo y Energía (National Association of Minerals, Petroleum and Energy) since 1988, serving
as Chairman of the Board from 1993 to 1995. Mr. Benavides served as chairman of the Confederación Nacional de Instituciones
Empresariales Privadas(National Confederation of Private Companies, or CONFIEP) from 1999 to March 2001. In 2001, Mr. Benavides
was appointed Vice Chairman of the World Gold Council and Vice Chairman of the Silver Institute in 2007. Mr. Benavides received
a B.S. in Engineering from Pontificia Universidad Católica del Perú (Pontifical Catholic University of Peru)
in Lima, Peru in 1977 and an M.B.A. from Henley, The Management College of Brunnel University in 1980, and completed the Program
for Management Development at the Harvard Business School in 1985 and the Advanced Management Program at Templeton College of
Oxford University in 1997. He is a board member of Banco de Crédito and Cementos Lima, both Peruvian companies.



Timothy Snider,
Director and member of the Nominating/Corporate Governance Committee. Mr. Snider was appointed a director in March 2011. He
serves as Chairman of Cupric Canyon Capital, LLC., a private equity company seeking investments in copper mining.  In addition,
he is a director of Compass Minerals International, Inc., and is Chairman of the Institute for Mineral Resources, a research organization
sponsored by the University of Arizona. Mr. Snider is also a board member of the Northern Arizona University Foundation. Mr. Snider’s
career in the copper business spans 41 years, the vast majority of which were with Phelps Dodge Corporation (now Freeport-McMoRan
Copper and Gold).  He began his career in 1970 as an underground mine laborer in the Copper Queen operation in Bisbee, Arizona,
and held numerous operational, technical, and exploration positions at several of Phelps Dodge’s operations in the United
States and Chile.  He led Phelps Dodge in the application of hydrometallurgical processing during the 1980s and 1990s. 
In 1998, Mr. Snider was appointed President of Phelps Dodge Mining Company and in 2003 was promoted to President and Chief Operating
Officer of Phelps Dodge Corporation. In these roles, he led the operational and technical integration of Phelps Dodge’s
Cyprus-AMAX acquisition, led several greenfield and brownfield expansion projects, and helped to establish Phelps Dodge as one
of the industry leaders in technology development and operational excellence. In early 2007, he assumed the role of President
and Chief Operating Officer of Freeport-McMoRan Copper and Gold, Inc. upon Freeport’s acquisition of Phelps Dodge, a position
he held until the end of the first quarter of 2008. Mr. Snider holds a B.S. in Geology and Chemistry from Northern Arizona University
and is a graduate of the Wharton Advanced Management Program at the University of Pennsylvania.



128







Aubrey Laurence
Paverd, Director and member of the Nominating/Corporate Governance Committee and Audit Committee. Dr. Paverd is currently
a private consultant based in Melbourne, Australia. He has been a director since 2002. From 1994 to 2000, he held the position
of Group Executive Exploration with North Ltd., a diversified mining company with gold and base metal mines in Australia, Europe
and North and South America. His career with Newmont Mining Corporation spanned 21 years. He began as Chief Geologist of South
Africa in 1973, rising through the positions of Chief Geologist at Tsumeb Corporation Ltd., Namibia, a subsidiary of Newmont,
to assistant to the Vice President of Exploration in New York in 1979, Director of Foreign Exploration in 1981 and ultimately
Vice President of Exploration when he left Newmont in 1994. Dr. Paverd was also a lecturer in geology at Rhodes University during
1972 and 1973 and worked as a field and mining geologist in Australia and Zambia during the period from 1962 to 1969. He received
B.S. (Hons) and M.S. degrees from Rhodes University in 1961 and 1966, respectively, and a Ph.D. from the University of James Cook
North Queensland in 1972. Dr. Paverd is currently also a director of Randgold Resources Ltd., a London-listed West African gold
mining company.



José Miguel
Morales, Director and member of the Nominating/Corporate Governance Committee. Mr. Morales was our General Counsel from 1973
to 2012 and was appointed a member of the Board in 2012. From 1992 to 1995, Mr. Morales served as an alternate member of the Executive
Committee of Yanacocha. Mr. Morales has also served as a member of the Executive Committee of Yanacocha since 1995. Mr. Morales
currently serves as a director of seven of our nineteen mining and mining-related subsidiaries or affiliates. In addition, he
has served as a director of the Instituto Nacional de Derecho de Minería y Petróleo (National Institute of
Mining and Petroleum Law), serving as its President from 1989 to 1990 and as a director of the Sociedad de Minería y
Petróleo del Perú (Mining and Petroleum Society of Peru) since 1998, serving as its vice chairman since 2000.
He has been a director of the following non-mining related companies: Almaceneradel Perú S.A. from 1992, Inversiones Cosepa
S.A. from 1979, Hotel Costa del Pacífico S.A. from 1994 and El Pacífico—Peruana Suiza Compañía
de Seguros from 1979. Since 1973, he also has been a partner of Estudio Aurelio García Sayán Abogados, a Lima law
firm. In February 2003, Mr. Morales was elected president of the Sociedad Nacional de Minería, Petróleo y Energía(National Association of Minerals, Petroleum and Energy). On January 31, 2005, Mr. Morales ended his tenure as President of
Sociedad Nacional de Minería, Petróleoy Energía and was elected on March 16, 2005 President of Confederación
Nacional de Instituciones Empresariales Privadas (National Confederation of Private Companies, or CONFIEP) until 2007. Mr.
Morales received his law degree from Pontificia Universidad Católicadel Perú in 1968 and completed the Sloan
Program at Stanford University’s Graduate School of Business in 1976.



Felipe Ortiz-de-Zevallos,
Director and member of the Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee. Mr. Ortiz-de-Zevallos
has been a director since August 2003. He was President of the Universidad del Pacífico de Lima from 2004 to 2006 and is
the founder and chairman of the Board of Grupo APOYO since 1977. Mr. Ortiz-de-Zevallos received a degree in Industrial Engineering
from The National University of Engineering in 1968, received an M.S. in Administration and System Analysis from the University
of Rochester in 1970 and completed the Owner/President Management program at Harvard Business School in 1996. He was the Peruvian
ambassador to the United States of America from 2006 to March 2009.



129







Carlos del Solar,
Director, member of the Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee. Mr. del Solar
was appointed a director in March 2011. He graduated with degrees in
Geology and Geological Engineering from the National University of San Marcos, earned a Master of Science degree from Stanford
University, California and completed the Advanced Executive Management Program at the University of Piura. Between
1998 and 2001, Mr. del Solar served as President and General Manager of ARCO for Brazil, Colombia, Peru, and Trinidad.  In
April 2001, he joined Hunt Oil in Peru as President and General Manager. From January 2005 through January 2007, he served as
President of the National Society of Mining, Petroleum and Energy and as First Vice President of the Peruvian Confederation of
Private Business Associations (CONFIEP) from March 2007 through March 2009. Since March 2010, Mr. del Solar has served as Second
Vice President of the Peruvian Exporters Committee (COMEXPERU). He is currently a director and member of the Executive Committees
of the National Society of Mining, Petroleum and Energy, of the Peruvian Confederation of Private Business Associations (CONFIEP)
and of COMEXPERU. Mr. del Solar also serves as President of the Advisory Council of the Graduate School of the Peruvian University
of Applied Sciences (UPC).



German Suárez,
Director and Chairman of the Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee. Mr. Suárez
has been a director since March 2005. Mr. Suárez is an economist who was employed by the Central Bank from 1964 to
1990. From 1979 to 1980, he worked at the International Monetary Fund, or IMF, representing Peru, and from 1981 to 1990 he was
in charge of different posts at the Ministry of Economy and Finance. Mr. Suárez served as Chairman of Banco de la Naciónfrom 1990 to 1992 and Chairman of the Central Bank of Peru from 1992 to 2001. He was a member of the board of directors at
Bladex, Extebandes and Arlabank, Latin American Reserves Fund, Credicorp Ltd. and Banco de Créditodel Peru. From 1993 to
2001, Mr. Suárez served as Governor of the IMF and Alternate Governor of the Inter-American Development. For the period
from 2000 to 2001, Mr. Suárez was elected Chairman of the G-24 (IMF-World Bank). Mr. Suárez graduated from UNMSM
with a B.S. in Economics in 1965 and received an M.A. in Economics from Columbia University in 1969.



Carlos E. Gálvez,
Vice President and Chief Financial Officer.  Mr. Gálvez was the Deputy Manager, Finance and Information Systems,
from 1985 to February 2001, when he was appointed Vice President and Chief FinancialOfficer.  He served as Deputy
Manager of our Treasury from 1980 to 1985, and as Treasurer from 1978 to 1980.  Mr. Gálvez has also served as director
of Colquirrumi, our subsidiary, and was appointed director of Conenhua in 2000, director of El Brocal in 2002 and director of
Contacto S.A. in 2005.  He has served as an alternate member of the Executive Committee of Yanacocha since 2005 and an alternate
board member of Cerro Verde since 2005. He also has served as director of the Sociedad de Minería, Petróleo y
Energía del Perú(Mining, Petroleum and Energy Society of Peru) since 2000.  Prior to joining us, Mr. Gálvez
served as Managerial Adjunct for Finance and Credit from 1971 to 1978 at Banco Minero del Perú (Mining Bank of Peru). 
He has also served as a board member of the Comité de Operación Económica del Sistema Eléctrico
Nacional (Committee of Economic Operation of the National Electric System).  Mr. Gálvez received his B.A. in Economics
from the Universidad Nacional Federico Villarreal in 1976, his M.B.A. from the Universidad del Pacifico de Lima
in 1980 and completed the Program for Management Development, in 1997, and the Advanced Management Program, in 2005, at The Harvard
Business School.



130







Raúl Benavides
Ganoza, Vice President Business Development.  Mr. Benavides has been Vice President of Business Development since 1992. 
He is also a member of the Executive Committee of Yanacocha and board member of Cerro Verde and several of our related companies.
From 1984 to 1996 he was General Manager (CEO) of Compañía de Minas Orcopampa. Prior to that time, Mr. Benavides
was Manager of Operations from 1983 to 1984 and Mine Manager from 1980 to 1983 at Colquirrumi. Since 1995, he has been a professor of mining administration at Pontificia Universidad Católica del Perú. 
Mr. Benavides also has served as President of the Instituto de Ingenieros de Minas (Institute of Mining Engineering), was
also the Founder and President of the Instituto de Seguridad Minera del Perú(Mining Safety Institute of Peru) from
1996 to 2000. Mr. Benavides received a B.S. in Mining Engineering from the University of Missouri-Rolla in 1980, an M.S. in Mineral
Engineering-Management from Pennsylvania State University in 1984 and completed the Advanced Management Program at The Harvard
Business School in 2001.



Alejandro Hermoza
Maraví, Vice President Community Relations. A Mechanical Engineer graduated from the University of Maryland, Mr. Hermoza
also holds an MSc in Engineering from the same University and an MBA from the Universidad de Ciencia Aplicadas –
UPC. He worked as Development Manager for the Confederación Nacional de Instituciones Empresariales Privadas –
CONFIEP, and later joined us in 2003, where he began as Deputy Manager for Administration and Human Resources. In 2011, Mr. Hermoza
completed the Advance Management Program at Harvard Business School.



Francois Muths,
Vice President of Operations. Mr. Muths was appointed Vice President of Operations in February 2007. Prior to that time, Mr.
Muths served as a director and general manager of Inversiones Mineras del Sur S.A., our wholly-owned subsidiary from 2005 to 2006,
general manager from 1985 to 2005 and general superintendent of the Uchucchacua mine from 1981 to 1983. He received a B.S. in
engineering from the National Engineering University of Peru and a M.S. in Mining Engineering from the Colorado School of Mines.
In 2005, Mr. Muths completed the Program for Management Development at Harvard Business School.



César E.
Vidal, Vice President of Exploration. Dr. Vidal has been our Exploration Manager from 1996 to 2010 and Vice President
of Exploration from 2011 onwards. Dr. Vidal received his B.Sc. in Geology from Universidad Nacional de Ingenieria (UNI) in 1977,
a Ph.D. in Geology from the University of Liverpool, UK, in 1980 and certification as an engineering geologist in Peru from UNI
in 1984. He was post-doctoral research fellow at the University of Heidelberg, Germany, from 1985 to 1986. From 1981 to 1987,
he served as a geologist for Buenaventura Ingenieros S.A. From 1987 to 1991, he served as an exploration geologist for Perubar
S.A., a Peruvian zinc mining company of the Glencore Group. Prior to rejoining Buenaventura, from 1991 to 1995, he served as an
independent consultant to several mining companies. In 2002, he received the “Distinguished Engineering Geologist”
award given by the Colegio de Ingenieros del Perú. He completed the Advanced Management Program at Templeton College, Oxford
University in 2005 and currently serves as an alternate member of Minera Yanacocha’s Executive Committee.



Leandro Garcia,
General Comptroller and Compliance Officer. Mr. Garcia received his Bachelor in Business Administration and Bachelor in Accounting
from Universidad del Pacifico and his M.B.A. from the University of Miami, Florida. Mr. Garcia worked at Buenaventura from 1990
to 1997, where he served as Head of Treasury. He performed as CFO in Sociedad Minera El Brocal until 2000. He was also Manager
of BTL Drugstores until 2005 and General Manager of Inkafarma Drugstores until June 2011. He rejoined Buenaventura as General
Comptroller in July 2011.



Gulnara La Rosa, General Counsel.
Ms. La Rosa has worked at Buenaventura since 1990. She was the Legal Director from 2006 to June 2012 and was appointed as Legal
Manager and General Counsel in July 2012. Ms. La Rosa served as Head of the Legal Department from 1997 to 2006 and as a lawyer
from 1991 to 1997. Ms. La Rosa received her law degree from Pontificia Universidad Católica del Perú in 1992. She
also completed the Corporate Law Specialization Program at Universidad de Navarra, Spain, in 1991 and the High Specialization
Program of Finance and Corporate Law at ESAN Graduate School of Business, Perú, in 2001. In addition, Ms. La Rosa attended
the Management Program for Lawyers at Yale School of Management in 2005 and the Corporate Governance and Performance Program at
Yale School of Management in 2012.



131







B. Compensation



During the year ended
December 31, 2012, the aggregate amount of compensation that we paid to all directors and executive officers was approximately
US$27.5 million, including director’s fees accrued in 2011 and paid in 2012. We do not disclose to our shareholders or otherwise
make public information with respect to the compensation of our individual directors or executive officers.



We have a long-term
stock appreciation program, with a term of ten years once initiated, that allows certain executives to receive a cash remuneration
equivalent to any excess of the market value at a future date over a stated price of a stated number of our ADSs. This program
is in effect as long as the executives are employed by us at the settlement date of the program. See Note 14(b) to the Financial
Statements.



C. Board Practices



Audit Committee



The Audit Committee,
which is composed entirely of independent directors as defined in Section 303A.02 of the New York Stock Exchange’s Listed
Company Manual, is responsible for assisting the Board of Directors in the appointment of independent auditors, upon delegation
of such responsibility by the shareholders at the general meeting of shareholders, or the General Meeting, and reviewing the scope
of internal and external audits. The Audit Committee also reviews compliance with internal control systems, reviews our annual
and quarterly financial statements, reviews financial statements before their presentation to the Superintendencia del Mercado
de Valores,or the SMV(formerly known as theComisión Nacional Supervisora de Empresas y Valores (National
Supervisory Commission of Business and Securities), or CONASEV), the Bolsa de Valores de Lima (Lima Stock Exchange) and
the SEC and maintains the integrity of the preparation of audits. The members of the Audit Committee are currently Messrs. Suárez,
Paverd, Ortiz-de-Zevallos and del Solar.



Compensation Committee



The Compensation Committee
is responsible for evaluating executive performance and approving executive compensation, including compensation of the chief
executive officer and any stock option compensation plans. The members of the Compensation Committee are currently Messrs. del
Solar, Ortiz-de-Zevallos and Suárez.



Nominating/Corporate Governance
Committee



The Nominating/Corporate
Governance Committee is responsible for preparing the proposals for the general meetings in respect of the composition of the
Board of Directors along with the director remuneration to be approved by the shareholders, monitoring issues and practices related
to corporate governance and proposing necessary actions in respect thereof. The members of the Nominating/Corporate Governance
Committee are currently Messrs. Benavides-Ganoza, Suárez, Morales, del Solar, Paverd, Ortiz-de-Zevallos and Snider.



132







D. Employees



As of December 31,
2012, we and our subsidiaries had 5,088 employees.  In addition, we have entered into arrangements with independent
contractors which employed 15,535 persons who worked at our operations.  We have sought to strengthen our workforce by implementing
a qualifications-based hiring policy and, with respect to employees working in the mines, reducing the average age of the workforce. 
As of December 31, 2012, the average tenure of our permanent laborers at the Julcani, Uchucchacua, Orcopampa, Poracota, Recuperada,
Ishihuinca, Mallay, Breapampa and Antapite mines (the only mines for which we have long-term historical records) was approximately
10 years.



Of our 1,954 permanent
employees, approximately 84 percent are members of nine different labor unions (including three unions and one labor union committee
for clerical workers and five unions for laborers), which represent all clerical workers and laborers in collective bargaining
negotiations with us. There are also five unions for workers employed by independent contractors that were formed over the last
four years in our mines at Uchucchacua, Antapite, Orcopampa, Poracota and Julcani.



Each of the labor
unions is a company-based union with an affiliation to a national union.  Administrative personnel are not represented by
unions. Labor relations for unionized and non-unionized employees in our production facilities, including compensation and benefits,
are governed by collective bargaining agreements, the terms and length of which are negotiated throughout the year as the various
collective bargaining agreements come up for renewal.  These collective bargaining agreements are typically one year in length
and set wages for the applicable period, including increases as negotiated and certain other employee benefits, such as overtime,
bonuses and family benefits.



During the six years
prior to April 30, 2007, we did not experience any strikes.  Between April 2007 and June 2008, we were affected by five strikes,
each lasting three to seven days, at our Uchucchacua, Orcopampa, Ishihuinca and Antapite mines.  On October 19, 2009, the
National Mining Federation held a two-day strike at our Uchucchacua mine.  In 2010, we experienced two simultaneous strikes,
each lasting approximately seven days, affecting operations at our Orcopampa, Uchucchacua and Antapite mines. In April 2011,
we experienced a 21-day work stoppage at our Uchucchacua mine due to a strike and related local community demonstrations. In May
and October 2011, we experienced two three-day strikes at our Orcopampa mine. In May and June 2012, we experienced a 15-day work
stoppage at our Orcopampa mine due to strikes related to the collective bargaining process with our labor unions and a further
9-day work stoppage at our Orcopampa mine in October 2012 due to a strike by a contract labor union.



Compensation received
by our employees includes salary, other cash payments (such as overtime, vacation pay and bonuses including, but not limited to,
high altitude and underground mining bonuses) and non-cash benefits.  Non-cash benefits include medical insurance, life insurance
and training programs for workers and administrative staff.  For mine and processing plant workers, benefits also include
transportation services, meals or food allowances, education for children of our employees and housing, hospitals and a full range
of social services for our permanent employees and their families at town sites near our mines in compliance with mining regulations. 
We voluntarily provide power, water and sewage services for the camp and houses of the workers as well as for certain towns nearby. 
In addition, pursuant to a profit-sharing plan mandated by Peruvian labor legislation, employees of mining companies in Peru are
entitled to receive the Employee Profit Sharing Amount equivalent to 8 percent of the annual pre-tax profits of their employer,
50 percent of such profits to be distributed based on the number of days each employee worked during the preceding year and the
remaining 50 percent of such profits to be distributed based on the aggregate annual salary of each employee.  Effective
January 1, 1997, the annual payment to each employee under the profit sharing plan cannot exceed 18 times such employee’s
monthly salary, and any difference between the Employee Profit Sharing Amount and the aggregate amount paid to employees must
be contributed by us to theFONDO-EMPLEO, a fund established to promote employment and employee training.



133







Under Peruvian law,
we may dismiss workers for cause by following certain formal procedures.  We may dismiss a worker without cause, provided
that we pay such worker a layoff indemnification in an amount equal to one and a half month’s salary for each full year
worked plus the pro rata portion for any uncompleted year, not to exceed in the aggregate 12 months’ salary.  Several
decisions adopted by the Peruvian Constitutional Court, holding that an employee is entitled for reinstatement if no cause for
dismissal is expressed by the employer or for failure to present evidence supporting the employer’s grounds, have limited
our ability to dismiss a worker without cause.  However, all employees are entitled to a severance payment upon termination
of their employment, regardless of the reason for such termination, equal to approximately one month’s salary for each full
year worked plus the pro rata portion for any uncompleted year.  Pursuant to the Peruvian labor laws enacted in 1991, we
deposit funds for severance payments in a bank account selected by each employee and for the benefit of such employee, in both
May and November of each year.



Our permanent employees
receive the benefit of one of two types of pension arrangements.  All workers can choose to enroll in the ONP (a public pension
fund managed by the state) or in AFPs (private pension funds).  We are required to withhold from each of the salaries of
the employees enrolled in the ONP system approximately 13 percent of such employee’s salary, and pay such amount to the
ONP system and withhold from the salary of each employee enrolled in the AFP system approximately 13 percent of such employee’s
salary, and pay such amounts to the respective AFP (exact amount varies from one AFP to another).  Additionally, for workers
involved in mining and metallurgical processes, an additional 2 percent is withheld from their salaries, and we contribute an
additional 2 percent to increase their pension funds.  We have no liability for the performance of these pension plans. 
In addition, our independent contractors are responsible for covering severance and pension payments with respect to their employees.



In addition, we pay
ESSALUD 9 percent of our total payroll for general health services for all permanent employees.  Prior to May 1997, we were
required to pay to ESSALUD 1 percent of our payroll of blue collar employees for employment-related illness and accidents, or
the Workers Compensation Fund Payment.  In addition, Law No. 26790 also requires us to provide private insurance representing
an average payment equal to 1.30 percent of the payroll of covered employees for employment-related incapacity and death for blue
collar employees and other employees exposed to mining-related hazards.



E. Share Ownership



As of March 31, 2013,
our directors and executive officers, as a group, owned 948,624 Common Shares, representing 0.37 percent of all the 254,232,571
Common and Investment Shares outstanding. Our directors and executive officers do not own any Investment Shares.



134







The share ownership of the Company’s
directors and executive officers on an individual basis as of March 31, 2013 is set forth below:



|Shareholder                                  |  | Number of Common Shares |         |  | Percentage Beneficial Ownership
    of Common Shares |  |      | Number of Investment Shares |  |  | Percentage Beneficial Ownership
    of Investment Shares |  |  | Number of Common Shares 
    and Investment Shares |   |  | Percentage Beneficial Ownership of 
    Common Shares and Investment Shares | 
|-------------------------------------------- |  | ----------------------- | ------- |  | ---------------------------------------------------- |  | ---- | --------------------------- |  |  | -------------------------------------------------------- |  |  | -------------------------------------------------- | - |  | --------------------------------------------------------------------------- | 
|                                             |  |                         |         |  |                                                      |  |      |                             |  |  |                                                          |  |  |                                                    |   |  |                                                                             | 
|Roque Benavides†                             |  |                         | 365,398 |  |                                                      |  | 0.14 |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|Timothy Snider                               |  |                         | —       |  |                                                      |  | —    |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|José Miguel Morales†                         |  |                         | 267,228 |  |                                                      |  | 0.11 |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|Aubrey Laurence Paverd                       |  |                         | —       |  |                                                      |  | —    |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|Felipe Ortiz-de-Zevallos                     |  |                         | —       |  |                                                      |  | —    |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|Carlos del Solar                             |  |                         | —       |  |                                                      |  | —    |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|Germán Suárez                                |  |                         | —       |  |                                                      |  | —    |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|Raúl Benavides†                              |  |                         | 267,228 |  |                                                      |  | 0.11 |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|Carlos E. Gálvez.                            |  |                         | 48,770  |  |                                                      |  | 0.02 |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|Alejandro Hermoza                            |  |                         | —       |  |                                                      |  | —    |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|Francois Muths                               |  |                         | —       |  |                                                      |  | —    |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|César E. Vidal                               |  |                         | —       |  |                                                      |  | —    |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|Gulnara la Rosa                              |  |                         | —       |  |                                                      |  | —    |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|Leandro Garcia                               |  |                         | —       |  |                                                      |  | —    |                             |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 
|                                             |  |                         |         |  |                                                      |  |      |                             |  |  |                                                          |  |  |                                                    |   |  |                                                                             | 
|Directors and Executive Officers as a Group† |  |                         | 948,624 |  |                                                      |  | 0.37 | %                           |  |  | —                                                        |  |  |                                                    | — |  |                                                                             | 








| | † | Does not
                                                                                     include Common Shares owned by Roque Benavides,
                                                                                     Raúl Benavides and the spouse of José
                                                                                     Miguel Morales that are subject to usufructo
                                                                                     agreements and related legal instruments
                                                                                     with Alberto Benavides. These usufructo agreements
                                                                                     and related legal instruments grant Alberto
                                                                                     Benavides voting control over the Common
                                                                                     Shares subject thereto and entitle Mr. Benavides
                                                                                     to receive all dividends payable thereon
                                                                                     during his lifetime. Alberto Benavides exercises
                                                                                     voting control over the Common Shares subject
                                                                                     to the usufructo agreements and related legal
                                                                                     instruments, including 13,546,608, 13,546,608
                                                                                     and 13,546,608 Common Shares owned by each
                                                                                     of Roque Benavides, Raúl Benavides
                                                                                     and the spouse of José Miguel Morales,
                                                                                     respectively. The Common Shares subject to
                                                                                     the usufructo agreements and related legal
                                                                                     instruments are not included in the separate
                                                                                     calculations of share ownership for Roque
                                                                                     Benavides, Raúl Benavides and José
                                                                                     Miguel Morales in the table above.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ITEM 7. | Major
                                                                                             Shareholders and Related Party Transactions
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------



A. Major Shareholders



As of March 31, 2013,
we had 274,889,924 Common Shares, including 21,130,260 treasury shares, and 744,640 Investment Shares, including 271,733 treasury
shares. The Common Shares are voting securities. The table below sets forth certain information concerning ownership of (i) the
Common Shares and Investment Shares and (ii) the aggregate Common Shares and Investment Shares, as of March 31,2013, with
respect to each shareholder known to us to own more than 2.5 percent of the outstanding Common Shares and with respect to all
directors and executive officers as a group.



Control of the
Company(1)



|Shareholder                               |  | Number ofCommon Shares |            |  | PercentageBeneficialOwnership ofCommonShares(3) |  |       | Number ofInvestmentShares |  |  | PercentageBeneficialOwnership ofInvestmentShares(4) |  |  | Number of CommonSharesand Investment Shares |   |  | Percentage BeneficialOwnership ofCommon Shares andInvestment Shares(5) | 
|----------------------------------------- |  | ---------------------- | ---------- |  | ----------------------------------------------- |  | ----- | ------------------------- |  |  | --------------------------------------------------- |  |  | ------------------------------------------- | - |  | ---------------------------------------------------------------------- | 
|                                          |  |                        |            |  |                                                 |  |       |                           |  |  |                                                     |  |  |                                             |   |  |                                                                        | 
|Benavides Family(2)                       |  |                        | 69,187,744 |  |                                                 |  | 27.27 |                           |  |  | —                                                   |  |  |                                             | — |  |                                                                        | 
|BlackRock Investment Management (UK) Ltd. |  |                        | 19,206,054 |  |                                                 |  | 7.57  |                           |  |  | —                                                   |  |  |                                             | — |  |                                                                        | 
|BlackRock Global Funds-World Mining Fund  |  |                        | 8,750,000  |  |                                                 |  | 3.45  |                           |  |  | —                                                   |  |  |                                             | — |  |                                                                        | 
|Prima, AFP                                |  |                        | 12,806,114 |  |                                                 |  | 5.05  |                           |  |  | —                                                   |  |  |                                             | — |  |                                                                        | 
|Integra, AFP                              |  |                        | 12,619,755 |  |                                                 |  | 4.97  |                           |  |  | —                                                   |  |  |                                             | — |  |                                                                        | 
|Market Vectors ETF Trust Gold Miners ETF  |  |                        | 11,015,164 |  |                                                 |  | 4.34  |                           |  |  |                                                     |  |  |                                             |   |  |                                                                        | 
|Van Eck Global                            |  |                        | 12,079,992 |  |                                                 |  | 4.76  |                           |  |  |                                                     |  |  |                                             |   |  |                                                                        | 
|BlackRock Global Funds-World Gold Fund    |  |                        | 7,800,000  |  |                                                 |  | 3.08  |                           |  |  | —                                                   |  |  |                                             | — |  |                                                                        | 
|Fidelity Management & Research Co         |  |                        | 4,288,376  |  |                                                 |  | 1.69  |                           |  |  | —                                                   |  |  |                                             | — |  |                                                                        | 
|Horizonte, AFP                            |  |                        | 9,349,815  |  |                                                 |  | 3.68  |                           |  |  | —                                                   |  |  |                                             | — |  |                                                                        | 
|BlackRock Fund Advisors                   |  |                        | 8,064,437  |  |                                                 |  | 3.18  |                           |  |  | —                                                   |  |  |                                             | — |  |                                                                        | 



135












| | (1) | The table above excludes treasury
                                                                 shares. As of March 31, 2013, our wholly-owned subsidiary, Condesa,
                                                                 held 21,160,260 Common Shares and 271,733 Investment Shares.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | These Common Shares are owned
                                                                 by certain members of Alberto Benavides de la Quintana’s
                                                                 immediate and extended family and their spouses and include the
                                                                 Common Shares over which Alberto Benavides de la Quintana exercises
                                                                 voting and dispositive control pursuant to usufructo agreements
                                                                 and related legal instruments.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Percentage calculated on the
                                                                 basis of 253,729,664 Common Shares outstanding, which excludes
                                                                 21,160,260 treasury shares.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Percentage calculated on the
                                                                 basis of 472,907 Investment Shares outstanding, which excludes
                                                                 271,733 treasury shares.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Percentage calculated on the
                                                                 basis of 254,232,571 Common Shares and Investment Shares outstanding,
                                                                 which excludes 21,431,993 treasury shares.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As of March 31, 2013,
we estimate that 152,022,687 ADSs were held in the United States, which represented approximately 55.31 percent of Common Shares
outstanding.  The number of institutional record holders of our Common Shares (or of ADSs representing our Common Shares)
in the United States was 58 institutions.



B. Related Party Transactions



Except as otherwise
disclosed herein, no director, senior officer, principal shareholder or any associate or affiliate thereof had any material interest,
direct or indirect, in any transaction since the beginning of our last financial year that has materially affected us, or in any
proposed transaction that would materially affect us. Except as otherwise disclosed herein, we have entered into no transactions
with parties that are not “related parties” but who would be able to negotiate terms not available on an arm’s-length
basis. From time to time in the ordinary course of business, we enter into management, exploration, mine construction, engineering
and employment contracts with joint venture companies in which one or more of our direct or indirect subsidiaries holds equity
or partnership interests.



The compensation of
our key executives (including the related income taxes we assumed in connection therewith) totaled US$51.1 million in 2011 and
US$32.3 million in 2012.



Chaupiloma is the
legal owner of the mineral rights operated by Yanacocha and receives a 3 percent royalty based on quarterly sales, after deducting
refinery and transportation costs. Royalties amounted to US$55.9 million, US$62.7 million and US$67.2 million in 2010, 2011 and
2012, respectively, and are presented as royalty income in our consolidated statements of income.



Condesa did not receive
a cash dividend from Yanacocha in 2010, 2011 or 2012.



We received cash dividends
from Cerro Verde of approximately US$183.0million in 2010. We did not receive a cash dividend from Cerro Verde in 2011
or 2012.



We received cash dividends
from Coimolache of approximately US$16.5 million in 2012.



In March 2002, Buenaventura
Ingenieros S.A. signed a technical service agreement with Yanacocha to perform a number of specialized activities and services.
Pursuant to the agreement, the services performed relate to the construction of mining projects and include completion of analysis
and studies, work plan design, and functions related to planning, monitoring and administrating the infrastructure projects required
by Yanacocha in its operations.



136







In November 2000,
Conenhua signed an agreement with Yanacocha for the construction and operation of a 220 kW transmission line between Trujillo
and Cajamarca, a 60 kW transmission line between Cajamarca and La Pajuela, and the Cajamarca Norte substation; this agreement
also encompassed activities necessary to enlarge the Trujillo substation. Pursuant to this contract, the construction work was
completed in October 2001.Concurrently, we and Yanacocha signed a 10-year agreement covering electric energy transmission
and infrastructure operation beginning in November 2001. In exchange for us operating and managing the transmission project, Yanacocha
pays an annual fee of US$3.7 million. The revenues for these services amounted to approximately US$4.3 million in each of 2011
and 2010, respectively.



C. Interests of Experts and Counsel



Not applicable.



| | ITEM 8. | Financial
                                                                                             Information
| | ------- | ------------------------------------------------------------------------------------------------------------------



A. Consolidated Statements and Other Financial Information



Consolidated Financial Statements



See “Item 19.
Exhibits” for a list of financial statements filed under Item 18.



Other Financial Information



Export Sales



See “Item 4.
Information on the Company—Buenaventura—B. Business Overview—Sales of Metal Concentrates—Sales and Markets”
for information on export sales.



Legal Proceedings



Other
than the legal proceedings relating to Yanacocha described in “Item 4. Information on the Company—Yanacocha—B.
Business Overview—Legal Proceedings,” we and Yanacocha are each parties to certain
other legal proceedings arising in the normal course of business, none of which, individually or in the aggregate, is material.



Dividends and Dividend Policy



We can distribute
three kinds of dividends: (i) cash dividends, which are paid out of our net distributable income for each year, (ii) stock dividends
that are akin to stock splits rather than distributions of earnings, which are issued for the purpose of adjusting the book value
per share of our stock, and (iii) stock dividends for the purpose of capitalizing profits, in each case as described in more detail
below. All shares outstanding and fully paid are entitled to share equally in any dividend declared based on the portion of our
capital represented by such share. Shares of capital stock which are only partially paid participate in a dividend or distribution
in the same proportion that such shares have been paid at the time of the dividend or distribution. No cash dividend may be declared
in respect of a given year unless we have earned net distributable income in respect of such year. However, we may declare dividends
during the year. We may make interim provisional payments to shareholders in respect of net distributable income for the current
fiscal year, which are referred to as “provisional dividends,” as explained below.



137







The Board of Directors,
following the end of each fiscal year, makes a recommendation at the annual obligatory shareholders’ meeting regarding the
amount and timing of payments, if any, to be made as dividends on our Common Shares and Investment Shares.



The dividend policy
establishes that dividends will be not less than 20 percent of our net profits. In principle there are two kinds of dividend payments:
interim dividends, which are approved by the Board and are generally paid during the fourth quarter of the year, and the final
dividend payment, which will be paid in accordance with the general shareholders’ meeting resolutions. However, the amount
and timing of such payments is subject to the final approval at such annual obligatory shareholders’ meeting and Board meeting,
as well as to the availability of earnings to distribute. According to the Peruvian Companies Law, holders of at least 20 percent
of the total Common Shares outstanding can request a dividend of 50 percent or less of the previous year’s after-tax profits,
net of amounts allocated to the legal reserve.



Available earnings
are subject to the following priorities. First, the mandatory employee profit sharing of 8 percent of pre-tax profits (which may
differ from pre-tax profits determined under IFRS due to different depreciation treatment and different adjustments of non-taxable
income and/or non-deductible expenses) is paid. Next, remaining earnings are taxed at the standard corporate income tax rate,
which has been 30 percent since January 1, 2004. Not less than 10 percent of such after-tax net profits must then be allocated
to a legal reserve, which is not available thereafter except to cover future losses or for use in future capitalizations. Amounts
reserved are nevertheless included in taxable income. The obligation to fund this reserve continues until the reserve constitutes
20 percent of the paid-in share capital. In addition, the holders of Common Shares can agree to allocate any portion of the net
profits to any special reserve. The remainder of the net profits is available for distribution to shareholders. Any dividend approved
by a shareholders’ meeting after December 31, 2002 is subject to an additional withholding tax at the rate of 4.1 percent
of the total amount of dividends distributed to shareholders who are either (i) individuals, whether domiciled or non-domiciled
in Peru, or (ii) non-domiciled companies or entities. Dividends paid to domiciled companies or entities are not subject to such
withholding tax. If any tax or other governmental charge will become payable by Scotiabank Peru, as custodian, the Depositary
or us with respect to any ADR or any deposited securities represented by the ADSs evidenced by such ADR, such tax or other governmental
charge will be payable by the owner or beneficial owner of such ADR to the Depositary.



Dividends on issued
and outstanding Common Shares and Investment Shares are distributed in accordance with the proportion of the total capital represented
by such respective shares. Dividends are distributed pro rata in accordance with the number of Common Shares or Investment Shares.
Accordingly, any dividend declared would be apportioned 99.73 percent to the holders of Common Shares and 0.27 percent to the
holders of Investment Shares. This proportion will not change in the future except and to the extent holders of Common Shares
and Investment Shares exercise their preemptive rights disproportionately in any future issuance of Common Shares and Investment
Shares, or we issue Common Shares without preemptive rights in accordance with Article 259 of the Peruvian Companies Law.



Holders of Common
Shares and Investment Shares are not entitled to interest on dividend payments.



138







Holders of ADRs are
entitled to receive dividends with respect to the Common Shares underlying the ADSs evidenced by such ADRs, subject to the terms
of the related Amended and Restated Deposit Agreement, to the same extent as owners of Common Shares.



To the extent that
we declare and pay dividends on the Common Shares, owners of the ADSs on the relevant record date are entitled to receive the
dividends payable in respect of the Common Shares underlying the ADSs, subject to the terms of the Amended and Restated Deposit
Agreement. Cash dividends are paid to the Depositary in Nuevos Soles and, except as otherwise described under the Amended and
Restated Deposit Agreement, are converted by the Depositary into U.S. Dollars and paid to owners of ADRs net of currency conversion
expenses. Under the Amended and Restated Deposit Agreement, the Depositary may, and will if we so request, distribute stock dividends
in the form of additional ADRs evidencing whole ADSs resulting from a dividend or free distribution of Common Shares by us received
by the Depositary. Cash dividends paid with respect to the Common Shares and amounts distributed with respect to ADSs are currently
subject to a Peruvian withholding income tax of 4.1 percent. See “Item 10. Additional Information—E. Taxation—Peruvian
Tax Considerations.”



We issue stock dividends
for value per share of our stock. The book value of our share capital is based on the nominal (par) value of each share but is
adjusted to account for inflation; thus, in inflationary periods, our book value will increase while the nominal value will remain
constant. In order to adjust the book value of each share to equal or approximate the nominal value, we periodically issue new
shares that are distributed as stock dividends to each existing shareholder in proportion to such shareholder’s existing
holdings, unless it increases the nominal value of the existing shares. These stock dividends (which under the Peruvian income
tax law are not considered dividends) do not change a stockholder’s percentage of interest in us. In addition, we may from
time to time capitalize profits and, in such case, we have to distribute stock dividends representing the profits capitalized.



Dividends not collected
within ten years will be retained by us, increasing our legal reserve, and the right to collect such dividends will expire.



Under Peruvian law,
each company may make formal cash distributions only out of net distributable income (calculated on an individual, unconsolidated
basis and demonstrated by a statement of financial position at any given time). We, however, may pay provisional dividends. Payment
of provisional dividends will be approved on the basis of financial statements which show the existence of net distributable income
obtained during the current fiscal year. In the event that, following such an interim provisional payment, we suffer a loss or
if we finish the fiscal year with a net income that is lower than the amount of provisional dividends paid during such fiscal
year, we could legally require all shareholders (including holders of ADRs) to return such payment to us with interest. However,
it has been and continues to be our policy not to require shareholders to return such payment of provisional dividends, but rather
to cover such contingency through a “dividends paid in advance” account to be offset by future net distributable income.



The following table
sets forth the amounts of interim and final cash dividends and the aggregate of cash dividends paid with respect to the years
2008 to 2012. Dividends with respect to the years 2008 to 2012 were paid per Common Share and ADS.



139







|Year endedDecember 31, (1) |  | PerCommon Share |      |  | PerADSs |  |      | PerInvestment Share | 
|-------------------------- |  | --------------- | ---- |  | ------- |  | ---- | ------------------- | 
|                           |  | Interim         |      |  | Final   |  |      | Total               | 
|2008                       |  |                 | 0.09 |  |         |  | 0.02 |                     | 
|2009                       |  |                 | 0.02 |  |         |  | 0.14 |                     | 
|2010                       |  |                 | 0.30 |  |         |  | 0.16 |                     | 
|2011                       |  |                 | 0.33 |  |         |  | 0.23 |                     | 
|2012                       |  |                 | 0.40 |  |         |  | 0.20 |                     | 








| | (1) | Interim and final dividend amounts
                                                               are expressed in U.S. Dollars.
| | --- | --------------------------------------------------------------------------------------------------------------------------------



Non-controlling Shareholders



Law No. 28370, published
on October 30, 2004, included in the Peruvian Companies Law certain provisions for the protection of non-controlling shareholders
that were formerly contained in Law No. 26985, which had been abrogated. Legislative Decree No. 1061, effective since June 29,
2008, has amended certain of these provisions. Pursuant to Article 262-A of the Peruvian Companies Law, we will issue a notice
within sixty days after the Annual Obligatory Shareholders’ Meeting, or after the expiration of the three-month period after
the end of the prior fiscal year in which such Annual Obligatory Shareholders’ Meeting is required to be held, containing
information regarding total number and value of any shares not claimed by shareholders, the name of such shareholders, the share
quote in the securities market for such shares; the total amount of uncollected dividends; and where shares and dividends pending
claim are available for the non-controlling shareholders. The publication must be made in the official gazette “El Peruano,”
on our website and on the SMV’s website. Article 262-B describes the procedure to request share certificates and/or dividends.
Article 262-F describes the procedure for handling any claim that the non-controlling shareholders may file, such claims to be
resolved by the SMV.



B. Significant Changes



No significant change
in our financial affairs has occurred since the date of the annual financial statements included in this Annual Report.



| | ITEM 9. | The
                                                                                             Offer and Listing
| | ------- | ------------------------------------------------------------------------------------------------------------------



A. Offer and Listing Details



Trading Information



The table below sets
forth the trading volume and the high and low closing prices of the Common Shares and Investment Shares in Nuevos Soles. The table
also includes the trading volume and the high and low closing prices of the ADSs representing the Common Shares in U.S. Dollars
for the same periods.



140







|                         |  | Common Shares(1) |      |  | ADSs(2)                   |  |        | Investment Shares(1) | 
|------------------------ |  | ---------------- | ---- |  | ------------------------- |  | ------ | -------------------- | 
|                         |  | TradingVolume    |      |  | High                      |  |        | Low                  | 
|                         |  | (inmillions)     |      |  | (in nominalS/. per share) |  |        | (inmillions)         | 
|Annual highs and lows    |  |                  |      |  |                           |  |        |                      | 
|                         |  |                  |      |  |                           |  |        |                      | 
|2008                     |  |                  | 1.63 |  |                           |  | 118.75 |                      | 
|2009                     |  |                  | 2.53 |  |                           |  | 122.00 |                      | 
|2010                     |  |                  | 1.44 |  |                           |  | 155.50 |                      | 
|2011                     |  |                  | 2.50 |  |                           |  | 136.00 |                      | 
|2012                     |  |                  | 2.15 |  |                           |  | 117.00 |                      | 
|                         |  |                  |      |  |                           |  |        |                      | 
|Quarterly highs and lows |  |                  |      |  |                           |  |        |                      | 
|                         |  |                  |      |  |                           |  |        |                      | 
|2011                     |  |                  |      |  |                           |  |        |                      | 
|1st quarter              |  |                  | 0.22 |  |                           |  | 136.00 |                      | 
|2nd quarter              |  |                  | 0.87 |  |                           |  | 121.80 |                      | 
|3rd quarter              |  |                  | 0.71 |  |                           |  | 134.10 |                      | 
|4th quarter              |  |                  | 0.70 |  |                           |  | 123.00 |                      | 
|                         |  |                  |      |  |                           |  |        |                      | 
|2012                     |  |                  |      |  |                           |  |        |                      | 
|1st quarter              |  |                  | 0.52 |  |                           |  | 117.00 |                      | 
|2nd quarter              |  |                  | 0.52 |  |                           |  | 113.00 |                      | 
|3rd quarter              |  |                  | 0.22 |  |                           |  | 95.00  |                      | 
|4th quarter              |  |                  | 0.90 |  |                           |  | 100    |                      | 
|                         |  |                  |      |  |                           |  |        |                      | 
|Monthly highs and lows   |  |                  |      |  |                           |  |        |                      | 
|                         |  |                  |      |  |                           |  |        |                      | 
|2012                     |  |                  |      |  |                           |  |        |                      | 
|October                  |  |                  | 0.02 |  |                           |  | 100.00 |                      | 
|November                 |  |                  | 0.84 |  |                           |  | 93.55  |                      | 
|December                 |  |                  | 0.05 |  |                           |  | 92.50  |                      | 
|2013                     |  |                  |      |  |                           |  |        |                      | 
|January                  |  |                  | 0.34 |  |                           |  | 90.09  |                      | 
|February                 |  |                  | 0.20 |  |                           |  | 76.30  |                      | 
|March                    |  |                  | 0.07 |  |                           |  | 67.31  |                      | 










| | (1) | Source: Lima
                                                                                  Stock Exchange
| | --- | -------------------------------------------------------------------------------------------------------------

| | (2) | Source: Bloomberg;
                                                                                  Yahoo Finance
| | --- | ------------------------------------------------------------------------------------------------------------------



As of March 31, 2013,
the share capital with respect to the Common Shares was S/.2,748,899,240 represented by 274,889,924 shares and the share capital
with respect to the Investment Shares was S/.7,446,400 represented by 744,640 shares. The Common Shares represent 100 percent
of our outstanding share capital. The Investment Shares have no voting rights and are not, under Peruvian law and accounting rules,
characterized as share capital. As of March 31, 2013, there were 1,210 owners of record of the Common Shares and 918 owners of
record of the Investment Shares.



B. Plan of Distribution



Not applicable.



C. Markets



The Common Shares
and ADSs representing the Common Shares (each ADS representing two Common Shares) have been listed and traded on the New York
Stock Exchange under the symbol “BVN.” In addition, the Common Shares and Investment Shares are listed and traded
on the Lima Stock Exchange.



141







D. Selling Shareholders



Not applicable.



E. Dilution



Not applicable.



F. Expenses of the Issue



Not applicable.



| | ITEM 10. | Additional
                                                                                              Information
| | -------- | --------------------------------------------------------------------------------------------------------------------



A. Share Capital



Not applicable.



B. Memorandum and Articles of Association



Organization and Register



We were formed on
September 7, 1953 by public deed as a Peruvian sociedad anónima.However, in May of 1998, our By-laws were changed
to conform with the new Peruvian Companies Law. The term of existence is indefinite and our principal place of business is Lima,
Peru. We are registered under file number 02136988 at the Companies Registry of Lima.



We are managed by
the General Meeting, the Board of Directors and the management.



Objectives and Purposes



Our legal purpose,
as set forth in our Articles of Association and By-laws, is to engage in mining operations and related activities either directly
or through majority-owned subsidiaries and controlled companies. Likewise, we may hold shares of companies performing mining operations.



Directors



The Board of Directors,
which must be comprised of seven members, is elected at the Annual Obligatory Meeting. Any changes in the Board of Directors require
the approval of the shareholders. The removal of the Board of Directors must be approved at a shareholders’ meeting, attended
by holders of 75 percent of the Common Shares in the first summons and 70 percent of the Common Shares in the second summons,
by resolution approved by at least two thirds of the total number of Common Shares outstanding. In the case of resignation of
Directors, the Board of Directors may appoint substitute Directors who will serve until the next shareholders’ meeting.



Directors are elected
as a group for a term of three years and may be reelected indefinitely. Pursuant to Article 29 of our By-laws, Directors are not
required to be shareholders. The Board of Directors, in its first meeting after the Annual Obligatory Meeting during which elections
are held, must choose from among its members a Chairman and a Vice Chairman. The Peruvian Companies Law requires that all companies
(sociedades anónimas) provide for the representation of non-controlling shareholders on their Boards of Directors.
To that effect, each of our Common Shares gives the holder the right to as many votes as there are directors to be elected. Each
holder may pool his votes in favor of one person or distribute them among various persons. Those candidates for the Board who
receive the most votes are elected directors.



142







The Board of Directors
meets when called by the Chairman of the Board, who is appointed by the Board. The Board of Directors is validly convened when
all Directors are present and unanimously agree to carry out the meeting for the purpose of transacting the business that has
been proposed. Pursuant to Article 177 of the Peruvian Companies Law, Directors may be jointly and severally liable to us, the
shareholders and third parties for their actions if they act with willful misconduct, gross negligence or abuse their powers.
In addition, Article 3 of Law No. 29720, which has been in force since June 26, 2011, provides that directors and managers are
liable for economic damages or any other kind of damages caused to us by any transaction we may enter into with them.



Our By-laws do not
contain any provisions related to a director’s power to vote on matters in which the director is materially interested.
However, Article 180 of the Peruvian Companies Law requires a director with an interest that conflicts with an interest of ours
on a specific matter to disclose such interest to us and abstain from participating in the deliberation and decision of the said
matter. A director that contravenes such requirement is liable for the damages suffered by us and can be removed by the Board
of Directors or a shareholders’ meeting upon the request of any shareholder or any member of the Board.



Our By-laws also do
not contain any provisions with respect to the power of the Directors to vote upon matters relating to their own compensation.
Nevertheless, Article 30 of the By-laws requires that the Board of Directors receive compensation of no more than 4 percent of
the profits of each fiscal year after making deductions for workers’ profit sharing, taxes, reinvestment of profits for
tax benefits and legal reserves. This amount will be submitted for ratification by the General Meeting during the annual obligatory
meeting, at which time it approves the statement of financial position, taxes, reinvestment of profits for tax benefits and legal
reserves.



Our By-laws contain
no provision relating to the directors’ power to borrow from us. However, Article 179 of the Peruvian Companies Law provides
that directors of a company may enter into an agreement with such company only in the event that the agreement relates to operations
the company performs in the regular course of business and in an arms-length transaction. Further, a company may provide a loan
to a director or grant securities in his favor only in connection with operations that the company usually performs with third
parties. Agreements, credits, loans or guarantees that do not meet the requirements set forth above require prior approval from
at least two thirds of the members of the company’s Board of Directors. Directors are jointly liable to the company and
the company’s creditors for contracts, credit, loans or securities executed or granted without complying with Article 179
of the Peruvian Companies Law. In addition, as mentioned above, Article 3 of Law No. 29720 provides that directors and managers
are liable for economic or other damages we incur as a result of transactions we may enter into with them.



Neither our By-laws
nor the Peruvian Companies Law contain age limit requirements for the retirement or non-retirement of directors.



Shares and Voting Rights



We have two classes
of shares, the Common Shares and the Investment Shares. The Common Shares represent 100 percent of our outstanding share capital.
The Investment Shares have no voting rights and are not, under Peruvian law and accounting rules, characterized as share capital.
The Common Shares and the Investment Shares may be either physical share certificates in registered form or book-entry securities
in the CAVALI ICLV S.A. book-entry settlement system, also in registered form.



143







Holders of Common
Shares are entitled to one vote per share, with the exception of the election of the Board of Directors, where each such holder
is entitled to one vote per share per nominee. Each holder’s votes may be cast all for a single nominee or distributed among
the nominees at the holder’s discretion. Holders of Common Shares may attend and vote at shareholders’ meetings either
in person or through a proxy. Additionally, holders of Common Shares have the right to participate in the distribution of dividends
and shareholder equity resulting from liquidation. Our By-laws do not establish a maximum time limit for the payment of the dividends.
However, according to Article 232 of the Peruvian Companies Law, the right to collect past-due dividends in the case of public
companies that are sociedades anónimas abiertas, as we are, expires at 10 years from the date on which the payment
was due in accordance with the dividend declaration.



Our share capital
may be increased by holders of Common Shares at a shareholders’ meeting. Capital reductions may be voluntary or mandatory
and must be approved by holders of Common Shares at a shareholders’ meeting. Capital reductions are mandatory when accumulated
losses exceed 50 percent of capital to the extent such accumulated losses are not offset by accumulated earnings and capital increases
within the following fiscal year. Capital increases and reductions must be communicated to the SMV, the Lima Stock Exchange and
the Superintendencia Nacional de Administración Tributaria (SUNAT) and published in the official gazette El Peruano
and in a widely circulated newspaper in the city in which we are located.



The Investment Shares
do not represent our stock obligations. Holders of Investment Shares are neither entitled to exercise voting rights nor to participate
in shareholders’ meetings. However, Investment Shares confer upon the holders thereof the right to participate in the dividends
distributed according to their nominal value, in the same manner as Common Shares.



Changes in the Rights of Shareholders



Our By-laws do not
contain special provisions relating to actions necessary to change the rights of holders of the classes of shares. However, Article
88 of the Peruvian Companies Law establishes that all shares of a same class must have the same rights and obligations, and that
in the event that we decide to establish different rights and obligations we must create a different class of shares, which creation
will be agreed upon by the General Meeting in accordance with the requirements for modification of the By-laws. The Common Shares
are the only class of shares representing 100 percent of our share capital, and, therefore, each Common Share has the same rights
and obligations of each other Common Share. These requirements are described under “—Shares and Voting Rights”
above.



The rights of any
class of shares may not be reduced except in accordance with the Peruvian Companies Law.



144







Shareholders’ Meetings



Pursuant to Peruvian
law and our By-Laws, the Annual Obligatory Meeting must be held during the three-month period after the end of each fiscal year.
Additional General Meetings may be held during the year. Because we are a sociedad anónima abierta, we are subject
to the special control of the SMV, as provided in Article 253 of the Peruvian Companies Law. If we do not hold the Annual Obligatory
Meeting during the three-month period after the end of each fiscal year or any other shareholders’ meeting required by the
Peruvian Companies Law or our By-Laws, the SMV will directly, or at the request of at least one shareholder of the Common Shares,
call for such a meeting, which will take place in a reasonable period of time. Other shareholders’ meetings are convened
by the Board of Directors when deemed convenient for us or when it is requested by the holders of at least 5 percent of the
Common Shares, provided that such Common Shares do not have their voting rights suspended. If, at the request of holders of 5
percent of the Common Shares, the shareholders’ meeting is not convened by the Board of Directors within 15 business days
of the receipt of such request, or the Board expressly or implicitly refuses to convene the shareholders’ meeting, the SMV
will call for such meeting after giving notice to the Board of such request. The Board is deemed to have implicitly refused to
convene the meeting if the Board (a) does not convene a shareholders’ meeting within 15 business days of receipt of the
request, (b) suspends or amends the terms of the agenda or the date of the meeting prescribed by the request or (c) schedules
the shareholders’ meeting more than 40 days after the date on which the summons is published. If the SMV calls for a shareholders’
meeting, the SMV will indicate the place, time and hour of the meeting, the agenda and the person who will preside. If it is a
meeting other than the Annual Obligatory Meeting or a shareholders’ meeting required by the Peruvian Companies Law or our
By-Laws, the agenda will contain those matters requested by the shareholders who requested the meeting. Resolución CONASEV
No. 111-2003-EF-94.10, as amended by Resolución CONASEV No. 016-2004-EF/94.10, Resolución CONASEV No. 015-2005-EF/94.10
and Resolución CONASEV No. 078-2010-EF/94.01.1, approved provisions related to the right of the non-controlling shareholders
to obtain information regarding a sociedad anónima abiertasuch as us and to request the SMV to call a shareholders’
meeting if it is not called by the sociedad anónima abierta upon request. Notwithstanding the notice requirements
as described in the preceding two sentences, any shareholders’ meeting will be deemed called and legally installed, provided
that the shareholders representing all of the voting shares are present, and provided that every present shareholder, whether
or not such shareholder has paid the full price of such shareholder’s shares, agrees to hold the shareholders’ meeting
and accepts the business to be discussed therein. Holders of Investment Shares have no right to request the Board to convene shareholders’
meetings.



Since we are a sociedad
anónima abierta, notice of shareholders’ meetings must be given by publication of a notice, with the publication
occurring at least 25 days prior to any shareholders’ meeting, in El Peruano and in a widely circulated newspaper in the
city in which we are located. The notice requirement may be waived at the shareholders’ meeting by holders of 100 percent
of the outstanding Common Shares. According to Article 25 of our By-Laws and Article 257 of the Peruvian Companies Law, shareholders’
meetings called for the purpose of considering a capital increase or decrease, the issuance of obligations, a change in our By-Laws,
the sale in a single act of assets with an accounting value that exceeds 50 percent of our capital stock, a merger, division,
reorganization, transformation or dissolution, are subject to a first, second and third quorum call, each of the second and third
quorum to occur upon the failure of the preceding one. A quorum for the first call requires the presence of shareholders holding
50 percent of our total voting shares. For the second call, the presence of shareholders holding at least 25 percent of our total
voting shares constitutes a quorum, and for the third call there is no quorum requirement. These decisions require the approval
of the majority of the voting shares represented at the shareholders’ meeting. General Meetings convened to consider all
other matters are subject to a first and second quorum call, the second quorum call to occur upon the failure of the first quorum.



In the case of shareholders’
meetings called for the purpose of considering the removal of members of the Board of Directors, at least 75 percent and 70 percent
of the total number of Common Shares outstanding are required to be represented at the shareholders’ meeting on the first
quorum call and second quorum call respectively. Provided such quorum is attained, the affirmative vote of no less than two thirds
of the total number of Common Shares outstanding is required to effect the removal of members of the Board of Directors. The special
quorum and voting requirements described above cannot be modified at a shareholders’ meeting called for the purpose of considering
the removal of members of the Board of Directors.



145







Under our By-Laws,
the following actions are to be taken at the annual obligatory shareholders’ meetings: approval of our statements of financial
position, profit and loss statements and annual reports; approval of management performance; allocation of profits; election of
external auditors; election of the members of the Board of Directors; and any other matters submitted by the Board of Directors.
The following actions are to be taken at the same annual shareholders’ meetings if the quorum and majority requirements
are met or at any other shareholders’ meeting: any amendment of our By-Laws; any decision to increase or reduce capital;
any decision to issue debt; initiating investigations or requesting auditor’s reports; liquidating, spinning-off, merging,
consolidating, dissolving, or changing our business form or structure.



In accordance with
Article 21 of the By-laws, only those holders of Common Shares whose names are inscribed in the Share Register not less than 10
days in advance of a meeting will be entitled to attend shareholders’ meetings and to exercise their rights.



Limitations on the Rights of Nonresident or Foreign Shareholders



There are no limitations
in our By-laws or the Peruvian Companies Law on the rights of nonresident or foreign shareholders to own securities or exercise
voting rights on our securities.



Change in Control



There are no provisions
in our By-laws that would have the effect of delaying, deferring or preventing a change in control.



Disclosure of Share Holdings



There are no provisions
in our By-laws governing the ownership threshold above which share ownership must be disclosed. However, according to Regulation
No. 009-2006-EF.94.10 of the SMV, which became effective on May 3, 2006, as amended by Regulation No. 020-2006-EF.94.10 and Regulation
No. 05-2009-EF-94.01.1 of the SMV, when an individual or financial group acquires, in one act or various successive acts, a significant
percentage (more than 25 percent) of the voting shares of a company, as well as upon any person or group increasing its ownership
above the 50 percent and 60 percent thresholds, a procedure known as Oferta Pública de Adquisición, or Takeover
Bid, must be followed. This has the effect of alerting other shareholders and the market that an individual or financial group
has acquired a significant percentage of a company’s voting shares, and gives other shareholders the opportunity to sell
their shares at the price offered by the purchaser. The purchaser is obliged to launch a Takeover Bid unless it is exempt pursuant
to Regulation No. 009-2006-EF.94.10 of the SMV as amended. The purchase of ADRs is exempted from the Takeover Bid unless the holders:
(i) exercises the voting rights of the Common Shares underlying the ADSs evidenced by such ADRs, or (ii) requests the delivery
of such underlying Common Shares. In addition, the SMV and the Lima Stock Exchange must be notified of any transfer of more than
5 percent of our paid-in capital.



Changes in Capital



Our By-laws do not
establish special conditions for increases or reductions of capital that are more stringent than is required by the Peruvian Companies
Law. Furthermore, the Peruvian Companies Law forbids sociedades anónimas abiertas, such as us, from including in
their by-laws stipulations limiting the transfer of their shares or restraining their trading in other ways. We cannot recognize
a shareholders’ agreement that contemplates limitations, restrictions or preferential rights on the transfer of shares,
even if such agreement is recorded in our Share Register (matrícula de acciones) or in CAVALI.



146







C. Material Contracts



On December 2, 2009,
Banco de Crédito del Peru, as lessor, executed a financial lease agreement with Conenhua, Huanza, as lessee, and us, as
guarantor, in the amount of US$119 million for construction of a hydroelectric power station. The term of the lease is ten years
and the interest rate is (i) LIBOR plus 4 percent from the first disbursement until six months after the start of commercial operation
of the power station and (ii) LIBOR plus 4.1 percent from six months after the start of commercial operation of the power station
until maturity. An English summary of the financial lease agreement is filed as Exhibit 4.2 of our Annual Report on Form 20-F
for the year ended December 31, 2010.



D. Exchange Controls



Since August 1990,
there have been no exchange controls in Peru and all foreign exchange transactions are based on free market exchange rates. Prior
to August 1990, the Peruvian foreign exchange market consisted of several alternative exchange rates. Additionally, during
the 1990s, the Peruvian currency has experienced a significant number of large devaluations, and Peru has consequently adopted,
and operated under, various exchange rate control practices and exchange rate determination policies, ranging from strict control
over exchange rates to market determination of rates. Current Peruvian regulations on foreign investment allow the foreign holders
of equity shares of Peruvian companies to receive and repatriate 100 percent of the cash dividends distributed by such companies.
Such investors are allowed to purchase foreign exchange at free market currency rates through any member of the Peruvian banking
system and transfer such foreign currency outside Peru without restriction.



E. Taxation



The following summarizes
the material Peruvian and United States tax consequences under present law of the purchase, ownership and disposition of ADSs
or Common Shares. The discussion is not a full description of all tax considerations that may be relevant to a decision to purchase
ADSs or Common Shares. In particular, this discussion deals only with holders that hold ADSs or Common Shares as capital assets
and that have the U.S. Dollar as their functional currency. The summary does not address the tax treatment of certain investors
that may be subject to special tax rules, such as banks, securities dealers, insurance companies, tax-exempt entities, persons
that will hold ADSs or Common Shares as a position in a “straddle” or “conversion transaction” for tax
purposes and holders of 10 percent or more of our voting shares. This discussion does not address any U.S. state or local taxes,
the U.S. federal alternative minimum tax or the U.S. Medicare tax on net investment income. There is no tax treaty currently in
effect between Peru and the United States, except for a treaty to exchange tax information. The information to be exchanged is
defined in such treaty as any data or declaration that may be relevant or essential to the administration and application of taxes.
Accordingly, the discussions below of Peruvian and U.S. tax considerations are based on the domestic law of each of Peru and the
United States which are subject to change and possibly with retroactive effect.



As used herein, “Peruvian
holder” means an owner of ADSs or Common Shares that is (i) an individual domiciled in Peru, (ii) a business entity created
under the laws of Peru, or (iii) a Peruvian branch, agency or permanent establishment of a non-Peruvian individual or entity.
“U.S. Holder” means a beneficial owner of ADSs or Common Shares that is (i) a United States citizen or resident, (ii)
a domestic corporation or partnership, (iii) a trust subject to the control of a U.S. fiduciary and the primary supervision of
a U.S. court or (iv) estate the income of which is subject to United States Federal income taxation regardless of its source.



147







Peruvian Tax Considerations



Cash Dividends and Other Distributions



Cash dividends paid
with respect to Common Shares and amounts distributed with respect to ADSs are currently subject to a Peruvian withholding Income
Tax, at a rate of 4.1 percent over the dividend paid, when the dividend is paid to shareholders that are: (i) individuals, whether
resident or nonresident in Peru or (ii) nonresident entities. As a general rule, the distribution of additional Common Shares
representing profits, distribution of shares which differ from the distribution of earnings or profits, as well as the distribution
of preemptive rights with respect to Common Shares, which are carried out as part of a pro rata distribution to all shareholders,
will not be subject to Peruvian Income Tax or withholding taxes.



Capital Gains



Pursuant to Article
6 of the Peruvian Income Tax Law, or the ITL, individuals and entities resident in Peru are subject to Peruvian Income Tax on
their worldwide income while non-resident individuals or entities are subject to Peruvian Income Tax on their Peruvian source
income only.



Furthermore, the ITL
states that income deriving from the disposal of securities issued by Peruvian entities is considered Peruvian source income subject
to the Income Tax.



With respect to this
matter, Article 2 of the ITL, as amended by Legislative Decree 945, defines: (i) capital gains as any revenue deriving from the
disposal of capital goods; and (ii) capital goods as those whose purpose is not to be traded in the regular course of a business.
Moreover, Article 2 of the ITL states that income deriving from the disposal of shares and similar securities is considered a
capital gain.



Accordingly, capital
gains deriving from the disposal of securities are considered Peruvian source income subject to Peruvian Income Tax.



Currently, regardless
of whether or not the transferor is domiciled in Peru, the ITL establishes that taxable income resulting from the disposal of
securities is determined by the difference between the sale price of the securities and its tax basis. However, prior to December
31, 2009, capital gains resulting from the disposal of ADSs or Common Shares issued by legal entities incorporated in Peru were
exempt from Peruvian Income Tax if: (i) in the case of non-regular individuals (i.e., individuals who do not frequently trade
securities), the transaction was carried out prior to December 31, 2009; and (ii) in the case of shareholders other than individuals,
the transaction was carried out on the Lima Stock Exchange (floor session) prior to December 31, 2009.



Effective January
1, 2010, the exemption was repealed and, as such, capital gains resulting from the disposal of ADSs or Common Shares issued by
legal entities incorporated in Peru became subject to Peruvian Income Tax. For non-resident entities or individuals, capital gains
will be subject to an Income Tax rate of either 5 percent or 30 percent, depending where the transaction takes place. If the transaction
is consummated within Peru, the Income Tax rate is 5 percent; if the transaction is consummated outside of Peru, capital gains
are taxed at a rate of 30 percent.



The ITL Regulations
have defined transactions consummated within Peru to mean that the securities at issue are transferred through the Lima Stock
Exchange. In contrast, the transaction is considered to have been consummated abroad when (i) the securities at issue are not
registered on the Lima Stock Exchange or (ii) registered securities are not transferred through the Lima Stock Exchange.



148







Prior to December
31, 2012, for nonresident individuals, the first five Tax Units (approximately US$6,800) of capital gains deriving from the transfer
of securities were exempted from the Income Tax. Effective January 1, 2013, this exemption was repealed. If the transferor is
a resident entity, capital gains deriving from the disposal of securities will be treated as any other taxable income subject
to the 30 percent Corporate Income Tax rate.



Furthermore, prior
to December 31, 2012, if the transferor was a resident individual, the first five Tax Units (approximately US$6,800) of capital
gains deriving from the transfer of securities were exempted from the Income Tax. Effective January 1, 2013, such exemption was
repealed. Any capital gain earned by a resident individual is subject to the five percent annual Income Tax rate regardless of
whether or not the transaction is carried out on the Lima Stock Exchange and regardless of how many transactions are carried out
by such individual. In this case, the five percent Income Tax rate will be applicable over the annual net capital gain, which
is calculated by deducting from the annual gross capital gain of the annual losses resulting from the disposal of shares during
the same fiscal year.



Moreover, if the transferor,
either a resident or nonresident individual or entity, acquired the ADSs or Common Shares that were exempt from the Income Tax
before January 1, 2010, pursuant to a special provision of the ITL, the tax basis is the higher of: (i) the acquisition cost;
(ii) the face or nominal value of the shares or (iii) the stock market value at closing on December 31, 2009.



If the transferor,
whether resident or nonresident in Peru, acquires the ADSs or Common Shares on or after January 1, 2010, the tax basis is: (i)
for shares purchased by the transferor, the acquisition price paid for the shares; (ii) for shares received by the transferor
as a result of a capital stock increase because of a capitalization of net profits, the face or nominal value of such shares;
(iii) for other shares received free of any payment, the stock market value of such shares if listed on the Lima Stock Exchange
or, if not, the face or nominal value of such shares and (iv) for shares of the same type acquired at different opportunities
and at different values, the tax basis will be the weighted average cost.



The aforementioned
rules are also applicable to ADSs or Common Shares acquired before January 1, 2010 that were not exempt from the Income Tax as
of December 31, 2009.



On December 31, 2010,
Law No. 29645 was promulgated and took effect from January 1, 2011. This law states that in any transaction of Peruvian securities
through the Lima Stock Exchange, CAVALI (the Peruvian clearing house) will act as withholding agent. As a result of this amendment,
the nonresident will no longer have to self-assess and pay its Income Tax liability directly to the Peruvian Tax Administration.



Law No. 29645 has
technically been in force since January 1, 2011. Implementing regulations were enacted in July 2011, and CAVALI begun acting as
a withholding agent on November 1, 2011. As a result, with regard to securities transferred though the Lima Stock Exchange by
a nonresident transferor subsequent to November 1, 2011, such nonresident transferor is no longer obliged to self-assess and pay
its Income Tax liability directly to Peruvian tax authorities within the first 12 working days following the month in which Peruvian
source income was earned.



If the purchaser is
resident in Peru and the sale is not performed through the Lima Stock Exchange, the purchaser will act as withholding agent, except
in cases in which the transferor is a resident individual.



However, if the transferor
is a resident entity, such transferor is solely responsible for its Peruvian Income Tax on capital gains resulting from the disposal
of ADSs or Common Shares, regardless of whether such securities are listed on the Lima Stock Exchange or elsewhere.



149







Other Considerations



No Peruvian estate
or gift taxes are imposed on the gratuitous transfer of ADSs or Common Shares. No stamp, transfer or similar tax applies to any
transfer of Common Shares, except for commissions payable by seller and buyer to the Lima Stock Exchange (0.15 percent of value
sold), fees payable to the SMV (0.05 percent of value sold), brokers’ fees (about 0.05 percent to 1 percent of value sold)
and Value Added Tax (at the rate of 18 percent) on commissions and fees. Any investor who sells its Common Shares on the Lima
Stock Exchange will incur these fees and taxes upon purchase and sale of the Common Shares.



United States Federal Income Tax Considerations



Assuming the obligations
contemplated by the Amended and Restated Deposit Agreement are being performed in accordance with its terms, holders of ADSs (or
ADRs evidencing ADSs) generally will be treated for United States federal income tax purposes as the owners of the Common Shares
represented by those ADSs.



Cash Dividends and Other Distributions



Cash dividends paid
with respect to Common Shares or Common Shares represented by ADSs generally are includible in the gross income of a U.S. Holder
as ordinary income. Dividends generally are treated as foreign source income. Dividends paid to a U.S. Holder that is a corporation
are not eligible for the dividends received deduction available to corporations. Under current law, a maximum 20 percent U.S.
tax rate is imposed on the dividend income of an individual U.S. holder with respect to dividends paid by a domestic corporation
or “qualified foreign corporation” if certain holding period requirements are met. A qualified foreign corporation
generally includes a foreign corporation if (i) its shares are readily tradable on an established securities market in the U.S.
or (ii) it is eligible for benefits under a comprehensive U.S. income tax treaty. Clause (i) will apply with respect to ADSs if
such ADSs are readily tradable on an established securities market in the U.S. The ADSs are traded on the New York Stock Exchange.
As a result, we believe that we should be treated as a qualified foreign corporation and, therefore, dividends paid to an individual
U.S. holder with respect to ADSs for which the minimum holding period requirement is met should be taxed at a maximum rate of
20 percent. Dividends paid in Nuevos Soles are includible in a United States dollar amount based on the exchange rate in effect
on the date of receipt (which, in the case of ADSs, will be the date of receipt by the Depositary) whether or not the payment
is converted into U.S. Dollars at that time. Any gain or loss recognized upon a subsequent sale or conversion of the Nuevos Soles
for a different amount of U.S. Dollars will be United States source ordinary income or loss. Distributions to U.S. Holders of
additional Common Shares or preemptive rights with respect to Common Shares that are made as part of a pro rata distribution to
all of our shareholders generally will not be subject to United States federal income tax but in other circumstances may constitute
a taxable dividend.



A U.S. Holder will
be entitled to a foreign tax credit for Peruvian taxes imposed by withholding or otherwise, subject to generally applicable limitations
and restrictions. In the case of U.S. individuals for whom the reduced rate of tax on dividends applies, such limitations and
restrictions will appropriately take into account the rate differential under rules similar to section 904(b)(2)(B) of the Internal
Revenue Code. The rules governing foreign tax credits are complex and U.S. Holders should consult their tax advisors regarding
their application to the particular circumstances of such holder.



A non-U.S. Holder
generally is not subject to United States Federal income or withholding tax on dividends paid with respect to Common Shares or
Common Shares represented by ADSs, unless such income is effectively connected with the conduct by the non-U.S. Holder of a trade
or business within the United States.



150







Capital Gains



U.S. Holders will
recognize capital gain or loss on the sale or other disposition of ADSs or Common Shares (or preemptive rights with respect to
such shares) held by the U.S. Holder or by the Depositary. U.S. Holders will not recognize gain or loss on deposits or withdrawals
of Common Shares in exchange for ADSs or on the exercise of preemptive rights. Any gain recognized by a U.S. Holder generally
will be treated as United States source income. Consequently, in the case of a disposition of Common Shares or ADSs in a transaction
subject to Peruvian tax, the U.S. Holder may not be able to claim the foreign tax credit for any Peruvian tax imposed on the gain
unless it has sufficient foreign source income from other sources against which it can apply the credit. Generally, gain or loss
will be a long-term capital gain or loss if the U.S. Holder’s holding period for such Common Shares or ADSs exceeds one
year. Long-term capital gain for an individual U.S. Holder is generally subject to a reduced rate of tax.



A non-U.S. Holder
of ADSs or Common Shares will not be subject to United States income or withholding tax on gain from the sale or other disposition
of ADSs or Common Shares unless (i) such gain is effectively connected with the conduct of a trade or business within the United
States or (ii) the non-U.S. Holder is an individual who is present in the United States for at least 183 days during the taxable
year of the disposition and certain other conditions are met.



Passive Foreign Investment Company



We believe that we
are not and will not become a passive foreign investment company for United States Federal income tax purposes. A foreign corporation
is a passive foreign investment company, or PFIC, in any taxable year in which, after taking into account the income and assets
of certain subsidiaries pursuant to the applicable look-through rules, either (i) at least 75 percent of its gross income is passive
income or (ii) at least 50 percent of the average value of its assets is attributable to assets that produce passive income or
are held for the production of passive income.



If we were a PFIC
in any year during which a U.S. Holder owned ADSs or Common Shares, we would not be treated as a “qualified foreign corporation”
for purposes of qualifying dividends paid to a U.S. Holder for the preferential 20 percent maximum U.S. tax rate noted above and
the U.S. Holder would be subject to additional taxes on any excess distributions received from us and any gain realized from the
sale or other disposition of ADSs or Common Shares (regardless of whether we continued to be a PFIC). A U.S. Holder has an excess
distribution to the extent that distributions on ADSs or Common Shares during a taxable year exceed 125 percent of the average
amount received during the three preceding taxable years (or, if shorter, the U.S. Holder’s holding period for the ADSs
or Common Shares). To compute the tax on an excess distribution or any gain, (i) the excess distribution or the gain is allocated
ratably over the U.S. Holder’s holding period for the ADSs or Common Shares, (ii) the amount allocated to the current taxable
year is taxed as ordinary income and (iii) the amount allocated to other taxable years is taxed at the highest applicable marginal
rate in effect for each year and an interest charge is imposed to recover the deemed benefit from the deferred payment of the
tax attributable to each year.



If we were a PFIC,
U.S. holders of interests in a holder of ADSs or Common Shares may be treated as indirect holders of their proportionate share
of the ADSs or Common Shares and may be taxed on their proportionate share of any excess distribution or gain attributable to
the ADSs or Common Shares. An indirect holder also must treat an appropriate portion of its gain on the sale or disposition of
its interest in the actual holder as gain on the sale of the ADSs or Common Shares.



151







Information Reporting and Backup Withholding



Dividends in respect
of the ADSs or Common Shares and the proceeds from the sale, exchange, or redemption of the ADSs or Common Shares may be reported
to the United States Internal Revenue Service and a backup withholding tax may apply to such amounts unless the holder (i) is
a domestic corporation (which may be required to establish its exemption by carrying its status on U.S. Internal Revenue Service
Form W-9), (ii) in the case of a U.S. Holder other than a corporation, provides an accurate taxpayer identification number in
the manner required by applicable law, (iii) in the case of a non-U.S. Holder, provides a properly executed U.S. Internal Revenue
Service Form W-8BEN, or other successor Form, or (iv) otherwise establishes a basis for exemption. The amount of any backup withholding
from a payment to a U.S. Holder generally will be allowed as a credit against the U.S. Holder’s United States Federal income
tax liability.



F. Dividends and Paying Agents



Not applicable.



G. Statement by Experts



Not applicable.



H. Documents on Display



We are subject to
the informational requirements of Exchange Act. In accordance with these requirements, we file annual reports and other information
to the SEC. These materials, including this Annual Report on Form 20-F and the exhibits hereto, may be inspected and copied at
the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 and at the SEC’s regional offices at
175 W. Jackson Boulevard, Suite 900, Chicago, Illinois 60604, and 3 World Financial Center, Suite 400, New York, New York 10281-1022.
Copies of the materials may be obtained from the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549
at prescribed rates. The public may obtain information on the operation of the SEC’s Public Reference Room by calling the
SEC in the United States at 1-800-SEC-0330. The SEC also maintains a web site at http://www.sec.govthat contains reports,
proxy statements and other information regarding registrants that file electronically with the SEC. Form 20-F reports and some
of the other information submitted by us to the SEC may be accessed through this web site.



I. Subsidiary Information



Not applicable.



| | ITEM 11. | Quantitative
                                                                                              and Qualitative Disclosures About
                                                                                              Market Risk
| | -------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
following discussion contains forward-looking statements that are subject to risks and uncertainties, many of which are outside
of our control. Our primary market risks are related to fluctuations in the prices of gold, silver, zinc and lead. To a lesser
extent, we are subject to market risk related to fluctuations in US$/Nuevo Sol exchange rates and to market risk related to interest
rate fluctuation on our cash balances.



152







Commodity Contracts



Gold,
silver, lead and copper hedging and sensitivity to market price



Our
revenues and earnings are to a great extent influenced by world market prices for gold, copper, silver, zinc and lead that fluctuate
widely and over which we have no control. We and our wholly-owned subsidiaries are completely unhedged as to the price at which
our gold and silver will be sold. See “Item 3. Key Information—D. Risk Factors—Factors Relating to the Company—Our
financial performance is highly dependent on the prices of gold, silver, copper and other metals.”



As of March 31, 2013,
we had no fixed price commitments for the sale of our metals. As of March 31, 2013, we had no silver derivative contracts or gold
convertible put option contracts in place.



Yanacocha and Cerro
Verde have informed us that they have generally not engaged in, and are currently not engaged in, gold or copper price hedging
activities, such as forward sales or option contracts, to minimize their exposure to fluctuations in the prices of gold or copper.



Normal Sales



We had no normal sales contracts with fixed
or capped prices outstanding as of March 31, 2013.



Foreign currency risk



We buy and sell our
products and obtain capital facilities and investment in U.S. Dollars. The assets and liabilities in different currencies from
the U.S. Dollar (Nuevos Soles) are not significant. We estimate that the future exchange rate fluctuations of Peruvian currency
versus the U.S. Dollar will not significantly affect the results of our future operations.



Interest Rate Sensitivity



We reduce our exposure
to the risks due to variations in interest rates by engaging in financial obligations and capital leasing with fixed interest
rates. See Note 28 to the Financial Statements. Consequently, we do not use derivative instruments to manage this risk and we
do not expect to incur significant losses based on interest risks.



| | ITEM 12. | Description
                                                                                              of Securities Other Than Equity
                                                                                              Securities
| | -------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



A. Debt Securities



Not applicable.



B. Warrants and Rights



Not applicable.



C. Other Securities



Not applicable.



153







D. American Depositary Shares



The
Depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs
for the purpose of withdrawal or from intermediaries acting for them. The Depositary collects fees for making distributions to
investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees.
The Depositary may collect its annual fee for depositary services by deductions from cash distributions or by directly billing
investors or by charging the book-entry system accounts of participants acting for them. The Depositary may generally refuse to
provide fee-attracting services until its fees for those services are paid. The following table summarizes the fees and expenses
payable by holders of ADSs:



|Persons depositing or withdrawing
    shares must pay:                                                                                                                                         |  | For:                                                                                                                                                         
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                               |  |                                                                                                                                                              
|US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)                                                                                                                                        |  | •    Issuance
    of ADSs, including issuances resulting from a distribution of shares or rights or other property                                           
|                                                                                                                                                                                               |  |                                                                                                                                                              
|                                                                                                                                                                                               |  | •    Cancellation
    of ADSs for the purpose of withdrawal, including if the deposit agreement terminates                                                   
|                                                                                                                                                                                               |  |                                                                                                                                                              
|A fee equivalent to the fee that would be payable if securities distributed to you had been
    shares and the shares had been deposited for issuance of ADSs                                  |  | •    Distribution
    of securities distributed to holders of deposited securities which are distributed by the depositary to ADS registered holders         
|                                                                                                                                                                                               |  |                                                                                                                                                              
|Registration or transfer fees                                                                                                                                                                  |  | •    Transfer
    and registration of shares on our share register to or from the name of the Depositary or its agent when you deposit or withdraw
    shares
|                                                                                                                                                                                               |  |                                                                                                                                                              
|Expenses of the Depositary                                                                                                                                                                     |  | •    Cable,
    telex and facsimile transmissions (when expressly provided in the deposit agreement)                                                         
|                                                                                                                                                                                               |  |                                                                                                                                                              
|                                                                                                                                                                                               |  | •    Converting
    foreign currency to U.S. Dollars                                                                                                         
|                                                                                                                                                                                               |  |                                                                                                                                                              
|Taxes and other governmental charges the Depositary or the custodian have to pay on any
    ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes |  | •    As necessary                                                                                                                                            
|                                                                                                                                                                                               |  |                                                                                                                                                              
|Any charges incurred by the Depositary or its agents for servicing the deposited securities                                                                                                    |  | •    As necessary                                                                                                                                            



Fees Incurred in Past Annual Period



From
January 1, 2012 to March 31, 2013, we received no fees from the Depositary related to our ADR facility, including continuing annual
stock exchange listing fees, standard out-of-pocket maintenance costs for the ADRs (consisting of the expenses of postage and
envelopes for mailing annual and interim financial reports, printing and distributing dividend checks, electronic filing of U.S.
Federal tax information, mailing required tax forms, stationery, postage, facsimile, and telephone calls), any applicable performance
indicators relating to the ADR facility, underwriting fees and legal fees.



154







Fees to be Paid in the Future



The
Depositary has agreed to reimburse us for expenses we incur that are related to establishment and maintenance expenses of the
ADS program. The Depositary has agreed to reimburse us for our continuing annual stock exchange listing fees. The Depositary has
also agreed to pay the standard out-of-pocket maintenance costs for the ADRs, which consist of the expenses of postage and envelopes
for mailing annual and interim financial reports, printing and distributing dividend checks, electronic filing of U.S. Federal
tax information, mailing required tax forms, stationery, postage, facsimile, and telephone calls. It has also agreed to reimburse
us annually for certain investor relationship programs or special investor relations promotional activities. In certain instances,
the Depositary has agreed to provide additional payments to us based on any applicable performance indicators relating to the
ADR facility. There are limits on the amount of expenses for which the Depositary will reimburse us, but the amount of reimbursement
available to us is not necessarily tied to the amount of fees the Depositary collects from investors.



The
Depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs
for the purpose of withdrawal or from intermediaries acting for them. The Depositary collects fees for making distributions to
investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees.
The Depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing
investors or by charging the book-entry system accounts of participants acting for them. The Depositary may generally refuse to
provide fee-attracting services until its fees for those services are paid.



PART II



| | ITEM 13. | Defaults,
                                                                                              Dividend Arrearages and Delinquencies
| | -------- | ---------------------------------------------------------------------------------------------------------------------------------------------



Not applicable.



| | ITEM 14. | Material Modifications to the Rights of Security
                                                                       Holders and Use of Proceeds
| | -------- | ---------------------------------------------------------------------------------------------------------------------------------------------------



Not applicable.



| | ITEM 15. | Controls
                                                                                              and Procedures
| | -------- | ---------------------------------------------------------------------------------------------------------------------



Evaluation of Disclosure Controls and Procedures



As of December 31,
2012, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.
There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility
of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls
and procedures can only provide reasonable assurance of achieving their control objectives. Based upon and as of the date of our
evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are
effective to provide reasonable assurance that information required to be disclosed in the reports we file and submit under the
Exchange Act is recorded, processed, summarized and reported as and when required.



Management’s Annual Report on
Internal Control over Financial Reporting



Our management is
responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external reporting purposes in accordance with generally accepted accounting principles. Because of
its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Our management has
assessed the effectiveness of our internal control over financial reporting as of December 31, 2012. In making its assessment,
management has utilized the criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission
in Internal Control—Integrated Framework.Our management concluded that based on its assessment, our
internal control over financial reporting was effective as of December 31, 2012.



155







Our independent registered
public accounting firm, Medina, Zaldívar, Paredes & Asociados, has issued an attestation report on our internal control
over financial reporting, which is included below.



Attestation Report of the Independent Registered Public
Accounting Firm



To the Board of Directors and Shareholders of Compañía
de Minas Buenaventura S.A.A.



We have audited Compañía
de Minas Buenaventura S.A.A.’s internal control over financial reporting as of December 31, 2012, based on criteria established
in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the
COSO criteria). Compañía de Minas Buenaventura S.A.A.’s management is responsible for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting
included in the accompanying Management’s report. Our responsibility is to express an opinion on the company’s internal
control over financial reporting based on our audit.



We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained
in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing
the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.



A company’s internal
control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only
in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material
effect on the financial statements.



Because of its inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.



In our opinion, Compañía
de Minas Buenaventura S.A.A. and subsidiaries maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2012, based on the COSO criteria.



156







We also have audited, in accordance
with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial position
of Compañía de Minas Buenaventura S.A.A. and subsidiaries as of December 31, 2012 and 2011, and the related consolidated
statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31,
2012 of Compañía de Minas Buenaventura S.A.A. and subsidiaries and our report dated April 30, 2013, expressed an
unqualified opinion thereon.



/S/ MEDINA, ZALDIVAR, PAREDES & ASOCIADOS



Countersigned by:



/S/ MARCO ANTONIO ZALDÍVAR



Marco Antonio Zaldívar

C.C.P.A. Register No. 12477



Lima, Peru

April 30, 2013



Changes in Internal Control Over Financial Reporting



There has been no
change in our internal control over financial reporting during 2012 that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.



| | ITEM 16A. | Audit
                                                                                               Committee Financial Expert
| | --------- | -------------------------------------------------------------------------------------------------------------------------------



The Board of Directors
has determined that Mr. German Suárez is the Audit Committee financial expert as defined in Item 16A of Form 20-F. The
Board of Directors has also determined that Mr. Suárezand each of the other
members of the Audit Committee are “independent directors” as defined in Section 303A.02 of the NYSE’s Listed
Company Manual.



| | ITEM 16B. | Code
                                                                                               of Ethics
| | --------- | -------------------------------------------------------------------------------------------------------------



We have adopted a
written code of business conduct and ethics that applies to our principal executive officer, principal financial officer, principal
accounting officer and controller, or persons performing similar functions, as well as all other employees. Our code of business
conduct and ethics is posted on, and within five days following the date of any amendment or waiver we intend to disclose any
amendments to or waivers from our code of business conduct and ethics on, our website, which is located at http://www.buenaventura.com.
The information on our website is not a part of, nor incorporated into, this document.



| | ITEM 16C. | Principal
                                                                                               Accountant Fees and Services
| | --------- | -------------------------------------------------------------------------------------------------------------------------------------



The Audit Committee
proposed at the General Meeting that Medina, Zaldívar, Paredes & Asociados, a member firm of Ernst & Young Global,
be elected as the independent auditor for 2012. Medina, Zaldívar, Paredes & Asociados has served as our independent
public accountant for each of the fiscal years in the two-year period ended December 31, 2011 and 2012, for which audited
financial statements appear in this annual report on Form 20-F.



157







The following table
presents the aggregate fees for professional services and other services rendered by Medina, Zaldívar, Paredes & Asociados
for 2011 and 2012.



|           |  | Year ended December 31, |          
|---------- |  | ----------------------- | ---------
|           |  | 2011                    |          
|Audit Fees |  | US$                     | 1,124,451
|Tax Fees   |  | US$                     | 213,764  
|Total      |  | US$                     | 1,338,215



Audit Fees.
Audit fees in the above table are the aggregate fees billed by Medina, Zaldívar, Paredes & Asociados in connection
with the audit of our annual financial statements, the review of our quarterly financial statements and statutory and regulatory
audits. In addition, the amounts in the above table includes fees that were incurred in connection with the audit of internal
control over financial reporting in 2011 and 2012.



Tax Fees. Tax
fees in the above table are fees billed by Medina, Zaldívar, Paredes & Asociados in connection with review of income
tax filings, transfer pricing studies and tax consultations.



Audit Committee
Pre-approval Policies and Procedures



Our Audit Committee
is responsible for the oversight of the independent auditor. The Audit Committee has adopted a policy regarding pre-approval of
audit services provided by our independent auditors, or the Policy. In accordance with the Policy, the Audit Committee must pre-approve
the provision of services by our independent auditor for all audit and non-audit services prior to commencement of the specified
service. The requests for pre-approval are submitted to the Audit Committee by the Chief Financial Officer and following approval
by audit committee members an engagement letter is executed. The Audit Committee approved all audit and tax fees in 2012.



| | ITEM 16D. | Exemptions
                                                                                               from the Listing Standards for
                                                                                               Audit Committees
| | --------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not applicable.



| | ITEM 16E. | Purchases
                                                                                               of Equity Securities by the Issuer
                                                                                               and Affiliated Purchasers
| | --------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



For the year ended December 31, 2012, neither
we nor any person acting on our behalf made any purchase of our Common Shares.



| | ITEM 16F. | Change
                                                                                               in Registrant’s Certifying
                                                                                               Accountant
| | --------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



None.



| | ITEM 16G. | Corporate
                                                                                               Governance
| | --------- | -------------------------------------------------------------------------------------------------------------------



There are significant
differences in the corporate governance practices followed by us as compared to those followed by United States domestic companies
under the New York Stock Exchange, or NYSE, listing standards. The NYSE listing standards provide that the board of directors
of a United States domestic listed company must consist of a majority of independent directors and that certain committees must
consist solely of independent directors. Under Peruvian corporate governance practices, a Peruvian company is not required to
have a majority of the members of the board of directors be independent.



158







The listing standards
for the NYSE also require that United States domestic companies have an audit committee, a nominating/corporate governance committee
and a compensation committee. Each of these committees must consist solely of independent directors and must have a written charter
that addresses certain matters specified in the listing standards. Peruvian corporate governance practices permit the Board of
Directors of a Peruvian company to form special governance bodies in accordance with the needs of such company and do not require
that these special governance bodies be composed partially or entirely of independent directors. We maintain three committees,
which include the Audit Committee, the Compensation Committee and the Nominating/Corporate Governance Committee. Our Board of
Directors has determined that our Audit Committee is composed entirely of independent directors, as defined in the NYSE’s
Listed Company Manual.



The NYSE’s listing
standards also require United States domestic companies to adopt and disclose corporate governance guidelines. In July 2002, the
SMV and a committee comprised of regulatory agencies and associations prepared and published a list of suggested corporate governance
guidelines called “Principles of Good Governance for Peruvian Companies.” These principles are disclosed on the SMV’s
website at http://www.smv.gob.pe. Our code of business conduct and ethics establishes our principles of good corporate
governance and, as indicated in “Item 16B. Code of Ethics,” is posted on our website.



| | ITEM 16H. | Mine
                                                                                                  Safety Disclosure
| | --------- | ------------------------------------------------------------------------------------------------------------------------



Not applicable.



PART III



| | ITEM 17. | Financial
                                                                                                 Statements
| | -------- | ---------------------------------------------------------------------------------------------------------------------



Not applicable.



| | ITEM 18. | Financial
                                                                                                 Statements
| | -------- | ---------------------------------------------------------------------------------------------------------------------



Please refer to Item
19.



159







| | ITEM 19. | Exhibits
| | -------- | --------



|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Page
|------------------------------------------------------ | ------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|(a)                                                    | Index to Financial Statements and Schedules |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|COMPAÑIA DE MINAS BUENAVENTURA S.A.A. AND SUBSIDIARIES |                                            
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|MINERA YANACOCHA S.R.L.                                |                                            
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|SOCIEDAD MINERA CERRO VERDE S.A.A.                     |                                            
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|(b)                                                    | Index to Exhibits                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|                                                       | 1.1                                         | By-Laws (Estatutos) of Compañía de Minas Buenaventura
    S.A.A., as amended April 30, 2002 (incorporated by reference from Compañía de Minas Buenaventura S.A.A. Annual
    Report on Form 20-F for the year ended December 31, 2002, filed on June 25, 2003).                                                                                                                                                                                                                                 |     
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|                                                       | 1.2                                         | By-Laws (Estatutos) of Minera Yanacocha S.R.L., as amended October
    18, 1999 (incorporated by reference from Compañía de Minas Buenaventura S.A.A. Annual Report on Form 20-F for
    the year ended December 31, 2002, filed on June 25, 2003).                                                                                                                                                                                                                                             |     
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|                                                       | 4.1                                         | Shareholders Agreement among SMM Cerro Verde Netherlands B.V., Sumitomo
    Metal Mining Co., Ltd., Sumitomo Corporation, Summit Global Management B.V., Compañía
    de Minas Buenaventura S.A.A., Cyprus Climax Metals Company, Phelps Dodge Corporation and Sociedad Minera Cerro Verde S.A.A.,
    dated June 1, 2005 (incorporated by reference from Compañía
    de Minas Buenaventura S.A.A. Annual Report on Form 20-F for the year ended December 31, 2005, filed on June 6, 2006).    |     
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|                                                       | 4.2                                         | English Summary of the Financial Lease Agreement (Arrendamiento Financiero), dated
    as of December 2, 2009, by and among Banco de Crédito del Peru, as lessor, Compañía de Minas Buenaventura
    S.A.A., as guarantor, Empresa de Generación de Huanza, S.A., as lessee, and Consorcio Energético Huancavelica
    S.A. (incorporated by reference from Compañía
    de Minas Buenaventura S.A.A. Annual Report on Form 20-F for the year ended December 31, 2010, filed on June 28, 2011). |     
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|                                                       | 11                                          | Code of Conduct and Ethics (incorporated by reference from Compañía
    de Minas Buenaventura S.A.A. Annual Report on Form 20-F for the year ended December 31, 2002, filed on June 25, 2003).                                                                                                                                                                                                                                                                                                  |     
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|                                                       | 12.1                                        | Certification of Chief Executive Officer of Compañía de Minas
    Buenaventura S.A.A. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.†                                                                                                                                                                                                                                                                                                                                               |     
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|                                                       | 12.2                                        | Certification of Chief Financial Officer of Compañía de Minas
    Buenaventura S.A.A. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.†                                                                                                                                                                                                                                                                                                                                               |     
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|                                                       | 13.1                                        | Certification of Chief Executive Officer of Compañía de Minas
    Buenaventura S.A.A. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†                                                                                                                                                                                                                                                                                                                                               |     
|                                                       |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     
|                                                       | 13.2                                        | Certification of Chief Financial Officer of Compañía de Minas
    Buenaventura S.A.A. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†                                                                                                                                                                                                                                                                                                                                               |     








† Filed herewith.



160







SIGNATURE



The registrant hereby certifies that it
meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign
this annual report on its behalf.



| | COMPAÑÍA DE MINAS BUENAVENTURA S.A.A.
| | -------------------------------------
| |                                      
| | By:                                  
| |                                      
| |                                      



Dated: April 30, 2013



161







Exhibit Index



|Exhibit
    No. |  | Document
    Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|1.1             |  | By-Laws (Estatutos) of Compañía de Minas
    Buenaventura S.A.A., as amended April 30, 2002 (incorporated by reference from Compañía de Minas Buenaventura
    S.A.A. Annual Report on Form 20-F for the year ended December 31, 2002, filed on June 25, 2003).                                                                                                                                                                                                                                
|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|1.2             |  | By-Laws (Estatutos) of Minera Yanacocha S.R.L., as amended
    October 18, 1999 (incorporated by reference from Compañía de Minas Buenaventura S.A.A. Annual Report on Form
    20-F for the year ended December 31, 2002, filed on June 25, 2003).                                                                                                                                                                                                                                            
|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4.1             |  | Shareholders Agreement among SMM Cerro Verde Netherlands B.V.,
    Sumitomo Metal Mining Co., Ltd., Sumitomo Corporation, Summit Global Management B.V., Compañía de Minas Buenaventura
    S.A.A., Cyprus Climax Metals Company, Phelps Dodge Corporation and Sociedad Minera Cerro Verde S.A.A. dated June 1, 2005 (incorporated
    by reference from Compañía de Minas Buenaventura S.A.A. Annual Report on Form 20-F for the year ended December
    31, 2005, filed on June 6, 2006).    
|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4.1             |  | English Summary of the Financial Lease Agreement (Arrendamiento
    Financiero), dated as of December 2, 2009, by and among Banco de Crédito del Peru, as lessor, Compañía
    de Minas Buenaventura S.A.A., as guarantor, Empresa de Generación de Huanza, S.A., as lessee, and Consorcio Energético
    Huancavelica S.A. (incorporated by reference from Compañía de Minas Buenaventura S.A.A. Annual Report on Form
    20-F for the year ended December 31, 2010, filed on June 28, 2011).
|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|11              |  | Code of Conduct and Ethics (incorporated by reference from Compañía
    de Minas Buenaventura S.A.A. Annual Report on Form 20-F for the year ended December 31, 2002, filed on June 25, 2003).                                                                                                                                                                                                                                                                                                 
|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|12.1            |  | Certification of Chief Executive Officer of Compañía
    de Minas Buenaventura S.A.A. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.†                                                                                                                                                                                                                                                                                                                                              
|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|12.2            |  | Certification of Chief Financial Officer of Compañía
    de Minas Buenaventura S.A.A. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.†                                                                                                                                                                                                                                                                                                                                              
|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|13.1            |  | Certification of Chief Executive Officer of Compañía
    de Minas Buenaventura S.A.A. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†                                                                                                                                                                                                                                                                                                                                              
|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|13.2            |  | Certification of Chief Financial Officer of Compañía
    de Minas Buenaventura S.A.A. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†                                                                                                                                                                                                                                                                                                                                              








† Filed herewith.



162







Index to the Financial Statements



|                                                                                                               | Page 
|-------------------------------------------------------------------------------------------------------------- | -----
|                                                                                                               |      
|Compañía
    de Minas Buenaventura S.A.A. and subsidiaries                                                     |      
|                                                                                                               |      
|Report of Independent Registered Public Accounting Firm                                                        | F-3  
|                                                                                                               |      
|Consolidated Statement of Financial Position as of December 31, 2011 and 2012                                  | F-4  
|                                                                                                               |      
|Consolidated Income Statement for the years ended December 31, 2010, 2011 and 2012                             | F-6  
|                                                                                                               |      
|Consolidated Statement of Comprehensive Income for the years ended December 31, 2010, 2011 and 2012            | F-7  
|                                                                                                               |      
|Consolidated Statement of Changes in Shareholders’ Equity for the years ended December 31, 2010, 2011 and 2012 | F-8  
|                                                                                                               |      
|Consolidated Statement of Cash Flows for the years ended December 31, 2010, 2011 and 2012                      | F-10 
|                                                                                                               |      
|Notes to the Consolidated Financial Statements                                                                 | F-13 
|                                                                                                               |      
|Minera Yanacocha S.R.L.                                                                                        |      
|                                                                                                               |      
|Report of the Independent Registered and Certified Public Accounting Firm                                      | F-110
|                                                                                                               |      
|Consolidated Statements of Income and Comprehensive Income                                                     | F-111
|                                                                                                               |      
|Consolidated Statements of Cash Flows                                                                          | F-112
|                                                                                                               |      
|Consolidated Balance Sheets                                                                                    | F-113
|                                                                                                               |      
|Consolidated Statements of Changes in Partners’ Equity                                                         | F-114
|                                                                                                               |      
|Notes to the Consolidated Financial Statements                                                                 | F-115
|                                                                                                               |      
|Sociedad Minera Cerro Verde S.A.A.                                                                             |      
|                                                                                                               |      
|Report of Independent Registered Public Accounting Firm                                                        | F-145
|                                                                                                               |      
|Statement of Financial Position                                                                                | F-146
|                                                                                                               |      
|Statements of Comprehensive Income                                                                             | F-147
|                                                                                                               |      
|Statements of Changes in Equity                                                                                | F-148
|                                                                                                               |      
|Statements of Cash Flows                                                                                       | F-149
|                                                                                                               |      
|Notes to the Financial Statements                                                                              | F-151



F-1







|Compañía de Minas Buenaventura S.A.A. and Subsidiaries                                                                                              |     
|--------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|                                                                                                                                                    |     
|Consolidated Financial Statements as of December 31, 2012, 2011 and 2010, together with the Report of Independent Registered Public Accounting Firm
|                                                                                                                                                    |     
|Contents                                                                                                                                            |     
|                                                                                                                                                    |     
|Report of Independent Registered Public Accounting Firm                                                                                             | F-3 
|                                                                                                                                                    |     
|Consolidated Statement of Financial Position as of December 31, 2011 and 2012                                                                       | F-4 
|                                                                                                                                                    |     
|Consolidated Income Statement for the years ended December 31, 2010, 2011 and 2012                                                                  | F-6 
|                                                                                                                                                    |     
|Consolidated Statement of Comprehensive Income for the years ended December 31, 2010, 2011 and 2012                                                 | F-7 
|                                                                                                                                                    |     
|Consolidated Statement of Changes in Shareholders’ Equity for the years ended December 31, 2010, 2011 and 2012                                      | F-8 
|                                                                                                                                                    |     
|Consolidated Statement of Cash Flows for the years ended December 31, 2010, 2011 and 2012                                                           | F-10
|                                                                                                                                                    |     
|Notes to the Consolidated Financial Statements                                                                                                      | F-13



F-2







Report of Independent Registered Public Accounting Firm



|ERNST & YOUNG | Medina, Zaldivar, Paredes 
|------------- | --------------------------
|              | & Asociados Sociedad Civil



To the Board of Directors and Shareholders of Compañía
de Minas Buenaventura S.A.A.







We have audited the accompanying consolidated financial statements
of Compañía de Minas Buenaventura S.A.A. (a Peruvian corporation) and Subsidiaries (together the “Company”),
which comprise the consolidated statement of financial position as of December 31, 2012 and 2011, and the related consolidated
income statement, statement of comprehensive income, statement of shareholders’ equity and statement of cash flows for the
years ended December 31, 2012 , 2011 and 2010. These consolidated financial statements are the responsibility of the Company's
Management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We have
not audited the financial statements for each of the years ended December 31, 2012, 2011 and 2010 of Minera Yanacocha S.R.L (an
associate in which the Company has a 43.65% interest through its subsidiary, Compañía Minera Condesa S.A.). Those
statements were audited by other auditors whose reports were furnished to us and our opinion, insofar as it relates to the amounts
included for Minera Yanacocha S.R.L., is based solely on the reports of the other auditors. In the consolidated financial statements
of the Company, the investment on the statement of financial position amounts to US$1,585.4 and US$1,312.1 million as of December
31, 2012 and 2011, respectively; and the share in the net income of this entity amounts to US$272.9, US$279.7, and US$251.5 million
for the years ended December 31, 2012, 2011 and 2010, respectively.



We conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement
presentation. We believe that our audits and the reports of the other auditors provide a reasonable basis for our opinion.



In our opinion, based on our audit and the reports of other
auditors on Minera Yanacocha S.R.L., the consolidated financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Compañía de Minas Buenaventura S.A.A. and Subsidiaries as of December 31,
2012 and 2011, their results of operations and their cash flows for each of the years ended on December 31, 2012, 2011 and 2010,
in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB).







We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), Compañía de Minas Buenaventura S.A.A. ́s internal
control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 30, 2013 expressed an
unqualified opinion thereon.



Lima, Peru,

April 30, 2013



/s/
Medina, Zaldivar, Paredes & Asociados

Countersigned by:





/s/ Marco Antonio Zaldívar

Marco Antonio Zaldívar

C.P.C.A. Register No.12477





F-3







Compañía de Minas Buenaventura S.A.A. and
Subsidiaries



Consolidated Statement of Financial Position

As of December 31, 2012 and 2011



|                                                                          |  | Note  |  | 2012     |           |  | 2011     | 
|------------------------------------------------------------------------- |  | ----- |  | -------- | --------- |  | -------- | 
|                                                                          |  |       |  | US$(000) |           |  | US$(000) | 
|Asset                                                                     |  |       |  |          |           |  |          | 
|Current asset                                                             |  |       |  |          |           |  |          | 
|Cash and cash equivalents                                                 |  | 4(a)  |  |          | 186,712   |  |          | 
|Financial assets at fair value through profit or loss                     |  | 5     |  |          | 54,509    |  |          | 
|Trade accounts receivable, net                                            |  | 6(a)  |  |          | 256,431   |  |          | 
|Other accounts receivable                                                 |  | 7     |  |          | 108,568   |  |          | 
|Accounts receivable from associates                                       |  | 31(c) |  |          | 22,534    |  |          | 
|Hedge derivative financial instruments                                    |  | 27(a) |  |          | -         |  |          | 
|Inventory, net                                                            |  | 8(a)  |  |          | 163,067   |  |          | 
|Prepaid expenses                                                          |  |       |  |          | 11,837    |  |          | 
|                                                                          |  |       |  |          |           |  |          | 
|Total current asset                                                       |  |       |  |          | 803,658   |  |          | 
|                                                                          |  |       |  |          |           |  |          | 
|Other accounts receivable                                                 |  | 7     |  |          | 6,702     |  |          | 
|Accounts receivable from associates                                       |  | 31(c) |  |          | 33,377    |  |          | 
|Long-term inventory                                                       |  | 8(a)  |  |          | 55,937    |  |          | 
|Investment in associates                                                  |  | 9(a)  |  |          | 2,436,237 |  |          | 
|Mining concessions, development costs, property, plant and equipment, net |  | 10(a) |  |          | 1,134,276 |  |          | 
|Deferred income tax asset, net                                            |  | 24(a) |  |          | 113,343   |  |          | 
|Other assets                                                              |  |       |  |          | 5,123     |  |          | 
|                                                                          |  |       |  |          |           |  |          | 
|Total assets                                                              |  |       |  |          | 4,588,653 |  |          | 



The accompanying notes are an integral part
of this consolidated statement of financial position.



F-4







|                                                                |  | Note  |  | 2012     |           |  | 2011     | 
|--------------------------------------------------------------- |  | ----- |  | -------- | --------- |  | -------- | 
|                                                                |  |       |  | US$(000) |           |  | US$(000) | 
|Liabilities and shareholders’ equity, net                       |  |       |  |          |           |  |          | 
|Current liability                                               |  |       |  |          |           |  |          | 
|Trade accounts payable                                          |  | 12    |  |          | 199,551   |  |          | 
|Accounts payable to associates                                  |  | 31(c) |  |          | 890       |  |          | 
|Other accounts payable                                          |  | 13    |  |          | 59,096    |  |          | 
|Provisions                                                      |  | 14    |  |          | 71,780    |  |          | 
|Embedded derivatives for purchase and sale of concentrates, net |  | 27(c) |  |          | 4,939     |  |          | 
|Income tax payable                                              |  |       |  |          | 7,935     |  |          | 
|Financial obligations                                           |  | 15(a) |  |          | 5,815     |  |          | 
|Total current liabilities                                       |  |       |  |          | 350,006   |  |          | 
|                                                                |  |       |  |          |           |  |          | 
|Other non-current provisions                                    |  | 14    |  |          | 100,041   |  |          | 
|Accounts payable to associates                                  |  | 31(c) |  |          | 731       |  |          | 
|Financial obligations                                           |  | 15(a) |  |          | 173,489   |  |          | 
|Total liability                                                 |  |       |  |          | 624,267   |  |          | 
|Shareholders’ equity, net                                       |  | 16    |  |          |           |  |          | 
|Capital stock, net of treasury shares for US$(000)62,622        |  |       |  |          | 750,540   |  |          | 
|Investment shares, net of treasury shares for US$(000)762       |  |       |  |          | 1,399     |  |          | 
|Additional paid-in capital                                      |  |       |  |          | 219,471   |  |          | 
|Legal reserve                                                   |  |       |  |          | 162,663   |  |          | 
|Other reserves                                                  |  |       |  |          | 269       |  |          | 
|Retained earnings                                               |  |       |  |          | 2,566,787 |  |          | 
|Other reserves of equity                                        |  |       |  |          | 925       |  |          | 
|Shareholders’ equity, net attributable to owners of the parent  |  |       |  |          | 3,702,054 |  |          | 
|Non-controlling interest                                        |  |       |  |          | 262,332   |  |          | 
|Total shareholders’ equity, net                                 |  |       |  |          | 3,964,386 |  |          | 
|Total liabilities and shareholders’ equity, net                 |  |       |  |          | 4,588,653 |  |          | 



The accompanying notes are an integral part
of this consolidated statement of financial position.



F-5







Compañía de Minas Buenaventura S.A.A. and
Subsidiaries



Consolidated Income Statement
For the years ended December 31, 2012, 2011 and 2010



|                                                                                                  |  | Note  |  | 2012     |             |   | 2011     |  |             | 2010     | 
|------------------------------------------------------------------------------------------------- |  | ----- |  | -------- | ----------- | - | -------- |  | ----------- | -------- | 
|                                                                                                  |  |       |  | US$(000) |             |   | US$(000) |  |             | US$(000) | 
|Operating income                                                                                  |  |       |  |          |             |   |          |  |             |          | 
|Net sales                                                                                         |  | 18    |  |          | 1,496,349   |   |          |  | 1,493,882   |          | 
|Royalty income                                                                                    |  | 31(a) |  |          | 67,178      |   |          |  | 62,742      |          | 
|Total income                                                                                      |  |       |  |          | 1,563,527   |   |          |  | 1,556,624   |          | 
|Operating costs                                                                                   |  |       |  |          |             |   |          |  |             |          | 
|Cost of sales, without considering depreciation and amortization                                  |  | 19    |  |          | (629,492    | ) |          |  | (446,163    | )        | 
|Exploration in units in operation                                                                 |  | 20    |  |          | (153,018    | ) |          |  | (109,355    | )        | 
|Depreciation and amortization                                                                     |  |       |  |          | (123,043    | ) |          |  | (96,381     | )        | 
|Royalties                                                                                         |  | 21    |  |          | (37,667     | ) |          |  | (60,262     | )        | 
|Total operating costs                                                                             |  |       |  |          | (943,220    | ) |          |  | (712,161    | )        | 
|Gross income                                                                                      |  |       |  |          | 620,307     |   |          |  | 844,463     |          | 
|Operating expenses                                                                                |  |       |  |          |             |   |          |  |             |          | 
|Administrative expenses                                                                           |  | 22    |  |          | (99,295     | ) |          |  | (75,170     | )        | 
|Exploring in non-operating areas                                                                  |  | 23    |  |          | (95,491     | ) |          |  | (49,593     | )        | 
|Selling expenses                                                                                  |  |       |  |          | (18,090     | ) |          |  | (11,617     | )        | 
|Reversal (provision) for impairment of long-lived assets                                          |  | 11    |  |          | (3,617      | ) |          |  | -           |          | 
|Excess of workers’ profit sharing                                                                 |  | 14(b) |  |          | (2,164      | ) |          |  | (6,221      | )        | 
|Reimbursement of exploration expenses on projects                                                 |  |       |  |          | -           |   |          |  | -           |          | 
|Other, net                                                                                        |  |       |  |          | 16,584      |   |          |  | 2,513       |          | 
|Total operating expenses                                                                          |  |       |  |          | (202,073    | ) |          |  | (140,088    | )        | 
|Operating income                                                                                  |  |       |  |          | 418,234     |   |          |  | 704,375     |          | 
|Other income (expenses), net                                                                      |  |       |  |          |             |   |          |  |             |          | 
|Share in the results of associates under equity method                                            |  | 9(b)  |  |          | 464,239     |   |          |  | 468,363     |          | 
|Interest income                                                                                   |  |       |  |          | 9,486       |   |          |  | 11,827      |          | 
|Interest expense                                                                                  |  |       |  |          | (8,290      | ) |          |  | (11,823     | )        | 
|Net gain (loss) from currency exchange difference                                                 |  |       |  |          | 1,715       |   |          |  | (675        | )        | 
|Total other income, net                                                                           |  |       |  |          | 467,150     |   |          |  | 467,692     |          | 
|Income before income tax                                                                          |  |       |  |          | 885,384     |   |          |  | 1,172,067   |          | 
|Income tax                                                                                        |  | 24(b) |  |          | (142,594    | ) |          |  | (211,589    | )        | 
|Net income                                                                                        |  |       |  |          | 742,790     |   |          |  | 960,478     |          | 
|Attributable to:                                                                                  |  |       |  |          |             |   |          |  |             |          | 
|Owners of the parent                                                                              |  |       |  |          | 684,685     |   |          |  | 858,927     |          | 
|Non-controlling interest                                                                          |  |       |  |          | 58,105      |   |          |  | 101,551     |          | 
|                                                                                                  |  |       |  |          | 742,790     |   |          |  | 960,478     |          | 
|Basic and diluted earnings per share attributable to owners of the parent, stated in U.S. dollars |  | 25    |  |          | 2.69        |   |          |  | 3.38        |          | 
|Weighted average number of shares outstanding (common and investment),  in units                  |  | 25    |  |          | 254,232,571 |   |          |  | 254,442,328 |          | 



The accompanying notes are an integral part
of this statement.



F-6







Compañía de Minas Buenaventura S.A.A. and
Subsidiaries



Consolidated Statement of Comprehensive Income



For the years ended December 31, 2012,
2011 and 2010



|                                                                                    |  | Note  |  | 2012     |         |   | 2011     |  |         | 2010     | 
|----------------------------------------------------------------------------------- |  | ----- |  | -------- | ------- | - | -------- |  | ------- | -------- | 
|                                                                                    |  |       |  | US$(000) |         |   | US$(000) |  |         | US$(000) | 
|                                                                                    |  |       |  |          |         |   |          |  |         |          | 
|Net income                                                                          |  |       |  |          | 742,790 |   |          |  | 960,478 |          | 
|                                                                                    |  |       |  |          |         |   |          |  |         |          | 
|Net change in unrealized gain (loss) on hedging derivative                          |  | 27(b) |  |          | (1,283  | ) |          |  | 24,471  |          | 
|Income tax for the effect on change in unrealized gain (loss) on hedging derivative |  | 27(b) |  |          | 439     |   |          |  | (7,395  | )        | 
|Net change in unrealized gain (loss) on other investments                           |  |       |  |          | (715    | ) |          |  | (687    | )        | 
|                                                                                    |  |       |  |          |         |   |          |  |         |          | 
|Other comprehensive income, net of taxes                                            |  |       |  |          | (1,559  | ) |          |  | 16,389  |          | 
|                                                                                    |  |       |  |          |         |   |          |  |         |          | 
|Total comprehensive income, net of taxes                                            |  |       |  |          | 741,231 |   |          |  | 976,867 |          | 
|                                                                                    |  |       |  |          |         |   |          |  |         |          | 
|Attributable to:                                                                    |  |       |  |          |         |   |          |  |         |          | 
|Owners of the parent                                                                |  |       |  |          | 683,542 |   |          |  | 866,901 |          | 
|Non-controlling interest                                                            |  |       |  |          | 57,689  |   |          |  | 109,966 |          | 
|                                                                                    |  |       |  |          |         |   |          |  |         |          | 
|                                                                                    |  |       |  |          | 741,231 |   |          |  | 976,867 |          | 



The accompanying notes are an integral part
of this statement.



F-7







Compañía de Minas Buenaventura S.A.A. and
Subsidiaries



Consolidated Statements of Changes in Shareholders’ Equity

For the years ended December 31, 2012,
2011 and 2010



|                                                                      |  | Attributable to owners of the parent       |            
|--------------------------------------------------------------------- |  | ------------------------------------------ | -----------
|                                                                      |  | Capital stock, net
     of treasury shares |            
|                                                                      |  | Number of shares outstanding               |            
|                                                                      |  |                                            |            
|Balance as of January 1,
    2010                                     |  |                                            | 253,759,664
|Net income                                                            |  |                                            | -          
|Net change in unrealized
    loss on hedging derivative, net of taxes |  |                                            | -          
|Net
    change in unrealized gain on other investments                |  |                                            | -          
|                                                                      |  |                                            |            
|Total comprehensive income
    of the year                            |  |                                            | -          
|                                                                      |  |                                            |            
|Dividends declared and
    paid, note 16(d)                           |  |                                            | -          
|Proceeds of expire dividends                                          |  |                                            | -          
|Capitalization of debt
    to minority shareholder of La Zanja        |  |                                            | -          
|Transfer to legal reserve                                             |  |                                            | -          
|Capitalization
    of debt to minority shareholder                    |  |                                            | -          
|                                                                      |  |                                            |            
|Balance as of December 31,
    2010                                   |  |                                            | 253,759,664
|                                                                      |  |                                            |            
|Net income                                                            |  |                                            | -          
|Net change in unrealized
    gain on hedging derivative, net of taxes |  |                                            | -          





The accompanying notes are an integral part of this consolidated
statement of financial position.



F-8







|                                                                                    |  | Attributable to owners of the parent       |            
|----------------------------------------------------------------------------------- |  | ------------------------------------------ | -----------
|                                                                                    |  | Capital stock, net
     of treasury shares |            
|                                                                                    |  | Number of shares outstanding               |            
|                                                                                    |  |                                            |            
|                                                                                    |  |                                            |            
|Net
    change in unrealized loss on other investments                              |  |                                            | -          
|                                                                                    |  |                                            |            
|Total comprehensive income
    of the year                                          |  |                                            | -          
|                                                                                    |  |                                            |            
|Dividends declared and
    paid, note 16(d)                                         |  |                                            | -          
|Expired dividends                                                                   |  |                                            | -          
|Acquisition of non-controlling
    interest in El Brocal and Colquijirca, note 1(f) |  |                                            | -          
|Other
    acquisitions of non-controlling interests                                 |  |                                            | -          
|                                                                                    |  |                                            |            
|Balance as of December 31,
    2011                                                 |  |                                            | 253,759,664
|                                                                                    |  |                                            |            
|Net income                                                                          |  |                                            | -          
|Net change in unrealized
    loss on hedging derivative, net of taxes               |  |                                            | -          
|Net
    change in unrealized gain on other investments                              |  |                                            | -          
|                                                                                    |  |                                            |            
|Total comprehensive income
    of the year                                          |  |                                            | -          
|                                                                                    |  |                                            |            
|Dividends declared and
    paid, note 16(d)                                         |  |                                            | -          
|Capitalization of debt
    to minority shareholder of La Zanja                      |  |                                            | -          
|Treasury shares                                                                     |  |                                            | -          
|Expired
    dividends                                                               |  |                                            | -          
|                                                                                    |  |                                            |            
|Balance
    as of December 31, 2012                                                 |  |                                            | 253,759,664



Las notas a los estados financieros adjuntas
son parte integrante de este estado consolidado.



F-9







Compañía de Minas Buenaventura S.A.A. and
Subsidiaries



Consolidated Statement of Cash Flows

For the years ended December 31, 2012,
2011 and 2010



|                                                                                           |  | 2012     |           |   | 2011     |  |           | 2010     | 
|------------------------------------------------------------------------------------------ |  | -------- | --------- | - | -------- |  | --------- | -------- | 
|                                                                                           |  | US$(000) |           |   | US$(000) |  |           | US$(000) | 
|Operating activities                                                                       |  |          |           |   |          |  |           |          | 
|Proceeds from sales                                                                        |  |          | 1,410,120 |   |          |  | 1,505,476 |          | 
|Royalty received                                                                           |  |          | 76,106    |   |          |  | 56,153    |          | 
|Value added tax (VAT) recovered                                                            |  |          | 40,940    |   |          |  | 22,585    |          | 
|Dividends received                                                                         |  |          | 16,467    |   |          |  | -         |          | 
|Interest received                                                                          |  |          | 8,606     |   |          |  | 8,528     |          | 
|Payments to suppliers and third parties                                                    |  |          | (838,250  | ) |          |  | (672,479  | )        | 
|Payments to employees                                                                      |  |          | (201,494  | ) |          |  | (164,677  | )        | 
|Income tax paid                                                                            |  |          | (136,336  | ) |          |  | (111,802  | )        | 
|Payments of royalties                                                                      |  |          | (38,985   | ) |          |  | (73,776   | )        | 
|Payments of interest                                                                       |  |          | (1,485    | ) |          |  | (2,543    | )        | 
|                                                                                           |  |          |           |   |          |  |           |          | 
|Net cash and cash equivalents provided by operating activities                             |  |          | 335,689   |   |          |  | 567,465   |          | 
|                                                                                           |  |          |           |   |          |  |           |          | 
|Investment activities                                                                      |  |          |           |   |          |  |           |          | 
|Decrease in time deposits                                                                  |  |          | 10,121    |   |          |  | 7,814     |          | 
|Proceeds from sale of investment shares                                                    |  |          | 3,658     |   |          |  | -         |          | 
|Proceeds from sale of mining concessions, development costs, property, plant and equipment |  |          | 255       |   |          |  | 7,891     |          | 
|Additions to mining concessions, development costs, property, plant and equipment          |  |          | (442,927  | ) |          |  | (317,816  | )        | 
|Contributions to associates and payments for purchase of investment shares                 |  |          | (58,594   | ) |          |  | (52,182   | )        | 
|Additions to financial assets at fair value through profit or loss                         |  |          | -         |   |          |  | -         |          | 
|                                                                                           |  |          |           |   |          |  |           |          | 
|Net cash and cash equivalents used in investment activities                                |  |          | (487,487  | ) |          |  | (354,293  | )        | 
|                                                                                           |  |          |           |   |          |  |           |          | 
|Financing activities                                                                       |  |          |           |   |          |  |           |          | 
|Increase in financial obligations                                                          |  |          | 74,258    |   |          |  | 50,962    |          | 
|Dividends paid                                                                             |  |          | (152,666  | ) |          |  | (142,488  | )        | 
|Dividends paid to non-controlling shareholders                                             |  |          | (44,881   | ) |          |  | (66,736   | )        | 
|Capital stock reduction paid to non-controlling interest                                   |  |          | (7,980    | ) |          |  | -         |          | 
|Payments of financial obligations                                                          |  |          | (1,068    | ) |          |  | (2,000    | )        | 
|Proceeds from sale of shares investments                                                   |  |          | -         |   |          |  | 60,379    |          | 
|Disbursements related to incorporation of non-controlling interests                        |  |          | -         |   |          |  | (225,303  | )        | 
|Net cash and cash equivalents used in financing activities                                 |  |          | (132,337  | ) |          |  | (325,186  | )        | 
|                                                                                           |  |          |           |   |          |  |           |          | 
|Decrease in cash and cash equivalents for the period, net                                  |  |          | (284,135  | ) |          |  | (112,014  | )        | 



F-10







|                                                     |  | 2012     |         |  | 2011     |  |         | 2010     | 
|---------------------------------------------------- |  | -------- | ------- |  | -------- |  | ------- | -------- | 
|                                                     |  | US$(000) |         |  | US$(000) |  |         | US$(000) | 
|Cash and cash equivalents at beginning of year       |  |          | 470,847 |  |          |  | 582,861 |          | 
|Cash and cash equivalents at the year-end, note 4(a) |  |          | 186,712 |  |          |  | 470,847 |          | 



F-11







Consolidated Statements of Cash Flows (continued)



|                                                                                                                            |  | 2012     |          |   | 2011     |  |          | 2010     | 
|--------------------------------------------------------------------------------------------------------------------------- |  | -------- | -------- | - | -------- |  | -------- | -------- | 
|                                                                                                                            |  | US$(000) |          |   | US$(000) |  |          | US$(000) | 
|                                                                                                                            |  |          |          |   |          |  |          |          | 
|Reconciliation of net income to cash and cash equivalents provided by operating activities                                  |  |          |          |   |          |  |          |          | 
|Net income attributable to owners of the parent                                                                             |  |          | 684,685  |   |          |  | 858,927  |          | 
|Add (less)                                                                                                                  |  |          |          |   |          |  |          |          | 
|Depreciation and amortization                                                                                               |  |          | 147,449  |   |          |  | 118,322  |          | 
|Net income attributable to non-controlling interest                                                                         |  |          | 58,105   |   |          |  | 101,551  |          | 
|Deferred income tax, mining royalties and special mining tax                                                                |  |          | 10,809   |   |          |  | 42,369   |          | 
|Changes in the fair value of embedded derivatives of purchase and sale of concentrates and adjustments on open liquidations |  |          | (16,592  | ) |          |  | 33,889   |          | 
|Accretion expense of the provision for closure of mining units and exploration projects                                     |  |          | 6,812    |   |          |  | 9,100    |          | 
|Net cost of plant and equipment retired and sold                                                                            |  |          | 4,120    |   |          |  | 1,858    |          | 
|Provision for impairment of long-lived assets                                                                               |  |          | 3,617    |   |          |  | -        |          | 
|Loss (gain) from currency exchange difference                                                                               |  |          | (1,715   | ) |          |  | 675      |          | 
|Share in the results of associates under equity method, net of dividends received in cash, note 9(b)                        |  |          | (447,772 | ) |          |  | (468,363 | )        | 
|Provisions                                                                                                                  |  |          | (6,200   | ) |          |  | (12,274  | )        | 
|Net changes in assets and liabilities accounts                                                                              |  |          |          |   |          |  |          |          | 
|Decrease (increase) in operating assets -                                                                                   |  |          |          |   |          |  |          |          | 
|Trade accounts receivable, net                                                                                              |  |          | (83,862  | ) |          |  | (11,641  | )        | 
|Other accounts receivable                                                                                                   |  |          | (60,047  | ) |          |  | 2,552    |          | 
|Accounts receivable from associates                                                                                         |  |          | 23,776   |   |          |  | (40,048  | )        | 
|Inventory                                                                                                                   |  |          | (21,051  | ) |          |  | (88,461  | )        | 
|Prepaid expenses                                                                                                            |  |          | (4,397   | ) |          |  | (13,244  | )        | 
|Increase (decrease) in operating liabilities -                                                                              |  |          |          |   |          |  |          |          | 
|Trade accounts payable                                                                                                      |  |          | 57,176   |   |          |  | 51,001   |          | 
|Other accounts payable                                                                                                      |  |          | 9,264    |   |          |  | (28,046  | )        | 
|Income tax payable                                                                                                          |  |          | (28,488  | ) |          |  | 9,298    |          | 
|                                                                                                                            |  |          |          |   |          |  |          |          | 
|Net cash and cash equivalents provided by operating activities                                                              |  |          | 335,689  |   |          |  | 567,465  |          | 



The accompanying notes are an integral part
of this statement.



F-12







Compañía de Minas Buenaventura S.A.A. and
Subsidiaries



Notes to the Consolidated Financial Statements

For the years 2012, 2011 and 2010



| | 1. | Identification and business activity of the Company
| | -- | ---------------------------------------------------



| | (a) | Identification -
| | --- | ----------------



Compañía de Minas Buenaventura S.A.A.
(hereafter “Buenaventura”) is a publicly traded corporation incorporated in 1953. Buenaventura’s stock is traded
on the Lima and New York Stock Exchanges through American Depositary Receipts (ADRs), which represent Company shares deposited
in the Bank of New York. Buenaventura’s legal domicile is at Carlos Villaran Avenue 790, Santa Catalina, Lima, Peru.



| | (b) | Business activity -
| | --- | -------------------

Buenaventura (individually and in association with
third parties) is engaged in the exploration, extraction, concentration, smelting and commercialization of polymetallic ores and
metals.

Buenaventura directly operates nine mining units
located in Peru: Uchucchacua, Orcopampa, Poracota, Julcani, Recuperada, Antapite, Ishihuinca Mallay and Breapampa. In addition,
the Company has a controlling interest in Sociedad Minera El Brocal S.A.A. (hereinafter “El Brocal”), which operates
the Colquijirca mining unit, Minera La Zanja S.R.L. (hereinafter “La Zanja”), which operates La Zanja mining unit and
Compañía de Exploraciones, Desarrollo e Inversiones Mineras S.A.C. (hereinafter “Cedimin”), which operates
the Shila - Paula mining unit. The Company also holds interests in a number of other mining companies. The Company also holds interests
in a number of other mining companies. The Company also owns an electric power distribution company, an electric power generation
company (construction stage), a mining engineering services company, a construction services company and another company which
will provide chemical processing to treat concentrates from Uchucchacua with high manganese content. See note 1(h).



| | (c) | Approval of consolidated financial statements -
| | --- | -----------------------------------------------

The consolidated financial statements as of December 31,
2012 and 2011 were approved by Management on April 30, 2013 and will be presented for the approval of the Board of Directors
and the Shareholders within the terms established by Law. In Management’s opinion, the accompanying consolidated financial
statements will be approved without changes by the Board of Directors and Shareholders’ Meetings.

F-13







Notes to the consolidated financial statements (continued)



| | (d) | The consolidated financial statements include the financial statements of the following subsidiaries:
| | --- | -----------------------------------------------------------------------------------------------------



|                                                                                 |  | Ownership in capital |       
|-------------------------------------------------------------------------------- |  | -------------------- | ------
|                                                                                 |  | December 31, 2012    |       
|                                                                                 |  | Direct               |       
|                                                                                 |  | %                    |       
|                                                                                 |  |                      |       
|Investment and mining concessions held, exploration and exploitation of minerals |  |                      |       
|Compañía de Exploraciones, Desarrollo e Inversiones Mineras S.A.C. – CEDIMIN     |  |                      | 82.91 
|Compañía Minera Condesa S.A.                                                     |  |                      | 100.00
|Compañía Minera Colquirrumi S.A.                                                 |  |                      | 100.00
|Sociedad Minera El Brocal S.A.A. (*) (e), (f)                                    |  |                      | 2.54  
|Inversiones Colquijirca S.A. (*) (f)                                             |  |                      | 99.99 
|S.M.R.L. Chaupiloma Dos de Cajamarca                                             |  |                      | 20.00 
|Minera La Zanja S.R.L.                                                           |  |                      | 53.06 
|Minera Julcani S.A. de C.V.                                                      |  |                      | 100.00
|Compañía de Minas Buenaventura Chile Ltda.                                       |  |                      | 100.00
|El Molle Verde S.A.C.                                                            |  |                      | 100.00
|                                                                                 |  |                      |       
|Electric power activity                                                          |  |                      |       
|Consorcio Energético de Huancavelica S.A.                                        |  |                      | 100.00
|Empresa de Generación Huanza S.A. (g)                                            |  |                      | -     
|                                                                                 |  |                      |       
|Services                                                                         |  |                      |       
|Buenaventura Ingenieros S.A.                                                     |  |                      | 100.00
|BISA Construcción S.A.                                                           |  |                      | -     
|Contacto Corredores de Seguros S.A.                                              |  |                      | -     
|                                                                                 |  |                      |       
|Industrial activities                                                            |  |                      |       
|Procesadora Industrial Rio Seco S.A. (h)                                         |  |                      | 100.00



| | (*) | As of December 31, 2012 and 2011 Buenaventura ́s participation in El Brocal common shares was 53.72 percent. Inversiones
Colquijirca S.A. (hereafter “Colquijirca”), a Buenaventura ́s subsidiary (99.99 percent as of December 31,
2012 and 2011), has a 51.06 percent interest in El Brocal, through which Buenaventura held an indirect participation of 48.18 percent
as of December 31, 2012 and 2011. See note 1(f).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-14







Notes to the consolidated financial statements (continued)



| | (e) | Project for the expansion of El Brocal operations -
| | --- | ---------------------------------------------------



On August 15, 2008, the Board of Directors of
El Brocal approved a project to expand its operations in order to reach a treatment level of 18,000 DMT/day of ore. This project,
will allow processing ore with lower lead–zinc grade from Tajo Norte and copper from Marcapunta, divided in three stages:



| | - | First: Optimization of the current plant of 5,000 DMT/day to 7,000 DMT/day.
| | - | ---------------------------------------------------------------------------



| | - | Second: New concentrate plant 2,490 DMT/day.
| | - | --------------------------------------------



| | - | Third: Expansion of the new plant from 2,490 DMT/day to 11,000 DMT/day.
| | - | -----------------------------------------------------------------------



Optimization Plant No. 1 (first stage) and the new
concentrator (second stage) with additional treatment capacity of 2,000 DMT/day and 2,490 DMT/day, respectively started operations
in October 2010 and January 2011.



As of December 31,
2012 and 2011, the works related to the project to expand operations, which costs have been capitalized, considering the project
economic feasibility study by El Brocal’s Management criteria, are the following:



|                                                       |  | 2012     |         |  | 2011     | 
|------------------------------------------------------ |  | -------- | ------- |  | -------- | 
|                                                       |  | US$(000) |         |  | US$(000) | 
|Mine development costs                                 |  |          |         |  |          | 
|Expansion of Tajo Norte – Marcapunta Norte             |  |          | 16,429  |  |          | 
|                                                       |  |          |         |  |          | 
|Mining concessions, property, plant and equipment      |  |          |         |  |          | 
|Expansion of refining plant capacity to 18,000 DMT/day |  |          | 127,262 |  |          | 
|Optimization of crushing plant and conveyor belt       |  |          | 53,674  |  |          | 
|Huachacaja tailings areas                              |  |          | 38,060  |  |          | 
|New offices and camps                                  |  |          | 16,188  |  |          | 
|Expansion of power grid                                |  |          | 14,812  |  |          | 
|Support area                                           |  |          | 4,311   |  |          | 
|Program management                                     |  |          | 3,852   |  |          | 
|Mineral storage                                        |  |          | 2,098   |  |          | 
|Borrowing cost                                         |  |          | 334     |  |          | 
|Other minor activities                                 |  |          | 928     |  |          | 
|                                                       |  |          |         |  |          | 
|Total investment made                                  |  |          | 277,948 |  |          | 



F-15









Notes to the consolidated financial statements (continued)





| | (f) | Changes in the participation of Colquijirca and El Brocal
-
| | --- | -----------------------------------------------------------

Inversiones Colquijirca
S.A.



On July and August of 2011, the
Company increased its participation of 81.42 to 99.99 percent in Colquijirca; acquiring shares amounted to US$197,021,000, which
was totally paid in cash as part of the investment.



The difference between price paid
and the carrying amount of these shares amounted to US$166,692,000, was recorded in “Retained earnings” caption in
the consolidated statement of changes in shareholders ́ equity.

Sociedad Minera El Brocal
S.A.A.

During the year 2011, the Company
purchased and sold El Brocal ́s shares. The disbursements to acquire 1.38 percent of El Brocal ́s shares amounted to
US$28,282,000, which was totally paid in cash at the date of consolidated statement of financial position. Revenues from the sale
of 3.09 percent of El Brocal ́s shares amounted to US$68,142,000.



The difference between price paid
and the carry amount of these shares and the price received net of cost from shares sold, amounted to US$23,292,000, was recorded
in “Retained earnings” caption in the consolidated statement of changes in shareholders ́ equity.



| | (g) | Construction of hydroelectric power station -
| | --- | ---------------------------------------------

In November 2009,
the Consorcio Energético de Huancavelica S.A. Board of Directors approved the construction of 90.6 MW capacity Huanza Hydroelectric
Power Station, located in the Santa Eulalia river valley. This initial investment of US$145,000,000, is in progress since March 2010.
This project is being financed with a US$119,000,000 financial leasing agreement executed with Banco de Credito del Peru and with
Consorcio Energético de Huancavelica S.A.’s own resources. The hydroelectric power station will start operations in
the third quarter of 2013 and the estimated investment is US$180,000,000.



As of
December 31, 2012, the investment in this project amounted to US$177,133,000 (US$119,509,000 as of December 31, 2011),
and it is composed as follows:



|                              |  | 2012     |        |  | 2011     | 
|----------------------------- |  | -------- | ------ |  | -------- | 
|                              |  | US$(000) |        |  | US$(000) | 
|                              |  |          |        |  |          | 
|Development costs             |  |          |        |  |          | 
|Concessions and other minors  |  |          | 2,171  |  |          | 
|Property, plant and equipment |  |          |        |  |          | 
|Water conductor system        |  |          | 86,967 |  |          | 
|Preliminary work              |  |          | 38,216 |  |          | 
|Borrowing cost                |  |          | 10,974 |  |          | 
|Pallca dam and water intake   |  |          | 9,977  |  |          | 



F-16







Notes to the consolidated financial statements (continued)



|                                   |  | 2012     |         |  | 2011     | 
|---------------------------------- |  | -------- | ------- |  | -------- | 
|                                   |  | US$(000) |         |  | US$(000) | 
|                                   |  |          |         |  |          | 
|Round house and yard keys          |  |          | 7,754   |  |          | 
|Access road                        |  |          | 7,387   |  |          | 
|Conduction tube line – Conay river |  |          | 6,445   |  |          | 
|Transmition line in 60 KV          |  |          | 3,293   |  |          | 
|Other minor activities             |  |          | 3,949   |  |          | 
|                                   |  |          |         |  |          | 
|                                   |  |          | 174,962 |  |          | 
|                                   |  |          |         |  |          | 
|Total included in work in progress |  |          | 177,133 |  |          | 



| | (h) | Construction of washing plant, sulfuric acid and manganese
sulfate -
| | --- | --------------------------------------------------------------------

At Board of Directors held on October 28,
2010, agreed the constitution of Procesadora Industrial Rio Seco S.A., in order to carry out the plant for the manganese sulfate
project. The project is located in the community of Lomera in Huaral at 102 kilometers from Lima. The main objective of this project
is to wash with sulfuric acid, the manganese content in the lead-silver concentrate of Uchucchacua mining unit to reduce chemically
the level of manganese and to obtain a higher value added in ore concentrate. This process will also improve and increase recovery
of silver reserves. For the treatment of gaseous effluents of the process, a sulfuric acid recovery plant will be installed, that
will be used for the acid wash of the concentrate.



The total estimated investment
for the construction of the washing plant, the plant of sulfuric acid and manganese sulphate plant amounted to US$93,379,000, and
it is expected to be completed in the third quarter of 2013. As of December 31, 2012, the investment in this project amounts
to US$84,288,000 (US$27,606,000 as of December 31, 2011).



| | (i) | Mallay’s mining unit start up -
| | --- | -------------------------------

On April 2, 2012, the Company
obtained the authorization to operate the plant and other services of Mallay mining unit, located 15 kilometers from the Uchucchacua
mining unit. The new plant has a treatment capacity of 400 MT / day, and it operates since April 2012. As of December 31,
2012, Mallay mining unit has produced 668,327 ounces of silver. Total investment in fixed assets was US$64,392,000 of which US$19,958,000
were disbursed in 2012.



| | (j) | Breapampa’s mining unit start up -
| | --- | ----------------------------------

On November 2012, the Company
obtained the authorization of the operation of the processing plant of Breapampa mining unit, located in the district of Chumpi,
Parinacochas province, Ayacucho. The new plant has a treatment capacity of 10,000 MT / day, and it operates since November 2012.
As of December 31, 2012, Breapampa mining unit has produced 5,922 ounces of gold. Total investment in fixed assets was US$52,125,000
of which US$31,560,000 were disbursed in 2012.



F-17







Notes to the consolidated financial statements (continued)



| | (k) | Capital reduction of Minera La Zanja S.R.L. (La Zanja) -
| | --- | --------------------------------------------------------

On January 26, 2012, the Shareholder’s
meeting agreed to reduce the capital stock of La Zanja by US$27,000,000, returning cash contributions. This agreement was registered
in the public records on March 30, 2012. The amount of the refund to the non-controlling interest amounted to US$4,694,000
(US$12,674,000 net disbursements of US$7,980,000).



| | 2. | Significant accounting principles
| | -- | ---------------------------------

| |      |                       
| | ---- | ----------------------
| | 2.1. | Basis of preparation -

Statement of compliance -

These consolidated financial statements
have been prepared in accordance with International Financial Reporting Standards (hereinafter “IFRS”), as issued by
the International Accounting Standards Board (hereinafter “IASB”) and its interpretations issued by the IFRS Interpretations
Committee (hereinafter “IFRS”), effective as of December 31, 2012.



Measurement basis -

The consolidated financial statements
have been prepared on a historical cost basis from the Company records, except for financial assets and liabilities at fair value
through profit or loss which include the derivative financial instruments and the liability for stock appreciation rights that
have been measured at fair value. The consolidated financial statements are presented in U.S. dollars and all values are rounded
to the nearest thousand, except when otherwise indicated, see note 2.3(a).



Basis of consolidation -

The consolidated financial statements
comprise Buenaventura’s financial statements and its subsidiaries in which Buenaventura controls, which generally is represented
by more than 50 percent equity participation and/or exercises control. All significant inter-company balances and transactions
have been eliminated.



See note 1(d) for a list of the
companies included in the consolidated financial statements.



The financial statements of the
subsidiaries are prepared for the same reporting period as the parent company, using accounting consistent principles and policies.



The shareholders’ equity
attributable to the non-controlling interest is shown in the consolidated statement of financial position. Earnings attributable
to the non-controlling interest are shown separately in the consolidated income statement.



F-18







Notes to the consolidated financial statements (continued)



The Company changed the ownership
interest of its subsidiaries, without a loss of control. Consequently, they are accounted for as an equity transaction.



| | 2.2. | Significant judgments, estimates and assumptions -
| | ---- | --------------------------------------------------

The preparation of consolidated
financial statements in conformity with IFRS requires Management to make judgments, estimates and assumptions that affect the reported
amounts of assets, liabilities and the disclosure of contingent assets and liabilities at the date of consolidated financial statements,
and reported amounts of revenues and expenses to be reported for the years ended December 31, 2012, 2011 and 2010. In Management ́s
opinion, these estimates were made on the basis of their best knowledge of the relevant facts and circumstances at the date of
preparation of consolidated financial statements; however, uncertainty about these assumptions and estimates could result in outcomes
that can differ from the estimates included in the consolidated financial statement. The Company’s Management does not expect
that these changes would have a significant effect on the consolidated financial statements.



Company ́s Management considers
the following significant estimates to prepare the consolidated financial statements:



| | (a) | Provision for closure of mining units – (note 2.3(n) and note 14(a)) -
| | --- | ----------------------------------------------------------------------

The Company assesses its provision
for closure of mining units annually. Significant estimates and assumptions are made in determining this provision, as there are
numerous factors that will affect the ultimate liability payable. These factors include estimates of the extent and costs of rehabilitation
activities, technological changes, regulations changes, costs increases as compared to the inflation rates and changes in the discount
rates. These uncertainties may result in future actual expenditure differing from the amounts currently provided. The provision
at reporting date represents Management ́s best estimate of the present value of future rehabilitation costs required.



| | (b) | Determination of mineral reserves and resources -
| | --- | -------------------------------------------------

The Company computes its reserves
using methods generally applied by the mining industry in accordance with international guidelines. All reserves computed represent
the estimated amounts of proved and probable ore that can be processed economically under the present conditions.



The process of estimating the
amount of reserves is complex and requires making subjective decisions at the time of evaluating all the geologic, geophysical,
engineering and economic information that is available. Revisions could occur in estimated reserves due to, among other things,
revisions of the geologic data or assumptions, changes in assumed prices, production costs and the results of exploration activities.



F-19







Notes to the consolidated financial statements (continued)



Changes in estimated reserves
could affect mainly the depreciation of fixed assets related directly to mining activity, provision for mine closure, assessment
of the deferred asset’s recoverability and the amortization period for development costs.



| | (c) | Unit-of-production depreciation - (note 2.3(g)) -
| | --- | -------------------------------------------------

Reserves are used in determining
the depreciation and amortization of mine specific assets. This results in a depreciation or amortization charge proportional to
the depletion of the anticipated remaining life of mine production. Each item’s life, which is assessed annually, has regarded
to: i) physical life limitations, and ii) present assessments of economically recoverable reserves of the mine property. These
calculations require the use of estimates and assumptions, including the amount of recoverable reserves. Changes are recorded prospectively.



| | (d) | Mine development costs - (note 10 (c)) -
| | --- | ----------------------------------------

The application of the Company’s
accounting policy for exploration and mine development costs requires judgment in determining whether it is likely that future
economic benefits are likely either from future exploitation. The determination of reserves and mineral resources is a complex
estimation that requires varying degrees of uncertainty depending on sub-classification and these estimates directly impact the
point of deferral of exploration and mine development costs and its amortization method for development costs. The deferral policy
requires Management to make certain estimates and assumptions about future events or circumstances, in particular whether an economically
viable extraction, operation and sale of mineral can be established. Estimates and assumptions made may change if new information
becomes available. If, after expenditure is capitalized, information becomes available suggesting that the recovery of expenditure
is unlikely, the amount capitalized is written off in profit or loss in the period when the new information becomes available.



| | (e) | Share-based payment transactions - (note 14(b)) -
| | --- | -------------------------------------------------

The Company measures the cost
of cash-settled share-based payments to employees by reference to the fair value of the equity instruments at the date at which
they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation
model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate
inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions
about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note
14(c).

F-20







Notes to the consolidated financial statements (continued)



| | (f) | Impairment of non-financial assets - (note 11) -
| | --- | ------------------------------------------------

The Company has determined that
the operations of each mining unit are cash generating units, considering each mining unit operation independently.



The Company assesses at each reporting
date whether there is an indication that an asset may be impaired. If any such indication exists, the Company makes a formal estimate
of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s fair value less
costs to sell and its value in use and is determined for an individual asset (cash-generating unit) unless the asset does not generate
cash inflows that are clearly independent of those from other assets or groups of assets. These assessments require the use of
estimates and assumptions such as long-term commodity prices, discount rates, operating costs, and others.



In assessing value in use, the
estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset.



| | (g) | Contingencies - (note 30) -
| | --- | ---------------------------

By their nature, contingencies
will only be resolved when one or more future events do or do not occur. Determining contingencies inherently involves the exercise
of judgment and estimates of the outcome of future events.



| | (h) | Fair value of financial instruments - (note 29) -
| | --- | -------------------------------------------------

Where the fair value of financial
assets and financial liabilities recorded in the consolidated statement of financial position cannot be derived from active markets,
their fair value is determined using valuation techniques including the discounted cash flow model. The inputs to these models
are taken from observable markets where possible. Where this is not feasible, a degree of judgment is required in establishing
fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions
about these factors could affect the reported fair value of financial instruments.



| | (i) | Production start date - (note 10(c)) -
| | --- | --------------------------------------

The Company assesses the stage of each mine under
development to determine when a mine moves into the production stage. The criteria used to assess the start date are determined
based on the nature of each mining project, the complexity of a plant and its location. The Company considers various relevant
criteria for assessing when the mine is substantially complete and ready for its planned use. Some of the criteria used will include,
but are not limited to, the following:



F-21







Notes to the consolidated financial statements (continued)



| | - | Level of capital expenditure incurred compared to the original construction cost estimates.
| | - | -------------------------------------------------------------------------------------------

| | - | Completion of a reasonable period of testing of the mine plant and equipment.
| | - | -----------------------------------------------------------------------------

| | - | Ability to produce metal in saleable form (within specifications).
| | - | ------------------------------------------------------------------

| | - | Ability to sustain ongoing production of metal.
| | - | -----------------------------------------------



When a mine development project
moves into the production stage, the capitalization of certain mine development costs ceases and costs are either regarded as forming
part of the cost of inventory or expensed, except for costs that qualify for capitalization (relating to mining asset additions
or improvements), underground mine development or mineable reserve development. It is also at this point that depreciation or amortization
commences.



| | (j) | Recovery of deferred tax assets - (note 24) -
| | --- | ---------------------------------------------

An assessment is required to determine
whether deferred tax assets should be recognized in the consolidated statement of financial position. Deferred tax assets, including
those resulting from unused tax losses, require Management to assess the likelihood that the Company would generate taxable earnings
in future periods to apply the deferred tax assets. Estimated future taxable income is based on projections of cash flows from
operations and application of the tax law existing in each jurisdiction. To the extent to which future cash flows and taxable income
differ significantly from those estimated; they could have an impact on the Company’s capability to realize the deferred
tax assets posted as of the reporting date.



Additionally, future changes in
tax law in the jurisdictions in which the Company operates could limit the Company’s ability to obtain tax deductions in
future periods.



| | (k) | Inventories - (note 8) -
| | --- | ------------------------

Inventories are classified in
short and long-term according to the period of time in which Management estimates will begin the production stage of concentrate
extracted of each mining unit.



Net realizable value tests are
performed at least annually and represent the estimated future sales price of the product based on prevailing spot metals prices
at the reporting date, less estimated costs to complete production and bring the product to sale. Additionally, in calculating
the net realizable value of the Company’s long-term inventories, Management also considers the time value of money.

F-22







Notes to the consolidated financial statements (continued)



Classified mineral inventories
–

Classified mineral contain lower
grade ore than the average of the mineral treated, which have been removed from the pit of Colquijirca mining unit, and that are
available to continue in the process of recovery of mineral and concentrates.



Because it is generally impracticable
to determine the mineral contained in the classified mineral located in the deposit field near to the Tajo Norte by physical count,
reasonable estimation method are employed. The quantity of mineral delivered to classified mineral is based on surveyed volumes
of mined material and daily production records. Sampling and assaying of blasthole cuttings determine the estimated copper, lead
and zinc grades of material delivered to classified mineral.



Mineral outside leach platforms
inventories –

Finished and in-progress goods
are measured by estimating the number of tonnes added and removed. The number of contained gold ounces is based on assay data,
and the estimated recovery percentage is based on the expected processing method. Tonnages and ounces of mineral are verified by
periodic surveys.



Mineral inside leach platforms
inventories –

Because it is generally impracticable
to determine the mineral contained in leach platforms by physical count, reasonable estimation method are employed. The quantity
of material delivered to leach platforms based on surveyed volumes of mined material and daily production records. Sampling and
assaying of blasthole cuttings determine the estimated ore grades of material delivered to leach platforms.



Recovery rates determination
–

Expected ore recovery rates for
leach platforms are determined by metallurgical sampling. The recoverability of ore in leach platforms, once entered into the production
process, can be produced into mineral and concentrate almost immediately.



Estimated ore recovery rates are
determined using laboratory tests, historical trends and other factors. Ultimate recovery of ore contained in leach platforms can
vary significantly depending on several variables, including type of ore recovery, mineralogy and the size of the rocks. Processes
and recovery rates are monitored continuously, and recovery rates are adjusted periodically as additional information becomes available
and as related technology changes.

F-23







Notes to the consolidated financial statements (continued)



| | (l) | Deferred stripping costs - (note 10) -
| | --- | --------------------------------------

The costs of waste removal or
overburden to access the ore body (waste removal) in an open pit drilling, incurred by the Company before the operation of the
mining project begins are capitalized as deferred stripping cost and are included in  ̈Mining rights, development costs and
property, plant and equipment, net ̈ caption in the consolidated statement of financial position. Such costs will be amortized
since the project is completed, using units of production method based on proven and probable reserves.



The stripping costs incurred during
the production phase of its operations are recognized as an operating expense when they are incurred. These costs of production
are included as part of the cost of the inventories extracted during the period in which the stripping cost was incurred.



| | 2.3. | Summary of significant accounting principles and policies –
| | ---- | -----------------------------------------------------------



| | (a) | Foreign currency translation -
| | --- | ------------------------------

Functional and presentation
currency

Financial statements are presented
in U.S. dollars, which is the Company’s functional and presentation currency.



Transactions and balances in
foreign currency

Transactions in foreign currency
(any currency different from the functional currency) are initially recorded at the functional currency rate in force at the date
of the transaction. The exchange rates issued by the Superintendencia de Banca y Seguros y AFP (SBS) are used in translating
foreign currency. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency rate
of exchange ruling at the consolidated statement of financial position. Exchange differences resulting from the settlement of the
transactions in foreign currencies and from the translation of the monetary assets and liabilities at the exchange rates at year-end
are recognized in the consolidated income statement.



Non-monetary items that are measured
in terms of historical cost in a foreign currency are translated using the exchange rates as of the dates of the initial transactions.



F-24







Notes to the consolidated financial statements (continued)



| | (b) | Financial assets -
| | --- | ------------------

Initial recognition and measurement

Financial assets within the scope
of IAS 39 are classified as: assets at fair value through profit or loss, loans and receivables, held-to-maturity investments,
available-for-sale financial assets, or as derivatives designated as hedging instruments. When financial assets are recognized
initially, they are measured at fair value directly attributable transaction costs, except in the case of financial assets recorded
at fair value through profit or loss which does not include transaction costs. The Company determines the classification of its
financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial
year end.



Purchases or sales of financial
assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (conventional
transactions) are recognized on the date of the transaction, that is to say, on the date on which the Company commits to sell the
asset.



The Company’s financial
assets include cash and cash equivalents, financial assets at fair value through profit or loss, trade accounts receivable, embedded
derivatives for purchase and sale of concentrates, other accounts receivable, and account receivable from associate.



Subsequent measurement -

The subsequentmeasurement
of financial assets depends on their classification, as detailed below:



Financial assets at fair value
through profit or loss -



Financial assets at fair value
through profit or loss includes financial assets held for trading and financial assets designated upon initial recognition as at
fair value through profit or loss. Derivatives are also classified as held for trading unless they are designated as effective
hedging instruments. Assets within this category are classified as current assets if they are held for trading or it is expected
to realize them within the next twelve months counted as from the consolidated statement of financial position date. Gain or losses
on investments held for trading are recognized in profit and loss. The Company has classified as financial assets at fair value
through profit or loss its mutual funds of variable income, see note 5.



The Company evaluates its financial
assets held for trading, other than derivatives, to determine whether the intention to sell them in the near term is still appropriate.
The reclassification to loans and receivables, available-for-sale or held to maturity depends on the nature of the asset. This
evaluation does not affect any financial assets designated at fair value through profit or loss using the fair value option at
designation.



F-25







Notes to the consolidated financial statements (continued)



Any embedded derivatives contained
in commercial contracts are recorded as separated derivatives and posted at their fair value if the directly associated economic
features and risks are not related to the commercial contract and the contract has not been classified as a negotiable financial
asset or at fair value with a charge to results. Any gains or losses from changes in the fair value of embedded derivatives are
posted in the consolidated income statement.



Loans and receivables -

The Company has the following
accounts: cash and cash equivalents, trade accounts receivable, accounts receivable from associates and other accounts receivable,
in this category; they are stated at the transaction value, net of an allowance for doubtful accounts when applicable.



All such instruments are non-derivative
financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement loans and
receivables are subsequently carried at amortized cost using the effective interest method less any provision for impairment.



The Company assesses whetheras of the date of its consolidated financial statements, there is objective evidence of an impairment in the value
of financial assets (such as the debtor’s probability of insolvency, significant financial difficulties, failure to pay principal
or interest or any observable evidence indicating that the estimated future flows associated with the loans or accounts receivable
have decreased). The amount of the impairment is measured as the difference between the book value of the assets and the present
value of the estimated future cash flows, discounted at the original effective interest rate if it’s a fixed rate or one
applicable for similar transactions if it’s a variable rate. The carrying amount of the receivable is reduced by means of
an allowance account. The amount of the loss must be recognized in the consolidated income statement. Impaired accounts receivable
or loans are written off when they are considered uncollectible.



If the amount of the loss should
decrease in a subsequent period, the Company reverses it with a credit entry to the consolidated income statement.



Held-to-maturity investments
-

Held-to-maturity investments are
non-derivative financial assets with fixed or determinable payments and fixed maturities that the Company’s Management has
the positive intention and ability to hold to maturity. After initial recognition the Company measures their held-to-maturity investments
at amortized cost using the effective interest method. Gains and losses are recognized in the consolidated income statement when
the investment is disposed, had impairment or through amortization. The Company did not maintain any held-to-maturity investment
as of December 31, 2012 and 2011.



F-26







Notes to the consolidated financial statements (continued)



Available-for-sale financial
investments -

Available-for-sale financial assets
are those non-derivative financial assets that are designated as available-for-sale or are not classified in any of the other categories.
After initial measurement, available for sale financial assets are measured at fair value with unrealized gains or losses being
recognized directly in equity. When the investment is disposed of, the cumulative gain or loss previously recorded in equity is
recognized in the consolidated income statement. The Company did not maintain any significant available-for-sale financial investment
as of December 31, 2012 and 2011.



Derecognition of financial
assets -

A financial asset is derecognized
when:

| | - | The rights to receive cash flows from such asset have expired.
| | - | --------------------------------------------------------------



| | - | The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received
cash flows to a third party under a pass-through arrangement; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | The Company has transferred substantially all of the risks and rewards of the asset or;
| | --- | ---------------------------------------------------------------------------------------

| | (ii) | Not having transferred or retained substantially all of the risks and rewards of the asset, it has transferred its control.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------



In the event that the Company
transfers its rights to receive cash flows from an asset or has entered into a pass-through arrangement, but has not transferred
substantially all the risks and rewards and still maintains control over of the asset, it must recognize the liabilities associated.
Assets transferred and the liabilities associated are measured on a basis that reflects the rights and obligations that the Company
has retained.



Impairment of financial assets
-

The Company assesses at each reporting
date whether there is any objective evidence that a financial asset or a group of financial assets is impaired.



A financial asset or a group of
financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more
events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and if loss event has
an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the debtors or a group of debtors are experiencing significant financial difficulty,
default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization
and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears
or economic conditions that correlate with unpaid counts.



F-27







Notes to the consolidated financial statements (continued)



Offsetting of financial instruments
-

Financial assets and liabilities
are offset and the net amount reported in the consolidated statement of financial position, if (i) there is a currently enforceable
legal right to offset the recognized amounts and (ii) there is an intention to settle on a net basis, or to realize the assets
and settle the liability simultaneously.



Fair value of financial instruments
-

The fair value of financial instruments
that are traded in active markets is determined on each reporting date by reference to quoted market prices or dealer price quotations
(bid price for long positions and ask price for short positions), without any deduction for transaction costs.



In the case of financial instruments
that are not traded in an active market, fair value is determined using appropriate valuation techniques. Such techniques may include
using recent arm ́s length market transactions; reference to the current fair value of another instrument that is substantially
same, an analysis of the adjusted flow of funds or other valuation models.



An analysis of fair values of
financial instruments and further details as to how they are measured are provided in note 29.



| | (c) | Cash and cash equivalents-
| | --- | --------------------------

The “Cash and cash equivalents”
caption presented in the Company’s consolidated statement of financial position includes all cash on hand and deposited in
banks, including time deposits whose maturities are three months or more.



Furthermore, this caption presented
in the Company’s consolidated statements of cash flows includes cash on hand, time deposits and highly liquid investments
with original maturities of three months or less.



| | (d) | Business combinations and goodwill -
| | --- | ------------------------------------

Business combinations are accounted
for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured
at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the
Company elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate share
of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and included in “Administrative
expenses” caption.



F-28







Notes to the consolidated financial statements (continued)



When the Company acquires a business,
it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the
contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree.



If the business combination is
achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is
remeasured to fair value at the acquisition date through profit or loss.



Any contingent consideration to
be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequent changes in the fair value of
the contingent consideration which is deemed to be an asset or liability will be recognized in accordance with IAS 39 either in
profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not
be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall
within the scope of IAS 39, it is measured in accordance with the appropriate IFRS.



Difference between price and the
carrying amount is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount
recognized for non-controlling interest over the fair value of the identifiable net assets acquired and liabilities assumed. If
the fair value of the identifiable net assets acquired is in excess of the aggregate consideration transferred, the gain is recognized
in profit or loss.



After initial recognition, difference
between price and the carrying amount is measured at cost less any accumulated impairment losses. For the purpose of impairment
testing, this difference is allocate to each of the Company’s cash-generating units that are expected to benefit from the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.



Where this difference forms part
of a cash-generating unit and part of the operation within that unit is disposed of, the difference associated with the operation
disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation.
Difference disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion
of the cash-generating unit retained.



F-29







Notes to the consolidated financial statements (continued)



| | (e) | Investments in associates -
| | --- | ---------------------------

Investments in entities in which
the Company’s ownership is greater than 20 percent or exercise significant influence are accounted for using the equity method.
Under this method, the investment in the associateis
carried in the consolidated statement of financial position at cost plus acquisition changes in the Company’s share of net
assets of the associate. The amount paid in excess of the fair value of the share of net assets of the associate is included in
the carrying amount of the investment and is neither amortized nor individually tested for impairment.



The consolidated income statement
reflects the share of the results of operations of the associate. When there has been a change recognized directly in the equity
of the associate, the Company recognizes its share of any changes and discloses this, when applicable, in the consolidated statements
of changes in shareholders ́ equity. Unrealized gains and losses resulting from transactions between the Company and the associate
are eliminated to the extent of the interest in the associate.



The reporting dates of the associates
and the Company are identical and the associates’ accounting policies are consistent with those used by the Company for like
transactions and events in similar circumstances. The functional and presentation currency of the associates Yanacocha (through
its subsidiary, Compañía Minera Condesa S.A.) and Cerro Verde is the U.S. dollar.



After the application of the equity
method, the Company determines whether it is necessary to recognize an additional impairment loss of the Company’s investment
in associates. The Company determines at each consolidated statement of financial position date whether there is any objective
evidence that the investment in associate is impaired. If this is the case, the Company calculates the amount of impairment as
being the difference between the fair value of the associate and the acquisition cost and recognizes the amount in the consolidated
income statement.



Upon loss of significant influence
over the associate, the Company measures and recognizes any retaining investment at its fair value. Any difference between the
carrying amount of the associate upon loss of significant influence and the fair value of the retaining investment and proceeds
from disposal is recognized in the consolidated income statement.



F-30







Notes to the consolidated financial statements (continued)



| | (f) | Inventories -
| | --- | -------------

Finished goods and products in
process are valued at the lower of average cost or net realizable value. Net realizable value is defined as the estimated future
sales price obtainable in the ordinary course of business, less estimated costs to complete production and bring the product to
sale.



Cost is determined by using the
weighted-average method and comprises direct purchase costs and an appropriate portion of fixed and variable overhead costs, including
depreciation and amortization, incurred in converting materials into finished goods.



The accrual for obsolescence for
spare parts and supplies are based on an item-by-item analysis completed by the Company’s Management and related amounts
are charged to expense in the period in which the obsolescence is deemed to have occurred.



Products in process -

Products in process represent
mineral that are currently accumulated to be treated in the production of concentrate and mineral content of gold and silver deposited
in the leach platforms, whose recovery is accomplished through exposure to sulfuric acid (leaching). Conversion processes for mining
operations vary depending on the nature of the mineral and the specific mining operation.



Products in process material is
measured based on assays of gold and silver in the minerals deposited in the platforms and daily production records.



Classified mineral

Low grade ore are placed in stockpiles
to be processed in midterm until the project to expand El Brocal ́s operations will be concluded (see note 1(e)). In this
sense, low grade ore that is stockpiled with the expectation that is will be processed in the future is accounted for in the same
way as minerals and concentrates.



According to the mine planning,
classified mineral will be treated on the next three years. As consequence, the ore is accounted for as non-current inventory and
measured at the lower of cost and net realizable value. Annually, the Company’s Management assess the net realizable value
of its non-current inventory based on the cash-flow projections obtained by the production and sales of the low grade ore stockpiled
considering to: (i) the forward copper price at the year that to be expected to process the low grade ore, (ii) the future
costs of processing (considering inflation rates, technological changes and other significant aspects would change), and (iii) the
discount rate.



F-31







Notes to the consolidated financial statements (continued)



| | (g) | Property, plant and equipment -
| | --- | -------------------------------

The property, plant and equipment,
is stated at cost, net of accumulated depreciation and accumulated impairment in value. The initial cost of an asset comprises
its purchase price or construction cost, including customs duties and non-reimbursable taxes, as well as any expense necessary
to put such asset into operation, the initial estimates of any rehabilitation obligation and, in the case of qualifying assets,
the cost of debt and any expense directly attributable to bringing the asset into operation. The capitalized value of leasing is
included in this caption.



Depreciation -

Unit-of-production method

Depreciation and amortization
of assets whose useful life is higher than the life of mine, is calculated base on a unit-of-production basis over the economically
recoverable reserves of the mine, except in the case of assets whose useful life is shorter, in which case the straight-line method
is applied.



The units of production are measured
in recoverable metric tons of concentrate. The unit-of-production rate for the depreciation and amortization takes into account
expenditures incurred to date.



Straight-line method

Depreciation of assets whose useful
life is less than the mining unit life is calculated under the straight-line method of accounting considering the lower of estimated
useful lives of the asset or useful life of the mining unit. The useful lives are the following:



|                                  |  | Years           
|--------------------------------- |  | ----------------
|                                  |  |                 
|Buildings, construction and other |  | Between 6 and 20
|Machinery and equipment           |  | Between 5 and 10
|Transportation units              |  | 5               
|Furniture and fixtures            |  | 10              
|Computer equipment                |  | 4               



An item of property, plant and
equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or
loss arising from derecognizing an asset (calculated as the difference between the proceeds from the sale and the book value of
the asset) is included in the consolidated income statement in the year the asset is derecognized.



The asset’s residual value,
useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.



F-32







Notes to the consolidated financial statements (continued)



Major maintenance and repairs
-

Expenses on major maintenance
refits or repairs comprise the cost of replacement assets or parts of assets and overhaul costs. The expense is capitalized when
an asset or part of an asset that was depreciated separately is replaced and eliminated from the books and it is probable that
the future economic benefits associated with such asset or part of an asset will flow to the Company during an additional period
of useful life.



When the replaced part of the
assets was not considered separately as a component, replacement value is used in order to estimate the book value of the assets
replaced, which is immediately written off.



| | (h) | Mining rights and concessions -
| | --- | -------------------------------

Mining rights are presented as
part of the “Mining rights, development costs, property, plant and equipment, net” correspond to the mineral reserves
and acquisitions of mining concessions allocated as part of the cost of non controlling interest acquisition that took place before
transition date to IFRS. Mining rights are capitalized in the consolidated statement of financial position, and represent the Company’s
ownership of mining properties that contain the mineral reserves acquired.



Mining concessions are depreciated
starting from the production phase following the units-of-production method based on proven and probable reserves. In the event
that the Company abandons these concessions, the costs associated are written off in the consolidated income statement.



At the end of each year, the Company
assesses each mining unit to see whether there is any indication of that the value of its mining rights has been impaired. If such
indication exists, the Company estimates the recoverable amount of the assets. See note 2.2(f).



| | (i) | Exploration and mine development costs -
| | --- | ----------------------------------------

Exploration costs are charged
to expense as incurred. These costs primarily include costs for material and fuels used in exploration, costs of topographical
surveys, drilling costs and payments made to contractors. When the Company determines that a mineral property can be economically
developed by establishing the existence of proved and probable reserves, the costs incurred to develop the property, including
the costs incurred to further delineate the ore body and remove topsoil, rocks and other mineral waste to initially expose the
ore body are capitalized. Mine development costs are amortized using the units-of-production method, based on proven and probable
reserves.



Development costs at the production
phase are charged to expense as incurred.



F-33







Notes to the consolidated financial statements (continued)



| | (j) | Deferred stripping costs -
| | --- | --------------------------

Stripping costs incurred in the
development of a mine before production commences are capitalized as part of the cost of constructing the mine and subsequently
amortized over the life of the mine on a units-of-production basis.



Where a mine operates several
open pits that are regarded as separate operations for the purpose of mine planning, stripping costs are accounted for separately
by reference to the ore from each separate pit. If, however, the pits are highly integrated for the purpose of the mine planning,
the second and subsequent pits are regarded as extensions of the first pit in accounting for stripping costs. In such cases, the
initial stripping, (i.e. overburden and other waste removal) of the second and subsequent pits is considered to be production phase
stripping relating to the combined operation.

Deferred stripping cost is included
in “Mining rights, development costs, property, plant and equipment, net” caption in the consolidated statement of
financial position. These form part of the total investment in the relevant cash generating units, which are reviewed for impairment
if events or changes of circumstances indicate that the carrying value may not be recoverable.



| | (k) | Financial liabilities -
| | --- | -----------------------

Initial recognition and measurement
-

Financial liabilities within the
scope of IAS 39 are classified as: financial liabilities at fair value through profit or loss, loans or as derivatives designated
as hedging instruments, as relevant.



The Company determines the classification
of its financial liabilities at initial recognition. All financial liabilities are recognized initially at fair value, plus directly
attributable transaction costs, except in the case of loans, which are recognized initially at the fair value of the cash received,
less any costs directly attributable to the transaction.



The Company’s financial
liabilities include trade accounts payable, other liabilities, derivative financial instruments, financial obligation and embedded
derivative for purchase and sale of concentrates.



Subsequent measurement -

The subsequentmeasurement
of financial liabilities depends on their classification, as detailed below:



F-34







Notes to the consolidated financial statements (continued)



Financial liabilities at fair
value through profit or loss -

Financial liabilities at fair
value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition
as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are acquired for the
purpose of selling in the near term. This category includes derivative financial instruments entered into by the Company that are
not designated as hedging instruments as defined in IAS 39. Separated embedded derivatives are also classified as held for trading
unless they are designated as cash-flow hedging instruments. Any gains or losses on liabilities held for trading are recognized
in the consolidated income statement. Except for the embedded derivative for sales of concentrates, the Company has not designated
any financial liability at fair value through profit or loss.



Interest-bearing loans and
borrowing -

After their initial recognition,
interest-bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate (EIR) method.
Any profit or loss is recognized in the consolidated income statement when the liability is terminated, as well as through the
process of amortizing the effective interest rate. Amortized costs are calculated taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the effective interest rate. Amortization of the effective interest
rate is included in financial cost in the consolidated income statement.



Derecognition of financial
liabilities -

A financial liability is derecognized
when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced
by another one from the same lender on substantially different terms, or the terms are substantially modified, such replacement
or amendment is treated as a derecognitionof the original liability and the recognition of a new liability, and the difference
in the respective carrying amount is recognized in the consolidated income statement.



| | (l) | Leases -
| | --- | --------

The determination of whether an
arrangement is, or contains, a lease is based on the substance of the agreement on its inception date. It requires consideration
as to whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys
a right to use the asset. A reassessment is made after inception of the lease if one of the following applies:



| | (i) | There is a change in the contractual terms, other than a renewal or extension of the arrangement.
| | --- | -------------------------------------------------------------------------------------------------

| | (ii) | A renewal option is exercised or extension granted, unless the term of the renewal or extension was initially included in the
lease term.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------

| | (iii) | There is a change in the determination of whether fulfillment is dependent on a specific asset; or
| | ----- | --------------------------------------------------------------------------------------------------



F-35







Notes to the consolidated financial statements (continued)



| | (iv) | There is a substantial change to the asset.
| | ---- | -------------------------------------------



Where a reassessment is made,
lease accounting shall commence or cease starting from the date when the change of circumstances gives rise to reassessment for
scenarios (i), (iii) or (iv), and at the date of the renewal or extension period for scenario (ii).



Embedded leases

All take-or-pay contracts are
reviewed for indicators of a lease on inception.



| | (m) | Share-based payments -
| | --- | ----------------------

Senior executives of the Company
are granted share appreciation rights, which can only be settled in cash. The liability for these transactions is measured at each
reporting date until settlement.



According to IFRS 2 “Share-Based
Payments”, the cost of cash-settled transactions is measured initially at fair value at the grant date using a binomial model
(see more details in note 14(c)). This fair value is expensed over the period until vesting with recognition of a corresponding
liability. The liability is re-measured at each consolidated statement of financial position date up to and including the settlement
date with changes in fair value recognized in the consolidated income statement.



| | (n) | Provisions -
| | --- | ------------

General -

Provisions are recognized when
the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Provisions are reviewed periodically and are adjusted to reflect the best estimate available as of the date of the
consolidated statement of financial position. The expense relating to any provision is presented in the consolidated income statement.
When they are significant, provisions are discounted using a current rate that reflects, where appropriate, the risks specific
to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a financial
expense.



Loss contingencies are recorded
in the consolidated financial statements when it is probable their occurrence and they can be reasonably estimated. In other case,
they are only disclosed in notes to the consolidated financial statements.



F-36







Notes to the consolidated financial statements (continued)



Contingent assets are not recognized
in the consolidated financial statements; however, they are disclosed in notes to the consolidated financial statements if it is
probable that such contingent assets will be realized.



Provision for closure of mining
units -

On initially entering the liability
for this obligation, it is posted at its fair value, offset by a greater a book value for long-lived assets related to development
costs and fixed assets.



The liability is subsequently
increased in each period to reflect the cost of interest considered in the initial estimate of fair value and, in addition, the
capitalized cost is depreciated or amortized based on the useful life of the related asset. When eliminating the liability, the
Company posts any resulting gain or loss. Changes in the fair value of the obligation or the useful life of the related asset that
arise from review of the initial estimates are recognized as an increase or decrease in the book value of the obligation and the
related assets in accordance with IAS 16 “Property, Plant and Equipment”. Any reduction in a mine closure liability
and, therefore, any reduction of the related asset, may not exceed the book value of such asset. If so, any excess over book value
is immediately transferred to the consolidated income statement.



If a change in estimate results
in an increase in the closure liability and, therefore, an addition to the asset’s book value, the Company must consider
whether or not this is an indication of impairment of the asset as a whole, and conduct impairment testing pursuant to IAS 36 “Impairment
of assets”. Furthermore, in the case of mature mines, if the revised mining assets net of the closure provisions exceed the
recoverable value, such portion of the increase is charged directly to expense. In the case of mines already closed, changes in
estimated costs are recognized immediately in the consolidated income statement. Likewise, any closure liability that arises as
a result of a mine’s production phase must be included in expenses when incurred.



| | (o) | Treasury shares -
| | --- | -----------------

The Company, through a subsidiary,
has treasury shares (common and investment shares). The nominal values of these shares are presented net of the capital stock and
investment shares amounts.



The effect of the dividends income
arising from the treasury shares held by the subsidiary are excluded for calculating the share in subsidiary and associates income
and are presented net from declared a paid dividends in the consolidated statements of changes in shareholders ́ equity.



F-37







Notes to the consolidated financial statements (continued)



| | (p) | Revenue recognition -
| | --- | ---------------------

Revenue is recognized to the extent
that it is probable that the economic benefits will flow to the Company. Revenue is measured at the fair value of the consideration
received, excluding discounts. The following specific recognition criteria must also be met before revenue is recognized:



Sales of concentrates, gold
and silver -

Revenues from sales of concentrates,
gold and silver are recognized when the significant risks and rewards of ownership are transferred to the buyer, and selling price
are known or can be reasonably estimated.



As far as the measurement of revenues
from the sale of concentrate, the Company assigns a provisional value to these sales, since they are subject to a final price adjustment
at the end of a contractually-set period, which normally ranges between 30 and 180 days after delivery of the concentrate to the
customer.  Exposure to changes in metals price is considered to contain an embedded derivative which is required to be separated
from the host commercial contract for accounting purposes.  At the close of each period, the sale price used initially is
adjusted in accordance with the future price for the quotation period stipulated in the contract. Adjustment of the provisional
sale value is posted as an increase or decrease in net sales.



Interest received -

Financial income is recognized
as interest accrues.



Income for engineering service
rendered -

Income for engineering service
rendered by Buenaventura Ingenieros S.A., a subsidiary of the Company, is recognized based on the progress of the current service
contracts.



Income for construction services
–

When the outcome of a contract
can be estimated reliably, contract revenue associated with the construction contract shall be recognized by reference to the stage
of completion of the contract activity at the end of the reporting period.



F-38







Notes to the consolidated financial statements (continued)



| | (q) | Borrowing costs -
| | --- | -----------------

Borrowing costs directly relating
to the acquisition, construction or production of a qualifying asset are capitalized, and added to the project’s cost until
such time as the assets are considered substantially ready for their planned use, that is to say, when they are capable of generating
commercial production. A qualifying asset is which value is higher than US$5 million and its substantial period is greater
than 12 months. Where funds are borrowed specifically to finance a project, the amount capitalized represents the actual borrowing
costs incurred. Where surplus funds are available for a short term out of money borrowed specifically to finance a project, the
income generated from the temporary investment of such amounts is also capitalized and deducted from the total capitalized borrowing
cost. Where the funds used to finance a project form part of general borrowings, the amount capitalized is calculated using a weighted
average of rates applicable to relevant general borrowings of the Company during the period. All other borrowing costs are recognized
in the consolidated income statement in the period in which they are incurred.



| | (r) | Income tax –
| | --- | ------------

Current taxes –

Income tax

Income Tax for the current period
are measured based on the separate financial statements of Buenaventura and each subsidiary in Nuevos Soles and for the amount
expected to be paid to the tax authorities. The rates and laws used to compute the amount are those in force as of the date of
the consolidated statement of financial position.



Current income tax relating to
items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not
in the consolidated income statement. Management periodically evaluates positions taken in the tax returns with respect to situations
in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.



Mining Royalties and Special
Mining Tax

Mining Royalties and Special Mining
Tax are accounted for under IAS 12 “Income tax” when they have the characteristics of an income tax. This is considered
to be the case when they are imposed under government authority and the amount payable is based on revenues less expenses after
adjustments for temporary differences, rather than based on quantity produced or as a percentage of revenue. Tax rates and tax
laws used to compute the amount are those that have been enacted by the end of the reporting period as of the date of the consolidated
statement of financial position.



| |  | Therefore, payments made by the Company to government authority as Mining Royalties and Special Mining Tax are in the scope
of IAS 12 and be considered as income tax. Both, Mining Royalties and Special Mining Tax generated deferred assets and liabilities
which should be measured using average rates that have to be applied to operating income in those quarters in which the Company
expects to reverse the temporary differences.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-39







Notes to the consolidated financial statements (continued)



Deferred tax



The income tax, mining royalties
and special mining tax for future periods are recognized using the liability method, considering the temporary differences between
the taxes and accounting bases of assets and liabilities as of the date of the consolidated statement of financial position.



Deferred income tax liabilities
are recognized for all taxable temporary differences, except for taxable temporary differences associated with investments in subsidiaries
and associates where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will reverse in the foreseeable future.



All deductible temporary differences
and loss carryforwards generate the recognition of deferred assets to the extent that it is probable that they can be used in calculating
taxable income in future years. Deferred income tax liabilities are recognized for all deductible temporary differences and tax
loss carry-forwards, to the extent that is probable that taxable profit will be available against which the deductible temporary
differences and unused tax losses can be utilized.



The carrying amount of the deferred
income tax assets is reviewed at each consolidated statement of financial position date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred asset to be utilized. Unrecognized
deferred assets are reassessed at each consolidated statement of financial position date.



Deferred tax relating to items
recognized outside profit or loss is recognized outside profit and loss. Deferred tax items are recognized in correlation to the
underlying transaction either in other comprehensive income or directly in equity.



Deferred assets and liabilities
are offset if there is a legal right to set them off and the taxes deferred relate to the same entity and the same tax authority.



| | (s) | Derivative financial instruments -
| | --- | ----------------------------------

Embedded derivative

Derivatives embedded in host contracts
are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely
related to those of the host contracts and the host contracts are not held for trading or designated at fair value though profit
or loss. These embedded derivatives are measured at fair value with changes in fair value recognized in profit or loss.



F-40







Notes to the consolidated financial statements (continued)



Derivatives designated as hedging
instruments -

El Brocal subsidiary uses derivative
instruments to manage its exposure to changes in metals prices. In order to manage special risks, El Brocal applies hedge accounting
for those transactions that meet the specific criteria applicable.



At the inception date of the hedge
relation, El Brocal formally documents the relationship between the item hedged and the hedging instrument, including the nature
of the risk, the objective and the strategy to be taken to carry out the hedging, and the method to be used to estimate the effectiveness
of the hedge relation.



A formal assessment is made upon
beginning the hedge relation, to assure that the hedging instrument is highly effective in offsetting the risk designated in the
item hedged. Hedges are formally assessed every half. A hedge is considered as highly effective if it is expected that the changes
in cash flow attributed to the risk hedged during the period for which the hedge is designated are offset within a range from 80
to 125 percent.



All the hedges maintained by the
Company classifies as cash flow hedges, as consequence, any gain or loss from the effective portion of the hedging instrument is
initially recognized in the consolidated statement of changes in shareholders’ equity in the “Other reserves of equity”
caption. Any gain or loss from the ineffective portion of the hedging instrument is initially recognized in the consolidated income
statement in the “Interest expenses” caption. Amounts recognized as equity transaction are transferred to the income
statement when the hedge transaction affects profit or loss, such as when a forecast sale occurs and is posted in the “Net
sales” caption of the consolidated income statement.



As of December 31, 2011,
El Brocal subsidiary had contracted derivative instruments on metals quotes under the Asian swap and collar option modes that qualify
as cash-flow hedging instruments. As of December 31, 2012, El Brocal does not have hedging financial instruments.



Current versus non-current
classification -

Derivative instruments that are
not designated as hedging instruments are classified as current or non-current, or are separated into a current and a non-current
portion based on an assessment of the facts and circumstances (for example, the underlying cash flows).



F-41







Notes to the consolidated financial statements (continued)



Embedded derivatives that are not closely related
to the main contract are classified consistently with the cash flows of the host contract.



Derivative instruments designated
as hedging instruments are classified in accordance with the classification of the underlying element hedged. The derivative instrument
is separated into a current and a non-current portion only if a reliable allocation can be made.



As of December 31, 2012,
the Company has not have instruments that qualify as hedging. As of December 31, 2011, the Company held those instruments
(see note 27).



| | (t) | Impairment of non financial instruments -
| | --- | -----------------------------------------



The Company assesses at each reporting
date whether there is an indication that an asset, determined by each individual asset (cash-generating unit) may be impaired.



A cash-generating unit is the
smallest identifiable group of assets, denominated a mining unit, that generates cash inflows from continuing use that are independent
of the cash inflow generated by other assets or groups of assets. In order to determine cash-generating units, the Company has
determined whether there is an active market for the minerals and metals produced by a mining unit.



Impairment losses are recognized
in the consolidated statement of income in those expense categories consistent with the function of the impaired asset. A previously
recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable
amount since the last impairment loss was recognized. The increased amount cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized
in the consolidated income statement.



| | (u) | Basic and diluted earnings per share -
| | --- | --------------------------------------

Basic and diluted earnings per
share have been calculated based on the weighted average number of common and investment shares outstanding at the date of the
consolidated statement of financial position; treasury shares have been excluded from the calculation. When the number of shares
is modified as a result of capitalization of retained earnings, share splits or share grouping, the net income per basic and diluted
shares is adjusted retroactively for all of the periods reported. If the change occurs after the date of the consolidated financial
statements, but before the financial statement are authorized for issue, the calculation of net income per basic and diluted share
for all of the reported periods must be based on the new number of shares, see note 25.



F-42







Notes to the consolidated financial statements (continued)



| | (v) | Workers’ profit sharing -
| | --- | -------------------------

The workers’ profit sharing
is calculated according to law in force at today (Legislative Decree No. 892) over the same taxable net basis used to calculate
the income tax. For the Company’s case, the workers’ profit sharing rate is 8% over the taxable net base of current
year. According to Peruvian Law the limit in the workers’ profit sharing that an employee would receive is equivalent to
18 monthly wages. According to the article 3 of Law No. 28756 (and its regulation law), it has been established that excess
amounts above such limit will be transferred to the “National Found for Employment’s Promotion and Training (“FONDOEMPLEO”,
by its Spanish acronym)”. Such funds are used for workers training, employment promotion and public investment projects.
The excess amount is retained and paid by the Company to the Peruvian government entities (FONDO EMPLEO and regional government).



The Company recognizes the current
portion of workers’ profit sharing paid directly to them according to the IAS 19 “Employees Benefits” approach,
considering them as benefits are all forms of consideration given by an entity in exchange for service rendered by employees. As
a consequence, the Company recognized the workers’ profit sharing as cost or expenses, according to their duties or function.



In the periods in which the excess
over the 18 wages limit arises, the Company considers this as part to the contributions made by the Company to the Government (FONDOEMPLEO)
related to the workers’ profit sharing. This is classified as operating expenses in the consolidated income statement.



| | (w) | Segments –
| | --- | ----------

| |  | An operating segment is a component of an entity: (i) that engages in business activities from which it may earn revenues
and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), (ii) whose
operating results are regularly reviewed by the Company ́s Management to make decisions about resources to be allocated to
the segment and assess its performance, and (iii) for which discrete financial information is available. See note 26.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.4. | Reclassifications to the consolidated financial statements of prior years -
| | ---- | ---------------------------------------------------------------------------



As of December 31, 2012, the
Company made the following reclassifications in its consolidated financial statements for the year ended on December 31, 2011:



F-43







Notes to the consolidated financial statements (continued)



| | - | In the consolidated statement of cash flows, US$164,924,000 from the net sale of investment shares to non-controlling interest
(see note 1 (f)), was reclassified from cash flows related to investment activities to cash flows related financing activities.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.5. | New International Financial Reporting Standards (IFRS) internationally issued but not effective on the issuance date of the
consolidated financial statements -
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

Improvements and interpretations issued as of December 31,
2012, include the following:



Effective the year 2012 –

There were no new standards and interpretations that
were applicable to the Company for 2012.



Effective as from January 1, 2013 -

| | - | IAS 1, Presentation of Financial Statements, effective for annual periods beginning on July 1, 2012. The amendments to
IAS 1 change the grouping of items presented in the statement of comprehensive income.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IAS 27, Separate Financial Statements (revised in 2011), effective for annual periods beginning on January 1, 2013. As
a consequence of the new IFRS 10 and IFRS 12, what remains in IAS 27 is limited to accounting for subsidiaries, joint arrangements
and associates in separate financial statements.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IAS 28, Investments in associates and joint ventures (revised in 2011), effective for annual periods beginning on January 1,
2013. As a consequence of the new IFRS 11 and IFRS 12, IAS 28 Investments in Associates and Joint Ventures, describes the application
of the equity method to investments in joint ventures in addition to associates.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 9, “Financial Instruments”, effective January 1,
2015, modifies the treatment and classification of financial assets established by IAS 39, “Financial Instruments: Recognition
and Measurement”.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 10, “Consolidated Financial Statements”, effective
January 1, 2013, replaces the consolidation requirements in SIC-12, “Consolidation—Special Purpose Entities”
and IAS 27, “Consolidated and Separate Financial Statements”.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 11, “Joint Arrangement”, effective January 1,
2013, addresses inconsistencies in the reporting of joint arrangements by requiring a single method to account for interests in
jointly controlled entities. The guidance focuses on the rights and obligations of the joint arrangement, rather than its legal
form (as is currently the case).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-44







Notes to the consolidated financial statements (continued)



| | - | IFRS 12, “Disclosure of Interests in Other Entities”,
effective January 1, 2013, is a new and comprehensive standard on disclosure requirements for all forms of interests in other
entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 13, “Fair Value Measurement”, effective January 1,
2013, defines fair value, sets out a framework for measuring fair value and requires disclosures about fair value measurements.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRIC 20, “Stripping Costs in the Production Phase of a Surface
Mine”, effective January 1, 2013, clarifies when the stripping cost in the production phase should be recognized as
an asset and how that asset should be measured, both initially and in subsequent periods.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Annual improvements to IFRS (issued in May 2012)
-



| | - | IAS 1, Presentation of Financial Statements, clarifies the difference between voluntary annual comparative information and
the minimum required of comparative period is the previous period.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IAS 16, Property, Plant and Equipment, clarifies that major spare parts and servicing equipments that meet the definition of
property, plant and equipment are not inventories.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IAS 32, Financial Instruments: Presentation, clarifies that income taxes arising from distributions to equity holders are accounted
for in accordance with IAS 12.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



Such improvements are effective for annual periods
beginning on or after January 1, 2013.



Although Management does not believe
the new pronouncements will have a significant impact on the Company, Management is currently evaluating their impact, if any,
on the Company’s consolidated financial statements for 2013.



| | 3. | Transactions in Nuevos Soles
| | -- | ----------------------------



Transactions in Nuevos Soles are completed using
exchange rates published by the Superintendent of Banks, Insurance and AFP. As of December 31, 2012, the exchange rates for
U.S. dollars published by this Institution were US$0.3923 for buying and US$0.3920 for selling (US$0.3711 for buying and US$0.3708
for selling as of December 31, 2011) and have been applied for the assets and liabilities accounts, respectively.



F-45







Notes to the consolidated financial statements (continued)



As of December 31, 2012 and 2011, the Company
had the following assets and liabilities denominated in Nuevos Soles:



|                          |  | 2012     |          |   | 2011     | 
|------------------------- |  | -------- | -------- | - | -------- | 
|                          |  | S/.(000) |          |   | S/.(000) | 
|                          |  |          |          |   |          | 
|Asset                     |  |          |          |   |          | 
|Cash and cash equivalents |  |          | 23,744   |   |          | 
|Other accounts receivable |  |          | 54,331   |   |          | 
|Prepaid expenses          |  |          | 2,484    |   |          | 
|                          |  |          | 80,559   |   |          | 
|Liabilities               |  |          |          |   |          | 
|Trade accounts payable    |  |          | (125,601 | ) |          | 
|Other accounts payable    |  |          | (129,624 | ) |          | 
|Provisions                |  |          | (40,908  | ) |          | 
|                          |  |          | (296,133 | ) |          | 
|                          |  |          |          |   |          | 
|Liability position, net   |  |          | (215,574 | ) |          | 



| | 4. | Cash and cash equivalents
| | -- | -------------------------

(a)	The
table below presents the components of this caption:



|                                                                   |  | 2012     |         |  | 2011     | 
|------------------------------------------------------------------ |  | -------- | ------- |  | -------- | 
|                                                                   |  | US$(000) |         |  | US$(000) | 
|                                                                   |  |          |         |  |          | 
|Cash                                                               |  |          | 1,017   |  |          | 
|Bank accounts                                                      |  |          | 67,695  |  |          | 
|Time deposits (b)                                                  |  |          | 118,000 |  |          | 
|Cash balances included in the consolidated statement of cash flows |  |          | 186,712 |  |          | 
|Time deposits with original maturity greater than 90 days (c)      |  |          | -       |  |          | 
|                                                                   |  |          |         |  |          | 
|                                                                   |  |          | 186,712 |  |          | 



F-46







Notes to the consolidated financial statements (continued)



| | (b) | The table below presents the components of time deposits as of December 31, 2012:
| | --- | ---------------------------------------------------------------------------------



|Currency     |  | Original maturities |  | Annual interest rate |  |          |        
|------------ |  | ------------------- |  | -------------------- |  | -------- | -------
|             |  |                     |  | %                    |  | US$(000) |        
|             |  |                     |  |                      |  |          |        
|U.S. dollars |  | From 5 to 13 days   |  | From 1.3 to 1.70     |  |          | 118,000
|             |  |                     |  |                      |  |          |        
|             |  |                     |  |                      |  |          | 118,000



The table below presents the components
of time deposits as of December 31, 2011:



|Currency     |  | Original maturities |  | Annual interest rate |  |          |        
|------------ |  | ------------------- |  | -------------------- |  | -------- | -------
|             |  |                     |  | %                    |  | US$(000) |        
|             |  |                     |  |                      |  |          |        
|U.S. dollars |  | From 5 to 63 days   |  | From 0.50 to 1.42    |  |          | 381,000
|Nuevos Soles |  | From 42 to 90 days  |  | From 4.05 to 4.35    |  |          | 17,056 
|             |  |                     |  |                      |  |          |        
|             |  |                     |  |                      |  |          | 398,056



| | (c) | As of December 31, 2011, it mainly corresponds to time deposits maintained by El Brocal and Buenaventura Ingenieros S.A.:
| | --- | -------------------------------------------------------------------------------------------------------------------------



|Currency     |  | Original maturities  |  | Annual interest rate |  |          |       
|------------ |  | -------------------- |  | -------------------- |  | -------- | ------
|             |  |                      |  | %                    |  | US$(000) |       
|             |  |                      |  |                      |  |          |       
|U.S. dollars |  | From 113 to 168 days |  | From 0.90 to 1.07    |  |          | 4,000 
|Nuevos Soles |  | From 104 to 198 days |  | From 4.10 to 4.48    |  |          | 6,121 
|             |  |                      |  |                      |  |          |       
|             |  |                      |  |                      |  |          | 10,121



| | 5. | Financial assets at fair value through profit or loss
| | -- | -----------------------------------------------------



Buenaventura’s
Management decided to invest the excess cash in mutual funds of variable income, which had been designated as financial assets
at fair value through profit or loss. According to note 2.3.(b), the Company recorded in the year 2012 an increase in the net investment
amounted to US$2,331,000 (US$2,024,000 in the year 2011), to profit and loss to take this investment at fair value as of December 31,
2012. The table below presents the components of this caption:



|                    |  | 2012     |        |  | 2011     | 
|------------------- |  | -------- | ------ |  | -------- | 
|                    |  | US$(000) |        |  | US$(000) | 
|                    |  |          |        |  |          | 
|Credifondo S.A. SAF |  |          | 54,509 |  |          | 
|                    |  |          |        |  |          | 
|                    |  |          | 54,509 |  |          | 



F-47







Notes to the consolidated financial statements (continued)



This fund is comprised by a portfolio of investments
issued by Peruvian Government and financial entities with high reputation in the local market. The outcome of the investment is
variable.



| | 6. | Trade accounts receivable, net
| | -- | ------------------------------



| | (a) | The table below presents the components of this caption:
| | --- | --------------------------------------------------------



|                                              |  | 2012     |         |   | 2011     | 
|--------------------------------------------- |  | -------- | ------- | - | -------- | 
|                                              |  | US$(000) |         |   | US$(000) | 
|                                              |  |          |         |   |          | 
|Johnson Matthey Limited                       |  |          | 80,214  |   |          | 
|Louis Dreyfus Commodities Metals              |  |          | 48,253  |   |          | 
|Glencore Peru S.A.                            |  |          | 45,014  |   |          | 
|Doe Run Peru S.R.L.                           |  |          | 16,822  |   |          | 
|MCC Non Ferrous Trading Inc.                  |  |          | 16,306  |   |          | 
|MRI Trading GMBH                              |  |          | 11,805  |   |          | 
|N.V. Umicore                                  |  |          | 8,485   |   |          | 
|Consorcio Minero S.A. – CORMIN                |  |          | 7,340   |   |          | 
|Minera Suyamarca S.A.                         |  |          | 5,045   |   |          | 
|BHL Peru S.A.C.                               |  |          | 4,927   |   |          | 
|Sumitomo Corporation of America               |  |          | 4,367   |   |          | 
|Rímac Internacional Cia. Seguros y Reaseguros |  |          | 4,210   |   |          | 
|Sudamericana Trading S.R.L.                   |  |          | 3,358   |   |          | 
|Werco Trade AG                                |  |          | 2,467   |   |          | 
|Andina Trade S.A.C.                           |  |          | 2,458   |   |          | 
|Traxys Peru S.A.C.                            |  |          | 2,002   |   |          | 
|MK Metal Trading GMBH                         |  |          | 1,794   |   |          | 
|Sinclair Knight Merz S.A.C.                   |  |          | 1,255   |   |          | 
|Compañía Minera Ares S.A.C.                   |  |          | 1,251   |   |          | 
|MR Trading AG                                 |  |          | 1,080   |   |          | 
|Transportadora Callao S.A.                    |  |          | 836     |   |          | 
|Hudbay Peru S.A.                              |  |          | 695     |   |          | 
|Empresa Administradora Cerro S.A.             |  |          | 655     |   |          | 
|Compañía Minera Antamina S.A.                 |  |          | 294     |   |          | 
|Glencore International A.G.                   |  |          | -       |   |          | 
|Other minors                                  |  |          | 7,239   |   |          | 
|                                              |  |          | 278,172 |   |          | 
|Allowance for doubtful accounts (b)           |  |          | (21,741 | ) |          | 
|                                              |  |          |         |   |          | 
|                                              |  |          | 256,431 |   |          | 



F-48







Notes to the consolidated financial statements (continued)



The accounts receivable are denominated
in U.S. dollars, have current maturities, do not accrue interest, have no specific guarantees and are unsecured.



The aging of the trade accounts
receivable balance was as follows:



As of December 31, 2012:



|                   |  | Not impaired |         |  | Impaired |  |        | Total    | 
|------------------ |  | ------------ | ------- |  | -------- |  | ------ | -------- | 
|                   |  | US$(000)     |         |  | US$(000) |  |        | US$(000) | 
|                   |  |              |         |  |          |  |        |          | 
|Not due            |  |              | 256,431 |  |          |  | -      |          | 
|                   |  |              |         |  |          |  |        |          | 
|Due                |  |              |         |  |          |  |        |          | 
|From 1 to 120 days |  |              | -       |  |          |  | -      |          | 
|More than 120 days |  |              | -       |  |          |  | 21,741 |          | 
|                   |  |              |         |  |          |  |        |          | 
|                   |  |              | 256,431 |  |          |  | 21,741 |          | 



As of December 31, 2011:



|                   |  | Not impaired |         |  | Impaired |  |        | Total    | 
|------------------ |  | ------------ | ------- |  | -------- |  | ------ | -------- | 
|                   |  | US$(000)     |         |  | US$(000) |  |        | US$(000) | 
|                   |  |              |         |  |          |  |        |          | 
|Not due            |  |              | 172,569 |  |          |  | -      |          | 
|                   |  |              |         |  |          |  |        |          | 
|Due                |  |              |         |  |          |  |        |          | 
|From 1 to 120 days |  |              | -       |  |          |  | -      |          | 
|More than 120 days |  |              | -       |  |          |  | 21,741 |          | 
|                   |  |              |         |  |          |  |        |          | 
|                   |  |              | 172,569 |  |          |  | 21,741 |          | 



In the process of estimating the
allowance for doubtful accounts, the Company’s Management constantly evaluates market conditions, for which it uses analysis
of aging and risk-rating reports for commercial operations.



| | (b) | The allowance for doubtful accounts had no movement during 2012, 2011 and 2010. In the opinion of the Company’s Management,
the allowance for doubtful accounts is sufficient to cover the risk of non-performance as of the consolidated financial position
date.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-49







Notes to the consolidated financial statements (continued)



| | 7. | Other accounts receivable
| | -- | -------------------------



| | (a) | The table below presents the components of this caption:
| | --- | --------------------------------------------------------



|                                         |  | 2012     |         |   | 2011     | 
|---------------------------------------- |  | -------- | ------- | - | -------- | 
|                                         |  | US$(000) |         |   | US$(000) | 
|                                         |  |          |         |   |          | 
|Value added tax credit                   |  |          | 52,655  |   |          | 
|Income tax credit                        |  |          | 24,629  |   |          | 
|Other accounts receivable to contractors |  |          | 16,993  |   |          | 
|Advances to suppliers                    |  |          | 13,929  |   |          | 
|Loans to employees                       |  |          | 1,421   |   |          | 
|Loans to third parties                   |  |          | 725     |   |          | 
|Other advances to employees              |  |          | 662     |   |          | 
|Claims to third parties                  |  |          | 580     |   |          | 
|Warrant deposits                         |  |          | 363     |   |          | 
|Interest receivable, other               |  |          | 47      |   |          | 
|Mining royalty credit                    |  |          | -       |   |          | 
|Valued added tax claimed                 |  |          | -       |   |          | 
|Other accounts receivable                |  |          | 3,266   |   |          | 
|                                         |  |          | 115,270 |   |          | 
|Less – Non current portion               |  |          |         |   |          | 
|Value added tax credit                   |  |          | (6,695  | ) |          | 
|Other minors                             |  |          | (7      | ) |          | 
|                                         |  |          | (6,702  | ) |          | 
|                                         |  |          |         |   |          | 
|Current portion                          |  |          | 108,568 |   |          | 



| | 8. | Inventory, net
| | -- | --------------



| | (a) | The table below presents the components of this caption:
| | --- | --------------------------------------------------------



|                                                   |  | 2012     |         |   | 2011     | 
|-------------------------------------------------- |  | -------- | ------- | - | -------- | 
|                                                   |  | US$(000) |         |   | US$(000) | 
|                                                   |  |          |         |   |          | 
|Finished goods                                     |  |          | 31,163  |   |          | 
|Products in process (b)                            |  |          | 148,533 |   |          | 
|Spare parts and supplies                           |  |          | 42,552  |   |          | 
|                                                   |  |          | 222,248 |   |          | 
|Provision for impairment of value of inventory (f) |  |          | (3,244  | ) |          | 
|                                                   |  |          | 219,004 |   |          | 
|Less non-current portion (b)                       |  |          | (55,937 | ) |          | 
|                                                   |  |          |         |   |          | 
|Current portion                                    |  |          | 163,067 |   |          | 



F-50







Notes to the consolidated financial statements (continued)



| | (b) | The products in process include the following:
| | --- | ----------------------------------------------



|                              |  | 2012     |         |   | 2011     | 
|----------------------------- |  | -------- | ------- | - | -------- | 
|                              |  | US$(000) |         |   | US$(000) | 
|                              |  |          |         |   |          | 
|Classified mineral (c)        |  |          | 69,149  |   |          | 
|Leach platform (d)            |  |          | 35,885  |   |          | 
|Ore cyanidation process       |  |          | 21,044  |   |          | 
|Activated coal (e)            |  |          | 16,269  |   |          | 
|Current mineral               |  |          | 4,344   |   |          | 
|Other                         |  |          | 1,842   |   |          | 
|                              |  |          |         |   |          | 
|                              |  |          | 148,533 |   |          | 
|Less non-current position (e) |  |          | (55,937 | ) |          | 
|                              |  |          |         |   |          | 
|Current position              |  |          | 92,596  |   |          | 



| | (c) | The table below presents the detail of long-term inventory which corresponds to classified mineral that is kept in Tajo Norte
deposit field by the subsidiary El Brocal:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                             |  | 2012     |        |  | 2011 | 
|---------------------------- |  | -------- | ------ |  | ---- | 
|                             |  | US$(000) |        |  | DMT  | 
|                             |  |          |        |  |      | 
|Classified mineral           |  |          |        |  |      | 
|Type II (copper mineral)     |  |          | 3,672  |  |      | 
|Type III (lead/zinc mineral) |  |          | 65,477 |  |      | 
|Total                        |  |          | 69,149 |  |      | 
|                             |  |          |        |  |      | 
|Non-current portion          |  |          | 55,937 |  |      | 
|                             |  |          |        |  |      | 
|Current portion              |  |          | 13,212 |  |      | 



As part of the mining unit preparation
to extract and treat mineral to a 18,000 DMT/per day, El Brocal ́s Management decided to accumulate the material with metal
content in stock nearby to Tajo Norte in order to be treated when the expansion operation plant, which is estimated to be in the
first semester of 2013.



El Brocal ́s Management assessed
the recoverability of its inventories in process based on the cash flow projections obtained by the production and sale of the
different minerals. As of December 31, 2012 and 2011 Management has a plan to treat mineral in stock when the expansion operation
plan finish, mentioned before, including the future costs of treatment and finishing, based on this plan these products will be
recovery through trading.



F-51







Notes to the consolidated financial statements (continued)



| | (d) | It includes gold content of mineral deposited in leach platforms, whose recovery is achieved through its exposure to acid sulphuric
solutions (leaching) and subsequent transfer to the electro-winning plant to produce gold bars. The recovery factor of ounces of
gold contained in leach is estimated based upon metallurgical assays performed on the material treated.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | Activated coal is related to granules of precious metals with crushed coconut shell which are the result of the gold and silver
recovery method through cyanide saturated solutions. This material is available for the next precious metals recovery process.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | The provision for impairment of value of inventory had the following movement during the years 2012, 2011 and 2010:
| | --- | -------------------------------------------------------------------------------------------------------------------



|                                                     |  | 2012     |       |   | 2011     |  |        | 2010     | 
|---------------------------------------------------- |  | -------- | ----- | - | -------- |  | ------ | -------- | 
|                                                     |  | US$(000) |       |   | US$(000) |  |        | US$(000) | 
|                                                     |  |          |       |   |          |  |        |          | 
|Opening balance                                      |  |          | 3,053 |   |          |  | 5,091  |          | 
|Provision for impairment of finished goods, note 19  |  |          | 212   |   |          |  | 383    |          | 
|Reversal of provision                                |  |          | (21   | ) |          |  | (2,413 | )        | 
|Provision for impairment of spare parts and Supplies |  |          | -     |   |          |  | -      |          | 
|Write-offs                                           |  |          | -     |   |          |  | (8     | )        | 
|                                                     |  |          |       |   |          |  |        |          | 
|Ending balance                                       |  |          | 3,244 |   |          |  | 3,053  |          | 



In the opinion of Company’s
Management, the provision for impairment of value of inventory adequately covers this risk as of the date of the consolidated statement
of financial position.



| | 9. | Investments in associates
| | -- | -------------------------

| |     |                                                         
| | --- | --------------------------------------------------------
| | (a) | The table below presents the components of this caption:



|                                         |  | Share in shareholders’ equity |       |  | Amount | 
|---------------------------------------- |  | ----------------------------- | ----- |  | ------ | 
|                                         |  | 2012                          |       |  | 2011   | 
|                                         |  | %                             |       |  | %      | 
|Investments held under the equity method |  |                               |       |  |        | 
|Minera Yanacocha S.R.L. (d) and (e)      |  |                               | 43.65 |  |        | 



F-52







Notes to the consolidated financial statements (continued)



|                                                    |  | Share in shareholders’ equity |        |  | Amount | 
|--------------------------------------------------- |  | ----------------------------- | ------ |  | ------ | 
|                                                    |  | 2012                          |        |  | 2011   | 
|                                                    |  |                               |        |  |        | 
|Sociedad Minera Cerro Verde S.A.A. (c), (e) and (h) |  |                               | 19.584 |  |        | 
|Canteras del Hallazgo S.A.C. (g)                    |  |                               | 49.00  |  |        | 
|Compañía Minera Coimolache S.A. (f)                 |  |                               | 40.095 |  |        | 
|Available-for-sale investments                      |  |                               |        |  |        | 
|Other                                               |  |                               |        |  |        | 
|                                                    |  |                               |        |  |        | 
|                                                    |  |                               |        |  |        | 



| | (b) | The table below presents the net share in results of associates:
| | --- | ----------------------------------------------------------------



|                                       |  | 2012     |         |  | 2011     |  |         | 2010     | 
|-------------------------------------- |  | -------- | ------- |  | -------- |  | ------- | -------- | 
|                                       |  | US$(000) |         |  | US$(000) |  |         | US$(000) | 
|                                       |  |          |         |  |          |  |         |          | 
|Minera Yanacocha S.R.L. (c)            |  |          | 272,851 |  |          |  | 279,726 |          | 
|Sociedad Minera Cerro Verde S.A.A. (c) |  |          | 151,201 |  |          |  | 208,659 |          | 
|Compañía Minera Coimolache S.A.C. (f)  |  |          | 40,187  |  |          |  | 9,648   |          | 
|Canteras del Hallazgo S.A.C. (g)       |  |          | -       |  |          |  | (29,670 | )        | 
|                                       |  |          |         |  |          |  |         |          | 
|                                       |  |          | 464,239 |  |          |  | 468,363 |          | 



| | (c) | The investments held in Yanacocha (a gold mine located in Cajamarca, Peru), through Compañía Minera Condesa S.A.,
and Cerro Verde (a copper mine located in Arequipa, Peru), represent the Company’s most significant investments. The share
in their results has been significant in relation to the Company’s net earnings in 2012, 2011 and 2010.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Yanacocha is developing the Conga project, which consists of two gold-copper porphyry deposits located northeast of the Yanacocha
operating area in the provinces of Celendín, Cajamarca and Hualgayoc. As of April 17, 2012, the independent experts
hired by Peruvian Government, issued the international report on water component of the environmental impact study for Conga mining
project, which validates essentially the environmental impact study approved in 2010 and includes recommendations for improvement.
On June 22, 2012, Yanacocha ́s Management has approved the recommendations made by independent experts. As a result,
Yanacocha’s Management has reprogrammed the development activities, focusing on recommended water sustainability activities.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-53







Notes to the consolidated financial statements (continued)



| | (e) | In order to calculate the investment amount and share in the result of Minera Yanacocha S.R.L. (hereinafter “Yanacocha”)
and Sociedad Minera Cerro Verde S.A.A. (hereinafter “Cerro Verde”), the Company had used the following information:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e.1) | Yanacocha -
| | ----- | -----------

Yanacocha issues financial statements
under Generally Accepted Accounting Principles in Peru and also under U.S. GAAP for its parent. There were no significant differences
between US GAAP and Peruvian GAAP for Yanacocha.



As part of the adoption to IFRS,
in 2011, the Company assessed the significant differences in Yanacocha ́s financial statements between U.S. GAAP and IFRS
and prepared a reconciliation of equity net as of December 31, 2012, 2011 and 2010 and the net income in the years 2012, 2011
and 2010 prepared under U.S. GAAP and IFRS in order to calculate its investment and participation under IFRS in Yanacocha to these
dates.



The table below presents the principal
amounts under U.S. GAAP as of December 31, 2012, 2011 and 2010.



|                                |  | Yanacocha |          
|------------------------------- |  | --------- | ---------
|                                |  | 2012      |          
|                                |  | US$(000)  |          
|Statement of financial position |  |           |          
|Total assets                    |  |           | 4,541,535
|Total liabilities               |  |           | 970,845  
|Shareholders’ equity            |  |           | 3,570,690
|                                |  |           |          
|Results                         |  |           |          
|Total income                    |  |           | 2,201,815
|Operating income                |  |           | 982,367  
|Net income                      |  |           | 626,540  



The table below presents the reconciliation
of the shareholders ́ equity prepared under U.S. GAAP with those prepared under IFRS prepared by the Company ́s Management
as of December 31, 2012 and 2011, and net income as of December 31, 2012, 2011 and 2010:



F-54







Notes to the consolidated financial statements (continued)



|                                                                           |  | 2012     |           |   | 2011     |  |           | 2010     | 
|-------------------------------------------------------------------------- |  | -------- | --------- | - | -------- |  | --------- | -------- | 
|                                                                           |  | US$(000) |           |   | US$(000) |  |           | US$(000) | 
|                                                                           |  |          |           |   |          |  |           |          | 
|Shareholders ́equity under U.S. GAAP                                        |  |          | 3,570,691 |   |          |  | 2,943,022 |          | 
|                                                                           |  |          |           |   |          |  |           |          | 
|Reversal of deferred workers ́ profit sharing                               |  |          | 19,800    |   |          |  | 16,979    |          | 
|Deemed cost of property, plant and equipment                               |  |          | 17,130    |   |          |  | 21,084    |          | 
|Deferred income tax for IFRS adjustments                                   |  |          | (9,661    | ) |          |  | (10,971   | )        | 
|Valuation of inventories                                                   |  |          | (3,123    | ) |          |  | (1,494    | )        | 
|                                                                           |  |          |           |   |          |  |           |          | 
|Shareholders ́equity under IFRS                                             |  |          | 3,594,837 |   |          |  | 2,968,620 |          | 
|                                                                           |  |          |           |   |          |  |           |          | 
|Net income under U.S. GAAP                                                 |  |          | 626,540   |   |          |  | 642,387   |          | 
|                                                                           |  |          |           |   |          |  |           |          | 
|Deferred income tax                                                        |  |          | 4,131     |   |          |  | (376      | )        | 
|Increased of depreciation for deemed cost of property, plant and equipment |  |          | (3,954    | ) |          |  | (6,985    | )        | 
|Valuation of inventories                                                   |  |          | (1,629    | ) |          |  | 5,813     |          | 
|                                                                           |  |          |           |   |          |  |           |          | 
|Net income under IFRS                                                      |  |          | 625,088   |   |          |  | 640,839   |          | 



| | (e.2) | Cerro Verde
| | ----- | -----------



The table below presents the principal
amounts in Cerro Verde as of December 31, 2012, 2011 and 2010 under IFRS.



|                                |  | 2012     |           |  | 2011     |  |           | 2010     | 
|------------------------------- |  | -------- | --------- |  | -------- |  | --------- | -------- | 
|                                |  | US$(000) |           |  | US$(000) |  |           | US$(000) | 
|                                |  |          |           |  |          |  |           |          | 
|Statement of financial position |  |          |           |  |          |  |           |          | 
|Total assets                    |  |          | 4,042,771 |  |          |  | 3,196,597 |          | 
|Total liabilities               |  |          | 593,063   |  |          |  | 518,959   |          | 
|Shareholders’ equity            |  |          | 3,449,708 |  |          |  | 2,677,638 |          | 
|                                |  |          |           |  |          |  |           |          | 
|Results                         |  |          |           |  |          |  |           |          | 
|Total income                    |  |          | 2,127,023 |  |          |  | 2,520,050 |          | 
|Operating income                |  |          | 1,217,274 |  |          |  | 1,559,280 |          | 
|Net income                      |  |          | 772,070   |  |          |  | 1,078,399 |          | 



On July 17, 2012, Cerro Verde
subscribed a new Agreement of Guarantees and Measures to Promote Investments with the Government of Peru, under the General Mining
Law and in connection with the Expansion of operations program. This new agreement will enable the Cerro Verde’s Management
to establish a tax system for the expansion and according to the management’s option; it will be in force in 2014. According
to this agreement, from the time it is in force, the new income tax rate will be 32 per cent.



F-55







Notes to the consolidated financial statements (continued)



| | (f) | Compañía Minera Coimolache S.A.-
| | --- | --------------------------------

Compañía Minera Coimolache
S.A. (hereafter “Coimolache”) is located in the province of Hualgayoc, which includes the districts of Hualgayoc and
Chugur in Cajamarca region and has reserves of 528,000 ounces of gold (unaudited). Coimolache started operations in the third quarter
of 2011. As December 31, 2012, the production amounted to 139,253 ounces of gold and 914,779 ounces of silver (50,916 ounces
of gold and 298,674 ounces of silver as of December 31, 2011).



The table below presents the main
figures audited from financial statements of Coimolache, restructured according to Buenaventura’s accounting practices:



|                                |  | 2012     |         |  | 2011     |  |         | 2010     | 
|------------------------------- |  | -------- | ------- |  | -------- |  | ------- | -------- | 
|                                |  | US$(000) |         |  | US$(000) |  |         | US$(000) | 
|Statement of financial position
|Total assets                    |  |          | 218,380 |  |          |  | 181,372 |          | 
|Total liabilities               |  |          | 137,658 |  |          |  | 156,734 |          | 
|Equity, net                     |  |          | 80,722  |  |          |  | 24,638  |          | 
|                                |  |          |         |  |          |  |         |          | 
|Income Statement               
|Total income                    |  |          | 262,596 |  |          |  | 79,176  |          | 
|Net income (loss)               |  |          | 100,229 |  |          |  | 26,886  |          | 



| | (g) | Canteras del Hallazgo S.A.C.: Chucapaca Project -
| | --- | -------------------------------------------------

The
mining project is located in Moquegua. There are evidences of gold, copper and silver in Chucapaca project zone, at Canahuire deposit.



As
of December 31, 2012, the project is in Feasibility and Environmental Studies, which are expected to be concluded at the end
of 2013 and it continues with exploration works in order to dimension the magnitude of mining field. Based on investment program
agreed with the other shareholder, the Company disbursed contributions which allow the project development. As of December 31,
2012, Buenaventura’s contribution amounted to US$153,303,000 (US$97,820,000 as of December 31, 2011).



F-56







Notes to the consolidated financial statements (continued)



The table below presents the main
figures audited from financial statements of Canteras del Hallazgo, restructured according to Buenaventura’s accounting practices:



|                                |  | 2012     |        |  | 2011     |  |         | 2010     | 
|------------------------------- |  | -------- | ------ |  | -------- |  | ------- | -------- | 
|                                |  | US$(000) |        |  | US$(000) |  |         | US$(000) | 
|                                |  |          |        |  |          |  |         |          | 
|Statement of financial position
|Total assets                    |  |          | 73,013 |  |          |  | 18,980  |          | 
|Total liabilities               |  |          | 6,842  |  |          |  | 8,292   |          | 
|Equity, net                     |  |          | 66,171 |  |          |  | 10,688  |          | 
|                                |  |          |        |  |          |  |         |          | 
|Income Statement               
|Total income                    |  |          | -      |  |          |  | -       |          | 
|Net income (loss)               |  |          | -      |  |          |  | (59,377 | )        | 



F-57







Notes to the consolidated financial statements (continued)



| | 10. | Mining concessions, development costs, property, plant and equipment, net
| | --- | -------------------------------------------------------------------------

| | (a) | Below is presented the movement in cost, depreciation and amortization, as well as the provision for accumulated impairment
of long-lived assets:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------



|                                              |  | As of January 1,
    2011 |           |  | Additions |  |         | Retirements |  |  | Sales    |   |  | Transfers |        |   | As of December 31,
    2011 |  |         | Additions |  |  | Retirements |  |  | Sales    |         |  | Transfers |  |        | As of December 31,
    2012 | 
|--------------------------------------------- |  | ------------------------- | --------- |  | --------- |  | ------- | ----------- |  |  | -------- | - |  | --------- | ------ | - | --------------------------- |  | ------- | --------- |  |  | ----------- |  |  | -------- | ------- |  | --------- |  | ------ | --------------------------- | 
|                                              |  | US$(000)                  |           |  | US$(000)  |  |         | US$(000)    |  |  | US$(000) |   |  | US$(000)  |        |   | US$(000)                    |  |         | US$(000)  |  |  | US$(000)    |  |  | US$(000) |         |  | US$(000)  |  |        | US$(000)                    | 
|                                              |  |                           |           |  |           |  |         |             |  |  |          |   |  |           |        |   |                             |  |         |           |  |  |             |  |  |          |         |  |           |  |        |                             | 
|Cost                                          |  |                           |           |  |           |  |         |             |  |  |          |   |  |           |        |   |                             |  |         |           |  |  |             |  |  |          |         |  |           |  |        |                             | 
|Land                                          |  |                           | 2,668     |  |           |  | 359     |             |  |  | -        |   |  |           | -      |   |                             |  | 1,034   |           |  |  | 4,061       |  |  |          | 1,968   |  |           |  | -      |                             | 
|Mining land                                   |  |                           | 7,215     |  |           |  | -       |             |  |  | -        |   |  |           | -      |   |                             |  | -       |           |  |  | 7,215       |  |  |          | -       |  |           |  | -      |                             | 
|Mining concessions                            |  |                           | 15,000    |  |           |  | -       |             |  |  | -        |   |  |           | -      |   |                             |  | -       |           |  |  | 15,000      |  |  |          | -       |  |           |  | -      |                             | 
|Mining concessions (b)                        |  |                           | 123,881   |  |           |  | -       |             |  |  | -        |   |  |           | -      |   |                             |  | -       |           |  |  | 123,881     |  |  |          | -       |  |           |  | -      |                             | 
|Development costs (c)                         |  |                           | 233,127   |  |           |  | 24,414  |             |  |  | -        |   |  |           | -      |   |                             |  | -       |           |  |  | 257,541     |  |  |          | 35,391  |  |           |  | -      |                             | 
|Buildings, construction
    and other         |  |                           | 261,156   |  |           |  | 849     |             |  |  | (1,055   | ) |  |           | -      |   |                             |  | 63,925  |           |  |  | 324,875     |  |  |          | 8,673   |  |           |  | (612   | )                           | 
|Machinery and equipment                       |  |                           | 304,308   |  |           |  | 36,024  |             |  |  | (895     | ) |  |           | (531   | ) |                             |  | 27,809  |           |  |  | 366,715     |  |  |          | 76,850  |  |           |  | (597   | )                           | 
|Transportation units                          |  |                           | 9,671     |  |           |  | 1,248   |             |  |  | (118     | ) |  |           | (391   | ) |                             |  | 753     |           |  |  | 11,163      |  |  |          | 742     |  |           |  | (212   | )                           | 
|Furniture and mixtures                        |  |                           | 10,419    |  |           |  | 215     |             |  |  | (37      | ) |  |           | -      |   |                             |  | 175     |           |  |  | 10,772      |  |  |          | 785     |  |           |  | -      |                             | 
|Units in transit                              |  |                           | 9,284     |  |           |  | 106,667 |             |  |  | -        |   |  |           | -      |   |                             |  | (71,625 | )         |  |  | 44,326      |  |  |          | 49,970  |  |           |  | (8     | )                           | 
|Works in progress                             |  |                           | 205,693   |  |           |  | 130,212 |             |  |  | -        |   |  |           | (1,491 | ) |                             |  | (22,071 | )         |  |  | 312,343     |  |  |          | 268,548 |  |           |  | -      |                             | 
|Stripping cost                                |  |                           | 1,266     |  |           |  | 17,828  |             |  |  | -        |   |  |           | -      |   |                             |  | -       |           |  |  | 19,094      |  |  |          | -       |  |           |  | -      |                             | 
|Mine
    closure costs                        |  |                           | 33,654    |  |           |  | 785     |             |  |  | -        |   |  |           | -      |   |                             |  | -       |           |  |  | 34,439      |  |  |          | 21,779  |  |           |  | -      |                             | 
|                                              |  |                           | 1,217,342 |  |           |  | 318,601 |             |  |  | (2,105   | ) |  |           | (2,413 | ) |                             |  | -       |           |  |  | 1,531,425   |  |  |          | 464,706 |  |           |  | (1,429 | )                           | 
|Accumulated
    depreciation and amortization |  |                           |           |  |           |  |         |             |  |  |          |   |  |           |        |   |                             |  |         |           |  |  |             |  |  |          |         |  |           |  |        |                             | 
|Mining land                                   |  |                           | 2,304     |  |           |  | -       |             |  |  | -        |   |  |           | -      |   |                             |  | -       |           |  |  | 2,304       |  |  |          | 898     |  |           |  | -      |                             | 
|Mining concessions (b)                        |  |                           | 59,943    |  |           |  | 12,269  |             |  |  | -        |   |  |           | -      |   |                             |  | -       |           |  |  | 72,212      |  |  |          | 3,643   |  |           |  | -      |                             | 
|Development costs (c)                         |  |                           | 144,386   |  |           |  | 35,930  |             |  |  | -        |   |  |           | -      |   |                             |  | -       |           |  |  | 180,316     |  |  |          | 40,727  |  |           |  | -      |                             | 
|Buildings, construction
    and other         |  |                           | 142,837   |  |           |  | 29,491  |             |  |  | (1,049   | ) |  |           | -      |   |                             |  | -       |           |  |  | 171,279     |  |  |          | 46,130  |  |           |  | (610   | )                           | 
|Machinery and equipment                       |  |                           | 193,064   |  |           |  | 38,228  |             |  |  | (863     | ) |  |           | (251   | ) |                             |  | -       |           |  |  | 230,178     |  |  |          | 55,653  |  |           |  | (215   | )                           | 



F-58







Notes to the consolidated financial statements (continued)



|                                                             |  | As of January 1,
    2011 |         |  | Additions |  |         | Retirements |  |  | Sales    |   |  | Transfers |      |   | As of December 31,
    2011 |  |   | Additions |  |  | Retirements |  |  | Sales    |         |  | Transfers |  |      | As of December 31,
    2012 | 
|------------------------------------------------------------ |  | ------------------------- | ------- |  | --------- |  | ------- | ----------- |  |  | -------- | - |  | --------- | ---- | - | --------------------------- |  | - | --------- |  |  | ----------- |  |  | -------- | ------- |  | --------- |  | ---- | --------------------------- | 
|                                                             |  | US$(000)                  |         |  | US$(000)  |  |         | US$(000)    |  |  | US$(000) |   |  | US$(000)  |      |   | US$(000)                    |  |   | US$(000)  |  |  | US$(000)    |  |  | US$(000) |         |  | US$(000)  |  |      | US$(000)                    | 
|                                                             |  |                           |         |  |           |  |         |             |  |  |          |   |  |           |      |   |                             |  |   |           |  |  |             |  |  |          |         |  |           |  |      |                             | 
|Transportation units                                         |  |                           | 6,406   |  |           |  | 1,182   |             |  |  | (96      | ) |  |           | (365 | ) |                             |  | - |           |  |  | 7,127       |  |  |          | 1,228   |  |           |  | (122 | )                           | 
|Furniture and mixtures                                       |  |                           | 5,098   |  |           |  | 1,018   |             |  |  | (35      | ) |  |           | (1   | ) |                             |  | - |           |  |  | 6,080       |  |  |          | 1,008   |  |           |  | (1   | )                           | 
|Stripping cost                                               |  |                           | 223     |  |           |  | 1,171   |             |  |  | -        |   |  |           | -    |   |                             |  | - |           |  |  | 1,394       |  |  |          | 891     |  |           |  | -    |                             | 
|Mine
    closure costs                                       |  |                           | 19,045  |  |           |  | 1,693   |             |  |  | -        |   |  |           | -    |   |                             |  | - |           |  |  | 20,738      |  |  |          | 3,512   |  |           |  | -    |                             | 
|                                                             |  |                           | 573,306 |  |           |  | 120,982 |             |  |  | (2,043   | ) |  |           | (617 | ) |                             |  | - |           |  |  | 691,628     |  |  |          | 153,690 |  |           |  | (948 | )                           | 
|                                                             |  |                           |         |  |           |  |         |             |  |  |          |   |  |           |      |   |                             |  |   |           |  |  |             |  |  |          |         |  |           |  |      |                             | 
|Provision  for
    impairment  of long-lived assets, note 11 |  |                           |         |  |           |  |         |             |  |  |          |   |  |           |      |   |                             |  |   |           |  |  |             |  |  |          |         |  |           |  |      |                             | 
|Mining concessions of
    Antapite (b)                       |  |                           | 2,805   |  |           |  | -       |             |  |  | -        |   |  |           | -    |   |                             |  | - |           |  |  | 2,805       |  |  |          | -       |  |           |  | -    |                             | 
|Property, plant and equipment                                |  |                           | 2,432   |  |           |  | -       |             |  |  | -        |   |  |           | -    |   |                             |  | - |           |  |  | 2,432       |  |  |          | 2,303   |  |           |  | -    |                             | 
|Development
    costs (c)                                    |  |                           | 3,563   |  |           |  | -       |             |  |  | -        |   |  |           | -    |   |                             |  | - |           |  |  | 3,563       |  |  |          | 1,314   |  |           |  | -    |                             | 
|                                                             |  |                           | 8,800   |  |           |  | -       |             |  |  | -        |   |  |           | -    |   |                             |  | - |           |  |  | 8,800       |  |  |          | 3,617   |  |           |  | -    |                             | 
|                                                             |  |                           |         |  |           |  |         |             |  |  |          |   |  |           |      |   |                             |  |   |           |  |  |             |  |  |          |         |  |           |  |      |                             | 
|Net
    cost                                                 |  |                           | 635,236 |  |           |  |         |             |  |  |          |   |  |           |      |   |                             |  |   |           |  |  | 830,997     |  |  |          |         |  |           |  |      |                             | 



F-59







Notes to the consolidated financial statements (continued)



| | (b) | Mining concessions -
| | --- | --------------------

The table below presents the movement
of the cost and accumulated amortization of the mining concessions for mining units:



|                                                                                 |  | As of January 1,
    2011 |         |  | Additions |  |        | As of December 31,
    2011 |  |  | Additions |  |  | As of December 31,
    2012 |      
|-------------------------------------------------------------------------------- |  | ------------------------- | ------- |  | --------- |  | ------ | --------------------------- |  |  | --------- |  |  | --------------------------- | -----
|                                                                                 |  | US$(000)                  |         |  | US$(000)  |  |        | US$(000)                    |  |  | US$(000)  |  |  | US$(000)                    |      
|                                                                                 |  |                           |         |  |           |  |        |                             |  |  |           |  |  |                             |      
|Cost                                                                             |  |                           |         |  |           |  |        |                             |  |  |           |  |  |                             |      
|Compañía
    de Exploraciones, Desarrollo e Inversiones Mineras S.A.C.- CEDIMIN  |  |                           | 51,138  |  |           |  | -      |                             |  |  | 51,138    |  |  |                             | -    
|Inversiones Colquijirca
    S.A.                                                 |  |                           | 43,103  |  |           |  | -      |                             |  |  | 43,103    |  |  |                             | -    
|Sociedad Minera El Brocal
    S.A.A.                                             |  |                           | 13,542  |  |           |  | -      |                             |  |  | 13,542    |  |  |                             | -    
|Inversiones Mineras del
    Sur S.A.                                             |  |                           | 11,662  |  |           |  | -      |                             |  |  | 11,662    |  |  |                             | -    
|Minas Poracota S.A.                                                              |  |                           | 2,864   |  |           |  | -      |                             |  |  | 2,864     |  |  |                             | -    
|Minera
    Paula 49 S.A.C.                                                       |  |                           | 1,572   |  |           |  | -      |                             |  |  | 1,572     |  |  |                             | -    
|                                                                                 |  |                           | 123,881 |  |           |  | -      |                             |  |  | 123,881   |  |  |                             | -    
|Accumulated
    amortization                                                     |  |                           |         |  |           |  |        |                             |  |  |           |  |  |                             |      
|Compañía
    de Exploraciones, Desarrollo e Inversiones Mineras S.A.C. – CEDIMIN |  |                           | 32,898  |  |           |  | 1,277  |                             |  |  | 34,175    |  |  |                             | 1,352
|Inversiones Colquijirca
    S.A.                                                 |  |                           | 14,189  |  |           |  | 1,087  |                             |  |  | 15,276    |  |  |                             | 1,086
|Sociedad Minera El Brocal
    S.A.A.                                             |  |                           | 2,675   |  |           |  | 7,881  |                             |  |  | 10,556    |  |  |                             | 117  
|Inversiones Mineras del
    Sur S.A.                                             |  |                           | 6,430   |  |           |  | 1,387  |                             |  |  | 7,817     |  |  |                             | 1,040
|Minas Poracota S.A.                                                              |  |                           | 2,179   |  |           |  | 637    |                             |  |  | 2,816     |  |  |                             | 48   
|Minera
    Paula 49 S.A.C.                                                       |  |                           | 1,572   |  |           |  | -      |                             |  |  | 1,572     |  |  |                             | -    
|                                                                                 |  |                           | 59,943  |  |           |  | 12,269 |                             |  |  | 72,212    |  |  |                             | 3,643
|Provision
    for impairment of mining concessions                               |  |                           |         |  |           |  |        |                             |  |  |           |  |  |                             |      
|Inversiones
    Mineras del Sur S.A., note 11                                    |  |                           | 2,805   |  |           |  |        |                             |  |  | 2,805     |  |  |                             |      



F-60







Notes to the consolidated financial statements (continued)



| | (c) | Mining development costs –
| | --- | --------------------------

The table below presents the movement
of the cost, accumulated amortization and provision for impairment:



|                             |  | As of January 1,
    2011 |         |  | Additions |  |        | As of December 31,
    2011 |  |  | Additions |  |  | As of December 31,
    2012 |       
|---------------------------- |  | ------------------------- | ------- |  | --------- |  | ------ | --------------------------- |  |  | --------- |  |  | --------------------------- | ------
|                             |  | US$(000)                  |         |  | US$(000)  |  |        | US$(000)                    |  |  | US$(000)  |  |  | US$(000)                    |       
|                             |  |                           |         |  |           |  |        |                             |  |  |           |  |  |                             |       
|Cost                         |  |                           |         |  |           |  |        |                             |  |  |           |  |  |                             |       
|Orcopampa                    |  |                           | 60,332  |  |           |  | 1,445  |                             |  |  | 61,777    |  |  |                             | 1,442 
|Uchucchacua                  |  |                           | 47,312  |  |           |  | 5,317  |                             |  |  | 52,629    |  |  |                             | 767   
|Poracota                     |  |                           | 32,035  |  |           |  | -      |                             |  |  | 32,035    |  |  |                             | -     
|Antapite                     |  |                           | 18,999  |  |           |  | -      |                             |  |  | 18,999    |  |  |                             | -     
|La Llave, note 1(e)          |  |                           | 16,127  |  |           |  | 302    |                             |  |  | 16,429    |  |  |                             | -     
|Shila – Paula                |  |                           | 6,945   |  |           |  | 8,388  |                             |  |  | 15,333    |  |  |                             | -     
|Recuperada                   |  |                           | 10,438  |  |           |  | 413    |                             |  |  | 10,851    |  |  |                             | -     
|Julcani                      |  |                           | 7,808   |  |           |  | 2,555  |                             |  |  | 10,363    |  |  |                             | 2,111 
|La Zanja                     |  |                           | 4,578   |  |           |  | 1,342  |                             |  |  | 5,920     |  |  |                             | 1,648 
|Mallay                       |  |                           | 575     |  |           |  | 3,866  |                             |  |  | 4,441     |  |  |                             | 4,216 
|Ishihuinca                   |  |                           | 1,027   |  |           |  | -      |                             |  |  | 1,027     |  |  |                             | -     
|Mine
    closure costs       |  |                           | 26,951  |  |           |  | 786    |                             |  |  | 27,737    |  |  |                             | 25,207
|                             |  |                           | 233,127 |  |           |  | 24,414 |                             |  |  | 257,541   |  |  |                             | 35,391
|                             |  |                           |         |  |           |  |        |                             |  |  |           |  |  |                             |       
|Accumulated
    amortization |  |                           |         |  |           |  |        |                             |  |  |           |  |  |                             |       
|Orcopampa                    |  |                           | 43,389  |  |           |  | 7,152  |                             |  |  | 50,541    |  |  |                             | 4,108 
|Uchucchacua                  |  |                           | 32,132  |  |           |  | 3,929  |                             |  |  | 36,061    |  |  |                             | 4,921 
|Poracota                     |  |                           | 20,153  |  |           |  | 11,479 |                             |  |  | 31,632    |  |  |                             | 400   
|Antapite                     |  |                           | 18,731  |  |           |  | 268    |                             |  |  | 18,999    |  |  |                             | -     
|Shila – Paula                |  |                           | 3,382   |  |           |  | 7,575  |                             |  |  | 10,957    |  |  |                             | -     
|Recuperada                   |  |                           | 2,437   |  |           |  | 637    |                             |  |  | 3,074     |  |  |                             | 6,897 
|Julcani                      |  |                           | 961     |  |           |  | 256    |                             |  |  | 1,217     |  |  |                             | 695   
|La Zanja                     |  |                           | 4,466   |  |           |  | 1,236  |                             |  |  | 5,702     |  |  |                             | 3,087 
|Ishihuinca                   |  |                           | 1,027   |  |           |  | -      |                             |  |  | 1,027     |  |  |                             | -     



F-61







Notes to the consolidated financial statements (continued)



|                                                       |  | As of January 1,
    2011 |         |  | Additions |  |        | As of December 31,
    2011 |  |  | Additions |  |  | As of December 31,
    2012 |       
|------------------------------------------------------ |  | ------------------------- | ------- |  | --------- |  | ------ | --------------------------- |  |  | --------- |  |  | --------------------------- | ------
|                                                       |  | US$(000)                  |         |  | US$(000)  |  |        | US$(000)                    |  |  | US$(000)  |  |  | US$(000)                    |       
|Mallay                                                 |  | -                         |         |  | -         |  |        | -                           |  |  | 1,431     |  |  | 1,431                       |       
|Mine
    closure costs                                 |  |                           | 17,708  |  |           |  | 3,398  |                             |  |  | 21,106    |  |  |                             | 19,188
|                                                       |  |                           | 144,386 |  |           |  | 35,930 |                             |  |  | 180,316   |  |  |                             | 40,727
|                                                       |  |                           |         |  |           |  |        |                             |  |  |           |  |  |                             |       
|Provision
    for impairment of mine development costs |  |                           |         |  |           |  |        |                             |  |  |           |  |  |                             |       
|Shila - Paula                                          |  |                           | 3,563   |  |           |  | -      |                             |  |  | 3,563     |  |  |                             | -     
|Recuperada                                             |  |                           | -       |  |           |  | -      |                             |  |  | -         |  |  |                             | 1,314 
|                                                       |  |                           | 3,563   |  |           |  | -      |                             |  |  | 3,563     |  |  |                             | 1,314 



F-62







Notes to the consolidated financial statements (continued)



| | (d) | During the year 2009, the Company started the construction of Huanza Hydroelectric plant, which is expected to be completed
in August 2012, date in which the asset will be transfer from work in progress to machinery and equipment. The carrying amount
of this work in progress amount to US$177,133,000. This construction is financed by a long-term financial obligation, see note
15. The amount of borrowing costs capitalized as of December 31, 2012 was US$10,974,000 (US$6,364,000 as of December 31,
2011). The rate used to calculate the borrowing costs eligible for capitalization was LIBOR rate to 90 days plus 4 per cent, which
is the effective interest rate of the specific loan.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The carrying value of plant and
equipment held under finance leases contracts as of December 31, 2012 was US$119,000,000 (US$105,042,000 as of December 31,
2011). Additions of leasing during the year include US$13,958,000 (US$50,915,000 in 2011) and are disclosed in “Works in
progress” caption. Leased assets contracts are pledged as security for the related finance lease.



| | 11. | Reversal for impairment of long-lived assets and investments in associates
| | --- | --------------------------------------------------------------------------

Mining concessions, property, plant and equipment
and development costs -

The table below presents the components and movement
of the reversal for impairment of long-lived assets:



|                                                    |  | As of  January 1 and December 31, 2011 |       |  | Additions |  |       | As of December 31, 2012 | 
|--------------------------------------------------- |  | -------------------------------------- | ----- |  | --------- |  | ----- | ----------------------- | 
|                                                    |  | US$(000)                               |       |  | US$(000)  |  |       | US$(000)                | 
|                                                    |  |                                        |       |  |           |  |       |                         | 
|Mining concessions, property, plant and equipment - |  |                                        |       |  |           |  |       |                         | 
|Antapite                                            |  |                                        | 2,805 |  |           |  | 743   |                         | 
|Shila-Paula                                         |  |                                        | 2,432 |  |           |  | -     |                         | 
|Recuperada                                          |  |                                        | -     |  |           |  | 810   |                         | 
|Poracota                                            |  |                                        | -     |  |           |  | 750   |                         | 
|                                                    |  |                                        | 5,237 |  |           |  | 2,303 |                         | 
|Development costs -                                 |  |                                        |       |  |           |  |       |                         | 
|Shila-Paula                                         |  |                                        | 3,563 |  |           |  | -     |                         | 
|Recuperada                                          |  |                                        | -     |  |           |  | 1,314 |                         | 
|                                                    |  |                                        | 3,563 |  |           |  | 1,314 |                         | 
|                                                    |  |                                        |       |  |           |  |       |                         | 
|Total                                               |  |                                        | 8,800 |  |           |  | 3,617 |                         | 



F-63







Notes to the consolidated financial statements (continued)



As a result of the decrease in the level and quality
of the reserves in some mining units, during the year 2012, the Company’s Management updated its assessment of the recoverability
of the book value of its long-lived assets. The provision made in the year 2012 amounts to US$3,617,000.



Assessing the impairment of long-lived assets involves
comparing their respective carrying amount with their recoverable values. The recoverable value of assets is the greater of its
fair value less the costs of sale or its value in use. The recoverable amount used in assessing the Antapite, Recuperada and Poracota
mining unit is the fair value. The Company estimated the use value of its long-lived assets using a discounted cash-flow model.
Cash flow was projected for the useful life of the mining units based on Management’s expectations. This useful life depends
on several variables, including the mineral reserves of each unit.



The following assumptions have been used for calculating
the value in use:



| | (i) | Production volumes: the production volumes of the Antapite, Recuperada and Poracota units are substantiated by the reserves
and resources audited as of December 31, 2012, considering Management’s production plan for the coming years. According
to such reserves, the Poracota unit has a production horizon of one year, Antapite of two years and Recuperada of three years.
Management believes that there will not be significant changes in estimated production volumes that would result in the present
value of long-lived assets exceeding their recoverable value.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Discount rates: Future cash flows have been adjusted according to the specific risk assigned to this type of asset and discounted
at a pre-tax rate of 6.21 per cent. The discount rate used is the Weighted Average Cost of Capital (pre-tax WACC). Management believes
that there will not be significant changes in the discount rate that could increase the impairment loss.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Metals prices: The Company has used future metals prices (forward metal prices) obtained from the average of estimates made
by foreign investment banks.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | Operating costs: The Company has projected its operating costs in relation to its cost structure as of the date of the consolidated
statement of financial position. Management believes that there will not be significant changes in estimated operating costs considered
that could increase the impairment loss.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In the opinion of the Company’s Management,
the provision for impairment of long-lived assets covers the risk of impairment at the date of the consolidated statement of financial
position.



F-64







Notes to the consolidated financial statements (continued)



Investments in associates -

In the case of Yanacocha (investment held through
its subsidiary Compañía Minera Condesa S.A.) the Company’s Management concluded that there was no objective
evidence of impairment as of the consolidated statement of financial position date derived from internal and external indicators
(rising trend in the international price of gold, constant level of reserves and an increase in the annual net profit reported).
In addition, in the case of associate Cerro Verde, the Company’s Management compared the investment’s fair value according
to market capitalization with the investment’s book value, and determined that there was no impairment as of the consolidated
statement of financial position date. On the other hand, in the case of Coimolache, and Canteras del Hallazgo, the Company ́s
Management concluded that there was no objective evidence of impairment as of the consolidated statement of financial position
date derived from internal and external indicators. See notes 9(f)
and (g).



| | 12. | Trade accounts payable
| | --- | ----------------------

Trade accounts payable arise mainly from the acquisition
of material, supplies and spare parts and services provided by third parties. These obligations are mostly denominated in U.S.
dollars, have current maturities, do not accrue interest and no specific guarantees have been granted for these obligations. Trade
accounts payable amount to US$199,551,000 as of December 31, 2012 (US$142,375,000 as of December 31, 2011).



| | 13. | Other accounts payable
| | --- | ----------------------

The table below presents the components of this
caption:



|                                             |  | 2012     |        |  | 2011     | 
|-------------------------------------------- |  | -------- | ------ |  | -------- | 
|                                             |  | US$(000) |        |  | US$(000) | 
|                                             |  |          |        |  |          | 
|Remuneration and similar benefits payable    |  |          | 17,487 |  |          | 
|Taxes payable                                |  |          | 16,454 |  |          | 
|Royalties payable to the Peruvian State      |  |          | 7,350  |  |          | 
|Accounts payable to non-controlling interest |  |          | 4,694  |  |          | 
|Dividends payable                            |  |          | 1,928  |  |          | 
|Royalties payable to third parties           |  |          | -      |  |          | 
|Other liabilities                            |  |          | 11,183 |  |          | 
|                                             |  |          |        |  |          | 
|                                             |  |          | 59,096 |  |          | 



F-65







Notes to the consolidated financial statements (continued)



| | 14. | Provisions
| | --- | ----------

The table below presents the components of this
caption:



|                                                                   |  | 2012     |         |  | 2011     | 
|------------------------------------------------------------------ |  | -------- | ------- |  | -------- | 
|                                                                   |  | US$(000) |         |  | US$(000) | 
|                                                                   |  |          |         |  |          | 
|Provision for closure of mining units and exploration projects (a) |  |          | 99,438  |  |          | 
|Workers’ profit sharing payable (b)                                |  |          | 28,427  |  |          | 
|Stock appreciation rights (c)                                      |  |          | 28,258  |  |          | 
|Provision for labor contingencies                                  |  |          | 7,490   |  |          | 
|Board of Directors’ participation, note 31(e)                      |  |          | 2,721   |  |          | 
|Provision for environmental liabilities                            |  |          | 1,932   |  |          | 
|Provision for security contingencies                               |  |          | 1,717   |  |          | 
|Provision for community contingencies                              |  |          | 1,613   |  |          | 
|Other provisions                                                   |  |          | 225     |  |          | 
|                                                                   |  |          |         |  |          | 
|                                                                   |  |          | 171,821 |  |          | 



|                                                                   |  | 2012     |          |   | 2011     | 
|------------------------------------------------------------------ |  | -------- | -------- | - | -------- | 
|                                                                   |  | US$(000) |          |   | US$(000) | 
|Less – Non current portion                                         |  |          |          |   |          | 
|Provision for closure of mining units and exploration projects (a) |  |          | (77,665  | ) |          | 
|Stock appreciation rights (b)                                      |  |          | (22,203  | ) |          | 
|Provision for environmental liabilities                            |  |          | (173     | ) |          | 
|                                                                   |  |          | (100,041 | ) |          | 
|                                                                   |  |          |          |   |          | 
|Current portion                                                    |  |          | 71,780   |   |          | 



| | (a) | Provision for closure of mining units and exploration projects-
| | --- | ---------------------------------------------------------------

The table below presents the movement
of the provision for closure of mining units and exploration projects:



|                                                                           |  | US$(000) |        
|-------------------------------------------------------------------------- |  | -------- | -------
|                                                                           |  |          |        
|Balance as of January 1, 2011                                              |  |          | 77,427 
|                                                                           |  |          |        
|Disbursements                                                              |  |          | (13,108
|Changes in estimates (property, plant and equipment and development costs) |  |          | 1,571  
|Changes in estimates (expenses)                                            |  |          | 6,924  
|Increase for accretion expense of the present value of the provision       |  |          | 9,100  
|Balance as of December 31, 2011                                            |  |          | 81,914 
|                                                                           |  |          |        
|Disbursements                                                              |  |          | (22,485



F-66







Notes to the consolidated financial statements (continued)



|                                                                           |  | US$(000) |       
|-------------------------------------------------------------------------- |  | -------- | ------
|                                                                           |  |          |       
|Changes in estimates (property, plant and equipment and development costs) |  |          | 24,812
|New mine closure plans (property, plant, equipment and development costs)  |  |          | 8,897 
|Changes in estimates (income)                                              |  |          | (512  
|Increase for accretion expense of the present value of the provision       |  |          | 6,812 
|                                                                           |  |          |       
|Balance as of December 31, 2012                                            |  |          | 99,438



The provision for closure of mining
units and exploration projects represents the present value of the closure costs that are expected to be incurred between the years
2013 and 2027. Estimates of the costs for closure of mining units are based on studies prepared by independent advisers that meet
the environmental regulations in effect. The provision for closure of mining units and exploration projects corresponds mostly
to activities that must be carried out for restoring the mining units and areas affected by operation and production activities.
The principal works to be performed correspond to earthworks, re-vegetation efforts and dismantling of the plants. Closure budgets
are reviewed regularly to take into account any significant change in the studies conducted. Nevertheless, the closure costs of
mining units will depend on the market prices for the closure works required, which would reflect future economic conditions. Also,
the time when the disbursements will be made depends on the useful life of the mine, which will be based on future metals prices.



As of December 31, 2012, the
future value of the provision for closure of mining units and exploration projects was US$181,250,000, which has been discounted
using the annual risk-free rate 4.07 percent, resulting in an updated liability of US$99,438,000 (US$127,492,000 which has been
discounted using the annual risk-free rate 4.87 percent, resulting in an updated liability of US$81,914,000 as of December 31,
2011). The Company believes that this liability is sufficient to meet the current environmental protection laws approved by the
Ministry of Energy and Mines.



During 2012 and 2011 the Ministry
of Energy and Mines has approved the following mine closure plans:



|Project name                                    |  | Resolution Number                                         |  | Approval date                             
|----------------------------------------------- |  | --------------------------------------------------------- |  | ------------------------------------------
|                                                |  |                                                           |  |                                           
|Julcani mining unit (*)                         |  | R.D. N°046-2011-MEM-AAM                                   |  | February 11, 2011                         
|Administrative Economic Unit Esperanza 2001 (*) |  | R.D. N°027-2011-MEM-AAM /
        R.D. N°264-2011-MEM-AAM |  | January 27, 2011 /
        August 19, 2011



F-67







Notes to the consolidated financial statements (continued)



|Project name                 | Resolution Number        | Approval date     
|---------------------------- | ------------------------ | ------------------
|Orcopampa mining unit (*)    | R.D. N°283-2011-MEM- AAM | September 9, 2011 
|Poracota mining unit (*)     | R.D.N°104-2011-MEM-AAM   | April 8, 2011     
|Angelica Rubio Chico Project | R.D.N°371-2011-MEM-AAM   | April 6, 2011     
|Angelica Rulo project        | R.D.N°111-2011-MEM-AAM   | April 12, 2011    
|Trocancha Anchaca project    | R.D.N °168-2011-MEM-AAM  | June 2, 2011      
|Pucarumi project             | R.D.N°297-2011-MEM-AAM   | September 26, 2011
|Breapampa mining unit        | R.D.N°237-2012-MEM-AAM   | July 17, 2012     
|Colquijirca mining unit (*)  | R.D.N°243-2012-MEM       | August 17, 2012   



(*) Change to the initial plan.



The Company has constituted letters
of credit to Ministry of Energy and Mines for US$46,608,000 (US$39,511,000 as of December 31, 2011) to secure mine closure
plans for the above-mentioned units.



| | (b) | Workers ́profit sharing -
| | --- | ------------------------

Legislative Decree N° 892 (L.D. 892), issued
in 1996 and which regulates the right of workers to participate in the company’s profits that performs activities generating
third categories income, requires companies domiciled in Peru to compute and pay to employees, a share of the profits generated
by the companies for which they work.



The worker’ profit sharing
is recognized as labor costs in the “Cost of sales, without considering depreciation and amortization” or “Administrative
expense” of the consolidated financial statement according to the duties or function of the workers.



According to indicated to note
2.3.(v), the workers’ profit sharing is paid until a limit of 18 wages. The excess is retained by the Company and this is
paid to Peruvian Government entities (FONDOEMPLEO and regional government). During the year 2012, the excess between the total
amounts of workers’ profit sharing calculated in accordance to L.D. 892 and the limit to pay to employees amounts to US$2,164,000
as of December 31, 2012 (US$6,221,000 as of December 31, 2011), which will be transferred to FONDOEMPLEO within the period
established by law. Based on the Company’s accounting policy, such excess is show as operating expenses in the consolidated
statement of comprehensive income.



The following table presents
the movement of the workers ́profit sharing:



|                              |  | US$(000) |        
|----------------------------- |  | -------- | -------
|                              |  |          |        
|Balance as of January 1, 2011 |  |          | 21,442 
|                              |  |          |        
|Payments                      |  |          | (21,329
|Changes in estimates          |  |          | 39,044 



F-68







Notes to the consolidated financial statements (continued)



|                                |  | US$(000) |        
|------------------------------- |  | -------- | -------
|                                |  |          |        
|Balance as of December 31, 2011 |  |          | 39,157 
|Payments                        |  |          | (34,014
|Changes in estimates            |  |          | 23,284 
|                                |  |          |        
|Balance as of December 31, 2012 |  |          | 28,427 



| | (c) | Stock Appreciation Rights -
| | --- | ---------------------------

Senior executives of the Company
are granted share appreciation rights, which can only be settled in cash, if the executive is working for the Company at each program’s
settlement date. These programs are mainly structured in a ten-year term, allocated in several programs with progressive maturities.
The settlement of each program is determined based on the variation of the market prices at the maturity date as compared to the
price at the date of the grant, over the corresponding number of shares.



The table below presents the principal
assumptions used by the Company to estimate the fair value:



|                                                               |  | 2012 |          |   | 2011 |    
|-------------------------------------------------------------- |  | ---- | -------- | - | ---- | ---
|                                                               |  |      |          |   |      |    
|Historical volatility                                          |  |      | 48.38    | % |      |    
|Risk-free interest rate for the remaining period until vesting |  |      | 0.16     | % |      |    
|Dividend yield                                                 |  |      | 1.25     | % |      |    
|Period covered by the program                                  |  |      | 10 years |   |      |    
|Market value of the shares at closing                          |  | US$  | 35.95    |   |      | US$



The expected life of the options
is based on historical and recent expectations, and does not necessarily represent patterns that indicate the executions of options
that could occur. The expected volatility reflects the assumption that the historical volatility for a period similar life of the
options indicates the trend in the future, which may not necessarily be the end result.



The valuation model used by the
Company as of December 31, 2012 and 2011 was Turnbull & Wakeman.



F-69







Notes to the consolidated financial statements (continued)



The table below presents the movement of the shares
subject to the compensation program for the years 2012 and 2011:



|                        |  | Number of shares |          
|----------------------- |  | ---------------- | ---------
|                        |  | 2012             |          
|                        |  |                  |          
|Opening balance         |  |                  | 3,593,733
|Granted during the year |  |                  | 790,000  
|Retired during the year |  |                  | (82,000  
|Expired during the year |  |                  | (332,069 
|                        |  |                  |          
|Ending balance          |  |                  | 3,969,664



The payment obligations of shares
subject to the compensation program per year are: 454,686 in 2013; 602,532 in 2014; 728,031 in 2015; 611,115 in 2016 and 1,573,300
thereafter.



The average real prices for the programs granted
and expiring in the months of January 2013 and 2012 were US$34.86 and US$40.04 per share, respectively.



The table below presents the movement of the stock
appreciation rights for the years 2012, 2011 and 2010:



|                                |  | 2012     |         |   | 2011     |  |         | 2010     | 
|------------------------------- |  | -------- | ------- | - | -------- |  | ------- | -------- | 
|                                |  | US$(000) |         |   | US$(000) |  |         | US$(000) | 
|                                |  |          |         |   |          |  |         |          | 
|Opening balance                 |  |          | 43,188  |   |          |  | 69,380  |          | 
|Valuation (reverse) of the year |  |          | 1,799   |   |          |  | (5,693  | )        | 
|Payments made during the year   |  |          | (16,729 | ) |          |  | (20,499 | )        | 
|                                |  |          | 28,258  |   |          |  | 43,188  |          | 
|                                |  |          |         |   |          |  |         |          | 
|Less - non-current portion      |  |          | (22,203 | ) |          |  | (26,457 | )        | 
|                                |  |          |         |   |          |  |         |          | 
|Current portion                 |  |          | 6,055   |   |          |  | 16,731  |          | 



F-70







Notes to the consolidated financial statements (continued)



| | 15. | Financial obligations
| | --- | ---------------------

| | (a) | The table below presents the detail of financial obligations: as of December 31, 2012 and 2011.
| | --- | -----------------------------------------------------------------------------------------------



|                                                  |  | Original amount |         |  | Period |          | Guarantee |                  | Annual interest rate |                                                                                                      | Maturities |                                                                                     | 2012     |  |          | 2011     | 
|------------------------------------------------- |  | --------------- | ------- |  | ------ | -------- | --------- | ---------------- | -------------------- | ---------------------------------------------------------------------------------------------------- | ---------- | ----------------------------------------------------------------------------------- | -------- |  | -------- | -------- | 
|                                                  |  | US$(000)        |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     | US$(000) |  |          | US$(000) | 
|                                                  |  |                 |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     |          |  |          |          | 
|Empresa
    de Generación Huanza S.A.             |  |                 |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     |          |  |          |          | 
|Banco de Credito
    del Peru - Leasing (c)       |  |                 | 119,000 |  |        | 10 years |           | Leased equipment |                      | Three-month Libor plus 4.00% (4.306%
    as of December 31, 2012 and 4.581% as of December 31, 2011) |            | Quarterly maturities to during seven
    years from capitalization                  |          |  | 119,000  |          | 
|Sociedad
    Minera El Brocal S.A.A.              |  |                 |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     |          |  |          |          | 
|Banco de Credito del Peru
    - Loan (b)          |  |                 | 120,000 |  |        | 4 years  |           | None             |                      | Three-month Libor plus 3% (3.32% as of December 31,
    2012)                                        |            | Quarterly maturities US$2,812 and a payment
    of US$45,000 at the end of the loan |          |  | 60,000   |          | 
|                                                  |  |                 |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     |          |  |          |          | 
|Leasing                                           |  |                 | 329     |  |        | 2 years  |           | Leased equipment |                      | 4.60%                                                                                                |            | Monthly maturities of US$13,569 from August 2012
    to July 2014                   |          |  | 257      |          | 
|                                                  |  |                 |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     |          |  |          |          | 
|Consorcio
    Energético de Huancavelica S.A.     |  |                 |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     |          |  |          |          | 
|BBVA Banco Continental
    - Working Capital Loan |  |                 | 10,000  |  |        | 4 years  |           | None             |                      | Three-month Libor plus 1.25%                                                                         |            | Quarterly maturities of US$500,000 from September 2007  to
    June 2012            |          |  | -        |          | 
|                                                  |  |                 |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     |          |  |          |          | 
|Other
    minor                                   |  |                 |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     |          |  | 47       |          | 
|                                                  |  |                 |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     |          |  | 179,304  |          | 
|                                                  |  |                 |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     |          |  |          |          | 
|Non-current
    portion                           |  |                 |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     |          |  | (173,489 | )        | 
|                                                  |  |                 |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     |          |  |          |          | 
|Current
    portion                               |  |                 |         |  |        |          |           |                  |                      |                                                                                                      |            |                                                                                     |          |  | 5,815    |          | 



| | (b) | On September 28, 2012, El Brocal subscribed a medium-term loan contract with Banco de Credito del Peru amounted to US$120,000,000;
which was approved by El Brocal  ́s Board of Directors on April 23, 2012, with the following terms and conditions:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-71







Notes to the consolidated financial statements (continued)



| | - | Capital: US$120,000,000.
| | - | ------------------------

| | - | Term and annual interest rate: 4 years with a variable rate (Three-month Libor plus 3 points).
| | - | ----------------------------------------------------------------------------------------------

| | - | Guarantee: Pledge of 2 contract of sale of concentrate, one of copper and another of lead.
| | - | ------------------------------------------------------------------------------------------

| | - | Amortization: Quarterly constant maturities and a final payment of 25 percent of capital.
| | - | -----------------------------------------------------------------------------------------

| | - | Availability of the loan period: Until May 2013.
| | - | ------------------------------------------------



At the same time to obtain the loan described above,
El Brocal Management obtained 3 bridge loans amounted to US$44,000,000 in the form of simple notes, which were disbursed on July 18,
September 19, and November 14, 2012. The rate for these loans was signed by the same initial loan of US$120,000,000 (three-month
Libor + 3 percent, equivalent to 3.32 percent at December 31, 2012). These notes were cancelled in November of 2012 with the
first disbursement of US$60,000,000.



The interest expenses related to this loan as of
December 31, 2012 amounted to US$334,000, which have been capitalized in “Mining concessions, development costs and
property, plant and equipment, net” caption.



F-72







Notes to the consolidated financial statements (continued)



| | (c) | On December 2, 2010 Banco de Credito (hereinafter “the Bank”) executed a financial lease agreement with Consorcio
Energético Huancavelica S.A., Empresa de Generación Huanza S.A. and Compañía de Minas Buenaventura
S.A.A. for construction of a hydroelectric power station. This financial lease for US$119,000,000 is in favor of Empresa de Generación
Huanza S.A. (hereinafter “the Lessee”). This agreement stipulates that Buenaventura commits itself as a joint surety
of the Lessee, guaranteeing fulfillment of the pecuniary obligations in favor of the bank. As of December 31, 2012, the total
disbursement made by the bank amounted to US$119,000,000 (US$105,042,000 as of December 31, 2011).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | The financial obligations held by Buenaventura and its subsidiaries mature as follows:
| | --- | --------------------------------------------------------------------------------------



|Year                |  | 2012     |         |   | 2011     | 
|------------------- |  | -------- | ------- | - | -------- | 
|                    |  | US$(000) |         |   | US$(000) | 
|                    |  |          |         |   |          | 
|2012                |  |          | -       |   |          | 
|2013                |  |          | 5,815   |   |          | 
|2014                |  |          | 28,364  |   |          | 
|2015 thereafter     |  |          | 145,125 |   |          | 
|                    |  |          | 179,304 |   |          | 
|                    |  |          |         |   |          | 
|Current portion     |  |          | (5,815  | ) |          | 
|                    |  |          |         |   |          | 
|Non-current portion |  |          | 173,489 |   |          | 



| | 16. | Shareholders’ equity, net
| | --- | -------------------------

| | (a) | Capital stock -
| | --- | ---------------

The Company’s share capital
is stated in Nuevos Soles (S/.) and consists of common shares with voting rights that represent 100 percent of the Company’s
issued capital. The table below presents the components of the capital stock:



|                |  | As of December 31, 2012 and 2011 |            
|--------------- |  | -------------------------------- | -----------
|                |  | Number of shares                 |            
|                |  |                                  |            
|                |  |                                  |            
|Common shares   |  |                                  | 274,889,924
|Treasury shares |  |                                  | (21,130,260
|                |  |                                  | 253,759,664



F-73







Notes to the consolidated financial statements (continued)



The market value of common shares
amounted to US$36.06 as of December 31, 2012 (US$37.78 as of December 31, 2011) and it presented a trading frequency
of 97.61 percent (98.41 percent as of December 31, 2011).



| | (b) | Investment shares -
| | --- | -------------------

Investment shares do not have voting
rights or participate in shareholders’ meetings but do participate in the distribution of dividends. The table below presents
the components of investment shares:



|                           |  | As of December 31, 2012 |         
|-------------------------- |  | ----------------------- | --------
|                           |  | Number of shares        |         
|                           |  |                         |         
|                           |  |                         |         
|Investment shares          |  |                         | 744,640 
|Treasury investment shares |  |                         | (271,733
|                           |  |                         | 472,907 



|                           |  | As of December 31, 2011 |        
|-------------------------- |  | ----------------------- | -------
|                           |  | Number of shares        |        
|                           |  |                         |        
|                           |  |                         |        
|Investment shares          |  |                         | 744,640
|Treasury investment shares |  |                         | (61,976
|                           |  |                         | 682,664



The market value of investment
shares amounted to US$29.41 as of December 31, 2012 (US$37.70 as of December 31, 2011) and it presented a trading frequency
of 7.57 percent (12 percent as of December 31, 2011).



| | (c) | Legal reserve -
| | --- | ---------------

The Peruvian Corporations Law (Ley
General de Sociedades) requires that a minimum of ten percent of the distributable earnings for each period, after deducting
the income tax, be transferred to a legal reserve until the latter is equal to 20 percent of the capital stock. This legal reserve
can be used to offset losses or may be capitalized, with the obligation, in both cases, to replenish it.



For the years ending December 31,
2012, 2011 and 2010, the Company had not increased its legal reserve due to its legal reserve reached the limit mentioned before.



| | (d) | Dividends declared and paid -
| | --- | -----------------------------

The table below presents the dividends
declared and paid in 2012, 2011 and 2010:



F-74







Notes to the consolidated financial statements (continued)



|Meeting                                |  | Date       |  | Dividends declared and paid |             |   | Dividend  per share | 
|-------------------------------------- |  | ---------- |  | --------------------------- | ----------- | - | ------------------- | 
|                                       |  |            |  | US$                         |             |   | US$                 | 
|2012 Dividends                         |  |            |  |                             |             |   |                     | 
|Mandatory Annual Shareholders’ Meeting |  | March 26   |  |                             | 110,254,000 |   |                     | 
|Board of Directors’ Meeting            |  | October 30 |  |                             | 55,126,000  |   |                     | 
|Less – Dividends of treasury shares    |  |            |  |                             | (12,714,000 | ) |                     | 
|                                       |  |            |  |                             | 152,666,000 |   |                     | 
|2011 Dividends                         |  |            |  |                             |             |   |                     | 
|Mandatory Annual Shareholders’ Meeting |  | March 25   |  |                             | 90,959,000  |   |                     | 
|Board of Directors’ Meeting            |  | October 27 |  |                             | 63,396,000  |   |                     | 
|Less – Dividends of treasury shares    |  |            |  |                             | (11,867,000 | ) |                     | 
|                                       |  |            |  |                             | 142,488,000 |   |                     | 
|2010 Dividends                         |  |            |  |                             |             |   |                     | 
|Mandatory Annual Shareholders’ Meeting |  | March 26   |  |                             | 82,690,000  |   |                     | 
|Board of Directors’ Meeting            |  | October 28 |  |                             | 44,101,000  |   |                     | 
|Less – Dividends of treasury shares    |  |            |  |                             | (9,748,000  | ) |                     | 
|                                       |  |            |  |                             | 117,043,000 |   |                     | 



The effect of declared and paid
dividends by subsidiaries to non-controlling interest is made up as follows:



|                                     |  | 2012     |        |  | 2011     |  |        | 2010     | 
|------------------------------------ |  | -------- | ------ |  | -------- |  | ------ | -------- | 
|                                     |  | US$(000) |        |  | US$(000) |  |        | US$(000) | 
|                                     |  |          |        |  |          |  |        |          | 
|Sociedad Minera El Brocal S.A.A.     |  |          | 19,266 |  |          |  | 17,263 |          | 
|S.M.R.L. Chaupiloma Dos de Cajamarca |  |          | 14,820 |  |          |  | 14,280 |          | 
|Minera La Zanja S.R.L.               |  |          | 10,795 |  |          |  | 31,919 |          | 
|Inversiones Colquijirca S.A.         |  |          | -      |  |          |  | 3,274  |          | 
|                                     |  |          | 44,881 |  |          |  | 66,736 |          | 



| | 17. | Tax Situation
| | --- | -------------

| | (a) | The Company and its subsidiaries are subject to the Peruvian tax system. As of December 31, 2012, the income tax rate
was 30 percent on taxable income.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------



Legal entities and individuals
not domiciled in Peru are subject to an additional tax of 4.1 percent on the dividends received.



Through Law N°29666, published on February 20,
2011, it is restored the 16 percent of Value Added Tax being applicable from March 1, 2011.

Additionally, through Law N°29667, published
in the same date, the Financial Transactions Tax is reduced to 0.005 percent, being applicable from April 1, 2011.



F-75







Notes to the consolidated financial statements (continued)



| | (b) | During the four years following the year of filing tax returns the tax authorities have the power to review and, as applicable,
correct the income tax computed by the Company. The Income Tax and Value Added Tax (“IGV” by its Spanish acronym) returns
for the following years are open to review by Tax Authorities:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Entity                                                                       | Years open to review by TaxAuthorities
|---------------------------------------------------------------------------- | --------------------------------------
|                                                                             |                                       
|Compañía de Minas Buenaventura S.A.A.                                        | 2008, 2009, 2010, 2011 and 2012       
|Buenaventura Ingenieros S.A.                                                 | 2008, 2009, 2010, 2011 and 2012       
|Compañía de Exploraciones, Desarrollo e Inversiones Mineras S.A.C. – CEDIMIN | 2010, 2011 and 2012                   
|Compañía Minera Condesa S.A.                                                 | 2008, 2009, 2010, 2011 and 2012       
|Compañía Minera Colquirrumi S.A.                                             | 2008, 2009, 2010, 2011 and 2012       
|Consorcio Energético de Huancavelica S.A.                                    | 2008, 2009,  2011 and 2012            
|Contacto Corredores de Seguros S.A.                                          | 2008, 2009, 2010, 2011 and 2012       
|Inversiones Colquijirca S.A.                                                 | 2008, 2009, 2010, 2011 and 2012       
|Sociedad Minera El Brocal S.A.A.                                             | 2008, 2009, 2010, 2011 and 2012       
|S.M.R.L. Chaupiloma Dos de Cajamarca                                         | 2008, 2010, 2011 and 2012             
|Minera La Zanja S.R.L.                                                       | 2008, 2009, 2010, 2011 and  2012      
|El Molle Verde S.A.C.                                                        | 2011 and 2012                         
|Empresa de Generación Huanza S.A.                                            | 2008, 2009, 2010, 2011 and 2012       
|Procesadora Industrial Rio Seco S.A.                                         | 2010, 2011 and 2012                   



Due to the possible interpretations
that the Tax Authorities may give to legislation in effect, it is not possible to determine whether or not any of the tax audits
that will perform will result in increased liabilities for the Company. For that reason any tax or surcharge that could arise from
future tax audits would be applied to the income of the period in which it is determined. In Management’s opinion and its
legal advisors, any possible additional payment of taxes in the entities mentioned before would not have a material effect on the
consolidated financial statements as of December 31, 2012 and 2011.



Buenaventura -

Buenaventura’s Income Tax
Returns for the 2000 and 2003 periods have been audited by Tax Authorities. As a result of the aforesaid, the Tax Administration
has issued assessments denying recognition of Buenaventura’s tax-loss carryforwards reported as of December 31, 2000
and 2003 amounting to S/.71,160,000 (equivalent to US$27,895,000) and S/.18,224,000 (equivalent to US$7,144,000), respectively.
In October and November of 2012, the Fiscal Court resolve in favor to the Company the appeal process for the year 2000 and 2003,
determining that the dividends should not be considered as taxable for purposes of determining the tax-loss carryforward.



F-76







Notes to the consolidated financial statements (continued)



During the year 2007, the Tax Administration audited
Buenaventura’s Income Tax Returns for the 2004 and 2005 periods. As a consequence of the aforementioned, the Tax Administration
issued assessments denying recognition of some tax deductions by S/.77,921,000 (equivalent to US$30,545,000) in 2004 and S/.119,785,000
(equivalent to US$46,956,000) in 2005. The main objection considered as taxable income the reversal of the provision related to
commercial contracts, which in that time were not deducted to calculate Income Tax. To date, the Tax Administration has issued
a resolution, on the claim petition filed by the Company, to ratify the assessment made in the audit.



In July 2012, the Fiscal Court resolved the
appeal process of the year 2005 determining null the resolution related to the reversal of the provision related to commercial
contracts. As of the date of the consolidated financial statement, Tax Administration, through resolution, annulled the main objection
of considered as taxable income the reversal of the provision related to commercial contracts, calculating a tax debt for S/.9,384,000
(equivalent to US$3,679,000), including fiscal penalty which were appealed. In Management ́s opinion and its legal advisors,
the Company should obtain a favorable result in the appeal process that the Company has started against the resolution.



In October 2012, the Fiscal Court resolved the
appeal process of the year 2004, determining null the resolution related to the reversal of the provision related to commercial
contracts. As of the date of the consolidated financial statement, Tax Administration, through resolution, annulled the main objection
of considered as taxable income the reversal of the provision related to commercial contracts, calculating a tax debt for S/.246,000
(equivalent to US$96,000). As of the date of the consolidated financial statement, the debt has been paid.



During the year 2010, the Tax Administration audited
Buenaventura’s Income Tax and Value Added Tax for the 2006 period. As a consequence of the aforementioned, the Tax Administration
does not recognize some tax deductions made by the Company amounting to S/.184,339,000 (equivalent to US$72,261,000). The main
objection considered as taxable income the reversal of the provision related to commercial contracts. Also, the Tax Administration
considered the explosive delivery to mining contractors as a transaction subject to Income Tax and Value Added Tax amounting to
S/.12,275,000 (equivalent to US$4,812,000). To date, the Tax Administration has issued a resolution, on the claim petition filed
by the Company, to ratify the assessment made in the audit.



In July 2012, the Fiscal Court resolved the
appeal process of the year 2006, determining null the resolution related to the reversal of the provision related to commercial
contracts and annulled the explosive delivery to mining contractors. As of the date of the consolidated financial statement, Tax
Administration, through resolution, annulled the main objection of considered as taxable income the reversal of the provision related
to commercial contracts, calculating a tax debt for S/.3,314,000 (equivalent to US$1,299,000). As of the date of the consolidated
financial statement, the debt has been paid.



F-77







Notes to the consolidated financial statements (continued)



The Income Tax declared by the
Company for the years 2008 to 2011 and Value Added Tax by the periods from December 2008 and December 2012, are subject
to be audited by tax authorities. It is important to mention that currently the Tax Administration is auditing 2007 Income Tax.
Furthermore, the Company has been notified by Tax Administration the beginning of the audit of the income tax declare by the Company
for the year 2008 and Value Added Tax for the period between January and December 2008, the audit will begin in March 2013.



Due to the possible interpretations
that the Tax Authorities may give to legislation in effect, it is not possible to determine whether or not any of the tax audits
that will perform will result in increased liabilities for the Company. For that reason any tax or surcharge that could arise from
future tax audits would be applied to the income of the period in which it is determined. However, in Management’s opinion
and its legal advisors, any possible additional payment of taxes would not have a material effect on the consolidated financial
statements as of December 31, 2012 and 2011.



Cedimin -

Cedimin ́s Income Tax Return
for the 2002 period has been audited by the Tax Administration. As a result, the Tax Administration has issued assessments modifying
the tax-loss carryforward declared by Cedimin. In those periods the principal objection is against having considered Cedimin ́s
loss of S/.22,041,000 (US$8,640,000) on the sale of Minera Huallanca S.A.C. and Minera Yanaquihua S.A. shares as non-deductible.
In the opinion of Cedimin ́s Management and its legal advisors, this interpretation has no legal basis, for which reason Cedimin
would obtain a favorable result in the tax claim procedure initiated against the above-indicated assessment.



Condesa -

Condesa ́s Income Tax Returns for the 2000,
2001 and 2003 periods have been audited by the Tax Administration. As a result of the aforesaid, the Tax Administration has issued
assessments reducing the tax-loss carryforwards from previous years, which Condesa had reported in those periods, by S/.31,338,000
(US$12,285,000). For these periods, the principal objection is against having considered non-taxable income (dividends) as taxable
for purposes of determining the tax-loss carryforward.



F-78







Notes to the consolidated financial statements (continued)



In October 2011, the Fiscal
Court issued the resolutions with favourable result to Condesa. Therefore, tax-loss carryforward reported by Condesa is correctly
recognized for 2000, 2001 and 2003.



Sociedad Minera El Brocal S.A.A.
-

In 2006 the Tax Administration
audited El Brocal Income tax return for the 2003 period, determining objections of S/.2,292,018 (equivalent to US$898,478) to net
income for the period for under-reporting sales by the improper deduction of freight and insurance on mineral exports, which results
in a reduction of the tax-loss carryforwards for the mentioned amount. The penalty resolution issued for this objection amounts
to S/.343,803 (equivalent to US$134,772, without penalty interest) and was not accepted by El Brocal, therefore a claim was filed
against the penalty. On November 30, 2010, the Tax Administration has issued a resolution No. 0150140009380, which rejected
Brocal ́s claim. Brocal do not agree with the scope of the resolution and a claim was presented to Fiscal Court on January 10,
2011, in accordance with the deadlines established by the Tax Code.



The Income Tax declared by the
Company for the years 2008 to 2012 and Value Added Tax by the periods from December 2008, January 2010 to December 2012,
are subject to be audited by tax authorities.



| | (c) | As of December 31, 2012 and 2011, the tax-loss carryforward determined by Buenaventura amounts to approximately S/.278,391,000
and S/.595,924,000 respectively (equivalent to US$109,130,000 and US$220,958,000). In November 2010, a restated income tax
return was submitted for 2009 which increased the tax-loss carryforward. As allowed by the Income Tax Law, Buenaventura has chosen
a system for offsetting this loss with an annual cap equivalent to 50 percent of net future taxable income, until exhausting this
amount. The amount of the tax-loss carryforward is subject to the results of the audits mentioned in the previous paragraph (b).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Buenaventura has decided to recognize a deferred
income tax asset insofar as there it is more likely than not that the tax-loss carryforward can be used to offset future taxable
net income. See note 24.



| | (d) | For purposes of determining the Income Tax, the transfer prices for transactions with related companies and companies domiciled
in territories with little or no taxation must be substantiated with documentation and information on the valuation methods used
and the criteria considered for their determination. Tax Administration can request this information based on analysis of the Company’s
operations, the Company’s Management and its legal advisers believe that, as a result of the application of these standards,
no material contingencies will arise for the Company as of December 31, 2012 and 2011. In accordance with the Legislative
Decree 1116, effective since August 1, 2012, those standards are not applicable to the determination of Value Added Tax.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-79







Notes to the consolidated financial statements (continued)



| | (e) | As mentioned in the note 2.3.(r) payments to the Government for mining royalties and special mining tax are under the scope
of IAS 12, therefore, they are managed as were income tax, see detail in note 24(d).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | On July 9, 2011, Law No. 29741 was enacted, which created the Supplemental Retirement Mining, Metallurgy and Steel Fund
as a social security fund for workers of undertakings included in such sectors. Subsequently, dated May 11, 2012, Supreme
Decree No. 006-2012-TR was issued, through which approved the regulations of the Law mentioned above.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



According to Article 1 of
the Law, the Fund is constituted by the following contributions: (i) 0.5 percent of the annual pre-tax income of mining metallurgical
and steel, and (ii) 0.5 percent monthly of gross monthly salary of each worker mining, metallurgical and steel.



| | 18. | Net sales
| | --- | ---------

The Company’s revenues are mostly from sales
of gold and precious metals in the form of concentrates, including silver-lead, silver-gold, zinc and lead-gold-copper concentrates
and ounces of gold. The table below presents the net sales to customers by geographic region and product type:



|                           |  | 2012     |           |  | 2011     |  |           | 2010     | 
|-------------------------- |  | -------- | --------- |  | -------- |  | --------- | -------- | 
|                           |  | US$(000) |           |  | US$(000) |  |           | US$(000) | 
|                           |  |          |           |  |          |  |           |          | 
|Sales by geographic region |  |          |           |  |          |  |           |          | 
|America                    |  |          | 742,103   |  |          |  | 710,729   |          | 
|Peru                       |  |          | 556,407   |  |          |  | 600,147   |          | 
|Europe                     |  |          | 98,085    |  |          |  | 132,662   |          | 
|Asia                       |  |          | 53,090    |  |          |  | 8,321     |          | 
|                           |  |          | 1,449,685 |  |          |  | 1,451,859 |          | 
|Services rendered          |  |          |           |  |          |  |           |          | 
|Peru                       |  |          | 46,656    |  |          |  | 41,225    |          | 
|America                    |  |          | 8         |  |          |  | 82        |          | 
|Asia                       |  |          | -         |  |          |  | 710       |          | 
|Europe                     |  |          | -         |  |          |  | 6         |          | 
|                           |  |          |           |  |          |  |           |          | 
|                           |  |          | 1,496,349 |  |          |  | 1,493,882 |          | 



F-80







Notes to the consolidated financial statements (continued)



|                                                  |  | 2012     |           |   | 2011     |  |           | 2010     | 
|------------------------------------------------- |  | -------- | --------- | - | -------- |  | --------- | -------- | 
|                                                  |  | US$(000) |           |   | US$(000) |  |           | US$(000) | 
|                                                  |  |          |           |   |          |  |           |          | 
|Sales by product                                  |  |          |           |   |          |  |           |          | 
|Gold                                              |  |          | 738,477   |   |          |  | 791,387   |          | 
|Silver                                            |  |          | 544,947   |   |          |  | 526,380   |          | 
|Copper                                            |  |          | 177,573   |   |          |  | 193,215   |          | 
|Zinc                                              |  |          | 82,873    |   |          |  | 72,095    |          | 
|Lead                                              |  |          | 52,834    |   |          |  | 36,880    |          | 
|                                                  |  |          | 1,596,704 |   |          |  | 1,619,957 |          | 
|Deductions                                        |  |          | (147,930  | ) |          |  | (127,957  | )        | 
|Prior-period settlements                          |  |          | (15,609   | ) |          |  | 2,429     |          | 
|                                                  |  |          | 1,433,165 |   |          |  | 1,494,429 |          | 
|Adjustment to open provisional liquidations       |  |          | 14,816    |   |          |  | (22,679   | )        | 
|Embedded derivatives from sale of concentrate (a) |  |          | 1,776     |   |          |  | (11,210   | )        | 
|Hedging operations                                |  |          | (72       | ) |          |  | (8,681    | )        | 
|                                                  |  |          | 1,449,685 |   |          |  | 1,451,859 |          | 
|Sale of services, power and other minor items     |  |          | 46,664    |   |          |  | 42,023    |          | 
|                                                  |  |          |           |   |          |  |           |          | 
|                                                  |  |          | 1,496,349 |   |          |  | 1,493,882 |          | 



| | (a) | Embedded derivative for sales of concentrate -
| | --- | ----------------------------------------------

Concentrates sales are based on
commercial contracts, from which a provisional value based on forward quotation. The sales adjustments are considered an embedded
derivative, which is required to be separated from the host commercial contract. Commercial contract are related to the quotation
prices (London Metal Exchange). The embedded derivative, which does not qualify for hedge accounting, therefore, changes in the
fair value are charge to profit and loss. Final quotations are settled in different months, according to the commercial contracts.



The adjustments to the provisional sale value are
recorded as an adjustment in the current net sales. These adjustments resulted in higher sales by US$1,776,000, lower sales by
US$11,210,000; and higher sales by US$13,870,000 in 2012, 2011 and 2010, respectively, as a result of the future behavior of metal
prices trade by the Company at the cutoff date.



| | (b) | Concentration of sales -
| | --- | ------------------------

In 2012, the three most important customers represented
48, 15 and 8 percent of total sales (58, 21 and 6 percent of total sales in 2011). As of December 31, 2012, 68 percent of
the accounts receivable is related to these customers (86 percent as of December 31, 2011). The Company’s sales of gold
and concentrates are delivered to investment banks and national and international well known companies. See note 28(b). Some have
sales contracts that guarantee supplying them the production from the Company’s mines at prices that are based on market
quotations.



F-81







Notes to the consolidated financial statements (continued)



| | 19. | Costs of sales, without considering depreciation and amortization
| | --- | -----------------------------------------------------------------

The table below presents the components of this
caption:



|                                                      |  | 2012     |          |   | 2011     |  |          | 2010     | 
|----------------------------------------------------- |  | -------- | -------- | - | -------- |  | -------- | -------- | 
|                                                      |  | US$(000) |          |   | US$(000) |  |          | US$(000) | 
|                                                      |  |          |          |   |          |  |          |          | 
|Opening balance of products in process, note 8(a)     |  |          | 140,775  |   |          |  | 77,441   |          | 
|Opening balance of finished goods, note 8(a)          |  |          | 19,026   |   |          |  | 6,750    |          | 
|                                                      |  |          | 159,801  |   |          |  | 84,191   |          | 
|                                                      |  |          |          |   |          |  |          |          | 
|Services provided by third parties                    |  |          | 274,100  |   |          |  | 173,162  |          | 
|Consumption of materials and supplies                 |  |          | 133,983  |   |          |  | 101,700  |          | 
|Direct labor                                          |  |          | 103,828  |   |          |  | 103,313  |          | 
|Electricity and water                                 |  |          | 29,966   |   |          |  | 35,083   |          | 
|Cost of concentrate purchase to third parties         |  |          | 18,563   |   |          |  | 16,917   |          | 
|Transport                                             |  |          | 16,389   |   |          |  | 13,445   |          | 
|Insurance                                             |  |          | 11,973   |   |          |  | 9,658    |          | 
|Rentals                                               |  |          | 9,835    |   |          |  | 24,542   |          | 
|Maintenance and repair                                |  |          | 7,016    |   |          |  | 5,256    |          | 
|Provision for impairment of finished goods, note 8(f) |  |          | 212      |   |          |  | 383      |          | 
|Other production expenses                             |  |          | 43,522   |   |          |  | 38,314   |          | 
|                                                      |  |          | 649,387  |   |          |  | 521,773  |          | 
|                                                      |  |          |          |   |          |  |          |          | 
|Final balance of products in process, note 8(a)       |  |          | (148,533 | ) |          |  | (140,775 | )        | 
|Final balance of finished goods, note 8(a)            |  |          | (31,163  | ) |          |  | (19,026  | )        | 
|                                                      |  |          | (179,696 | ) |          |  | (159,801 | )        | 
|                                                      |  |          |          |   |          |  |          |          | 
|                                                      |  |          | 629,492  |   |          |  | 446,163  |          | 



F-82







Notes to the consolidated financial statements (continued)



| | 20. | Exploration in operating units
| | --- | ------------------------------

The table below presents the components of this
caption:



|                     |  | 2012     |         |  | 2011     |  |         | 2010     | 
|-------------------- |  | -------- | ------- |  | -------- |  | ------- | -------- | 
|                     |  | US$(000) |         |  | US$(000) |  |         | US$(000) | 
|                     |  |          |         |  |          |  |         |          | 
|Exploration expenses |  |          |         |  |          |  |         |          | 
|Orcopampa            |  |          | 49,079  |  |          |  | 33,391  |          | 
|Poracota             |  |          | 30,105  |  |          |  | 18,244  |          | 
|Uchucchacua          |  |          | 29,306  |  |          |  | 20,223  |          | 
|Antapite             |  |          | 12,222  |  |          |  | 7,271   |          | 
|Mallay               |  |          | 8,018   |  |          |  | -       |          | 
|Recuperada           |  |          | 7,476   |  |          |  | 5,847   |          | 
|Julcani              |  |          | 7,327   |  |          |  | 6,563   |          | 
|Shila - Paula        |  |          | 6,371   |  |          |  | 15,482  |          | 
|La Zanja             |  |          | 2,517   |  |          |  | 2,334   |          | 
|Breapampa            |  |          | 308     |  |          |  | -       |          | 
|Caraveli             |  |          | 236     |  |          |  | -       |          | 
|Other                |  |          | 53      |  |          |  | -       |          | 
|                     |  |          |         |  |          |  |         |          | 
|                     |  |          | 153,018 |  |          |  | 109,355 |          | 



| | 21. | Royalties
| | --- | ---------

The table below presents the components of this
caption:



|                                               |  | 2012     |        |  | 2011     |  |        | 2010     | 
|---------------------------------------------- |  | -------- | ------ |  | -------- |  | ------ | -------- | 
|                                               |  | US$(000) |        |  | US$(000) |  |        | US$(000) | 
|                                               |  |          |        |  |          |  |        |          | 
|Sindicato Minero de Orcopampa S.A., note 30(b) |  |          | 34,863 |  |          |  | 31,882 |          | 
|Peruvian Goverment                             |  |          | 2,489  |  |          |  | 28,222 |          | 
|Minera El Futuro de Ica S.R.L., note 30(b)     |  |          | 315    |  |          |  | 158    |          | 
|                                               |  |          |        |  |          |  |        |          | 
|                                               |  |          | 37,667 |  |          |  | 60,262 |          | 



| | 22. | Administrative expense
| | --- | ----------------------

The table below presents the components of this
caption:



|                                                 |  | 2012     |        |  | 2011     |  |        | 2010     | 
|------------------------------------------------ |  | -------- | ------ |  | -------- |  | ------ | -------- | 
|                                                 |  | US$(000) |        |  | US$(000) |  |        | US$(000) | 
|                                                 |  |          |        |  |          |  |        |          | 
|Personnel expense                                |  |          | 40,665 |  |          |  | 38,466 |          | 
|Other management expenses                        |  |          | 28,796 |  |          |  | 17,969 |          | 
|Professional fees                                |  |          | 12,307 |  |          |  | 12,116 |          | 
|Insurance                                        |  |          | 2,901  |  |          |  | 726    |          | 
|Board of Directors’ participation                |  |          | 2,522  |  |          |  | 2,591  |          | 
|Donations                                        |  |          | 2,181  |  |          |  | 1,878  |          | 
|Rent                                             |  |          | 2,058  |  |          |  | 2,653  |          | 
|Travel and mobility                              |  |          | 1,846  |  |          |  | 731    |          | 
|Valuation (reversed) of stock appreciation right |  |          | 1,720  |  |          |  | (5,982 | )        | 
|Supplies                                         |  |          | 1,669  |  |          |  | 1,162  |          | 
|Communications                                   |  |          | 989    |  |          |  | 783    |          | 
|Subscription and quote                           |  |          | 768    |  |          |  | 976    |          | 
|Maintenance                                      |  |          | 457    |  |          |  | 729    |          | 
|Canon                                            |  |          | 377    |  |          |  | 83     |          | 
|Amortization of other assets                     |  |          | 39     |  |          |  | 239    |          | 
|Allowance for doubtful accounts                  |  |          | -      |  |          |  | 50     |          | 
|                                                 |  |          |        |  |          |  |        |          | 
|                                                 |  |          | 99,295 |  |          |  | 75,170 |          | 



F-83







Notes to the consolidated financial statements (continued)



| | 23. | Exploration in non-operating areas
| | --- | ----------------------------------

The expenses by exploration area are presented below:



|                                          |  | 2012     |        |  | 2011     |  |        | 2010     | 
|----------------------------------------- |  | -------- | ------ |  | -------- |  | ------ | -------- | 
|                                          |  | US$(000) |        |  | US$(000) |  |        | US$(000) | 
|                                          |  |          |        |  |          |  |        |          | 
|Projects outside of mining units          |  |          |        |  |          |  |        |          | 
|Trapiche                                  |  |          | 16,145 |  |          |  | 4,731  |          | 
|San Gregorio                              |  |          | 11,292 |  |          |  | 3,015  |          | 
|Focus - Chancas                           |  |          | 6,381  |  |          |  | 1,957  |          | 
|Consolidado de Hualgayoc                  |  |          | 5,704  |  |          |  | 1,937  |          | 
|Breapampa                                 |  |          | 5,571  |  |          |  | 5,565  |          | 
|Chiptaj - Chancas                         |  |          | 4,360  |  |          |  | 1,813  |          | 
|Colquemayo                                |  |          | 3,973  |  |          |  | 4,042  |          | 
|San Pedro Sur                             |  |          | 2,477  |  |          |  | -      |          | 
|Chacua (San Francisco)                    |  |          | 2,209  |  |          |  | 1,612  |          | 
|Mallay                                    |  |          | 1,959  |  |          |  | 10,536 |          | 
|Surichata                                 |  |          | 1,088  |  |          |  | -      |          | 
|El Faique                                 |  |          | 916    |  |          |  | 590    |          | 
|Vacas Heladas                             |  |          | 453    |  |          |  | 736    |          | 
|La Joya                                   |  |          | 324    |  |          |  | 1,577  |          | 
|Anamaray                                  |  |          | 159    |  |          |  | 99     |          | 
|Chaje                                     |  |          | 24     |  |          |  | 206    |          | 
|Terciopelo                                |  |          | 23     |  |          |  | 133    |          | 
|Pachuca Norte - Mexico                    |  |          | -      |  |          |  | 3,264  |          | 
|Other minor projects less than US$500,000 |  |          | 10,524 |  |          |  | 991    |          | 
|                                          |  |          | 73,582 |  |          |  | 42,804 |          | 
|Projects in mining units                  |  |          |        |  |          |  |        |          | 
|Shila                                     |  |          | 16,191 |  |          |  | -      |          | 
|Marcapunta                                |  |          | 3,119  |  |          |  | 6,789  |          | 
|Santa Barbara                             |  |          | 2,599  |  |          |  | -      |          | 
|                                          |  |          |        |  |          |  |        |          | 
|                                          |  |          | 95,491 |  |          |  | 49,593 |          | 



F-84







Notes to the consolidated financial statements (continued)



| | 24. | Deferred income tax
| | --- | -------------------

| | (a) | The Company and its subsidiaries recognize the effects of timing differences between the accounting basis and the tax basis.
The table below presents the components of this caption, according to the items that give rise to them:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                    |  | As of 
    January 1, 2011 |         |   | Credit (debit) to
    the consolidated Income statement |  |         | Credit (debit) to the
    consolidated changes in shareholders ́equity |  |  | As of December 31, 
     2011 |   |  | Credit (debit) to the
    consolidated Income statement |         |   | Credit (debit) to the
    consolidated changes in shareholders ́
equity |  |         | As of December 31,
    2012 | 
|----------------------------------------------------------------------------------- |  | -------------------------- | ------- | - | ------------------------------------------------------- |  | ------- | --------------------------------------------------------------------- |  |  | ----------------------------- | - |  | ------------------------------------------------------- | ------- | - | ---------------------------------------------------------------------- |  | ------- | --------------------------- | 
|                                                                                    |  | US$(000)                   |         |   | US$(000)                                                |  |         | US$(000)                                                              |  |  | US$(000)                      |   |  | US$(000)                                                |         |   | US$(000)                                                               |  |         | US$(000)                    | 
|Deferred
    asset for income tax included in results                               |  |                            |         |   |                                                         |  |         |                                                                       |  |  |                               |   |  |                                                         |         |   |                                                                        |  |         |                             | 
|Difference
    in depreciation and amortization rates                               |  |                            | 19,208  |   |                                                         |  | 8,831   |                                                                       |  |  | -                             |   |  |                                                         | 28,039  |   |                                                                        |  | 12,172  |                             | 
|Tax – loss carryforward                                                             |  |                            | 125,363 |   |                                                         |  | (59,053 | )                                                                     |  |  | -                             |   |  |                                                         | 66,310  |   |                                                                        |  | (33,522 | )                           | 
|Effect of translation
    to U.S. dollars                                           |  |                            | 5,930   |   |                                                         |  | 3,130   |                                                                       |  |  | -                             |   |  |                                                         | 9,060   |   |                                                                        |  | 7,746   |                             | 
|Provision for closure
    of mining units, net                                      |  |                            | 13,774  |   |                                                         |  | 1,132   |                                                                       |  |  | -                             |   |  |                                                         | 14,906  |   |                                                                        |  | 469     |                             | 
|Stock appreciation rights
    provision                                             |  |                            | 20,862  |   |                                                         |  | (7,545  | )                                                                     |  |  | -                             |   |  |                                                         | 13,317  |   |                                                                        |  | (4,864  | )                           | 
|Environmental liability
    for Mina Santa Barbara                                  |  |                            | 1,494   |   |                                                         |  | -       |                                                                       |  |  | -                             |   |  |                                                         | 1,494   |   |                                                                        |  | 127     |                             | 
|Embedded derivative from
    sale of concentrates                                   |  |                            | 1,327   |   |                                                         |  | 929     |                                                                       |  |  | -                             |   |  |                                                         | 2,256   |   |                                                                        |  | (853    | )                           | 
|Other
    minor                                                                     |  |                            | 7,784   |   |                                                         |  | 2,053   |                                                                       |  |  | -                             |   |  |                                                         | 9,837   |   |                                                                        |  | 5,693   |                             | 
|                                                                                    |  |                            | 195,742 |   |                                                         |  | (50,523 | )                                                                     |  |  | -                             |   |  |                                                         | 145,219 |   |                                                                        |  | (13,032 | )                           | 
|Less
    – Allowance for deferred asset recoverability                              |  |                            | (2,622  | ) |                                                         |  | (1,177  | )                                                                     |  |  | -                             |   |  |                                                         | (3,799  | ) |                                                                        |  | (1,518  | )                           | 
|                                                                                    |  |                            | 193,120 |   |                                                         |  | (51,700 | )                                                                     |  |  | -                             |   |  |                                                         | 141,420 |   |                                                                        |  | (14,550 | )                           | 
|                                                                                    |  |                            |         |   |                                                         |  |         |                                                                       |  |  |                               |   |  |                                                         |         |   |                                                                        |  |         |                             | 
|Deferred
    asset included in retained earnings                                    |  |                            |         |   |                                                         |  |         |                                                                       |  |  |                               |   |  |                                                         |         |   |                                                                        |  |         |                             | 
|Derivative
    financial instruments                                                |  |                            | 6,957   |   |                                                         |  | -       |                                                                       |  |  | (6,468                        | ) |  |                                                         | 489     |   |                                                                        |  | -       |                             | 
|                                                                                    |  |                            | 200,077 |   |                                                         |  | (51,700 | )                                                                     |  |  | (6,468                        | ) |  |                                                         | 141,909 |   |                                                                        |  | (14,550 | )                           | 
|Deferred
    assets for mining royalties and special mining tax included in results |  |                            |         |   |                                                         |  |         |                                                                       |  |  |                               |   |  |                                                         |         |   |                                                                        |  |         |                             | 
|Exploration expenses                                                                |  |                            | -       |   |                                                         |  | 2,157   |                                                                       |  |  | -                             |   |  |                                                         | 2,157   |   |                                                                        |  | 1,319   |                             | 
|Embedded derivatives from
    sale of concentrate                                   |  |                            | -       |   |                                                         |  | 335     |                                                                       |  |  | -                             |   |  |                                                         | 335     |   |                                                                        |  | (144    | )                           | 
|Final
    price adjustment of open provisional liquidations                         |  |                            | -       |   |                                                         |  | 828     |                                                                       |  |  | -                             |   |  |                                                         | 828     |   |                                                                        |  | (804    | )                           | 
|                                                                                    |  |                            | -       |   |                                                         |  | 3,320   |                                                                       |  |  | -                             |   |  |                                                         | 3,320   |   |                                                                        |  | 371     |                             | 
|Total
    deferred asset                                                            |  |                            | 200,077 |   |                                                         |  | (48,380 | )                                                                     |  |  | (6,468                        | ) |  |                                                         | 145,229 |   |                                                                        |  | (14,179 | )                           | 



F-85







Notes to the consolidated financial statements (continued)



|                                                                   |  | As of 
    January 1, 2011 |         |   | Credit (debit) to
    the consolidated Income statement |  |       | Credit (debit) to the
    consolidated changes in shareholders ́equity |  |  | As of December 31, 
     2011 |  |  | Credit (debit) to the
    consolidated Income statement |         |   | Credit (debit) to the
    consolidated changes in shareholders ́
equity |  |        | As of December 31,
    2012 | 
|------------------------------------------------------------------ |  | -------------------------- | ------- | - | ------------------------------------------------------- |  | ----- | --------------------------------------------------------------------- |  |  | ----------------------------- |  |  | ------------------------------------------------------- | ------- | - | ---------------------------------------------------------------------- |  | ------ | --------------------------- | 
|                                                                   |  | US$(000)                   |         |   | US$(000)                                                |  |       | US$(000)                                                              |  |  | US$(000)                      |  |  | US$(000)                                                |         |   | US$(000)                                                               |  |        | US$(000)                    | 
|Deferred
    liability for income tax included in results          |  |                            |         |   |                                                         |  |       |                                                                       |  |  |                               |  |  |                                                         |         |   |                                                                        |  |        |                             | 
|Differences
    in amortization rates for development costs        |  |                            | (18,163 | ) |                                                         |  | 3,278 |                                                                       |  |  | -                             |  |  |                                                         | (14,885 | ) |                                                                        |  | 1,792  |                             | 
|Deemed cost of fixed assets                                        |  |                            | (4,848  | ) |                                                         |  | 1,469 |                                                                       |  |  | -                             |  |  |                                                         | (3,379  | ) |                                                                        |  | 1,094  |                             | 
|Unrealized loss on financial
    instruments                       |  |                            | -       |   |                                                         |  | (384  | )                                                                     |  |  | -                             |  |  |                                                         | (384    | ) |                                                                        |  | -      |                             | 
|Other minor                                                        |  |                            | (251    | ) |                                                         |  | 6     |                                                                       |  |  | -                             |  |  |                                                         | (245    | ) |                                                                        |  | (1,131 | )                           | 
|Embedded
    derivatives from sale of concentrate                  |  |                            | (2,765  | ) |                                                         |  | 2,565 |                                                                       |  |  | -                             |  |  |                                                         | (200    | ) |                                                                        |  | 171    |                             | 
|                                                                   |  |                            | (26,027 | ) |                                                         |  | 6,934 |                                                                       |  |  | -                             |  |  |                                                         | (19,093 | ) |                                                                        |  | 1,926  |                             | 
|Deferred
    liability for mining royalties and special mining tax |  |                            |         |   |                                                         |  |       |                                                                       |  |  |                               |  |  |                                                         |         |   |                                                                        |  |        |                             | 
|Deemed cost of fixed assets                                        |  |                            | -       |   |                                                         |  | (501  | )                                                                     |  |  | -                             |  |  |                                                         | (501    | ) |                                                                        |  | 217    |                             | 
|Adjustment to open provisional
    liquidations                    |  |                            | -       |   |                                                         |  | -     |                                                                       |  |  | -                             |  |  |                                                         | -       |   |                                                                        |  | (151   | )                           | 
|Derivative financial instruments                                   |  |                            | -       |   |                                                         |  | (54   | )                                                                     |  |  | -                             |  |  |                                                         | (54     | ) |                                                                        |  | -      |                             | 
|Embedded
    derivatives from sale of concentrate                  |  |                            | -       |   |                                                         |  | (43   | )                                                                     |  |  | -                             |  |  |                                                         | (43     | ) |                                                                        |  | 43     |                             | 
|                                                                   |  |                            | -       |   |                                                         |  | (598  | )                                                                     |  |  | -                             |  |  |                                                         | (598    | ) |                                                                        |  | 109    |                             | 
|Total
    deferred liability                                       |  |                            | (26,027 | ) |                                                         |  | 6,336 |                                                                       |  |  | -                             |  |  |                                                         | (19,691 | ) |                                                                        |  | 2,035  |                             | 
|Deferred asset, net                                                |  |                            | 174,050 |   |                                                         |  |       |                                                                       |  |  |                               |  |  |                                                         | 125,538 |   |                                                                        |  |        |                             | 

F-86







Notes to the consolidated financial statements (continued)



Buenaventura has not recognized
deferred income tax liability in relation to the excess of the accounting basis over the tax basis of investments in shares due
to the following:



| | - | In the case of the Cerro Verde associate, Buenaventura has not recognized a deferred income tax asset for US$369,206,000 as
of December 31, 2012 (deferred asset of US$363,097,000 as of December 31, 2011), given that Buenaventura’s Management,
even though only exercising significant influence over this associate, has the intention and capacity to hold this investment until
its copper reserves are depleted; in this sense, Management believes that the timing differences will be reversed by means of dividends
to be received in the future that, are not subject to the income tax paid by the Company. There is no legal or contractual obligation
that would require the Company’s Management to sell its investment in this associate (which event would result in a taxable
capital gain based on current tax law).
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | In the case of the Yanacocha associate, Buenaventura has not recognized a deferred income tax liability for US$236,463,000
as of December 31, 2012 (deferred liability of US$159,320,000 as of December 31, 2011), given that Buenaventura’s
Management, even though only exercising significant influence over this associate, has the intention and capacity to hold this
investment until its gold and silver reserves are depleted; in this sense, Management believes that the timing differences will
be reversed by means of dividends to be received in the future that, are not subject to the income tax paid by the Company. There
is no legal or contractual obligation that would require the Company’s Management to sell its investment in this associate
(which event would result in a taxable capital gain based on current tax law).
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | The table below presents the current and deferred portions of the provisions for Income Tax shown in the consolidated income
statement for the years 2012, 2011 and 2010:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                          |  | 2012     |         |   | 2011     |  |         | 2010     | 
|----------------------------------------- |  | -------- | ------- | - | -------- |  | ------- | -------- | 
|                                          |  | US$(000) |         |   | US$(000) |  |         | US$(000) | 
|                                          |  |          |         |   |          |  |         |          | 
|Income tax -                              |  |          |         |   |          |  |         |          | 
|Current                                   |  |          |         |   |          |  |         |          | 
|Compañía de Minas Buenaventura S.A.A.     |  |          | (37,343 | ) |          |  | (60,091 | )        | 
|Minera La Zanja S.A.                      |  |          | (30,493 | ) |          |  | (37,180 | )        | 
|S.M.R.L. Chaupiloma Dos de Cajamarca      |  |          | (20,560 | ) |          |  | (18,976 | )        | 
|Sociedad Minera El Brocal S.A.A.          |  |          | (10,400 | ) |          |  | (35,944 | )        | 
|Consorcio Energético de Huancavelica S.A. |  |          | (3,029  | ) |          |  | (1,404  | )        | 



F-87







Notes to the consolidated financial statements (continued)



|                                                                             |  | 2012     |          |   | 2011     |  |          | 2010     | 
|---------------------------------------------------------------------------- |  | -------- | -------- | - | -------- |  | -------- | -------- | 
|                                                                             |  | US$(000) |          |   | US$(000) |  |          | US$(000) | 
|Other                                                                        |  |          | (4,984   | ) |          |  | (4,867   | )        | 
|                                                                             |  |          | (106,809 | ) |          |  | (158,462 | )        | 
|Deferred                                                                     |  |          |          |   |          |  |          |          | 
|Compañía de Minas Buenaventura S.A.A.                                        |  |          | (27,890  | ) |          |  | (51,544  | )        | 
|Minera La Zanja S.A.                                                         |  |          | 7,463    |   |          |  | 31       |          | 
|Sociedad Minera El Brocal S.A.A.                                             |  |          | 2,457    |   |          |  | 6,335    |          | 
|Other                                                                        |  |          | 6,723    |   |          |  | 54       |          | 
|                                                                             |  |          | (11,247  | ) |          |  | (45,124  | )        | 
|                                                                             |  |          | (118,056 | ) |          |  | (203,586 | )        | 
|Mining royalties and Special Mining Tax -                                    |  |          |          |   |          |  |          |          | 
|Current                                                                      |  |          |          |   |          |  |          |          | 
|Compañía de Minas Buenaventura S.A.A.                                        |  |          | (16,041  | ) |          |  | (7,371   | )        | 
|Minera La Zanja S.A.                                                         |  |          | (5,170   | ) |          |  | (2,176   | )        | 
|Sociedad Minera El Brocal S.A.A.                                             |  |          | (3,765   | ) |          |  | (1,211   | )        | 
|                                                                             |  |          | (24,976  | ) |          |  | (10,758  | )        | 
|                                                                             |  |          |          |   |          |  |          |          | 
|Deferred                                                                     |  |          |          |   |          |  |          |          | 
|Compañía de Minas Buenaventura S.A.A.                                        |  |          | 1,093    |   |          |  | 1,140    |          | 
|Minera La Zanja S.A.                                                         |  |          | (330     | ) |          |  | 1,634    |          | 
|Sociedad Minera El Brocal S.A.A.                                             |  |          | (282     | ) |          |  | 3        |          | 
|Compañía de Exploraciones, Desarrollo e Inversiones Mineras S.A.C. - CEDIMIN |  |          | (43      | ) |          |  | (22      | )        | 
|                                                                             |  |          | 438      |   |          |  | 2,755    |          | 
|                                                                             |  |          | (24,538  | ) |          |  | (8,003   | )        | 
|                                                                             |  |          |          |   |          |  |          |          | 
|Total income tax                                                             |  |          | (142,594 | ) |          |  | (211,589 | )        | 



F-88







Notes to the consolidated financial statements (continued)



| | (c) | During the years 2012, 2011 and 2010 the provisions posted for income tax in the income statement were determined as follows:
| | --- | -----------------------------------------------------------------------------------------------------------------------------



|                                                                  |  | 2012     |          |   | % |  |       | 2011     |  |  | %         |   |  | 2010     |       |   | % | 
|----------------------------------------------------------------- |  | -------- | -------- | - | - |  | ----- | -------- |  |  | --------- | - |  | -------- | ----- | - | - | 
|                                                                  |  | US$(000) |          |   |   |  |       | US$(000) |  |  |           |   |  | US$(000) |       |   |   | 
|                                                                  |  |          |          |   |   |  |       |          |  |  |           |   |  |          |       |   |   | 
|Income
    before income tax                                      |  |          | 885,384  |   |   |  |       |          |  |  | 1,172,067 |   |  |          |       |   |   | 
|Share
    in the results of associates                            |  |          | (464,239 | ) |   |  |       |          |  |  | (468,363  | ) |  |          |       |   |   | 
|                                                                  |  |          | 421,145  |   |   |  | 100.0 |          |  |  | 703,704   |   |  |          | 100.0 |   |   | 
|                                                                  |  |          |          |   |   |  |       |          |  |  |           |   |  |          |       |   |   | 
|Theoretical income tax                                            |  |          | 126,344  |   |   |  | 30.0  |          |  |  | 211,112   |   |  |          | 30.0  |   |   | 
|Expenses not deductible
    for tax purposes                      |  |          | 4,578    |   |   |  | 1.1   |          |  |  | 4,856     |   |  |          | 0.7   |   |   | 
|Effect of translation
    to U.S. dollars                         |  |          | (11,716  | ) |   |  | (2.8  | )        |  |  | (3,130    | ) |  |          | (0.4  | ) |   | 
|Mining royalties and special
    mining tax                       |  |          | (5,876   | ) |   |  | (1.4  | )        |  |  | (3,227    | ) |  |          | (0.5  | ) |   | 
|Effect from currency exchange
    difference                      |  |          | (3,794   | ) |   |  | (0.9  | )        |  |  | (5,027    | ) |  |          | (0.7  | ) |   | 
|Recovery of exploration
    expenses in Tantahuatay project       |  |          | -        |   |   |  | -     |          |  |  | -         |   |  |          | -     |   |   | 
|Reversal of the provision
    for impairment of long-lived assets |  |          | -        |   |   |  | -     |          |  |  | -         |   |  |          | -     |   |   | 
|Other
    permanent items                                         |  |          | 8,520    |   |   |  | 2.0   |          |  |  | (998      | ) |  |          | (0.1  | ) |   | 
|Expense
    for income tax purposes                               |  |          | 118,056  |   |   |  | 28.0  |          |  |  | 203,586   |   |  |          | 28.9  |   |   | 
|Mining
    royalties and Special Mining Tax                       |  |          | 24,538   |   |   |  | 5.8   |          |  |  | 8,003     |   |  |          | 1.1   |   |   | 
|                                                                  |  |          |          |   |   |  |       |          |  |  |           |   |  |          |       |   |   | 
|Total                                                             |  |          | 142,594  |   |   |  | 33.9  |          |  |  | 211,589   |   |  |          | 30.1  |   |   | 



F-89







Notes to the consolidated financial statements (continued)



| | (d) | On September 29, 2011, Laws 29788 and 29789 modified the Mining Royalties, and created the Special Mining Tax, respectively.
Both laws establishes that the payments for mining royalties and special mining tax will be calculated using the quarterly operating
income. Rates are establishes based on the gross margin, which is calculated dividing the quarterly operating income over the income
generated on that period. The higher amount between the mining royalty and 1 per cent of the income generated by the quarterly
sales is paid. Also it is required to pre-payments in advance for the months of October, November and December 2011. Laws
were effective since October 1, 2011.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 25. | Basic and diluted earnings per share
| | --- | ------------------------------------

Basic earnings per share are computed by dividing
net earnings for the period by the weighted average number of shares outstanding during the year.



In the table below is the composition of the number
of shares outstanding as of December 31, 2012, 2011 and 2010, and the number of shares considered in the calculation of basic
and diluted earnings per share:



|                                                |  | Shares outstanding as of December 31, 2012, 2011 and 2010 |             |  | Shares
    (denominator in calculating earnings per share considering treasury shares acquired in 2012) | 
|----------------------------------------------- |  | --------------------------------------------------------- | ----------- |  | ------------------------------------------------------------------------------------------------------- | 
|                                                |  | Common                                                    |             |  | Investment                                                                                              | 
|                                                |  |                                                           |             |  |                                                                                                         | 
|                                                |  |                                                           |             |  |                                                                                                         | 
|Balance at
    January 1, 2012, 2011 and 2010   |  |                                                           | 274,889,924 |  |                                                                                                         | 
|                                                |  |                                                           |             |  |                                                                                                         | 
|Treasury
    shares acquired during 2012        |  |                                                           | -           |  |                                                                                                         | 
|Balance
    at December 31, 2012, 2011 and 2010 |  |                                                           | 274,889,924 |  |                                                                                                         | 



F-90







Computation of the earnings per share as of December 31,
2012, 2011 and 2010 is presented below:



|                                                                               |  | 2012 |             |  | 2011 |  |             | 2010 | 
|------------------------------------------------------------------------------ |  | ---- | ----------- |  | ---- |  | ----------- | ---- | 
|                                                                               |  |      |             |  |      |  |             |      | 
|Attributable net income attributable to owners of the parent (numerator) – US$ |  |      | 684,685,000 |  |      |  | 858,927,000 |      | 
|Shares (denominator)                                                           |  |      | 254,232,571 |  |      |  | 254,442,328 |      | 
|                                                                               |  |      |             |  |      |  |             |      | 
|Basic and diluted earnings per share – US$                                     |  |      | 2.69        |  |      |  | 3.38        |      | 



| | 26. | Disclosure of information on segments
| | --- | -------------------------------------

International Financial Reporting Standard (IFRS)
8 – “Operating Segments” requires that corporations present financial information taking into account the information
reported that the chief operating decision maker uses internally for evaluating the performance of operating segments and allocating
resources to those segments (a “through the eyes of management” approach).



The Company ́s only reportable segment that
meets the threshold for reporting is mining, these activities are executed through thirteen companies. The Company ́s Management
considers that these companies could be combined in one segment (mining) considering the financial performance and similar characteristic
related to goods nature, production process nature, type of clients and legal environment. The electric segment, mining consulting
and insurance are not significant in order to evaluate business development, reason why the Management considers mining the only
reportable segment.



The Board of Directors has been identified as the
responsible for approving the Company’s operational decisions. The Board of Directors is responsible for allocating resources
and assessing performance as a single operating unit.



| | 27. | Derivative financial instruments
| | --- | --------------------------------

Buenaventura

As of December 31, 2012 and 2011, Buenaventura
had no derivative contracts.



El Brocal

El Brocal performed hedge transactions to hedge
metals prices using anyone of the derivative instruments existing in the financial market for up to a term of 3 years, for a total
of no more than 25 percent of the estimated metal content of its annual production each year. El Brocal Board of Directors meeting
of February 23, 2007 named a Hedging Committee to be responsible for approving all hedging transactions, after their contracting
and/or execution. El Brocal maintains lines of credit without margin with brokers on the London Metals Exchange (LME).



F-91







| | (a) | Mineral quotes hedging operations -
| | --- | -----------------------------------

As of December 31, 2012, the
agreements related to the price hedge were already settled. These hedging derivatives held force since 2010, with the intention
of covering the risk resulting from a fall in metal prices which markets El Brocal, so they signed contracts that qualify as cash
flow hedging cash, which were recorded as assets or liabilities in the statement of financial position, and presented at fair value.
In the case hedges were effective to offset future cash flows from the sale of the related production, changes in fair value are
deferred in an equity account. The deferred amounts were reclassified to sales when the corresponding production was sold.



Cash-flow hedges operations as
of December 31, 2012 were:



|Metal                               |  | MonthlyaverageamountMT |     |  | VolumeamountMT |  |       | Fixed average Price per 
    MT |  |  | Periods                                                                        |       |  | Fair value |                                                                                          
|----------------------------------- |  | ---------------------- | --- |  | -------------- |  | ----- | ------------------------------- |  |  | ------------------------------------------------------------------------------ | ----- |  | ---------- | -----------------------------------------------------------------------------------------
|                                    |  |                        |     |  |                |  |       | US$                             |  |  |                                                                                |       |  | US$(000)   |                                                                                          
|                                    |  |                        |     |  |                |  |       |                                 |  |  |                                                                                |       |  |            |                                                                                          
|Zero cost collar-option contracts   |  |                        |     |  |                |  |       |                                 |  |  |                                                                                |       | 
|Copper                              |  |                        | 250 |  |                |  | 2,750 |                                 |  |  | 7,500
                                                       – 8,415           |       |  |            | February
                                                       – December 2012          
|Copper                              |  |                        | 250 |  |                |  | 2,750 |                                 |  |  | 7,500
                                                                 – 8,425 |       |  |            | February
                                                                 – December 2012
|                                    |  |                        |     |  |                |  |       |                                 |  |  |                                                                                |       |  |            |                                                                                          
|Fair value of financial instruments |  |                        |     |  |                |  |       |                                 |  |  |                                                                                | 1,283 | 



The net change in the equity account
“Other equity reserves” for the twelve months ended as of December 31, 2012 amounts to a loss of US$844,000 (gain
of US$17,076,000 as of December 31, 2011 and a loss of US$11,442,000 as of December 31, 2010).



F-92







| | (b) | The change in the consolidated statement of comprehensive income related to hedging instruments is as follows:
| | --- | --------------------------------------------------------------------------------------------------------------



|                                                                      |  | Hedge derivative financial instruments |         |   | Income tax and mining taxes |  |        | Net change in unrealized gain (loss) on hedging derivative financial instruments | 
|--------------------------------------------------------------------- |  | -------------------------------------- | ------- | - | --------------------------- |  | ------ | -------------------------------------------------------------------------------- | 
|                                                                      |  | US$(000)                               |         |   | US$(000)                    |  |        | US$(000)                                                                         | 
|                                                                      |  |                                        |         |   |                             |  |        |                                                                                  | 
|Balance as of January 1, 2010                                         |  |                                        | (6,843  | ) |                             |  | 2,053  |                                                                                  | 
|Loss from hedging transactions settled during the  period, note 18(a) |  |                                        | (1,884  | ) |                             |  | 565    |                                                                                  | 
|Unrealized gain on hedge derivative financial instruments             |  |                                        | (14,461 | ) |                             |  | 4,338  |                                                                                  | 
|Total change in derivative financial instruments for hedging          |  |                                        | (16,345 | ) |                             |  | 4,903  |                                                                                  | 
|                                                                      |  |                                        |         |   |                             |  |        |                                                                                  | 
|Balance as of December 31, 2010                                       |  |                                        | (23,188 | ) |                             |  | 6,956  |                                                                                  | 
|Gain from hedging transactions settled during the  period, note 18(a) |  |                                        | 8,681   |   |                             |  | (2,604 | )                                                                                | 
|Unrealized gain on hedge derivative financial instruments             |  |                                        | 15,790  |   |                             |  | (4,791 | )                                                                                | 
|Total change in derivative financial instruments for hedging          |  |                                        | 24,471  |   |                             |  | (7,395 | )                                                                                | 
|                                                                      |  |                                        |         |   |                             |  |        |                                                                                  | 
|Balance as of December 31, 2011                                       |  |                                        | 1,283   |   |                             |  | (439   | )                                                                                | 
|Loss from hedging transactions settled during the  period, note 18(a) |  |                                        | (72     | ) |                             |  | 20     |                                                                                  | 
|Unrealized gain on hedge derivative financial instruments             |  |                                        | (1,211  | ) |                             |  | 419    |                                                                                  | 
|Total change in derivative financial instruments for hedging          |  |                                        | (1,283  | ) |                             |  | 439    |                                                                                  | 
|                                                                      |  |                                        |         |   |                             |  |        |                                                                                  | 
|Balance as of December 31,  2012                                      |  |                                        | -       |   |                             |  | -      |                                                                                  | 



| | (c) | Embedded derivatives from changes in the provisional prices of commercial settlements -
| | --- | ---------------------------------------------------------------------------------------

As of December 31, 2012 and
2011 the changes in the fair value of embedded derivatives, were present in the “Net sales” caption of the consolidated
income statement. The futures quotes for the dates on which it is expected to settle the open positions as of December 31,
2012 and 2011 are taken from publications of the London Metals Exchange.



F-93







Embedded derivatives from sales of concentrate held
by Buenaventura and El Brocal as of December 31, 2012:



|                         |  |        |                                                                            |  | Maturity |  |                                                                                  | Quotations  |  |  | Fair value,                                                                    | 
|------------------------ |  | ------ | -------------------------------------------------------------------------- |  | -------- |  | -------------------------------------------------------------------------------- | ----------- |  |  | ------------------------------------------------------------------------------ | 
|Metal                    |  | Amount |                                                                            |  | 2013     |  |                                                                                  | Provisional |  |  | Future                                                                         | 
|                         |  |        |                                                                            |  |          |  |                                                                                  | US$         |  |  | US$                                                                            | 
|                         |  |        |                                                                            |  |          |  |                                                                                  |             |  |  |                                                                                | 
|Sale of concentrates     |  |        |                                                                            |  |          |  |                                                                                  |             |  |  |                                                                                | 
|                         |  |        |                                                                            |  |          |  |                                                                                  |             |  |  |                                                                                | 
|Gold                     |  |        | 37,454
                                                       DMT          |  |          |  | January                                                                          |             |  |  | 1,651
                                                       - 1,750           | 
|Silver                   |  |        | 2,258,731
                                            Oz                   |  |          |  | January
                                            – April                      |             |  |  | 28.70
                                            – 34.23                      | 
|Gold                     |  |        | 179
                                            DMT                        |  |          |  | January
                                            – March                      |             |  |  | 1,686
                                            – 1,771                      | 
|Copper                   |  |        | 36,076
                                            DMT                     |  |          |  | January
                                            – April                      |             |  |  | 7,491
                                            – 8,193                      | 
|Zinc                     |  |        | 4,015
                                            DMT                      |  |          |  | January
                                            – February                   |             |  |  | 1,810
                                            – 2,037                      | 
|Lead                     |  |        | 4,926
                                                                 Oz  |  |          |  | January
                                                                 – March |             |  |  | 1,895
                                                                 – 2,275 | 
|                         |  |        |                                                                            |  |          |  |                                                                                  |             |  |  |                                                                                | 
|Purchase of concentrates |  |        |                                                                            |  |          |  |                                                                                  |             |  |  |                                                                                | 
|Copper                   |  |        | 1,136
                                                                 DMT |  |          |  | January                                                                          |             |  |  | 7,965                                                                          | 
|Total liability, net     |  |        |                                                                            |  |          |  |                                                                                  |             |  |  |                                                                                | 



Embedded derivatives from sales of concentrate held
by Buenaventura and El Brocal as of December 31, 2011:



|                     |  |        |                                                                  |  | Maturity |  |                                                                        | Quotations  |  |  | Fair value,                                                                | 
|-------------------- |  | ------ | ---------------------------------------------------------------- |  | -------- |  | ---------------------------------------------------------------------- | ----------- |  |  | -------------------------------------------------------------------------- | 
|Metal                |  | Amount |                                                                  |  | 2012     |  |                                                                        | Provisional |  |  | Future                                                                     | 
|                     |  |        |                                                                  |  |          |  |                                                                        | US$         |  |  | US$                                                                        | 
|Gold                 |  |        | 6,713
                                                       DMT |  |          |  | January
                                                       – March |             |  |  | 1,605.40
                                                       - 1,727.90 | 
|Silver               |  |        | 1,451,655
                                            Oz         |  |          |  | January
                                            – April            |             |  |  | 29.38
                                            – 41.02                  | 
|Copper               |  |        | 17,898
                                            DMT           |  |          |  | January
                                            – April            |             |  |  | 7,348.00
                                            – 9,040.34            | 
|Lead                 |  |        | 9,273
                                            DMT            |  |          |  | January
                                            – April            |             |  |  | 1,945.00
                                            - 2,457.78            | 
|Zinc                 |  |        | 1,581
                                            DMT            |  |          |  | January
                                            – March            |             |  |  | 1,914.97
                                            - 2,011.75            | 
|Gold                 |  |        | 60,458
                                            Oz            |  |          |  | January                                                                |             |  |  | 1,606.50
                                            – 1,785.00            | 
|Other                |  |        |                                                                  |  |          |  |                                                                        |             |  |  |                                                                            | 
|Total liability, net |  |        |                                                                  |  |          |  |                                                                        |             |  |  |                                                                            | 



F-94







| | 28. | Financial – risk management objectives and policies
| | --- | ---------------------------------------------------

The Company’s Management principal financial
liabilities, other than derivatives, comprise accounts payable, bank loans and overdrafts and debentures. The main purpose of these
financial instruments is to manage short-term cash flow and raise finance for the Company’s capital expenditure programme.
The Group has various financial assets such as trade and other receivables and cash and short-term deposits that arise directly
from its operations.



The Company’s Management manages its exposure
to key financial risks in accordance with the Company’s financial risk management policy. The objective of the policy is
to support the delivery of the Company’s financial targets while protecting future financial security. The main risks that
could adversely affect the Group’s financial assets, liabilities or future cash flows are market risks, comprising commodity
price risk, cash flow interest rate risk and foreign currency risk and liquidity risk and credit risk. Management reviews and agrees
policies for managing each of these risks that are summarized below.



The Company’s Management oversees the management
of financial risks. The Group’s senior management is supported by a Financial Risk Committee that advises on financial risks
and the appropriate financial risk governance framework for the Group. The Financial Risk Committee provides assurance to the Group’s
senior management that the Group’s financial risk-taking activities are governed by appropriate policies and procedures and
that financial risks are identified, measured and managed in accordance with the Group’s policies and risk objectives. All
derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience
and supervision.



Financial instruments that are affected by market
risks include accounts receivable, accounts payable, embedded derivatives and hedge derivative financial instruments.



The Board of Directors reviews and approves policies
to manage each of these risks, which are described below:



| | (a) | Market risk
| | --- | -----------

Market risk is the risk that the
fair value of the future cash flows from financial instruments should fluctuate as a result of changes in market prices. The market
risks that apply to the Company include three types of risk: exchange-rate risk, risk of changes in the prices of minerals and
interest-rate risk. Financial instruments affected by market risks include loans, deposits and derivative financial instruments.



The sensitivity analysis in this
section relates to the positions as of December 31, 2012 and 2011, and has been prepared considering that the proportion of
financial instruments in foreign currency remains constant.



F-95







| | (a.1) | Exchange-rate risk
| | ----- | ------------------

The Company bills the sale of its products (locally
and abroad) mostly in United States dollars. Exchange-rate risk arises mainly from deposits and other accounts payable in Nuevos
Soles. The Company mitigates the effect of exposure to exchange-rate risk by carrying out almost all of its transactions in its
functional currency. Management retains smaller amounts in Nuevos Soles in order to cover its needs (taxes and compensation) in
this currency.



As of December 31, 2012, the Company had posted
a net loss of US$1,715,000 from exchange differences (a net loss of US$675,000 and US$750,000 as of December 31, 2011 and
2010), from the translation of balances in Nuevos Soles to the functional currency.



A table showing the effect on
results of a reasonable change in foreign-currency exchange rates is presented below, with all other variables kept constant:



|              |  | Exchange-rate increase / decrease |     |   | Effect on earnings before income tax | 
|------------- |  | --------------------------------- | --- | - | ------------------------------------ | 
|              |  |                                   |     |   | US$(000)                             | 
|2012          |  |                                   |     |   |                                      | 
|Exchange rate |  |                                   | +10 | % |                                      | 
|Exchange rate |  |                                   | -10 | % |                                      | 
|              |  |                                   |     |   |                                      | 
|2011          |  |                                   |     |   |                                      | 
|Exchange rate |  |                                   | +10 | % |                                      | 
|Exchange rate |  |                                   | -10 | % |                                      | 
|              |  |                                   |     |   |                                      | 
|2010          |  |                                   |     |   |                                      | 
|Exchange rate |  |                                   | +10 | % |                                      | 
|Exchange rate |  |                                   | -10 | % |                                      | 



| | (a.2) | Risk of prices
| | ----- | --------------

Risk in mineral prices

International price of minerals
has an important impact on the results of the Company’s operations. The price of the mineral sold by the Company has fluctuated
historically and is affected by numerous factors beyond the Company’s control. The Company manages this risk through the
use of sales commitments with customers. The Company does not hedge its exposure to price fluctuation.



F-96







Buenaventura -

The Company does not have financial
hedging instruments for managing this risk.



Embedded derivatives

The Company allocates a provisional
sales value to the sales that are subject to future settlement pursuant to the commercial contracts signed with its customers.
Exposure to changes in the price of metals generates an embedded derivative that must be separated from the commercial contract.
At each period’s closing, the value of provisional sales is adjusted in accordance with the estimated price for the quotation
period stipulated in the contract. Adjustment of the provisional sale value is posted as an increase or decrease in net sales.
See note 2.3(p).



The estimated change in the price
for sales pending final settlement, which is disclosed within the net sales of embedded derivative to December 31, 2012, amounted
to US$1,776,000 (note 27(c)). The estimate corresponding to such settlements as closed in January 2012 were reduced by 10
percent with respect to the actual value settled. In the case of settlements that still maintain their provisional value as of
December 31, 2010; their estimate was also reduced by 36 percent due to the drop in metals prices since the month of January
(liquidations that were closed in January 2012 were increased (greater loss) at 10 percent).



El Brocal -

As of December 31, 2012, the Company does not
hold hedging instruments. Regarding future prices as of December 31, 2011 and the market value at that time of the position
of derivative financial instruments contracted by the Brocal presents a sensitivity analysis of the market value of this position
on a variation of around 10 percent for the relevant prices, while all other variables held constant:



|                                        |  | Effect on unrealized gain (loss) on hedge derivative financial instruments, net |       
|--------------------------------------- |  | ------------------------------------------------------------------------------- | ------
|                                        |  | US$(000)                                                                        |       
|                                        |  |                                                                                 |       
|2011                                    |  |                                                                                 |       
|Increase of 10 percent in future quotes |  |                                                                                 |       
|Hedges in effect for 2012               |  |                                                                                 | (2,047
|                                        |  |                                                                                 |       
|Decrease of 10 percent in future quotes |  |                                                                                 |       
|Hedges in effect for 2012               |  |                                                                                 | 4,661 



F-97







| | (a.3) | Interest-rate risk
| | ----- | ------------------

The Company is exposure to interest-rate risk change
especially by its long-term financial obligations.



In the case, the interest-rate
subject to the long-term financial obligation changes on the order of 10 percent for LIBOR rate as of December 31, 2012 and
2011 respectively, the effect on income before income tax had not been significant. The effect is shown below:



|              |  | Increase / decrease in Libor rate |       |  |                     | 
|------------- |  | --------------------------------- | ----- |  | ------------------- | 
|              |  | (percentage points)               |       |  | Assets
    US$(000) | 
|              |  |                                   |       |  |                     | 
|2012          |  |                                   |       |  |                     | 
|Interest rate |  |                                   | +10.0 |  |                     | 
|Interest rate |  |                                   | -10.0 |  |                     | 
|              |  |                                   |       |  |                     | 
|2011          |  |                                   |       |  |                     | 
|Interest rate |  |                                   | +10.0 |  |                     | 
|Interest rate |  |                                   | -10.0 |  |                     | 



| | (b) | Credit risk -
| | --- | -------------

The Company’s credit risk
arises from the inability of debtors to be able to fulfill their obligations, to the extent to which they are overdue. Therefore,
the Company deposits its excess funds in leading financial institutions, establishes conservative credit policies and constantly
evaluates conditions of the market in which it is involved, for which it uses risk-rating reports for commercial and credit transactions.



There is concentration-of-credit
risk when there are changes in the economic, industrial or geographic factors that equally affect the counterparts related to the
Company. The Company’s gold and concentrate sales are made to companies of recognized national and international prestige.
Transactions are executed with various counterparts with credit solvency, which mitigates any significant concentration of credit.



Trade accounts receivable are denominated
in U.S. dollars; their due dates are the dates of emission on the proof of payment, which amounts becomes cash in days following
their due dates. The Company’s sales of the Company are made to domestic and foreign customers; as of December 31, 2012
it had a portfolio of 19 customers (14 customers as of December 31, 2011). See concentration of sales in note 18(b). The Company
performs an assessment on those debts whose collection is estimated as a variable to determine the allowance for doubtful accounts.



F-98







Credit risk is limited to the book
value of the financial assets as of the consolidated statement of financial position date. These assets consist mainly of cash
and cash equivalents, trade accounts receivable, other accounts receivable and derivative financial instruments.



Collections in January 2013
amounted to US$175,358,000, which represents 68 percent of the balances receivable as of December 31, 2012.



| | (c) | Liquidity risk -
| | --- | ----------------

Prudent management of liquidity
risk implies maintaining sufficient cash and cash equivalents and the possibility of committing or having financing committed through
an adequate number of credit sources. The Company maintains suitable levels of cash and cash equivalents; its shareholders also
include companies with economic backing and it has sufficient credit capacity to allow it to have access to lines of credit in
leading financial entities.



The Company continually monitors
its liquidity reserves based on cash flow projections.



An analysis of the Company’s
financial liabilities classified according to their aging is presented below, considering the period from their due date to the
consolidated statement of financial position:



|                                                |  | Less than  1 year |         |  | Between  1 and 2
years |  |        | Between 2 and 5
    years |  |  | More than 5 years |  |  | Total    |        
|----------------------------------------------- |  | ----------------- | ------- |  | ---------------------- |  | ------ | ------------------------- |  |  | ----------------- |  |  | -------- | -------
|                                                |  | US$(000)          |         |  | US$(000)               |  |        | US$(000)                  |  |  | US$(000)          |  |  | US$(000) |        
|                                                |  |                   |         |  |                        |  |        |                           |  |  |                   |  |  |          |        
|As of December 31,
    2012                     |  |                   |         |  |                        |  |        |                           |  |  |                   |  |  |          |        
|Trade accounts
    payable                      |  |                   | 199,551 |  |                        |  | -      |                           |  |  | -                 |  |  |          | -      
|Long-term debt (principal
    and interest)     |  |                   | 6,116   |  |                        |  | 29,832 |                           |  |  | 29,712            |  |  |          | 122,925
|Other
    accounts payable                      |  |                   | 58,603  |  |                        |  | -      |                           |  |  | -                 |  |  |          | -      
|                                                |  |                   |         |  |                        |  |        |                           |  |  |                   |  |  |          |        
|Total                                           |  |                   | 264,270 |  |                        |  | 29,832 |                           |  |  | 29,712            |  |  |          | 122,925
|                                                |  |                   |         |  |                        |  |        |                           |  |  |                   |  |  |          |        
|As of December 31,
    2011                     |  |                   |         |  |                        |  |        |                           |  |  |                   |  |  |          |        
|Trade accounts payable                          |  |                   | 142,375 |  |                        |  | -      |                           |  |  | -                 |  |  |          | -      
|Long-term debt (principal
    and interest)     |  |                   | 1,085   |  |                        |  | 857    |                           |  |  | 55,519            |  |  |          | 53,001 
|Embedded derivatives for
    concentrates sales |  |                   | 7,306   |  |                        |  | -      |                           |  |  | -                 |  |  |          | -      
|Other
    accounts payable                      |  |                   | 41,150  |  |                        |  | -      |                           |  |  | -                 |  |  |          | -      
|                                                |  |                   |         |  |                        |  |        |                           |  |  |                   |  |  |          |        
|                                                |  |                   | 191,916 |  |                        |  | 857    |                           |  |  | 55,519            |  |  |          | 53,001 



F-99







| | (d) | Capital management -
| | --- | --------------------

The objective is to safeguard the
Company’s capacity to continue as a going concern for the purpose of providing returns for shareholders, benefits for the
stakeholders and maintaining an optimal structure that allows reducing the cost of capital.



The Company manages its capital
structure and makes adjustments to confront changes in the market’s economic conditions. The Company’s policy is to
finance all its short and long-term projects with its own operating resources. In order to maintain or adapt the capital structure,
the Company may amend the policy for dividend payments to shareholders, return capital to its shareholders or issue new shares.
There were no changes in objectives, policies or procedures during the years ending December 31, 2012 and 2011.



| | 29. | Fair value of financial instruments
| | --- | -----------------------------------

Fair value is defined as the amount at which assets
would be exchanged or liabilities settled between knowing and willing parties in an arm’s length transaction, under the assumption
is a going concern entity.



When a financial instrument is traded in a liquid
and active market, its price as set in a real market transaction offers the best evidence of its fair value. When no price is set
in the market or the latter may not be indicative of the instrument’s fair value, the market value of another substantially
similar instrument, the analysis of discounted flows or other applicable techniques may be used to determine this fair value, which
is materially affected by the assumptions used. Although Management has used its best judgment in estimating the fair values of
its financial instruments, any technique for making these estimates entails a certain level of inherent fragility. As a result,
fair value may not be indicative of the net realizable or liquidation value of financial instruments.



Financial instruments whose
fair value is similar to their book value –

For financial assets and liabilities
which are liquid or have short-term maturity (less than three months), such as cash and cash equivalent, accounts receivable, other
accounts receivable, accounts receivable from associates, accounts payable and other current liabilities, it is estimated that
their book value is similar to their fair value.



The fair value of embedded derivatives
is determined using valuation techniques using information directly observable in the market (forward prices of metals).



F-100







Financial instruments at
fixed and variable rates –

The fair value of financial assets
and liabilities at fixed and variablerates at amortized cost is determined by comparing the market interest rates at the
time of their initial recognition to the current market rates with regard to similar financial instruments. The estimated fair
value of deposits that accrue interest is determined by means of cash flows discounted using the prevailing market interest rates
in the currency with similar maturities and credit risks.



Based on the foregoing, there
are no significant differences between book value and fair value of financial instruments (assets and liabilities) as of December 31,
2012 and 2011.



Fair value hierarchy -

The Company uses the following
hierarchy for determining and disclosing the fair value of financial instruments which are measured at fair value by valuation
technique:



| | Level 1: | Quoted (unadjusted) prices in active markets for identical
assets or liabilities.
| | -------- | ---------------------------------------------------------------------------------



| | Level 2: | Other techniques for which all inputs or data different
from the quoted price of Level 1 are observable, either directly or indirectly.
| | -------- | ---------------------------------------------------------------------------------------------------------------------------------------



| | Level 3: | Techniques which use inputs which have a significant
effect on the recorded fair value that are not based on observable market data.
| | -------- | ------------------------------------------------------------------------------------------------------------------------------------



The financial instruments measured
at fair value used by the Company, use level 2 valuation techniques in the periods ended as of December 31, 2012 and 2011.
This financial instrument is related to the embedded derivative based on the future price of copper on the expected date of settlement.
As of December 31, 2012 and 2011, the balance of those items was a liability of US$4,939,000 and of US$7,306,000, respectively.



There has been no transfer between
fair value levels during 2012 neither 2011.



| | 30. | Commitments and contingencies
| | --- | -----------------------------

| | (a) | Environmental -
| | --- | ---------------

Buenaventura -

The Company’s exploration
and exploitation activities are subject to environmental protection standards.



Law No. 28090 regulates the obligations
and procedures that must be met by the holders of mining activities for the preparation, filing and implementation of Mine Closure
Plans, as well as the establishment of the corresponding environmental guarantees to secure fulfillment of the investments that
this includes, subject to the principles of protection, preservation and recovery of the environment.



F-101







Law No. 28271 regulates environmental
liabilities in mining activities. This Law has the objectives of ruling the identification of mining activity’s environmental
liabilities and financing the remediation of the affected areas. According to this law, environmental liabilities refer to the
impact caused to the environment by abandoned or inactive mining operations.



In compliance with the above-mentioned
laws, the Company presented preliminary environmental studies and Environmental Adaptation and Management Programs (EAMP) for mining
units. The Ministry of Energy and Mines has approved the EAMP presented by the Company for its mining units and exploration projects.
See detail of plans approved in note 14(a).



El Brocal -

In July 2012, in compliance
with current environmental legislation on the closure of the mining units in operation, El Brocal commissioned a company authorized
by the Peruvian government to developed a new closure plan for their production unit Colquijirca.



On
July 12, 2012, the Company presented the Update Mine Closure Plan Colquijirca where new obligations include closure caused
by the expansion of operations. The main changes are related to the closure update clearing deposits and tailings impoundments,
decommissioning and dismantling of the concentrator plant expansion to 5,000 DMT/day to 7,000 DMT/day and 10,500 new concentrator
DMT/day. The new Mine Closure Plan was approved by a nominal value of US$52,952,000.



Cerro Verde -

On September 2012, according
as established by the current legal regulations, Cerro Verde presented to the Ministry of Energy and Mines an updated mine closure
plan, in which the remediation and mine closure budget was updated. As a result and pursuant to the accounting policies of Cerro
Verde increased the liability for mine closure remediation at US$72,512,000 and the mine closure asset by the same amount.



The increase presented in the mine
closure plan in 2012 was due to the update of costs related to the future closure of platform 4B and additional deposits for clearing.
Additionally, as a result of the Expansion Project, the useful life of the mine and exploration time has been significantly reduced.
The Company considers that this liability is sufficient to meet the current environmental protection laws approved by the MEM.
Cerro Verde has issued letters of credit to Ministry of Energy and Mines amounting to US$12,838,000 to secure mine closure plans
for its mining unit.



F-102







The Company believes that the liability
recorded is sufficient to meet the current regulatory environment in Peru.



| | (b) | Leased concessions -
| | --- | --------------------

Sindicato Minero Orcopampa
S.A. -

The Company pays 10 percent on
the valued production of mineral obtained from the concessions leased by Sindicato Minero Orcopampa S.A. This concession is in
force until the year 2043. See note 21.



Minera El Futuro de Ica S.R.L. -

Inminsur entered into a contract
with Minera El Futuro de Ica S.R.L. to operate leased mining concessions in the department of Arequipa. The contractual terms establish
that the lease is subject to payment of a royalty equivalent to seven percent of the monthly value of the sale of concentrates.
As part of the merger with Buenaventura, the contract will be in force until the year 2015. See note 21.



| | (c) | Purchase option contracts -
| | --- | ---------------------------

During the ordinary course of
business, the Company executes contracts to undertake exploration works in third-party concessions. Under the terms of these contracts,
the Company generally has an option to acquire the concession or to invest in it in order to earn a share in the holding company.
In order to exercise these options, the Company must fulfill certain obligations during the contract term. The Company’s
failure to perform the obligations established therein is usually grounds for termination of these contracts.



The Company may terminate these
contracts at any time during their terms, generally after having performed at least the minimum obligations established. Along
this line, the Company constantly analyzes the advisability of whether or not to continue with such contractual relationships.



| | (d) | Legal procedures -
| | --- | ------------------

Buenaventura -

Buenaventura is a party in legal procedures that
have arisen in the normal course of its activities; nevertheless, in the opinion of Buenaventura’s Management, none of these
procedures, in particular or as a whole, could result in material contingencies.



Yanacocha -

Mercury spill in Choropampa

In June 2000, a transport contractor of Yanacocha
spilled approximately 151 kilograms of elemental mercury near the town of Choropampa, Peru, which is located 53 miles (85 kilometers)
southwest of the Yanacocha mine. Elemental mercury is not used in Yanacocha’s operations but is a by-product of gold mining
and was sold to a Lima firm for use in medical instruments and industrial applications. A comprehensive health and environmental
remediation program was undertaken by Yanacocha in response to the incident. In August 2000, Yanacocha paid under protest
a fine of S/.1.7 million (approximately US$0.5 million).



F-103







Yanacocha has entered into settlement agreements
with a number of individuals impacted by the incident. As compensation for the disruption and inconvenience caused by the incident,
Yanacocha entered into agreements with and provided a variety of public works in the three communities impacted by this incident.
Yanacocha cannot predict the likehood of additional expenditures related to this matter.



Additional lawsuits relating to
the Choropampa incident were filed against Yanacocha in the local courts of Cajamarca, Peru, in May 2002 by over 900 Peruvian
citizens. A significant number of the plaintiffs in these lawsuits entered into settlement agreements with Yanacocha prior to filing
such claims. In April 2008, the Peruvian Supreme Court upheld the validity of these settlement agreements, which should result
in the dismissal of all claims brought by previously settled plaintiffs. Yanacocha has also entered into settlement agreements
with approximately 350 additional plaintiffs. The claims asserted by approximately 212 plaintiffs remain. In December 2010,
Yanacocha resolved 4 additional claims which should result in the dismissal of all claims brought by previously settled plaintiffs.
Yanacocha cannot reasonably predict the final outcome or estimate the possible loss relating to such claims. The maximum additional
expense related to these judicial claims is estimated at US$1.5 million.



Baños del Inca

In September 2006 the Municipality of
Baños del Inca issued a declaration designating an area that includes the Carachugo Expansion and San Jose Projects as
reserved and protected areas. Based on previous experience and actions taken by the Constitutional Tribunal (Peru Court of
Last instance for Constitutional issues) in respect of Cerro Quilish in which it was ruled that such declaration did not
affect Yanacocha’s mining rights, Yanacocha believes that Baños del Inca’s declaration, should not impact
the Yanacocha’s legal rights to exploit these concessions. The legal proceeding is currently pending resolution in
Lima’s Court of First Instance.



In March 2008, the Lima Court rejected a Baños
del Inca Municipality request which did not recognize Lima’s Jurisdiction.



F-104







San Pablo

In February 2007 the Municipality of San Pablo
issued an ordinance designating an area that includes Las Lagunas and Pozo Seco as reserved and protected areas, where Yanacocha
has mining rights. Based on previous experience and actions taken by the Constitutional Tribunal in respect of Cerro Quilish in
which it was ruled that such declaration did not affect Yanacocha’s mining rights, Yanacocha believes that San Pablo’s
declaration, should not impact Yanacocha’s legal rights to exploit these concessions. Yanacocha has challenged this ordinance
on the grounds that, under Peruvian law, local governments lack the authority to create such areas, denying the rights granted
by Yanacocha’s mining concessions. The Court in the First Instance rejected the complaint based on formal grounds. The resolution
of the Court was appealed before Lima’s Court of Second Instance.



In November 2008, Lima’s Court affirmed
the ruling from the First Instance. In December 2011, Constitutional Court accepts the complaint. The process is currently
pending resolution.



Clínica Internacional, Addeco, SDC Security

Workers of three contractors companies (Clínica
Internacional, Adecco and SDC Security) have initiated judicial proceedings through which they demand their incorporation into
Minera Yanacocha ́s payroll. The workers deem they are direct employees of Yanacocha with all the rights, arguing that they
receive direct orders from Minera Yanacocha and that most of the equipment they use is given by Yanacocha. All proceedings, which
involve a total of 85 workers, are pending First Instance resolution.



| | (e) | Tax procedures -
| | --- | ----------------

Cerro Verde –

SUNAT has assessed mining royalties on materials
processed by Cerro Verde concentrator which commenced operations in late 2006. These assessments cover the period October 2006
to December 2007 and the years 2008 and 2009. SUNAT has issued rulings denying Cerro Verde’s protest of the assessments.
Cerro Verde has appealed these decisions and currently has three cases pending before the Peruvian Tax Tribunal. Cerro Verde is
challenging these royalties because it believes its stability agreement provides an exemption for all minerals extracted from its
mining concession, irrespective of the method used for processing those minerals. Although we believe our interpretation of the
stability agreement is correct, if Cerro Verde is ultimately found responsible for these assessments, the amount of royalty and
related interest payable would be significant. SUNAT may continue to assess mining royalties annually until this matter is resolved
by the Peruvian Tax Tribunal.



F-105







| | 31. | Transactions with associates companies
| | --- | --------------------------------------

| | (a) | The Company has carried out the following transactions with its associates in the years 2012, 2011 and 2010:
| | --- | ------------------------------------------------------------------------------------------------------------



|                                                                        |  | 2012     |        |  | 2011     |  |        | 2010     | 
|----------------------------------------------------------------------- |  | -------- | ------ |  | -------- |  | ------ | -------- | 
|                                                                        |  | US$(000) |        |  | US$(000) |  |        | US$(000) | 
|                                                                        |  |          |        |  |          |  |        |          | 
|Transactions with Minera Yanacocha S.R.L.:                              |  |          |        |  |          |  |        |          | 
|Paid royalties to:                                                      |  |          |        |  |          |  |        |          | 
|S.M.R.L. Chaupiloma Dos de Cajamarca                                    |  |          | 67,178 |  |          |  | 62,742 |          | 
|                                                                        |  |          |        |  |          |  |        |          | 
|Services received by:                                                   |  |          |        |  |          |  |        |          | 
|Buenaventura Ingenieros S.A (Implementation of specific work orders)    |  |          | 4,440  |  |          |  | 11,579 |          | 
|Consorcio Energético de Huancavelica S.A. (Electric power transmission) |  |          | 1,681  |  |          |  | 4,279  |          | 
|                                                                        |  |          |        |  |          |  |        |          | 
|Transactions with Compañía Minera Coimolache S.A.:                      |  |          |        |  |          |  |        |          | 
|Received dividends                                                      |  |          | 16,467 |  |          |  | -      |          | 
|Loan                                                                    |  |          | -      |  |          |  | 24,232 |          | 
|Expenses recovery of exploration projects                               |  |          | -      |  |          |  | -      |          | 
|                                                                        |  |          |        |  |          |  |        |          | 
|Contributions made to associates:                                       |  |          |        |  |          |  |        |          | 
|Canteras del Hallazgo S.A.C.                                            |  |          | 26,410 |  |          |  | 32,208 |          | 
|Compañía Minera Coimolache S.A.                                         |  |          | -      |  |          |  | 5,221  |          | 



| | (b) | Compañía Minera Coimolache S.A. (“Coimolache”) -
| | --- | ------------------------------------------------

On October 18, 2010, the
Shareholders ́Meeting of Compañía Minera Coimolache S.A. approved the development program and financial support
of Tantahuatay Project; the total budget of the project was estimated in US$110,000,000 and the project financing structure should
be: 30 percent shareholders ́s equity and 70 percent loans from shareholders. The account receivable to Coimolache has been
recovered and generates a calculated interest with a LIBOR interest rate to 6 months plus 3 percent. During the months of June,
August and November 2012, the collections made amounted to US$13,423,000.



F-106







| | (c) | As a result of the transactions indicated before, the Company had the following accounts receivable from associates:
| | --- | --------------------------------------------------------------------------------------------------------------------



|                                |  | 2012     |         |   | 2011     | 
|------------------------------- |  | -------- | ------- | - | -------- | 
|                                |  | US$(000) |         |   | US$(000) | 
|Accounts receivable             |  |          |         |   |          | 
|Compañía Minera Coimolache S.A. |  |          | 39,166  |   |          | 
|Minera Yanacocha S.R.L.         |  |          | 16,513  |   |          | 
|Other                           |  |          | 232     |   |          | 
|                                |  |          | 55,911  |   |          | 
|Less – non-current portion      |  |          |         |   |          | 
|Compañía Minera Coimolache S.A. |  |          | (33,377 | ) |          | 
|Non-current portion             |  |          | (33,377 | ) |          | 
|                                |  |          |         |   |          | 
|Current portion                 |  |          | 22,534  |   |          | 
|                                |  |          |         |   |          | 
|Accounts payable                |  |          |         |   |          | 
|Compañía Minera Coimolache S.A. |  |          | 1,018   |   |          | 
|Minera Yanacocha S.R.L.         |  |          | 603     |   |          | 
|                                |  |          | 1,621   |   |          | 
|Less – non-current portion      |  |          |         |   |          | 
|Compañía Minera Coimolache S.A. |  |          | (731    | ) |          | 
|Current portion                 |  |          | 890     |   |          | 



| | (d) | As of December 31, 2012 and 2011, directors, officers and employees of the Company have been involved, directly and indirectly,
in credit transactions with certain subsidiaries. As of December 31, 2012 and 2011, officers and employees of the Company
have been involved, directly and indirectly, in credit transactions with certain subsidiaries. As of December 31, US$1,474,000
and US$1,025,000, respectively; said loans are paid monthly and earn interest at market rates.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



There are no loans to the Company’s
directors and key personnel guaranteed with Buenaventura or any of its Subsidiaries’ shares.



| | (e) | The Company’s key executives’ compensation (including the related income taxes assumed by the Company) as of December 31,
2012 and 2011:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------



|                                           |  | 2012     |        |  | 2011     | 
|------------------------------------------ |  | -------- | ------ |  | -------- | 
|                                           |  | US$(000) |        |  | US$(000) | 
|Accounts payable:                          |  |          |        |  |          | 
|Share-based compensation plans, note 14(c) |  |          | 28,258 |  |          | 
|Directors’ compensations, note 14          |  |          | 2,721  |  |          | 
|Salaries                                   |  |          | 1,362  |  |          | 
|                                           |  |          |        |  |          | 
|Total                                      |  |          | 32,341 |  |          | 



F-107







|Disbursements by:                          |  |          |        |  |          | 
|------------------------------------------ |  | -------- | ------ |  | -------- | 
|                                           |  | 2012     |        |  | 2011     | 
|                                           |  | US$(000) |        |  | US$(000) | 
|                                           |  |          |        |  |          | 
|Share-based compensation plans, note 14(c) |  | 16,729   |        |  | 20,499   | 
|Salaries                                   |  |          | 10,824 |  |          | 
|                                           |  |          |        |  |          | 
|Total                                      |  |          | 27,553 |  |          | 



F-108







MINERA YANACOCHA S.R.L.



CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012



|CONTENTS                                                                  | Page 
|------------------------------------------------------------------------- | -----
|                                                                          |      
|Report of the Independent Registered and Certified Public Accounting Firm | F-110
|                                                                          |      
|Consolidated Statements of Income and Comprehensive Income                | F-111
|                                                                          |      
|Consolidated Statements of Cash Flows                                     | F-112
|                                                                          |      
|Consolidated Balance Sheets                                               | F-113
|                                                                          |      
|Consolidated Statements of Changes in Partners’ Equity                    | F-114
|                                                                          |      
|Notes to the Consolidated Financial Statements                            | F-115



F-109







REPORT OF THE INDEPENDENT REGISTERED AND CERTIFIED PUBLIC
ACCOUNTING FIRM



To the Partners and the Executive Committee ofMinera Yanacocha S.R.L.



March 25, 2013



In our opinion, the accompanying
consolidatedbalance sheets and the related consolidatedstatements
of income and comprehensive income, changes in partners’ equity and cash flows, present fairly, in all material respects,
the financial position of Minera Yanacocha S.R.L.at December 31, 2012 and 2011, and the results of their operations
and its cash flows for each of the three years in the period ended December 31, 2012 in conformity with accounting principles
generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits
of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis
for our opinion.



/s/ Dongo-Soria Gaveglio y Asociados



Countersigned by



|/s/ Fernando Gaveglio | (partner)
|--------------------- | ---------

Fernando Gaveglio

Peruvian Certified Public Accountant

Registration No.01-19847



F-110







CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME



|                                                                               |  | Years Ended December 31, |          
|------------------------------------------------------------------------------ |  | ------------------------ | ---------
|                                                                               |  | 2012                     |          
|                                                                               |  | (dollars in thousands)   |          
|                                                                               |  |                          |          
|Revenues                                                                       |  | $                        | 2,201,815
|                                                                               |  |                          |          
|Costs and expenses                                                             |  |                          |          
|Costs applicable to sales (1)                                                  |  |                          | 694,146  
|Amortization                                                                   |  |                          | 252,900  
|Reclamation and remediation                                                    |  |                          | 20,090   
|Exploration                                                                    |  |                          | 39,975   
|Write-down of long-lived assets                                                |  |                          | 17,577   
|Advanced projects                                                              |  |                          | 81,749   
|Other expense, net (Note 3)                                                    |  |                          | 112,995  
|                                                                               |  |                          | 1,219,432
|                                                                               |  |                          |          
|Other income (expense)                                                         |  |                          |          
|Other income, net (Note 4)                                                     |  |                          | 6,580    
|Interest expense, net of capitalized interest of nil, and $4,404, respectively |  |                          | (566     
|                                                                               |  |                          | 6,014    
|                                                                               |  |                          |          
|Income before income and mining tax                                            |  |                          | 988,397  
|Income and mining tax expense (Note 5)                                         |  |                          | (361,857 
|Net income                                                                     |  |                          | 626,540  
|                                                                               |  |                          |          
|Other comprehensive income (loss)                                              |  |                          | 1,129    
|Comprehensive income                                                           |  | $                        | 627,669  



| | (1) | Excludes Amortization and
Reclamation and remediation
| | --- | -----------------------------------------------------



The accompanying notes are an integral part of these consolidated
financial statements.



F-111







CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                    |  | Years Ended December 31, |           
|----------------------------------------------------------------------------------- |  | ------------------------ | ----------
|                                                                                    |  | 2012                     |           
|                                                                                    |  | (dollars in thousands)   |           
|Operating activities:                                                               |  |                          |           
|Net income                                                                          |  | $                        | 626,540   
|Adjustments to reconcile net income to net cash provided from operating activities: |  |                          |           
|Amortization                                                                        |  |                          | 252,900   
|Deferred income tax                                                                 |  |                          | 4,648     
|Deferred workers’ profit participation                                              |  |                          | 1,347     
|Reclamation and remediation                                                         |  |                          | 20,090    
|Write-down fixed assets                                                             |  |                          | 17,550    
|Other operating adjustments                                                         |  |                          | 5,279     
|Decrease (increase) in operating assets:                                            |  |                          |           
|Inventories, stockpiles and ore on leach pads                                       |  |                          | (15,481   
|Other assets                                                                        |  |                          | 19,698    
|Increase (decrease) in operating liabilities:                                       |  |                          |           
|Accounts payable and other accrued liabilities                                      |  |                          | 11,752    
|Reclamation liabilities                                                             |  |                          | (7,661    
|Net cash provided from operations                                                   |  |                          | 936,662   
|                                                                                    |  |                          |           
|Investing activities:                                                               |  |                          |           
|Additions to property, plant and mine development                                   |  |                          | (1,147,757
|Investments in marketable debt securities                                           |  |                          | -         
|Proceeds from marketable securities                                                 |  |                          | -         
|Proceeds from sale of assets                                                        |  |                          | 31,155    
|Net cash used in investing activities                                               |  |                          | (1,116,602
|                                                                                    |  |                          |           
|Financing activities:                                                               |  |                          |           
|Repayment of debt                                                                   |  |                          | -         
|Net cash used in financing activities                                               |  |                          | -         
|                                                                                    |  |                          |           
|Net change in cash and cash equivalents                                             |  |                          | (179,940  
|Cash and cash equivalents at beginning of the year                                  |  |                          | 797,991   
|Cash and cash equivalents at end of the year                                        |  | $                        | 618,051   



See Note 17 for supplemental cash flow
information.



The accompanying notes are an integral part of these consolidated
financial statements.



F-112







CONSOLIDATED BALANCE SHEETS



|                                                    |  | At December 31,        |          
|--------------------------------------------------- |  | ---------------------- | ---------
|                                                    |  | 2012                   |          
|                                                    |  | (dollars in thousands) |          
|ASSETS                                              |  |                        |          
|Cash and cash equivalents                           |  | $                      | 618,051  
|Accounts receivable (Note 7)                        |  |                        | 100,539  
|Due from related parties (Note 12)                  |  |                        | 17,205   
|Inventories (Note 8)                                |  |                        | 87,413   
|Stockpiles and ore on leach pads (Note 9)           |  |                        | 145,546  
|Deferred income tax assets (Note 5)                 |  |                        | 4,378    
|Other current assets (Note 10)                      |  |                        | 22,334   
|Current assets                                      |  |                        | 995,466  
|                                                    |  |                        |          
|Property, plant and mine development, net (Note 11) |  |                        | 3,120,173
|Stockpiles and ore on leach pads (Note 9)           |  |                        | 352,086  
|Other long-term assets (Note 10)                    |  |                        | 73,810   
|Total assets                                        |  | $                      | 4,541,535
|                                                    |  |                        |          
|LIABILITIES                                         |  |                        |          
|                                                    |  |                        |          
|Accounts payable                                    |  | $                      | 114,803  
|Due to related parties (Note 12)                    |  |                        | 49,399   
|Workers’ profit participation (Note 13)             |  |                        | 45,225   
|Income tax payable                                  |  |                        | 13,862   
|Other current liabilities (Note 14)                 |  |                        | 145,078  
|Current liabilities                                 |  |                        | 368,367  
|                                                    |  |                        |          
|Reclamation and remediation liabilities (Note 15)   |  |                        | 507,943  
|Deferred workers’ profit participation (Note 13)    |  |                        | 18,327   
|Deferred income tax liabilities (Note 5)            |  |                        | 74,042   
|Other long-term liabilities                         |  |                        | 2,166    
|Total liabilities                                   |  | $                      | 970,845  
|                                                    |  |                        |          
|Commitments and contingencies (Note 19)             |  |                        |          
|                                                    |  |                        |          
|PARTNERS’ EQUITY                                    |  |                        |          
|Partners’ contributions                             |  |                        | 398,216  
|Additional contributions                            |  |                        | 226      
|Accumulated other comprehensive income              |  |                        | 2,006    
|Retained earnings                                   |  |                        | 3,170,242
|Total partners’ equity (Note 16)                    |  |                        | 3,570,690
|Total liabilities and partners’ equity              |  | $                      | 4,541,535



The accompanying notes are an integral part
of these consolidated financial statements.

F-113







CONSOLIDATED STATEMENTS OF CHANGES IN
PARTNERS’ EQUITY



|                                                                |  | Partners’Contributions |         |  | AdditionalContributions |   |     | Retained Earnings |  |   | Accumulated OtherComprehensiveIncome |  |  | Total Partners’Equity |       
|--------------------------------------------------------------- |  | ---------------------- | ------- |  | ----------------------- | - | --- | ----------------- |  | - | ------------------------------------ |  |  | --------------------- | ------
|                                                                |  |                        |         |  |                         |   |     |                   |  |   |                                      |  |  |                       |       
|Balance at January 1, 2010                                      |  | $                      | 398,216 |  |                         | $ | 226 |                   |  | $ | 1,311,421                            |  |  | $                     | 1,239 
|Unrealized gain on marketable
    securities, net of income tax |  |                        | -       |  |                         |   | -   |                   |  |   | -                                    |  |  |                       | 1,149 
|Net
    income                                                  |  |                        | -       |  |                         |   | -   |                   |  |   | 589,894                              |  |  |                       | -     
|Balance at December 31,
    2010                                |  | $                      | 398,216 |  |                         | $ | 226 |                   |  | $ | 1,901,315                            |  |  | $                     | 2,388 
|Unrealized gain on marketable
    securities, net of income tax |  |                        | -       |  |                         |   | -   |                   |  |   | -                                    |  |  |                       | (1,511
|Net
    income                                                  |  |                        | -       |  |                         |   | -   |                   |  |   | 642,387                              |  |  |                       | -     
|Balance at December 31,
    2011                                |  | $                      | 398,216 |  |                         | $ | 226 |                   |  | $ | 2,543,702                            |  |  | $                     | 877   
|Unrealized gain on marketable
    securities, net of income tax |  |                        | -       |  |                         |   | -   |                   |  |   | -                                    |  |  |                       | 1,129 
|Net
    income                                                  |  |                        | -       |  |                         |   | -   |                   |  |   | 626,540                              |  |  |                       | -     
|Balance at December 31,
    2012                                |  | $                      | 398,216 |  |                         | $ | 226 |                   |  | $ | 3,170,242                            |  |  | $                     | 2,006 



The accompanying notes are an integral part of these consolidated
financial statements.



F-114







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



| | 1. | BUSINESS ACTIVITIES
| | -- | -------------------



Minera Yanacocha S.R.L. (the “Company”),
formerly Minera Yanacocha S.A., was incorporated in Peru on January 14, 1992 and commenced operations in 1993. The Company
is engaged in the production of gold and exploration and development of gold and copper under the mining concessions it owns or
that are owned by S.M.R.L. Chaupiloma Dos de Cajamarca (“Chaupiloma”).



The Company is owned 51.35% by Newmont Second Capital
Corporation, a 100% indirectly owned subsidiary of Newmont Mining Corporation (“Newmont”), 43.65% owned by Compañía
Minera Condesa S.A., which is 100% owned by Compañía de Minas Buenaventura S.A.A. (“Buenaventura”) and
5% owned by the International Finance Corporation.



The majority Partners of the Company (or their affiliates)
also own the majority interest in Chaupiloma. In accordance with a mining lease, amended effective January 1, 1994, the Company
pays Chaupiloma a 3% royalty based on quarterly production sold at current market prices, after deducting refinery and transportation
costs. The royalty agreement expired in 2012, however this was extended until 2032.



The Company is located in Cajamarca, province of Peru
and currently has active open pit mines as Cerro Yanacocha, La Quinua (which includes El Tapado Oeste), Chaquicocha, Maqui Maqui,
Carachugo and Cerro Negro. The Company has four leach pads, three processing facilities, and one mill. Gold-bearing ores are transported
to one of four leach pads for gold recovery using conventional heap-leaching or milling, followed by Merrill - Crowe zinc precipitation
and smelting where a final doré product is poured. The doré is then shipped offsite for refining and is sold on the
worldwide gold markets.



Gold mining requires the use of specialized facilities
and technology. The Company relies heavily on such facilities and technology to maintain production levels. Also, the cash flow
and profitability of the Company’s operations are significantly affected by the market price of gold. Gold prices can fluctuate
widely and are affected by numerous factors beyond the Company’s control. During 2012, 2011 and 2010, the Company produced
1.35 million, 1.29 million and 1.46 million ounces of gold, respectively.



The Conga project consists of two gold-copper porphyry
deposits located northeast of the Yanacocha operating area in the provinces of Celendin, Cajamarca and Hualgayoc. The project has
proven and probable reserves of 12.6 million ounces (unaudited) of contained gold and 3.3 billion pounds (unaudited)
of contained copper at December 31, 2012.



F-115







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



Construction activities on our Conga project were
suspended on November 30, 2011 at the request of Peru’s central government following increasing protests in Cajamarca
by anti-mining activists led by the regional president. At the request of the Peruvian central government, the environmental impact
assessment prepared in connection with the project, which was previously approved by the central government in October 2010,
was reviewed by independent experts, in an effort to resolve allegations around the environmental viability of Conga. This review
concluded that the environmental impact assessment complied with international standards and provided some recommendations to improve
water management. Yanacocha is currently focusing on the construction of water reservoirs prior to the development of other project
facilities. Management is committed to the development of Conga, however, development of Conga is contingent upon generating acceptable
project returns and getting local community and government support.





In the second quarter of 2011, Presidential and Congressional
elections resulted in a change in government in Peru. The new administration supported mining as a driver for continued growth
and future development of Peru in 2012. However, we are unable to predict whether the Central government will continue to take
similar positions in the future. The regional government actively opposed the Conga project in 2012 and continues to reject the
viability of its development. We are unable to predict the positions that will be taken in the future and whether such positions
or changes in law will affect Yanacocha or Conga. Such changes may include increased labor regulations, environmental and other
regulatory requirements, and additional taxes and royalties, as well as future protests, community demands and road blockages.
For example, during the third quarter of 2011, the new government enacted four new tax laws. The Company cannot predict future
positions of either the Central or regional government on foreign investment, mining concessions, land tenure or other regulation.
Any change in government positions or laws on these issues could adversely affect the assets and operations of Yanacocha or Conga,
which could have a material adverse effect on our results of operations and financial position. Additionally, any inability to
continue to develop the Conga project or operate at Yanacocha could have an adverse impact on our growth if we are not able to
replace its expected production.



Total proven and probable reserves (unaudited) contained
in active open pits, other pits to be developed, stockpiles, ore in process on leach pads and the Conga project are approximately
18.5 million ounces of contained gold, 3.3 billion pounds of contained copper and 37.1 million ounces of silver
at December 31, 2012.



F-116







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



| | 2. | SIGNIFICANT ACCOUNTING POLICIES
| | -- | -------------------------------



Principles of Consolidation



The Consolidated Financial Statements include the accounts
of Minera Yanacocha S.R.L and the San José Reservoir Trust (“Trust”). In November 2008, the Company funded
the Trust to ensure continuous operation of the San José Reservoir after 2018. The Company transferred $13,000 to the Trust
in 2008. No withdrawals are allowed until 2018 and the Company is committed to a $23,000 fund as of such date. This Trust is irrevocable
and is a separate legal entity. The grantor is the Company, the trustee is the FiduPerú S.A. Sociedad Fiduciaria and the
beneficiary is the Company; therefore, the Company consolidates the Trust in its Consolidated Financial Statements.



Use of Estimates



The Company’s Consolidated Financial Statements
have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation
of the Company’s Consolidated Financial Statements requires the Company to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the Consolidated
Financial Statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas
requiring the use of management estimates and assumptions relate to mineral reserves that are the basis for future cash flow estimates
utilized in impairment calculations and units-of-production amortization calculations; environmental, reclamation and closure obligations;
estimates of recoverable gold and other minerals in stockpile and leach pad inventories; write-downs of inventory, ore on leach
pads and stockpiles to net realizable value; employee benefit liabilities; valuation allowances for deferred tax assets; workers’
profit participation; reserves for contingencies and litigation; and the fair value and accounting treatment of financial instruments.
The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under
the circumstances. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.



Currency



The Consolidated Financial Statements are stated in
U.S. dollars, the Company’s functional currency, as most of its transactions are traded, collected and paid in such currency.
Transactions in other currencies are recorded in U.S. dollars based on exchange rates prevailing at the time of such transactions.
Monetary assets and liabilities denominated in other currencies are translated into the U.S. dollar at exchange rates prevailing
at the balance sheet dates, and any resulting gains or losses are reflected in current earnings.



Cash and Cash Equivalents



Cash and cash equivalents consist of all cash balances
and highly liquid investments with an original maturity of three months or less. Because of the short maturity of these balances,
the carrying amounts approximate their fair value. Restricted cash is excluded from cash and cash equivalents and is included in
other current assets or long-term assets depending on restrictions.



F-117







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



Investments



Management determines the appropriate classification
of its investments in equity securities at the time of purchase and reevaluates such determinations at each reporting date. The
Company accounts for its marketable security investments as available for sale securities in accordance with FASB Accounting
Standards Codification (“ASC”) guidance on accounting for certain investments in debt and equity securities. The
Company periodically evaluates whether declines in fair values of its investments below the Company’s carrying value are
other - than - temporary in accordance with ASC guidance. The Company’s policy is to generally treat a decline in the investment’s
quoted market value that has lasted continuously for more than six months as other - than - temporary decline in value. The Company
also monitors its investments for events or changes in circumstances that have occurred that may have a significant adverse effect
on the fair value of the investment and evaluates qualitative and quantitative factors regarding the severity and duration of the
unrealized loss and the Company’s ability to hold the investment until a forecasted recovery occurs to determine if the decline
in value of an investment is other - than - temporary. Declines in fair value below the Company’s carrying value deemed to
be other - than - temporary are charged to earnings.



Stockpiles, Ore on Leach Pads and Inventories



As described below, costs that are incurred in or
benefit the productive process are accumulated as stockpiles, ore on leach pads and inventories. Stockpiles, ore on leach pads
and inventories are carried at the lower of average cost or net realizable value. Net realizable value represents the estimated
future sales price of the product based on current and long - term metals prices, less the estimated costs to complete production
and bring the product to sale. Write - downs of stockpiles, ore on leach pads and inventories to net realizable value are reported
as a component of Costs applicable to sales. The current portion of stockpiles, ore on leach pads and inventories is determined
based on the expected amounts to be processed within the next twelve months. Stockpiles, ore on leach pads and inventories not
expected to be processed within the next twelve months are classified as long - term. The major classifications are as follows:



Stockpiles



The recovery of gold from certain gold oxide ores
is achieved through the heap leaching process. Under this method, ore is placed on leach pads where it is treated with a chemical
solution, which dissolves the gold contained in the ore. The resulting gold - bearing solution is further processed in a plant
where the gold is recovered. Costs are added to ore on leach pads based on current mining costs, including applicable overhead
and amortization relating to mining operations. Costs are removed from ore on leach pads as ounces are recovered based on the average
cost per recoverable ounce of gold on the leach pad.



F-118







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



The estimates of recoverable gold on the leach pads
are calculated from the quantities of ore placed on the pads (measured tons added to the leach pads), the grade of ore placed on
the leach pads (based on assay data) and a recovery percentage (based on ore type). In general, the leach pads recover approximately
50% to 95% of the ultimate recoverable ounces in the first year of leaching, declining each year thereafter until the leaching
process is complete.



Although the quantities of recoverable gold placed
on the leach pads are reconciled by comparing the grades of ore placed on the pads to the quantities of gold actually recovered
(metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely monitor inventory levels.
As a result, the metallurgical balancing process is constantly monitored and estimates are refined based on actual results over
time. Historically, the Company’s operating results have not been materially impacted by variations between the estimated
and actual recoverable quantities of gold on its leach pads. Variations between actual and estimated quantities resulting from
changes in assumptions and estimates that do not result in write - downs to net realizable value are accounted for on a prospective
basis.



In-process Inventory



In - process inventories represent materials that
are currently in the process of being converted to a saleable product. The conversion processes vary depending on the nature of
the ore and the specific processing facility, and include mill in-circuit and leach in-circuit. In - process material is measured
based on assays of the material fed into the process and the projected recoveries of the respective plants. In - process inventories
are valued at the average cost of the material fed into the process attributable to the source material coming from the mines,
stockpiles and/or leach pads plus the in - process conversion costs, including applicable amortization relating to the process
facilities incurred to that point in the process.



Precious Metals Inventory



Precious metals include gold dore and/or gold bullion.
Precious metals that result from the Company’s mining, processing and refining activities are valued at the average cost
of the respective in - process inventories incurred prior to the refining process, plus applicable refining costs.



Concentrate Inventory



Concentrate inventories represent silver, gold and
copper concentrate available for shipment. The Company values concentrate inventory at the average cost, including an allocable
portion of support costs and amortization. Costs are added and removed to the concentrate inventory based on tons of concentrate
and are valued at the lower of average cost or net realizable value.



F-119







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



Materials and Supplies



Materials and supplies are valued at the lower of
average cost or net realizable value. Cost includes applicable taxes and freight.



Property, Plant and Mine
Development



Facilities and Equipment



Expenditures for new facilities or equipment and expenditures
that extend the useful lives of existing facilities or equipment are capitalized and recorded at cost. The facilities and equipment
are amortized using the straight - line method at rates sufficient to amortize such costs over the estimated productive lives of
such facilities. These estimated productive lives do not exceed the related estimated mine lives, which are based on proven and
probable reserves.





Mine Development



Mine development costs include engineering and metallurgical
studies, drilling and other related costs to delineate an ore body, and the removal of overburden to initially expose an ore body
at open pit surface mines. Costs incurred before mineralization is classified as proven and probable reserves are expensed and
classified as Exploration or Advanced projects expense. Capitalization of mine development project costs, that meet
the definition of an asset, begins once mineralization is classified as proven and probable reserves.



Drilling and related costs are capitalized for an
ore body where proven and probable reserves exist; the activities are directed at obtaining additional information on the ore body
or converting non - reserve mineralization to proven and probable reserves. All other drilling and related costs are expensed as
incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs and
then included as a component of Costs applicable to sales.



The cost of removing overburden and waste materials
to access the ore body at an open pit mine prior to the production phase are referred to as “pre - stripping costs”.
Pre - stripping costs are capitalized during the development of an open pit mine. Where multiple open pits exist at a mining complex
utilizing common processing facilities, pre - stripping costs are capitalized at each pit. The removal and production of de minimis
saleable materials may occur during development and are recorded as Other income, net of incremental mining and processing
costs.



F-120







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



The production phase of an open pit mine commences
when saleable minerals, beyond a de minimis amount, are produced. Stripping costs incurred during the production phase of a mine
are variable production costs that are included as a component of inventory to be recognized in Costs applicable to sales
in the same period as the revenue from the sale of inventory. The Company’s definition of a mine and the mine’s production
phase may differ from that of other companies in the mining industry resulting in incomparable allocations of stripping costs to
deferred mine development and production costs. Other mining companies may expense pre - stripping costs associated with subsequent
pits within a mining complex. Other mining companies may capitalize stripping costs incurred in connection with the production
phase.



Mine development costs are amortized using the units
- of production (“UOP”) method based on estimated recoverable ounces in proven and probable reserves. To the extent
that these costs benefit an entire ore body, they are amortized over the estimated life of the ore body. Costs incurred to access
specific ore blocks or areas that only provide benefit over the life of that area are amortized over the estimated life of that
specific ore block or area.



Mineral Interests



Mineral interests include acquired interests in production,
development and exploration stage properties. The mineral interests are capitalized at their fair value at the acquisition date,
either as an individual asset purchase or as part of a business combination.



The value of such assets is primarily driven by the
nature and amount of mineralized material believed to be contained in such properties. Production stage mineral interests represent
interests in operating properties that contain proven and probable reserves. Development stage mineral interests represent interests
in properties under development that contain proven and probable reserves. Exploration stage mineral interests represent interests
in properties that are believed to potentially contain mineralized material consisting of (i) mineralized material such as
inferred material within pits; measured, indicated and inferred material with insufficient drill spacing to qualify as proven and
probable reserves; and inferred material in close proximity to proven and probable reserves; (ii) around - mine exploration
potential such as inferred material not immediately adjacent to existing reserves and mineralization, but located within the immediate
mine area; (iii) other mine - related exploration potential that is not part of measured, indicated or inferred material and
is comprised mainly of material outside of the immediate mine area; (iv) greenfields exploration potential that is not associated
with any other production, development or exploration stage property, as described above; or (v) any acquired right to explore
or extract a potential mineral deposit. The Company’s mineral rights generally are enforceable regardless of whether proven
and probable reserves have been established. The Company has the ability and intent to renew mineral interests where the existing
term is not sufficient to recover all identified and valued proven and probable reserves and/or undeveloped mineralized material.



F-121







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



Asset Impairment



The Company reviews and evaluates its long-lived assets
for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment
is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the
assets. An impairment loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated
based on quantities of recoverable minerals, expected gold and other commodity prices (considering current and historical prices,
trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine
plans. Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization that is not
part of the measured, indicated or inferred resource base, are included when determining the fair value of mine site reporting
units at acquisition and, subsequently, in determining whether the assets are impaired. The term “recoverable minerals”
refers to the estimated amount of gold or other commodities that will be obtained after taking into account losses during ore processing
and treatment. Estimates of recoverable minerals from such exploration stage mineral interests are risk adjusted based on management’s
relative confidence in such materials. In estimating future cash flows, assets are grouped at the lowest level for which there
are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company’s estimates
of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different
than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and
costs and capital are each subject to significant risks and uncertainties.



Revenue Recognition



Revenue is recognized, net of treatment and refining
charges, from a sale when persuasive evidence of an arrangement exists, the price is determinable, the product has been delivered,
the title has been transferred to the customer and collection of the sales price is reasonably assured. Revenues from silver and
copper sales are credited to Costs applicable to sales as a by-product credit.



Income and Mining Taxes and Profit Sharing



The Company accounts for income and mining taxes and
legally required profit sharing using the liability method, recognizing certain temporary differences between the financial reporting
basis of the Company’s liabilities and assets and the related income tax basis for such liabilities and assets. This method
generates a net deferred income tax liability and profit sharing liability or net deferred income tax asset and profit sharing
asset for the Company, as measured by the statutory tax and profit sharing rates in effect as enacted. The Company derives its
deferred income tax charge or benefit and profit sharing charge or benefit by recording the change in the net deferred income tax
liability and profit sharing liability or net deferred income tax asset and profit sharing asset balance for the year, based on
Peruvian income and mining tax and profit sharing rates.



F-122







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



The Company’s deferred income tax assets include
certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets
when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred
income tax asset will not be realized.



Reclamation and Remediation Costs



Asset retirement obligations are recognized when incurred
and recorded as liabilities at fair value. The liability is accreted over time through periodic charges to earnings. In addition,
the asset retirement cost is capitalized as part of the asset’s carrying value and amortized over the life of the related
asset. Reclamation costs are periodically adjusted to reflect changes in the estimated present value resulting from the passage
of time and revisions to the estimates of either the timing or amount of the reclamation costs. The estimated retirement obligation
is based on when spending for an existing environmental disturbance is expected to occur. The Company reviews, on an annual basis,
unless otherwise deemed necessary, the reclamation obligation at each mine site in accordance with ASC guidance for reclamation
obligations.



Future remediation costs for inactive mines are accrued
based on management’s best estimate at the end of each period of the costs expected to be incurred at a site. Such cost estimates
include, where applicable, ongoing care, maintenance and monitoring costs. Changes in estimates at inactive mines are reflected
in earnings in the period an estimate is revised.



Comprehensive Income



In addition
to Net income, Comprehensive income (loss) includes all changes in equity during a period, such as cumulative unrecognized
changes in fair value of marketable securities available - for - sale or other investments, except those resulting from investments
by and distributions to owners.



Recently
Adopted Accounting Pronouncements



Fair Value
Accounting



In May 2011,
ASC guidance was issued related to disclosures around fair value accounting. The updated guidance clarifies different components
of fair value accounting including the application of the highest and best use and valuation premise concepts, measuring the fair
value of an instrument classified in a reporting entity’s shareholders’ equity and disclosing quantitative information
about the unobservable inputs used in fair value measurements that are categorized in Level 3 of the fair value hierarchy. The
Company’s January 1, 2012 adoption of the updated guidance had no impact on the Company’s consolidated financial
position, results of operations or cash flows. Refer to note 6 for further details regarding the Company’s assets and liabilities
measured at fair value.



F-123







MINERA
YANACOCHA S.R.L.



NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars
in thousands unless otherwise stated)



Comprehensive
Income



In June 2011,
theASC guidance was issued related to comprehensive income. Under the updated guidance, an entity will have the option
to present the total of comprehensive income either in a single continuous statement of comprehensive income or in two separate
but consecutive statements. In addition, the update required certain disclosure requirements when reporting other comprehensive
income. The update does not change the items reported in other comprehensive income or when an item of other comprehensive income
must be reclassified to income. The Company adopted the new guidance and its deferral and opted to present the total of comprehensive
income in two separate but consecutive statements effective for its fiscal year beginning January 1, 2011. The early adoption
had no impact on the Company’s consolidated financial position, results of operations or cash flows.



Recently
Issued Accounting Pronouncements



Reporting
of Amounts reclassified out of Accumulated Other Comprehensive Income



In February 2013,
ASC guidance was issued related to items reclassified from Accumulated Other Comprehensive Income. The new standard requires
either in a single note or parenthetically on the face of the financial statements:(i) the effect of significant amounts reclassified
from each component of accumulated other comprehensive income based on its source and (ii) the income statement line items
affected by the reclassification. The update is effective for the Company’s fiscal year beginning January 1, 2013 with
early adoption permitted. The Company does not expect the updated guidance to have a significant impact on the consolidated financial
position, results of operations or cash flows.



Disclosures
about Offsetting Assets and Liabilities



In November 2011,
ASC guidance was issued related to disclosures about offsetting assets and liabilities. The new standard requires disclosures
to allow investors to better compare financial statements prepared under U.S. GAAP with financial statements prepared under IFRS.
The update is effective for the Company’s fiscal year beginning January 1, 2013, and interim periods within those annual
periods. Retrospective application is required.



F-124







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



In January 2013, ASC guidance was issued to clarify
that the disclosure requirements are limited to derivatives,repurchase agreements, and securities lending
transactions to the extent that they are (i) offset in the financial statements or (ii) subject to an enforceable master
netting arrangement or similar agreement.The Company does not expect the updated guidance to have an impact on the consolidated
financial position, results of operations or cash flows.



| | 3. | OTHER EXPENSE, NET
| | -- | ------------------



|                                           |  | Years Ended December 31, |        
|------------------------------------------ |  | ------------------------ | -------
|                                           |  | 2012                     |        
|Regional administration                    |  | $                        | 35,026 
|Community development and external affairs |  |                          | 30,078 
|World Gold Council dues                    |  |                          | 3,021  
|Negotiated payment                         |  |                          | -      
|Employee Severance Program                 |  |                          | 40,943 
|Other                                      |  |                          | 3,927  
|                                           |  | $                        | 112,995



Negotiated Payment



In December 2006, the Peruvian
Government approved legislation regulating the conditions in which the negotiated payment was paid by Peruvian mining companies.
The payment amounted to 3.75% of Peruvian net income after income tax (2.75% paid to a Local Mining Fund and 1% paid to a Regional
Mining Fund), payable for 2006 through 2010 if certain conditions were met. The funds are managed by an association designated
by the Company. Mining companies contributed these funds to participate in the government efforts to eradicate poverty in Peru
in the current favorable economic environment.



Employee severance program



During 2012, Yanacocha conducted a restructuring program
in order to align the Company’s organization with future business needs. In connection therewith, a group of employees signed
mutual agreements to terminate their labor contracts in return for severance payments. This program was mainly executed during
the month of September 2012 and no liabilities were outstanding at year-end.



F-125







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



| | 4. | OTHER INCOME, NET
| | -- | -----------------



|                                      |  | Years Ended December 31, |       
|------------------------------------- |  | ------------------------ | ------
|                                      |  | 2012                     |       
|Development projects, net             |  | $                        | 10,785
|Gain (loss) on sale of assets         |  |                          | (3,878
|Interest income                       |  |                          | 1,019 
|Gain (loss) on sale of investments    |  |                          | -     
|Foreign currency exchange gain (loss) |  |                          | (1,216
|Other                                 |  |                          | (130  
|                                      |  |                          | 6,580 



| | 5. | INCOME AND MINING TAXES
| | -- | -----------------------



Tax Stabilization Agreements



The Company has entered into the following tax stability
agreements, each with a term of 15 years:



|Mine            |  | Effective       |  | Date of the Tax
        Agreement |  | Tax Regimes in
        Force
|--------------- |  | --------------- |  | --------------------------------- |  | ----------------------------
|                |  |                 |  |                                   |  |                             
|Maqui Maqui     |  | January 1, 1997 |  | September 12, 1994                |  | May 6, 1994                 
|Cerro Yanacocha |  | January 1, 2000 |  | September 16, 1998                |  | May 22, 1997                
|La Quinua       |  | January 1, 2004 |  | August 25, 2003                   |  | August 25, 2003             



These agreements guarantee the Company’s use
of the tax regimes shown in the table above and permit maintenance of its accounting records in U.S. dollars.



The Maqui - Maqui tax stability agreement expired
on January 1, 2012 and is no longer in effect.



The Company determines the taxable income based on
its understanding and that of its legal advisors, of applicable tax legislation. Taxable income differs from pre-tax income disclosed
within these financial statements by those items that the applicable tax legislation deems to be non-taxable or non-deductible
and by certain differences between U.S. and Peruvian generally accepted accounting principles.



For the years ended December 31, 2012, 2011 and
2010 the income tax rate was 30% except for the La Quinua mine for which a 29% income tax rate applied.



F-126







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



Other Mining Taxes



| | a) | Law N° 29788, Mining Royalties
| | -- | ------------------------------



During the second quarter of 2004, the Peruvian Government
enacted legislation to establish a sliding scale mining royalty of up to 3% based on the volume of mine production. The royalty
is calculated on revenue from sales of product less certain refining and transportation expenses. While the Peruvian royalty became
effective during the second quarter of 2004, it does not apply to those projects that had stabilization agreements prior to the
adoption of the royalty law. The Company’s current production is derived from projects that were stabilized prior to the
enactment of the royalty legislation as well as projects where the stabilization agreements have expired. In September 2011,
the law was modified to comprise anew mining tax payable to the Peruvian Government for extracting
metallic and non - metallic mineral resources from its mining concessions.



The new mining royalty is payable quarterly, based
on sales and operating profit determined in accordance with Peruvian generally accepted accounting principles. The royalty amount
due is 1% of sales. An additional mining tax due is calculated based on the level of operating profit up to a maximum applicable
rate is 12%. This component of the new mining tax only applies to those projects that are not covered by a tax stabilization agreement.
During 2012 and 2011, $5,102 and $1,146, respectively, were included in Costs applicable to salesbased on 1% of revenue
and $2,359 and $132 were included in Income and mining tax expensebased on an average of 3.46% and 3.97% of operating profit,
respectively.



| | b) | Law N° 29789, Special Mining Tax
| | -- | --------------------------------



The Special Mining Tax
(“IEM”) applies to mines not covered by a tax stabilization agreement. The IEM is payable on a quarterly basis with
rates ranging from 2% to 8.4% of operating profit determined, in accordance with Peruviangenerally accepted accounting
principles. The rate varies depending on the level of operating profit. During 2012 and 2011, $6,900
and $1,319, respectively, were included in Income and mining tax expensedue to the IEM based on average of 3.13% and 3.69%
of operating profit, respectively.



| | c) | Law N° 29790, Special Mining Charge
| | -- | -----------------------------------



The Special Mining Charge (“GEM”) applies
to mines covered by a tax stabilization agreement. The GEM is payable on a quarterly basis with rates
ranging from 4% to 13.12% of operating profit, determined in accordance with Peruviangenerally accepted accounting principles.
The rate varies depending on the level of operating profit margin. The GEM applied to operations at
Cerro Yanacocha and La Quinua in 2012 and the fourth quarter of 2011. This resulted in $68,644 and $19,661, respectively, of additional
Income and mining tax expensebased on a 2012 average rate of 6.55% of operating profit and a 2011 average rate of 5.95%
of operating profit.



F-127







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



| | d) | Law N°29471, Supplementary Fund
| | -- | -------------------------------



The Supplementary Fund for retirement
of mining applies to metallurgical and steel workers, affiliated to the National Pension System - SNP and the Private Pension System
– PPS; and is applicable since May 11, 2012. This Fund is formed by contributions of employees andemployer which are distributed according to the following detail:



| | - | Employers will contribute 0.5% of the annual income before taxes.
| | - | -----------------------------------------------------------------

| | - | Employees will contribute 0.5% of their monthly gross salary.
| | - | -------------------------------------------------------------

| | - | The employer’s contributions are paid before tax; therefore these amounts are deductible
expenses for the year.
| | - | ---------------------------------------------------------------------------------------------------------------



The new pension fund tax
is payable quarterly in accordance with Peruvian generally accepted accounting principles. During 2012 this amounts wereincluded in Income and mining tax expense.



Peruvian Income Tax and Workers’ Profit Participation



The current income tax and workers’ profit participation
expense (Note 13) was determined as follows:



|                                                                                            |  | Years Ended December 31, |          
|------------------------------------------------------------------------------------------- |  | ------------------------ | ---------
|                                                                                            |  | 2012                     |          
|Income before workers’ profit participation and income tax in accordance with Peruvian GAAP |  | $                        | 1,074,530
|Plus:                                                                                       |  |                          |          
|Non-deductible expenses                                                                     |  |                          | 27,503   
|Reclamation (environmental) reserve liability                                               |  |                          | 33,910   
|Advanced projects (prior to operations)                                                     |  |                          | 49,904   
|Provision for government mining royalties                                                   |  |                          | 12,552   
|Capitalized interest amortization                                                           |  |                          | 4,357    
|Contingencies and commitments’ accruals                                                     |  |                          | 909      
|Intangible asset road amortization                                                          |  |                          | 2,849    
|Leasing benefit                                                                             |  |                          | 7,534    
|Provision for obsolescence of inventories                                                   |  |                          | 6,901    
|Conga Non-deductible expenses                                                               |  |                          | 45,413   
|Other                                                                                       |  |                          | 10,915   
|                                                                                            |  |                          | 202,747  
|Less:                                                                                       |  |                          |          
|Amortization and mineral interests                                                          |  |                          | (148,995 
|Tax amortization rate adjustment                                                            |  |                          | (19,332  
|Reclamation (environmental) reserve expense                                                 |  |                          | (7,661   
|Accounts receivable write-off                                                               |  |                          | -        
|Other mining taxes                                                                          |  |                          | (91,935  



F-128







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



|                                                          |  | Years Ended December 31, |          
|--------------------------------------------------------- |  | ------------------------ | ---------
|                                                          |  | 2012                     |          
|Capitalized interest                                      |  |                          | -        
|Other                                                     |  |                          | -        
|                                                          |  |                          | (267,923 
|Base to calculate workers’ profit participation           |  |                          | 1,009,353
|Workers’ profit participation (8%)                        |  |                          | (80,748  
|Taxable income                                            |  | $                        | 928,605  
|                                                          |  |                          |          
|Income tax (30%)                                          |  | $                        | 278,581  
|Credit for charitable donations                           |  |                          |          
|Prior year adjustment                                     |  |                          |          
|Adjustment due to income tax rate applicable to La Quinua |  |                          | (1,149   
|Current income tax                                        |  | $                        | 277,432  



F-129







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



Income Tax – Reconciliation from Peru Tax Return to
Income Tax Expense and Tax Balance Sheets

The Company’s income tax provision consisted of the following:



|                                  |  | Years Ended December 31, |        
|--------------------------------- |  | ------------------------ | -------
|                                  |  | 2012                     |        
|Current Peru tax return           |  | $                        | 277,432
|Royalties and mining taxes        |  |                          | 79,383 
|Other taxes                       |  |                          | 1,157  
|Income tax prior year adjustments |  |                          | (763   
|Current                           |  |                          | 357,209
|Deferred                          |  |                          | 4,648  
|Other                             |  |                          | -      
|Income tax expense                |  | $                        | 361,857



Income tax expense differs from the amount computed by applying
the statutory Peruvian corporate income tax rate of 30% to pre-tax income as a result of the following:



|                                                          |  | Years Ended December 31, |        
|--------------------------------------------------------- |  | ------------------------ | -------
|                                                          |  | 2012                     |        
|Income before tax provision                               |  | $                        | 928,605
|Peruvian statutory rate                                   |  |                          | 30     
|Income tax at statutory rate                              |  |                          | 278,581
|Adjustment due to income tax rate applicable to La Quinua |  |                          | (1,149 
|Negotiated payment                                        |  |                          | -      
|Donations                                                 |  |                          | -      
|Other mining taxes                                        |  |                          | 79,383 
|Other                                                     |  |                          | 5,042  
|Total income tax expense                                  |  | $                        | 361,857



Components of deferred income tax assets (liabilities) are as
follows:



|                                       |  | At December 31, |         
|-------------------------------------- |  | --------------- | --------
|                                       |  | 2012            |         
|Deferred income tax assets:            |  |                 |         
|Reclamation and remediation            |  | $               | 72,584  
|Accounts payable and accrued expenses  |  |                 | 30,132  
|Deferred workers’ profit participation |  |                 | 5,498   
|Other                                  |  |                 | 9,620   
|                                       |  |                 | 117,834 
|Deferred income tax liabilities:       |  |                 |         
|Property, plant and mine development   |  |                 | (161,471
|Inventories                            |  |                 | (23,796 
|Other                                  |  |                 | (2,231  
|                                       |  |                 | (187,498
|Net deferred income tax liabilities    |  |                 | (69,664 
|                                       |  |                 |         
|Current deferred income tax assets     |  |                 | 4,378   



F-130







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



|                                          |  | At December 31, |        
|----------------------------------------- |  | --------------- | -------
|                                          |  | 2012            |        
|                                          |  |                 |        
|Long-term deferred income tax liabilities |  |                 | (74,042
|Net deferred income tax liabilities       |  |                 | (69,664



Unrecognized Tax Benefits



At December 31, 2012 and 2011, the Company had
$1,198 and $5,566, respectively, of total gross unrecognized tax benefits that, if recognized, would impact the Company’s
effective income tax rate. The Company’s continuing practice is to recognize interest and/or penalties related to unrecognized
tax benefits as part of its income tax expense. The Company files income tax returns with Peruvian taxing authorities and is no
longer subject to income tax audits by taxing authorities for years before 2008.



| | 6. | FAIR VALUE ACCOUNTING
| | -- | ---------------------



Fair value accounting establishes a fair value hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable
inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:



| | Level 1 | Unadjusted quoted prices in active markets that are accessible
at the measurement date for identical, unrestricted assets or liabilities;
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------



| | Level 2 | Quoted prices in markets that are not active, or inputs
that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Level 3 | Prices or valuation techniques that require inputs that
are both significant to the fair value measurement and unobservable (supported by little or no market activity).
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The following table sets forth the Company’s
assets measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. As required by
accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant
to the fair value measurement.



|                                  |  | Fair Value at December 31, 2012 |       
|--------------------------------- |  | ------------------------------- | ------
|                                  |  | Total                           |       
|Assets:                           |  |                                 |       
|San José Reservoir Trust assets   |  | $                               | 17,115
|Provisional priced products sales |  | $                               | 34    



F-131







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



The Company’s SanJoséReservoir Trust assets are made up of marketable equity and debt securities that
are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy.
The fair value of the marketable equity securities is calculated as the quoted market price of the marketable equity security multiplied
by the quantity of shares held by the Company.



The Company’s net trade receivable from provisional
silver, gold, carbon fines and copper concentrate sales is valued using quoted market prices based on the forward the COMEX Silver
Index, the London Bullion Market Association P.M. fix (“London P.M. fix”) (gold), and the London Metal Exchange (“LME”)
(copper), and, as such is classified within Level 1 of the fair value hierarchy.



| | 7. | ACCOUNTS RECEIVABLE
| | -- | -------------------



|                               |  | At December 31, |        
|------------------------------ |  | --------------- | -------
|                               |  | 2012            |        
|Value added tax                |  | $               | 71,498 
|Equipment and fuel receivables |  |                 | 19,973 
|Trade accounts receivable      |  |                 | 730    
|Employee receivables           |  |                 | 793    
|Other                          |  |                 | 7,545  
|                               |  | $               | 100,539



| | 8. | INVENTORIES
| | -- | -----------



|                       |  | At December 31, |       
|---------------------- |  | --------------- | ------
|                       |  | 2012            |       
|Leach in-process       |  | $               | 4,624 
|Mill in-circuit        |  |                 | 13,620
|Precious metals        |  |                 | 7,942 
|Materials and supplies |  |                 | 61,227
|                       |  | $               | 87,413



| | 9. | STOCKPILES AND ORE ON LEACH PADS
| | -- | --------------------------------



|                  |  | At December 31, |        
|----------------- |  | --------------- | -------
|                  |  | 2012            |        
|Current:          |  |                 |        
|Stockpiles        |  | $               | 30,979 
|Ore on leach pads |  |                 | 114,567
|                  |  | $               | 145,546
|Long-term:        |  |                 |        
|Stockpiles        |  | $               | 88,615 
|Ore on leach pads |  |                 | 263,471
|                  |  | $               | 352,086



F-132







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



| | 10. | OTHER ASSETS
| | --- | ------------



|                                         |  | At December 31, |       
|---------------------------------------- |  | --------------- | ------
|                                         |  | 2012            |       
|Other current assets:                    |  |                 |       
|Prepayments to suppliers and contractors |  |                 | 14,510
|Claims for tax refunds                   |  |                 | 4,335 
|Restricted cash                          |  |                 | 1,045 
|Prepaid expenses and other               |  |                 | 2,444 
|                                         |  |                 | 22,334
|Other long-term assets:                  |  |                 |       
|Intangible assets, net                   |  |                 | 54,549
|San José Reservoir Trust assets          |  |                 | 17,127
|Other                                    |  |                 | 2,134 
|                                         |  | $               | 73,810



As of December 31, 2012, Prepayments to suppliers
and contractors is related to the purchase of equipment of $3,398, supplies of $91 and other services $11,021.



Intangible assets relate to an alternative road to
the coast.



| | 11. | PROPERTY, PLANT AND MINE DEVELOPMENT, NET
| | --- | -----------------------------------------



|                             |  | At December 31, 2012 |           |  | At December 31, 2011         |  
|---------------------------- |  | -------------------- | --------- |  | ---------------------------- | -
|                             |  | Cost                 |           |  | Accumulated
    Amortization |  
|Land                         |  | $                    | 76,397    |  |                              | $
|Facilities
    and equipment |  |                      | 2,457,548 |  |                              |  
|Mine development             |  |                      | 930,709   |  |                              |  
|Mineral
    interests        |  |                      | 69,779    |  |                              |  
|Asset
    retirement cost    |  |                      | 451,647   |  |                              |  
|Construction-in-progress     |  |                      | 1,526,315 |  |                              |  
|                             |  | $                    | 5,512,395 |  |                              | $



Construction - in - progress for 2012 of $1,526,315
related primarily to leach pad development, surface development and Conga reservoir engineering and procurement activities.



Construction - in - progress for 2011 of $915,432
primarily related to project development costs for Conga and leach pad expansion.



|                          |  | Method        |  | Depreciable Life (in years) |            
|------------------------- |  | ------------- |  | --------------------------- | -----------
|Facilities and equipment: |  | Straight line |  |                             | 8 to 25    
|Facilities                |  |               |  |                             | 8 to 25    
|Leach pads                |  |               |  |                             | 5          
|Equipment                 |  |               |  |                             | 2.5 to 10.5



F-133







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



|                      |  | Method                     |  | Depreciable Life (in years) |        
|--------------------- |  | -------------------------- |  | --------------------------- | -------
|Other                 |  |                            |  |                             | 5      
|Mine development      |  | UOP based on ounces mined  |  |                             | 8 to 21
|Mineral interests     |  | UOP for producing property |  |                             | 12     
|Asset retirement cost |  | Related asset              |  |                             | 5 to 15



|                  |  | At December 31, 2012 |        |  | At December 31, 2011     |  
|----------------- |  | -------------------- | ------ |  | ------------------------ | -
|                  |  | Gross Carrying Value |        |  | Accumulated Amortization |  
|Mineral Interest  |  |                      |        |  |                          |  
|                  |  |                      |        |  |                          |  
|Production stage  |  | $                    | 32,299 |  |                          | $
|Development stage |  |                      | 20,298 |  |                          |  
|Exploration stage |  |                      | 17,182 |  |                          |  
|                  |  | $                    | 69,779 |  |                          | $



| | 12. | DUE TO/FROM RELATED PARTIES
| | --- | ---------------------------



The Company has the following amounts due from and
to related parties:



|                                      |  | At December 31, |       
|------------------------------------- |  | --------------- | ------
|                                      |  | 2012            |       
|Due from related parties:             |  |                 |       
|Newmont Boddington Gold Pty Ltd       |  | $               | 6,466 
|Newmont USA Limited                   |  |                 | 4,988 
|Newmont International Service Limited |  |                 | 2,592 
|Newmont Insurance Limited             |  |                 | 1,000 
|Suriname Gold                         |  |                 | 374   
|Newmont Peru S.R.L.                   |  |                 | 148   
|Newmont Santa Fe Pacific Chile        |  |                 | 26    
|Newmont (Other)                       |  |                 | 1,611 
|                                      |  | $               | 17,205



|                                      |  | At December 31, |        
|------------------------------------- |  | --------------- | -------
|                                      |  | 2012            |        
|Due to related parties:               |  |                 |        
|Newmont USA Limited                   |  | $               | 17,161 
|S.M.R.L. Chaupiloma Dos de Cajamarca  |  |                 | 12,557 
|Newmont Technologies Limited          |  |                 | 6,687  
|Newmont International Service Limited |  |                 | 5,865  
|Newmont Peru S.R.L.                   |  |                 | 5,193  
|Newmont Santa Fe Pacific Chile        |  |                 | 315    
|Newmont (Other)                       |  |                 | 1,621  
|                                      |  | $               | 49, 399



F-134







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



Management, exploration, mine development, engineering
and employment services are received pursuant to contracts with affiliates. The corresponding charges totaled $88,476 and $66,506
in 2012 and 2011, respectively.



As described in Note 1, the Company pays to Chaupiloma
a 3% royalty based on quarterly production sold at current market prices, after deducting refinery and transportation costs. Royalty
expense totaled $66,586, $60,816 and $55,765 in 2012, 2011 and 2010, respectively and is included in Costs applicable to sales.



| | 13. | WORKERS’ PROFIT PARTICIPATION
| | --- | -----------------------------



In accordance with Peruvian legislation, the Company
maintains an employee profit sharing plan equal to 8% of annual taxable income. Distributions to employees under the plan are based
50% on the number of days that each employee worked during the preceding year and 50% on proportionate annual salary levels.



In 2012, 2011 and 2010, the current expense portion
of workers’ profit participation amounted to $80,748, $79,057 and $77,578, respectively, which was included in Costs applicable
to sales.



Peruvian law limits payments of annual profit sharing
per employee to eighteen months salary but continues to base total profit sharing on 8% of taxable income, notwithstanding the
per employee limitation. Supreme Decree N°009-98-TR, published on August 6, 1998, provides that the excess of total profit
sharing for the year over aggregate profit sharing payable to all employees be paid to the Fondo Nacional de Capacitación
Laboral y de Promoción del Empleo (“FONDOEMPLEO”). Law 28464 published in January 2005,
which modified art.3 of Law Decree 892, provides that the excess of total profit sharing for the year over aggregate profit sharing
payable to all employees be applied to training of employees and construction of public facilities. Supreme Decree N°
002-2005-TR, published in May 6, 2005, establishes a limit of 2,200 UIT (inflation measurement unit, of S/.3,650 new Peruvian
sol per unit at December 31, 2012) in the contributions to FONDOEMPLEO indicating that the difference goes to the Regional
Government.



| | 14. | OTHER CURRENT LIABILITIES
| | --- | -------------------------



|                                     |  | At December 31, |        
|------------------------------------ |  | --------------- | -------
|                                     |  | 2012            |        
|Accrued capital expenditures         |  | $               | 56,296 
|Contractors fund retention guarantee |  |                 | 32,524 
|Accrued operating costs              |  |                 | 18,686 
|Reclamation and remediation          |  |                 | 21,411 
|Payroll and other benefits           |  |                 | 9,053  
|Taxes other than income and mining   |  |                 | 2,194  
|Income tax withholding               |  |                 | 3,222  
|Deferred revenues                    |  |                 | 660    
|Other                                |  |                 | 1,032  
|                                     |  | $               | 145,078



F-135







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)





Accrued capital projects are mainly related to Conga,
Western Oxides, Carachugo Water Treatment and other minor projects.



| | 15. | RECLAMATION AND REMEDIATION
| | --- | ---------------------------



The Company’s mining and exploration activities
are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually
changing and are generally becoming more restrictive. The Company conducts its operations so as to protect the public health and
environment and believes its operations are in compliance with all applicable laws and regulations in all material respects. The
Company has made, and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict
the amount of such future expenditures. Estimated future reclamation costs are based principally on legal and regulatory requirements.



The liability corresponds primarily to activities
to be performed in the reclamation and remediation of mining activities once the gold extraction process has been finished. These
activities include reclamation of the mine sites, operating water treatment plants, revegetation and earthworks.



The following is a reconciliation of reclamation and
remediation liabilities:



|                                               |  | Years Ended December 31, |        
|---------------------------------------------- |  | ------------------------ | -------
|                                               |  | 2012                     |        
|                                               |  |                          |        
|Balance at beginning of year                   |  | $                        | 353,875
|Addtions change in estimates and other settled |  |                          | 163,050
|Liabilities settled                            |  |                          | (7,661 
|Accretion expense                              |  |                          | 20,090 
|Balance at end of year                         |  | $                        | 529,354



The current portion of Reclamation and remediationof $21,411 and $10,598 at December 31, 2012 and 2011, respectively, are included in Other current liabilities.



The increase in the asset retirement obligation in
2012 relates to additional remediation and reclamation requirements caused by the impact of mining activities during 2012, additional
costs for waste rock reclamation and new Peruvian regulatory requirements that extended the water treatment and monitoring requirements
more than 20 years.



F-136







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



| | 16. | PARTNERS’ EQUITY
| | --- | ----------------



Partners’ Contributions



Partners’ contributions represent 1,278,451,304
common partnership interests with a par value of one Peruvian Nuevo sol each, fully subscribed and paid. Such partnership interest
includes 720,407,310 that are owned by foreign investors.



Under current Peruvian regulations, there is no restriction
on remittance of dividends or repatriation of foreign investment, except as discussed in sections below.



The legal structure of the Company is that of a Limited
Liability Partnership. The main characteristics of such structure are: (i) the number of Partners cannot exceed 20, (ii) the
capital is represented by partnership interests, and (iii) there is no obligation to create a legal reserve.



Retained Earnings



Effective January 1, 2003, distribution of earnings
for Partners other than legal entities domiciled in Peru is subject to a withholding tax of 4.1%.



Accumulated Other Comprehensive Income



|                                                       |  | At December 31, |      
|------------------------------------------------------ |  | --------------- | -----
|                                                       |  | 2012            |      
|                                                       |  |                 |      
|Unrealized gain on marketable securities, net of taxes |  | $               | 2,006
|                                                       |  | $               | 2,006



| | 17. | SUPPLEMENTAL CASH FLOW INFORMATION
| | --- | ----------------------------------



Net cash provided from operations includes the following
cash payments:



|                                          |  | Years Ended December 31, |        
|----------------------------------------- |  | ------------------------ | -------
|                                          |  | 2012                     |        
|Income and mining taxes paid              |  | $                        | 392,741
|Interest paid, net of amounts capitalized |  | $                        | -      



| | 18. | MAJOR CUSTOMERS AND EXPORT SALES
| | --- | --------------------------------



The Company is not economically dependent on a limited
number of customers for the sale of its product because gold can be sold through various commodity market traders worldwide. In
2012, sales to one customer accounted for $1,580 which represented 72% of total annual sales. In 2011, sales to one customer accounted
for $1,419,109 which represented 71% of total annual sales. In 2010, sales to one customer accounted for $1,326,000 which represented
75% of total annual sales. All gold sales were made outside of Peru.



F-137







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



| | 19. | COMMITMENTS AND CONTINGENCIES
| | --- | -----------------------------



Income and Mining Tax Contingencies



Income and mining tax contingencies are provided for
under ASC guidance (see Notes 2 and 5).



Unitization of Properties



In December 2000, as a result of the unitization
plan carried out by the Partners, the Company signed several asset transfer and mining lease agreements with related entities.
The main conditions are:



| | · | The Company must pay to Chaupiloma, 3% of the quarterly net sales, according to the lease agreement. The mining rights subject
to this 3% royalty are those identified in the lease agreement as part of the “Area of Influence of Chaupiloma”. Some
of these mining rights are in exploitation and the rest of them in exploration.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The Company must pay to S.M.R.L. Coshuro (“Coshuro”) and Buenaventura, 3% of the quarterly net sales, according
to the transfer agreement. The mining rights subject to this 3% royalty are those identified in the transfer agreement, and are
located out of the “Area of Influence of Chaupiloma” and within the “Area of Influence of the Joint Venture”.
These mining rights are currently under exploration.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The Company must pay to Los Tapados S.A., 3% of the quarterly net sales proceeds of mineral extracted from the transferred
and leased concessions of Los Tapados S.A. The transferred and leased concessions of Los Tapados S.A. are also subject to a previously
existing royalty on the minerals. These mining rights are currently under exploration.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Legal Proceedings



Choropampa (mercury
spill)



In June 2000, a transport contractor of Yanacocha
spilled approximately 151 kilograms of elemental mercury near the town of Choropampa, Peru, which is located 53 miles (85 kilometers)
southwest of the Yanacocha mine. Elemental mercury is not used in Yanacocha’s operations but is a by-product of gold mining
and was sold to a Lima firm for use in medical instruments and industrial applications. A comprehensive health and environmental
remediation program was undertaken by Yanacocha in response to the incident. In August 2000, Yanacocha paid under protest
a fine of 1,740,000 Peruvian soles (approximately $0.5) to the Peruvian government. Yanacocha has entered into settlement agreements
with a number of individuals impacted by the incident. As compensation for the disruption and inconvenience caused by the incident,
Yanacocha entered into agreements with and provided a variety of public works in the three communities impacted by this incident.
Yanacocha cannot predict the likelihood of additional expenditures related to this matter.



F-138







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



Additional lawsuits relating to the Choropampa incident
were filed against Yanacocha in the local courts of Cajamarca, Peru, in May 2002 by over 900 Peruvian citizens. A significant
number of the plaintiffs in these lawsuits entered into settlement agreements with Yanacocha prior to filing such claims. In April 2008,
the Peruvian Supreme Court upheld the validity of these settlement agreements, which the Company expects to result in the dismissal
of all claims brought by previously settled plaintiffs. Yanacocha has also entered into settlement agreements with approximately
350 additional plaintiffs. The claims asserted by approximately 200 plaintiffs remain. In 2011, Yanacocha was served with 22 complaints
alleging grounds to nullify the settlements entered between Yanacocha and the plaintiffs. Yanacocha has answered the complaints
and will continue to vigorously defend its position. Neither the Company nor Yanacocha can reasonably estimate the ultimate loss
relating to such claims.



Since December 2010 to date,
23 new claims involving 29 plaintiffs were received by Yanacocha. In this claim, plaintiffs are requesting the Judge to (i) declare
void the compensation agreement signed with Yanacocha and to (ii) award them with new compensation amounts. 2 of these new
claims involving 2 plaintiffs were dismissed as they did not comply with formal requirements.



In 19 of these cases, the initial
presiding judge admitted a motion to dismiss based on prescription of the actions and dismissing the processes. Plaintiffs appealed
this decision, and Superior Court confirmed it in 18 cases. In 8 of these cases, plaintiffs have challenged this decision in front
of the Supreme Court, but to date one of them has already been dismissed.



In one of the claims, a different
presiding judge accepted the Company’s motion to dismiss the claim regarding a new award but it has rejected it regarding
the compensation agreement, this decision was confirmed by Superior Court, so this claim continues in first instance.



Both request (i) and (ii) were
prescribed according to the terms in Peruvian legislation, so those claims should be dismissed.



F-139







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



Baños del Inca



In September 2006, the Municipality
of Baños del Inca issued a declaration designating an area that includes the Carachugo Expansion and San José Projects
as reserved and protected areas. Based on previous experience and actions taken by the Constitutional Tribunal (Peru Court of Last
instance for Constitutional issues) in respect of Cerro Quilish in which it was ruled that such declaration did not affect the
Company’s mining rights, the Company believes that Baños del Inca’s declaration, should not impact the Company’s
legal rights to exploit these concessions.



In March 2008, the company
filed an Action for Constitutional Relief (Amparo) against the Municipality of Baños del Inca seeking that the referred
ordinance be declared inapplicable. The Court of first instance of Lima rejected the claim lodged by the Municipality of Baños
del Inca regarding the jurisdiction of such court to hear this case. On March 14, 2011 the Court of first instance of Lima
served the ruling it had issued declaring the complaint inadmissible. The judgment was appealed by Yanacocha. By a resolution served
on August 15, 2011, the first Civil Courtroom of the Superior Court of Lima declared void the judgment of first instance,
ordering the Judge to issue a new ruling. On September 07, 2012 Yanacocha request to the Civil Courtroom decides to issue
a judgment due to its constitutional rights is seriously threat by the Municipality of Baños del Inca. The action is pending
new judgment to be issued by the Court of first instance with no judgment as of date.



San Pablo



In February 2007 the Municipality of San Pablo
issued an Ordinance declaring Las Lagunas and Pozo Seco, where the company holds concession rights, as reserved and protected areas.
According to past experience and actions taken by the Constitutional Court with regard to Cerro Quilish, where it was ruled that
such declaration did not affect the company’s mining rights, the Company believes that it this case, the declaration issued
by the Municipality of San Pablo should not impact the legal rights it has to exploit these concessions. The company filed an Action
for Constitutional Relief (Amparo) challenging the Ordinance on the grounds that, under Peruvian law, local governments are not
empowered to create such areas, denying the rights granted by the Peruvian mining concessions. The Court of first instance rejected
the complaint on grounds of form. Thus, the corresponding appeal was lodged.



On November 19, 2008 the second Civil Courtroom
of the Superior Court of Lima confirmed the first instance ruling rejecting the action for relief, which led to the filing of an
extraordinary appeal with the Constitutional Court.



By a ruling dated December 10, 2010 the Constitutional
Court revoked the resolution issued by the second Civil Courtroom of the Superior Court of Lima and ordered that the complaint
be admitted for processing.



By resolution served on March 25, 2011, the Court
of First Instance admitted the complaint for processing and that it is served to the Provincial Municipality of San Pablo. The
Municipality of San Pablo answered the complaint asserting the expiration of the statute of limitations of the action for relief.
Yanacocha has requested the rejection of the expiration of the statute of limitations asserted on the grounds that the complaint
for constitutional relief was timely filed.



F-140







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



On October 31, 2012 the defendant formulates
allegation and presents new evidentiary. By resolution served on December 10, 2012, the Courts resolve to confirm the Resolution
N°26 which declares unfunded the exception of prescription of the case. The Court ruling on the statute of limitations is pending.



Conga Project



Regional Ordinance No. 036-2011-GR.CAJ-CR dated December 5,
2011 issued by the Regional Government of Cajamarca (hereinafter the Regional Ordinance) was published in the Official Gazette
“El Peruano” on December 28, 2011.



The Regional Ordinance, among other things, declares
the unworkability of the implementation of the Conga Project in the headwaters of the basin where the following lakes are found:
el Perol (District of Sorochuco); Azul and Cortada (District of Huasmín); Mamacocha (District of Bambamarca) and all those
located in the area of influence of the Conga Project on the grounds of the existence of technical - legal inconsistencies in the
Environmental Impact Assessment approved by Directorial Resolution No.351 - 2010 - MEM/AAM, dated October 27, 2010, and also
on the grounds that it contravenes constitutional norms and international treaties. Furthermore, it declares the invalidity of
any legal rule that contravenes the referred Regional Ordinance.



There is Constitutional Court jurisprudence establishing
that large scale mining projects fall under the exclusive jurisdiction of the Executive Power, not of the Regional Governments
or Municipalities. The Attorney General filled an unconstitutionality action with the Constitutional Court seeking that this regional
ordinance be declared unconstitutional and void. The complaint has already been admitted for processing by the Constitutional Court.



On April 17, 2012, Constitutional Court granted
the action brought by Attorney General and declared unconstitutional the Regional Ordinance. This final ruling was published in
the Official Gazette “El Peruano” on April 27, 2012.



At the same time, Yanacocha initiated an action for
constitutional relief to declare the inapplicability of Regional Ordinance No. 036-2011-GR.CAJ-CR. As the ruling by Constitutional
Court declared unconstitutional the Regional Ordinance, this action is no longer needed.



F-141







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



Action for Constitutional Relief against Conga
Project Exploitation



On October 19, 2012, Marco Antonio Arana Zegarra
initiated an action for constitutional relief against the Mines and Energy Ministry and Yanacocha requesting that Court orders
to cease any threats of violation to live in an adequate and balanced environment; so that Court declare the suspension of the
exploitation of Conga Project and avoid Directorial Resolution No. 351-2010-MEM/AM dated on October 27, 2010 that approved
Conga Environmental Impact Assessment.



By Court resolution
No. 1 dated on October 23, 2012 the action was dismissed. On November 5, 2012, resolution No. 1 was appealed by plaintiff
and the hearing at Superior Court will be held on March 4, 2013 at 12:15 p.m.



Clínica
International, Adecco, SGC Security



Employees belonging
to three contractors (Clinica International, Adecco, SCG Seguridad) have filed legal actions claiming to be included in Minera
Yanacocha’s payroll. These workers claim that for all practical effects they are employees of the Company and therefore
are entitled to all the rights attached thereto, arguing that they receive direct orders from Yanacocha and that most of the infrastructure
and equipment used in the performance of their duties is also provided by the Company. All of these proceedings involve a total
of 97 workers. The cases are detail as follow:



Regarding to Adecco employees, the complaint included
77 plaintiffs. This complaint was declared groundless in the first instance and confirmed by the Civil Courtroom. Thus, the plaintiffs
filed an appeal for reversal. As of February 2013, the records were forwarded to the Standing Constitutional and Social Courtroom
of the Supreme Court of Justice of the Republic, but complaint was not accepted. Also during this time some of the plaintiffs desisted
from the claim, so to date this complaint is finished, as no plaintiffs is remaining in the process.



Regarding to Clinica International employees, the
complaint included 14 plaintiffs. In cases: 254-2008 and 253-2008 are pending the issuance of judgment in the first instance, since
the Civil Courtroom declared the previous judgment null, on the grounds that the judge made a mistake by having unduly matched
the terms material resources and own equipment, since the former is one of the requirements for the valid existence of outsourcing,
and the latter is a contributory element, as provided in Article 4 of Supreme Decree No. 003-2002-TR, amended by Supreme Decree
No. 020-2007-TR. Case File No. 255 - 2008 also is pending judgment in the first instance.



In the case of SGC Security workers, the complaint
included 6 plaintiffs. The issuance of judgment in the first instance is pending, since the previous judgment was declared null
by the Civil Courtroom.



F-142







MINERA YANACOCHA S.R.L.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands unless otherwise
stated)



Letters of Guarantee



On January 17, 2010, the
Company signed a Letter of Guarantee of US$85 million with Banco de Credito del Peru (BCP) in accordance with the Mine
Closure Regulation approved by Supreme Decree No.033-2005 of The Ministry of Energy and Mines. This letter of guarantee has a renewal
for one more year since January 18, 2012. For the period 2013 the letter has an amount of US$105.9 million and shall
have an effective term of one additional year extended to January 18th, 2014.



On January 13, 2012, the
Company signed an additional letter of guarantee for US$45 million with BBVA Continental which have extended to January 18th,
2013 in accordance with the Mine Closure Regulations. This letter of guarantee has a renewal for US$71.7 million for the period
2013 and shall have an effective term of one additional year extended to January 18th, 2014.

On January 18, 2013, the
Company signed an additional letter of guarantee for US$30 million with Interbank which have extended to January 18th,
2014, in accordance with the Mine Closure Regulations.



These three letters of guarantee
shall come into force if the Company fails to execute in whole or in part the Mine Closure Plan.



F-143







Dictamen de los auditores independientes (continuación)



Sociedad Minera Cerro Verde S.A.A.



Financial Statements as of December 31, 2012, 2011 and 2010,
together with the Report of Independent Registered Public Accounting Firm



Contents



|Report of Independent Registered Public Accounting Firm | F-145
|------------------------------------------------------- | -----
|                                                        |      
|Statement of Financial Position                         | F-146
|                                                        |      
|Statements of Comprehensive Income                      | F-147
|                                                        |      
|Statements of Changes in Equity                         | F-148
|                                                        |      
|Statements of Cash Flows                                | F-149
|                                                        |      
|Notes to the Financial Statements                       | F-151



F-144







Report of Independent Registered Public Accounting Firm



|ERNST & YOUNG | Medina, Zaldivar, Paredes 
|------------- | --------------------------
|              | & Asociados Sociedad Civil



To the Board of Directors and Shareholders of Sociedad Minera
Cerro Verde S.A.A.





We have audited the accompanying financial statements of Sociedad
Minera Cerro Verde S.A.A. (a Peruvian company, subsidiary of Freeport-McMoRan Copper & Gold Inc.), which comprise the statement
of financial position as of December 31, 2012 and 2011, and the related statements of comprehensive income, statements of changes
in equity and statements of cash flows for each of the three years ended December 31, 2012, 2011 and 2010. These financial statements
are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements
based on our audits.



We conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an
audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over
financial reporting as a basis of designing audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we
express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.



In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Sociedad Minera Cerro Verde S.A.A. as of December 31, 2012 and
2011, and the results of operations and its cash flows for each of the three years ended December 31, 2012, 2011 and 2010, in conformity
with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (“IASB”).



Lima, Peru,

April 30, 2013



/s/ Medina, Zaldivar,
Paredes & Asociados

Countersigned by:





/s/ Marco Antonio Zaldívar__

Marco Antonio Zaldívar

C.P.C.C. Register No.12477







F-145







Sociedad Minera Cerro Verde S.A.A.



Statement of Financial Position

As of December 31, 2012 and 2011



|                                               |  | Note  |  | 2012     |           |  | 2011     | 
|---------------------------------------------- |  | ----- |  | -------- | --------- |  | -------- | 
|                                               |  |       |  | US$(000) |           |  | US$(000) | 
|Assets                                         |  |       |  |          |           |  |          | 
|Current assets                                 |  |       |  |          |           |  |          | 
|Cash and cash equivalents                      |  | 3     |  |          | 1,427,528 |  |          | 
|Trade accounts receivable                      |  | 4     |  |          | 4,054     |  |          | 
|Trade accounts receivable from related parties |  | 17(f) |  |          | 318,562   |  |          | 
|Embedded derivative                            |  | 19    |  |          | 11,569    |  |          | 
|Other accounts receivable                      |  |       |  |          | 28,408    |  |          | 
|Inventories, net                               |  | 6     |  |          | 194,909   |  |          | 
|                                               |  |       |  |          |           |  |          | 
|Total current assets                           |  |       |  |          | 1,985,030 |  |          | 
|Other long – term accounts receivable          |  | 5     |  |          | 63,964    |  |          | 
|Long-term inventories                          |  | 6     |  |          | 188,990   |  |          | 
|Property, plant and equipment, net             |  | 7     |  |          | 1,799,709 |  |          | 
|Intangible assets, net                         |  | 16(d) |  |          | 5,078     |  |          | 
|                                               |  |       |  |          |           |  |          | 
|Total assets                                   |  |       |  |          | 4,042,771 |  |          | 
|                                               |  |       |  |          |           |  |          | 
|Liabilities and equity, net                    |  |       |  |          |           |  |          | 
|Current liabilities                            |  |       |  |          |           |  |          | 
|Trade accounts payable                         |  | 8     |  |          | 146,354   |  |          | 
|Trade accounts payable to related parties      |  | 17(f) |  |          | 8,081     |  |          | 
|Embedded derivative                            |  | 19    |  |          | -         |  |          | 
|Income tax liability                           |  |       |  |          | 21,187    |  |          | 
|Workers’ profit sharing payable                |  | 9     |  |          | 75,991    |  |          | 
|Other accounts payable                         |  |       |  |          | 20,855    |  |          | 
|                                               |  |       |  |          |           |  |          | 
|Total current liabilities                      |  |       |  |          | 272,468   |  |          | 
|Non-current portion of other accounts payable  |  |       |  |          | 540       |  |          | 
|Provision for remediation and mine closure     |  | 16(a) |  |          | 79,812    |  |          | 
|Deferred income tax liability                  |  | 10(a) |  |          | 240,243   |  |          | 
|                                               |  |       |  |          |           |  |          | 
|Total liabilities                              |  |       |  |          | 593,063   |  |          | 
|                                               |  |       |  |          |           |  |          | 
|Equity, net                                    |  | 11    |  |          |           |  |          | 
|Issued capital                                 |  |       |  |          | 990,659   |  |          | 
|Other capital reserves                         |  |       |  |          | 198,132   |  |          | 
|Retained earnings                              |  |       |  |          | 2,260,917 |  |          | 
|                                               |  |       |  |          |           |  |          | 
|Total equity, net                              |  |       |  |          | 3,449,708 |  |          | 
|                                               |  |       |  |          |           |  |          | 
|Total liabilities and equity, net              |  |       |  |          | 4,042,771 |  |          | 



The accompanying notes are an integral part
of this financial statement.



F-146







Sociedad Minera Cerro Verde S.A.A.



Statements of Comprehensive Income

For the years ended December 31, 2012, 2011 and 2010



|                                                            |  | Note     |  | 2012     |             |   | 2011     |  |             | 2010     | 
|----------------------------------------------------------- |  | -------- |  | -------- | ----------- | - | -------- |  | ----------- | -------- | 
|                                                            |  |          |  | US$(000) |             |   | US$(000) |  |             | US$(000) | 
|                                                            |  |          |  |          |             |   |          |  |             |          | 
|Sales of goods                                              |  | 13       |  |          | 2,127,023   |   |          |  | 2,520,050   |          | 
|                                                            |  |          |  |          |             |   |          |  |             |          | 
|Cost of sales of goods                                      |  | 14       |  |          | (801,571    | ) |          |  | (824,700    | )        | 
|                                                            |  |          |  |          |             |   |          |  |             |          | 
|Gross profit                                                |  |          |  |          | 1,325,452   |   |          |  | 1,695,350   |          | 
|                                                            |  |          |  |          |             |   |          |  |             |          | 
|Operating expenses                                          |  |          |  |          |             |   |          |  |             |          | 
|Selling expenses                                            |  | 15       |  |          | (78,674     | ) |          |  | (83,612     | )        | 
|Expense related to water plant                              |  | 16(b)    |  |          | (19,606     | ) |          |  | (13,670     | )        | 
|Excess of workers’ profit sharing                           |  | 9(b)     |  |          | -           |   |          |  | (21,923     | )        | 
|Voluntary contribution                                      |  | 16(e)    |  |          | -           |   |          |  | -           |          | 
|Other operating expenses                                    |  |          |  |          | (9,898      | ) |          |  | (16,865     | )        | 
|                                                            |  |          |  |          |             |   |          |  |             |          | 
|                                                            |  |          |  |          | (108,178    | ) |          |  | (136,070    | )        | 
|                                                            |  |          |  |          |             |   |          |  |             |          | 
|Operating profit                                            |  |          |  |          | 1,217,274   |   |          |  | 1,559,280   |          | 
|                                                            |  |          |  |          |             |   |          |  |             |          | 
|Other income (expenses)                                     |  |          |  |          |             |   |          |  |             |          | 
|Financial income                                            |  |          |  |          | 1,886       |   |          |  | 1,078       |          | 
|Financial expenses                                          |  |          |  |          | (6,951      | ) |          |  | (165        | )        | 
|Gain net from exchange differences                          |  | 20(a)    |  |          | 3,149       |   |          |  | 1,924       |          | 
|                                                            |  |          |  |          |             |   |          |  |             |          | 
|Profit before income tax                                    |  |          |  |          | 1,215,358   |   |          |  | 1,562,117   |          | 
|                                                            |  |          |  |          |             |   |          |  |             |          | 
|Income tax expense                                          |  | 10(c, d) |  |          | (443,288    | ) |          |  | (483,718    | )        | 
|                                                            |  |          |  |          |             |   |          |  |             |          | 
|Profit for the year                                         |  |          |  |          | 772,070     |   |          |  | 1,078,399   |          | 
|                                                            |  |          |  |          |             |   |          |  |             |          | 
|Basic and diluted earnings per share (stated in US dollars) |  | 18       |  |          | 2.21        |   |          |  | 3.08        |          | 
|                                                            |  |          |  |          |             |   |          |  |             |          | 
|Weighted average number of shares outstanding               |  | 18       |  |          | 350,056,012 |   |          |  | 350,056,012 |          | 



F-147







Sociedad Minera Cerro Verde S.A.A.



Statements of Changes in Equity

For the years ended December 31, 2012, 2011 and 2010



|                                  |  | Issued  capital |         |  | Other capital reserves |  |         | Retained earnings |  |  | Total     |  
|--------------------------------- |  | --------------- | ------- |  | ---------------------- |  | ------- | ----------------- |  |  | --------- | -
|                                  |  | US$(000)        |         |  | US$(000)               |  |         | US$(000)          |  |  | US$(000)  |  
|                                  |  |                 |         |  |                        |  |         |                   |  |  |           |  
|Balance as of January 1, 2010     |  |                 | 990,659 |  |                        |  | 198,132 |                   |  |  | 286,055   |  
|                                  |  |                 |         |  |                        |  |         |                   |  |  |           |  
|Profit for the year               |  |                 | -       |  |                        |  | -       |                   |  |  | 1,074,393 |  
|Dividend distribution, note 11(d) |  |                 | -       |  |                        |  | -       |                   |  |  | (950,000  | )
|                                  |  |                 |         |  |                        |  |         |                   |  |  |           |  
|Balance as of December 31, 2010   |  |                 | 990,659 |  |                        |  | 198,132 |                   |  |  | 410,448   |  
|                                  |  |                 |         |  |                        |  |         |                   |  |  |           |  
|Profit for the year               |  |                 | -       |  |                        |  | -       |                   |  |  | 1,078,399 |  
|                                  |  |                 |         |  |                        |  |         |                   |  |  |           |  
|Balance as of December 31, 2011   |  |                 | 990,659 |  |                        |  | 198,132 |                   |  |  | 1,488,847 |  
|                                  |  |                 |         |  |                        |  |         |                   |  |  |           |  
|Profit for the year               |  |                 | -       |  |                        |  | -       |                   |  |  | 772,070   |  
|                                  |  |                 |         |  |                        |  |         |                   |  |  |           |  
|Balance as of December 31, 2012   |  |                 | 990,659 |  |                        |  | 198,132 |                   |  |  | 2,260,917 |  



F-148







Sociedad Minera Cerro Verde S.A.A.



Statements of Cash Flows

For the years ended December 31, 2012, 2011 and 2010



|                                                                                              |  | 2012     |           |   | 2011     |  |           | 2010     | 
|--------------------------------------------------------------------------------------------- |  | -------- | --------- | - | -------- |  | --------- | -------- | 
|                                                                                              |  | US$(000) |           |   | US$(000) |  |           | US$(000) | 
|                                                                                              |  |          |           |   |          |  |           |          | 
|Operating activities                                                                          |  |          |           |   |          |  |           |          | 
|Profit before income tax                                                                      |  |          | 1,215,358 |   |          |  | 1,562,117 |          | 
|Adjustments to profit for the year that do not affect net cash flow from operating activities |  |          |           |   |          |  |           |          | 
|Depreciation of property, plant and equipment                                                 |  |          | 94,242    |   |          |  | 82,431    |          | 
|Amortization of intangible assets                                                             |  |          | 1,630     |   |          |  | 1,630     |          | 
|Unwinding of discount provision for remediation and mine closure                              |  |          | 239       |   |          |  | 358       |          | 
|Provision (recovery of provision) for inventory obsolescence                                  |  |          | 778       |   |          |  | 203       |          | 
|Net loss from disposal/sale of property, plant and equipment                                  |  |          | 24        |   |          |  | 4,062     |          | 
|Other adjustments                                                                             |  |          | -         |   |          |  | -         |          | 
|                                                                                              |  |          |           |   |          |  |           |          | 
|Net changes in operating assets and liabilities accounts                                      |  |          |           |   |          |  |           |          | 
|Net decrease (increase) in operating assets                                                   |  |          |           |   |          |  |           |          | 
|Trade accounts receivable                                                                     |  |          | 40,261    |   |          |  | (16,460   | )        | 
|Trade accounts receivable from related parties                                                |  |          | (119,231  | ) |          |  | 91,378    |          | 
|Embedded derivative                                                                           |  |          | (11,569   | ) |          |  | 208,474   |          | 
|Other accounts receivable                                                                     |  |          | (2,449    | ) |          |  | 2,290     |          | 
|Inventories                                                                                   |  |          | (19,850   | ) |          |  | (5,612    | )        | 
|Other long-term accounts receivable                                                           |  |          | (12,119   | ) |          |  | 19,002    |          | 
|Long-term inventories                                                                         |  |          | (48,319   | ) |          |  | (20,698   | )        | 
|Net increase (decrease) in operating liabilities                                              |  |          |           |   |          |  |           |          | 
|Trade accounts payable                                                                        |  |          | 90,404    |   |          |  | (11,426   | )        | 
|Accounts payable to related parties                                                           |  |          | 4,666     |   |          |  | (436      | )        | 
|Embedded derivative                                                                           |  |          | (75,257   | ) |          |  | -         |          | 
|Workers’ profit sharing payable                                                               |  |          | (43,720   | ) |          |  | 9,646     |          | 
|Other accounts payable                                                                        |  |          | (3,820    | ) |          |  | (109,289  | )        | 
|Non-current portion of other accounts payable                                                 |  |          | (758      | ) |          |  | -         |          | 
|Income tax paid                                                                               |  |          | (465,819  | ) |          |  | (626,925  | )        | 
|                                                                                              |  |          |           |   |          |  |           |          | 
|Net cash and cash equivalents provided by operating activities                                |  |          | 644,691   |   |          |  | 1,190,745 |          | 



F-149







Statements of Cash Flows (continued)



|                                                                    |  | 2012     |           |   | 2011     |  |           | 2010     | 
|------------------------------------------------------------------- |  | -------- | --------- | - | -------- |  | --------- | -------- | 
|                                                                    |  | US$(000) |           |   | US$(000) |  |           | US$(000) | 
|                                                                    |  |          |           |   |          |  |           |          | 
|Investing activities                                                |  |          |           |   |          |  |           |          | 
|Collection from the sale of property, plant and equipment           |  |          | 262       |   |          |  | -         |          | 
|Purchase of property, plant and equipment                           |  |          | (600,872  | ) |          |  | (195,222  | )        | 
|Purchase of intangibles                                             |  |          | (189      | ) |          |  | -         |          | 
|                                                                    |  |          |           |   |          |  |           |          | 
|Net cash and cash equivalents used in investing activities          |  |          | (600,799  | ) |          |  | (195,222  | )        | 
|                                                                    |  |          |           |   |          |  |           |          | 
|Financing activities                                                |  |          |           |   |          |  |           |          | 
|Payment of dividends                                                |  |          | -         |   |          |  | -         |          | 
|                                                                    |  |          |           |   |          |  |           |          | 
|Net cash and cash equivalents used in financing activities          |  |          | -         |   |          |  | -         |          | 
|                                                                    |  |          |           |   |          |  |           |          | 
|Net increase in cash and cash equivalents during the year           |  |          | 43,892    |   |          |  | 995,523   |          | 
|Cash and cash equivalents at beginning of year                      |  |          | 1,383,636 |   |          |  | 388,113   |          | 
|                                                                    |  |          |           |   |          |  |           |          | 
|Cash and cash equivalents at year-end                               |  |          | 1,427,528 |   |          |  | 1,383,636 |          | 
|                                                                    |  |          |           |   |          |  |           |          | 
|Transactions  with no effects in cash flows:                        |  |          |           |   |          |  |           |          | 
|Increase in the provision for remediation and mine closure estimate |  |          | 72,512    |   |          |  | 3,217     |          | 





F-150







Sociedad Minera Cerro Verde S.A.A.

Notes to the Financial Statements

As of December 31, 2012, 2011 and 2010



| | 1. | Identification and business activity of the Company
| | -- | ---------------------------------------------------

| | (a) | Identification -
| | --- | ----------------

Sociedad Minera Cerro Verde S.A.A. (hereinafter “the
Company”) was incorporated in Peru on August 20, 1993, as a result of the privatization process of certain mining units
carried out by the Peruvian State in that year. The Company has listed its shares on the Lima Stock Exchange since November 14,
2000.



Through its subsidiary Cyprus Climax Metals Company,
Freeport-McMoRan Corporation (“FMC” – formerly Phelps Dodge Corporation), a wholly owned subsidiary of Freeport-McMoRan
Copper & Gold Inc. (“Freeport”), owns 53.56% of the voting shares of the Company. Additionally, SMM Cerro Verde
Netherlands B.V. (a subsidiary of Sumitomo Metal Mining Company Ltd.) owns 21% of the voting share of the Company, Compañía
de Minas Buenaventura S.A.A. owns 19.58%, and the minority stakeholders own the remaining 5.86%.



| |  | The Company’s legal address is Asiento Minero Cerro Verde S/N Uchumayo – Arequipa. The ore deposits are located
southwest of the city of Arequipa.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Business activity -
| | --- | -------------------

The Company’s activities are regulated by the
Peruvian General Mining Law and comprise the extraction, production and sale of copper cathodes and concentrates.



Expansion of operations

The Company is engaged in a large-scale expansion of
Cerro Verde ́s production unit. The US$4.4 billion project will expand the processing capacity
from 120,000 metric tons per day of ore to 360,000 metric tons per day, targeting incremental annual production of approximately
600 million pounds of copper and 15 million of molybdenum beginning in 2016. In December 2012, the Company received
approval of the Environmental Impact Study from the Peruvian Ministry of Energy and Mines. Detailed engineering and procurement
of long-lead items are in progress. The Company expects to begin construction in 2013.



| | (c) | Financial statements approval –
| | --- | -------------------------------



The financial statements as of December 31, 2012
and 2011 were approved by Company ́s Management on February 8, 2013 and will be presented for the approval of the Board
of Directors and the Shareholders within the terms established by law. In Management’s opinion, the accompanying financial
statements will be approved without changes by the Board of Directors and Shareholders’ Meetings that will be held in the
first quarter of 2013.



F-151







Notes to the Financial Statements (continued)



| | 2. | Significant accounting principles and policies
| | -- | ----------------------------------------------

| | 2.1 | Basis of preparation -
| | --- | ----------------------

The financial statements of the Company have been prepared
in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting
Standards Board (“IASB”) and interpretations issued by the IFRS Interpretations Committee (“IFRIC”).



The financial statements have been prepared based on
historical cost, except for accounts receivable and/or payable related to embedded derivatives, which have been measured at fair
value.



The financial statements are presented in United States
(“US”) dollars and include the years ended December 31, 2012, 2011 and 2010. Unless otherwise indicated, all values
have been rounded to the nearest thousand.



| | 2.2 | Accounting estimates, judgments and assumptions –
| | --- | -------------------------------------------------

The preparation of the financial statements according
to IFRS requires that Management make judgments, estimates and assumptions that affect the amounts of the assets and liabilities
reported, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses for the years ended December 31, 2012, 2011 and 2010.



Estimates and assumptions are continuously evaluated
and are based on the experience of Management and other factors, including expectations of future events that are reasonable under
current circumstances; however, actual results could differ from these estimates.



Information about estimations and judgements taken into
account by Management in the preparation of the financial statements follows:



| | (a) | Estimates of ore reserves and resources -
| | --- | -----------------------------------------

Ore reserves are estimates of the ore quantity that
can be economically and legally extracted from the mine properties. The Company estimates its ore reserves based on information
compiled by individuals qualified in reference to geological data about the size, depth and form of the ore body, and requires
of geological judgments in order to interpret the data.



The estimation of recoverable reserves is based on
factors such as estimated exchange rates, commodity prices, future requirements of capital and production costs, together with
geological hypothesis and judgments made when estimating the size and quality of ore. Revisions in reserve or resource estimates
may have an impact on the value of mining properties, property, plant and equipment, provisions for cost of mine closure, recognition
of assets for deferred taxes and depreciation and amortization of assets.



F-152







Notes to the Financial Statements (continued)



| | (b) | Units-of-production (“UOP”) depreciation
-
| | --- | ------------------------------------------

Estimates of recoverable reserves are used in determining
the depreciation and amortization of mine assets. This results in a depreciation/amortization charge proportional to the depletion
of the anticipated remaining life of mine production. Each item’s life, which is assessed annually, takes into account its
physical life limitations and the present assessments of economically recoverable reserves. These calculations require the use
of estimates and assumptions, including the amount of recoverable reserves that may be recovered.



| | (c) | Asset impairment –
| | --- | ------------------

The Company has determined that the Cerro Verde operation
consists of one cash generating unit, considering the operation as a whole. Therefore, the Cerro Verde operation is evaluated annually
in order to determine if there are any impairment indicators. If any such indication exists, the Company makes an estimate of the
recoverable amount, which is the greater of the fair value less costs to sell and the value in use. These assessments require the
use of estimates and assumptions, such as long-term commodity prices, discount rates, operating costs, and others.



Fair value is defined as the amount that would be
obtained from the sale of the asset in an arm’s length transaction between willing and knowledgeable parties. The fair value
of assets is generally determined as the current value of future cash flows derived from the continuous use of the asset, which
includes estimates, such as the cost of future expansion plans and eventual disposal, while applying assumptions that an independent
market participant may take into account. The cash flows are discounted by applying a discount rate that reflects current market,
the time value of money and the risks specific to the asset.



| | (d) | Mine closure provision -
| | --- | ------------------------

The Company assesses its mine closure provision annually.
It is necessary to make estimates and assumptions in determining this provision, including cost estimates of activities that are
necessary for the rehabilitation of the site, technological and regulatory changes, interest rates and inflation rates. As discussed
in note 2.3(h), estimated changes in the fair value of the mine closure provision or the useful life of the related assets are
recognized as an increase or decrease in the book value of the provision and related asset retirement cost (ARC) in accordance
with IAS 16, “Property, Plant and Equipment”. If any change in the estimate results in an increase to the mine closure
and related ARC, the Company shall consider whether or not this is an indicator of impairment of the assets and will apply impairment
tests in accordance with IAS 36, “Impairments of Assets”.



F-153







Notes to the Financial Statements (continued)



| | (e) | Inventories -
| | --- | -------------

Net realizable value tests are performed at least
annually and represent the estimated future sales price of the product based on prevailing spot metals prices, less estimated costs
to complete production and bring the inventory to sale. Additionally, in calculating the net realizable value of the Company’s
long-term stockpiles, Management also considers the time value of money.



Mill and leach stockpiles generally contain lower
grade ores that have been extracted from the ore body and are available for copper recovery. For mill stockpiles, recovery is through
milling and concentrating. For leach stockpiles, recovery is through exposure to acidic solutions that dissolve copper and delivery
it in solution to extraction processing facilities.



Because it is generally impracticable to determine
copper contained in mill and leach stockpiles by physical count, reasonable estimation method are employed. The quantity of material
delivered to mill and leach stockpiles is based on surveyed volumes of mined material and daily production records. Sampling and
assaying of blasthole cuttings determine the estimated copper grades of material delivered to mill and leach stockpiles.



Expected copper recovery rates for mill stockpiles
are determined by metallurgical sampling. The recoverability of copper in mill stockpiles, once entered into the production process,
can be produced into copper concentrate almost immediately.



Estimated copper recovery rates are determined using
laboratory tests, historical trends and other factors. Ultimate recovery of copper contained in leach stockpiles can vary significantly
depending on several variables, including type of copper recovery, mineralogy and the size of the rocks. Processes and recovery
rates are monitored continuously, and recovery rates are adjusted periodically as additional information becomes available and
as related technology changes.



| | (f) | Contingencies -
| | --- | ---------------

By their nature, contingencies will only be resolved
when one or more future events do or do not occur. Determining contingencies inherently involves the exercise of judgment and calculation
of the estimated results of future events.



| | 2.3. | Summary of significant accounting policies and practices
-
| | ---- | ----------------------------------------------------------



| | (a) | Currency -
| | --- | ----------

The financial statements are presented in US dollars;
which is also the Company’s functional currency.



F-154







Notes to the Financial Statements (continued)



Foreign currency transactions are considered to be
those which are carried out in a currency that is other than the function currency. Foreign currency transactions are translated
into the functional currency by applying the exchange rate in force on the date the transaction takes place. Monetary assets and
liabilities denominated in foreign currencies are converted using the functional currency spot rate in force at the reporting date.



Gains and losses as a result of the difference in
the exchange rate when currency items are liquidated or when converting currency items at exchange rates that are different from
those used for their initial recognition are recognized in the statements of comprehensive income for the year.



The Company uses exchange rates published by the Superintendent
of Banks, Insurance and AFP. As of December 31, 2012, the published exchange rates were S/.2.594 for US$1 for buying and S/.2.551
for US$1 for selling (S/.2.695 for US$1 and S/. 2.697 for US$1, as of December 31, 2011, respectively). These rates have been
applied to the appropriate asset and liability accounts. As of December 31, 2012 and 2011, the Company did not maintain significant
assets or liabilities in Nuevos Soles.



| | (b) | Financial assets -
| | --- | ------------------

The Company determines the classification of its financial
assets at initial recognition in accordance with IAS 39, “Financial Instruments: Recognition and Measurement”.



Financial assets are recognized initially at fair
value plus the direct costs attributable to the transaction. The Company’s financial assets include cash and cash equivalents,
accounts receivable and embedded derivatives.



Cash and cash equivalents -

Cash and cash equivalents are financial assets that
may be liquidated immediately, such as bank accounts, and other liquid investments with original maturities of three months or
less.



Receivables -

The Company’s receivables include trade accounts
receivables to related parties and third parties and other accounts receivable. These receivables are stated at their transaction
value, net of an allowance for doubtful accounts.



Receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active market. After initial measurement, receivables are subsequently
carried at amortized cost using the effective interest method less any provision for impairment (i.e. allowance for doubtful accounts).



F-155







Notes to the Financial Statements (continued)



The Company assesses whether, as of the date of the
financial statements, there is objective evidence of impairment in the value of the receivable. Any resulting impairment is measured
as the difference between the book value of the receivable and the present value of the estimated future cash flows, discounted
at an original effective interest rate or one applicable to a similar transaction. The carrying amount of the receivable is reduced
by means of an allowance account and recognized in the statements of comprehensive income.



Embedded derivatives -

The Company’s copper sales are provisionally
priced at the time of shipment. The provisional prices are finalized in a specified future month based on quoted London Metal Exchange
(LME) monthly average prices. The Company receives market prices based on prices in the specified future month, which results
in price fluctuations recorded through revenues until the date of settlement. The Company records revenues and commercial invoices
at the time of shipment based on the current LME prices, which result in an embedded derivative that is required to be separated
from the main contract.



The Company’s embedded derivatives from sales
are measured at fair value (based on LME spot copper prices) with subsequent changes recognized in the statements of comprehensive
income until the month of settlement.



| | (c) | Inventories –
| | --- | -------------

Inventories are stated at the lower of cost or the
net realizable value. Inventory of materials and supplies, as well as finished products are determined using the weighted-average
cost method. The cost of finished goods and in - process inventory (i.e., stockpiles) includes labor and benefits, supplies, energy
and other costs related to mining and processing of minerals. Net realizable value is the estimated future sales price based on
forward metal prices (at the year that are expected to be processed), less estimated costs to complete production and bring the
inventory to sale; and the discount rate.



Provision for obsolescence -

Obsolescence allowances are established based on an
item-by-item analysis by Management. Any amount of obsolescence identified is charged to the statements of comprehensive income
in the year it is deemed to have occurred.



| | (d) | Property, plant and equipment -
| | --- | -------------------------------

Property, plant and equipment are valued at historical
cost, including costs that are directly attributed to the construction or acquisition, net of accumulated depreciation, amortization
and impairment.



F-156







Notes to the Financial Statements (continued)



Repairs and/or improvements of an asset that is depreciated
separately and is required to be discharged or replaced, creating an increase of economic life of property and for which it is
probable that there will be future economic benefit to the Company, are recorded as assets. All other maintenance costs are charged
to expense as incurred.



Land is not depreciated. Depreciation of assets directly
related to the useful life of the mine is calculated using the UOP method based on the mine’s proven and probable reserves.
Other assets are depreciated using the straight-line method based on the following estimated useful lives:



|                                  |  | Years            
|--------------------------------- |  | -----------------
|Buildings and other constructions |  | Between 10 and 30
|Machinery and equipment           |  | Between 3 and 25 
|Transportation units              |  | 7                
|Furniture and fixtures            |  | 7                
|Other equipment                   |  | Between 3 and 25 



Critical spare parts and those which are directly
identified with machinery or equipment are included in property, plant and equipment, and the economic life assigned will be related
to the main asset with which they are identified.



An item of property, plant and equipment is retired
at the time of its disposal or when no future economic benefits are expected from its use or subsequent disposition. Any gain or
loss arising at the time of retirement is calculated as the difference between the proceeds from the sale and the book value of
the asset and is included in the statements of comprehensive income in the year the asset is retired.



The residual value and useful economic lives of
the Company’s property, plant and equipment are reviewed, and adjusted if appropriate, at each year end. The Company also
assesses, at the end of each period, whether there is an indication that its property, plant and equipment may be impaired.



| | (e) | Exploration, development and stripping costs –
| | --- | ----------------------------------------------

Exploration costs -

Mineral exploration costs, as well as drilling and
other costs incurred for the purpose of converting mineral resources to proven and probable reserves, or identifying new mineral
resources at development or production stage properties, are charged to the statements of comprehensive income as incurred.



Development costs -

Development costs are capitalized based on the Management ́s
judgement, when the economic and technological feasibility of the project is confirmed, which is generally when the development
or expansion project has reached a milestone in accordance with a model established by Company.



F-157







Notes to the Financial Statements (continued)



Stripping cost -

The Company records the cost of stripping incurred
during the mine’s production stage as a variable production cost and includes them in the cost of inventory produced during
the period when such stripping costs were incurred. Stripping costs incurred in the development of a mine (i.e., before production
commences) are capitalized until the production stage is initiated and subsequently amortized using the UOP method.



| | (f) | Intangible assets -
| | --- | -------------------

The intangible assets acquired are recorded at cost
less accumulated amortization. As indicated in note 16(c), the Company has recorded an intangible asset for the future benefit
of electrical energy at a fixed price, which is being amortized over the term of the contract, which expires December 31,
2015. The Company assesses at the end of each period, whether there is an indication that its intangible asset may be impaired.



| | (g) | Impairment -
| | --- | ------------

At each reporting date, the Company evaluates if there
is any indication that an asset could be impaired. If such an indication exists, the Company estimates the recoverable amount of
the asset. The recoverable amount of an asset is the greater of its fair value less costs to sell or its value in use and is determined
for the assets of the mine as a whole, since there are no assets that generate cash revenues independently.



When the book value of an asset exceeds its recoverable
amount, the asset is considered impaired and is reduced to its recoverable amount. When evaluating the value in use, the future
estimated cash flows are discounted to their present value using a discount rate before taxes that reflects current market evaluations
of the time value of money and the specific risks to the asset.



Losses resulting from the impairment of assets are
recognized in the statements of comprehensive income under the categories of expenses consistent with the function of the impaired
asset. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the
asset’s recoverable amount since the last impairment loss was recognized. The revised valuation cannot exceed the book value
that would have been determined, net of depreciation, if an impairment loss for the asset had not been recognized in a previous
period. Such a reversal is recognized in the statements of comprehensive income.



F-158







Notes to the Financial Statements (continued)



There was no indication of impairment of the Company’s
assets as of December 31, 2012 and December 31, 2011.



| | (h) | Provisions -
| | --- | ------------

General -

A provision is recognized when the Company has a present
obligation (legal or constructive) as a result of a past event, it is probable that resources of the Company will be required to
settle the obligation, and an estimate of the amount of the obligation can be calculated. The expense relating to any provision
is presented in the statements of comprehensive income, net of any reimbursement, in the period the provision is established.



If the effect of the time value of money is significant,
provisions are discounted by applying a discount rate that reflects, where applicable, the risks specific to the liability. When
discounting is used, the increase in the provision due to the passage of time is recognized as a financial expense in the statements
of comprehensive income.



Mine closure provision -

The Company records a mine closure provision when
a contractually or legally enforceable obligation arises. The Company estimates the present value of its future obligation for
mine closure and increases the carrying amount of the related ARC, which is included in property, plant and equipment. Subsequently,
the mine closure provision is accreted to full value over time and recognized as an interest cost considered in the initial fair
value estimate. The related ARC is depreciated using the units-of-production method during the economic life of the mine.



The Company evaluates its mine closure provision
annually and makes adjustments to estimates and assumptions, including scope, future costs and discount rates, as applicable. Changes
in the fair value of the mine closure provision or the useful life of the related asset are recognized as an increase or decrease
in the book value of the provision and the related ARC in accordance with IAS 16. Any decrease in the mine closure provision and
related ARC cannot exceed the current book value of the asset; amounts over the current book value will be recorded in the statements
of comprehensive income.



| | (i) | Revenue recognition -
| | --- | ---------------------

The Company primarily sells copper cathodes and concentrates
in accordance with sales contracts entered into with its customers. Revenues comprise the fair value of the sale of goods, net
of related general sales taxes. The Company recognizes revenue when the amount can be reliably measured, it is probable that future
economic benefits will flow to the Company and all significant risks (including title and insurance risk) and rewards of ownership
have transferred to the customer. Revenue is not considered reliably measured until all contingencies relating to the sale have
been resolved.



F-159







Notes to the Financial Statements (continued)



Sales of copper cathodes and concentrates –

Local sales of copper cathodes are recognized when
the Company has delivered the goods to the shipping company designated by the customer. Revenue associated with foreign sales of
copper cathodes and copper concentrates is recognized when all significant risks and rewards of ownership have transferred to the
customer, which is typically when the inventory has passed over the vessel’s rail at the port of loading.



As described in note 2.3(b), the Company’s copper
sales are provisionally priced at the time of shipment. The provisional prices are finalized in a specified future month in accordance
with the terms specified in the related sales contract and based on quoted LME monthly average prices. The Company receives market
prices in the specified future month, and these sales result in changes recorded to revenues until the specified future month.
The Company records revenues and commercial invoices at the time of shipment based on the current LME prices, which result in an
embedded derivative that is bifurcated from the host contract.



| | (j) | Income taxes, deferred taxes and other taxes -
| | --- | ----------------------------------------------

Income taxes-

Income tax assets and liabilities are measured at
the amounts expected to be paid to or recovered from the tax authorities. The tax rates and tax laws that are applied to compute
the amounts are those that are enacted or substantially enacted at the end of the year. The Company calculates the provision for
income tax in accordance with the Peruvian tax legislation in force. The income tax rate in Peru was 30% as of December 31,
2012 and 2011.



Deferred taxes -

The deferred income tax is presented using the liability
method for differences between the tax bases of assets and liabilities and their book values for financial reporting purposes.
Deferred tax liabilities are recognized for all temporary differences. Deferred tax assets are recorded for all deductible temporary
differences when there is a probability that there could be future taxable earnings against which the deductible temporary differences
could be applied.



The book value of the deferred tax asset is reviewed
at the end of each period and reduced to an amount that is more likely than not to be realized against taxable earnings. Deferred
tax assets that are not recognized are reassessed at each period and are recognized when it is more likely than not that future
taxable earnings will allow for the deferred tax asset to be recovered.



F-160







Notes to the Financial Statements (continued)



Deferred tax assets and liabilities are measured at
tax rates that are expected to be applicable during the year when the assets are realized or the liabilities are liquidated, based
on the tax rates (and tax laws) that have been enacted at the end of the period. Deferred tax assets and liabilities are offset
if there is a legally enforceable right to offset tax assets against tax liabilities and the deferred tax is related to the same
entity and the same tax authority.



Mining Taxes -

On September 29, 2011, Law 29788 (which amended
Law 28528) was enacted creating a new mining tax and royalty regime in Peru. Under the new regime, companies that do not have stability
agreements will be subject to a revised royalty and a special mining tax. Cerro Verde operates under a stability agreement and
therefore is not subject to the revised royalty and special mining tax until its stability agreement expires on December 31,
2013. The Peruvian government has also created a special mining burden that companies with tax stability agreements can elect to
pay. The special mining burden is based on a sliding scale of 4% to 13%, with a maximum effective tax rate of 8.79%. Cerro Verde
will elect to pay this special mining burden during the remaining term of its stability agreement.



| | (k) | Workers’ profit sharing -
| | --- | -------------------------

The Company recognizes worker’s profit sharing
In accordance with IAS 19, “Employees Benefits”. Workers’ profit sharing is calculated in accordance with Peruvian
laws (Legislative Decree No. 892), and the Company’s workers’ profit sharing rate is 8% over the taxable net base of
current year. According to Peruvian law the limit in the workers’ profit sharing that an employee could receive is equivalent
to 18 months of wages, and any excess above such limit will be transferred to the Regional Government and “National Found
for Employment’s Promotion and Training” (“FONDOEMPLEO”). The Company’s workers’ profit sharing
is recognized as a liability in the statement of financial position and as an operating expense in the statements of comprehensive
income.



| | (l) | Basic and diluted earningsper share -
| | --- | -------------------------------------

Basic and diluted earnings per share have been calculated
based on the weighted average number of common shares held during the period. When the number of shares is modified as a result
of capitalization of retained earnings, the net income per basic and diluted share is adjusted retroactively for all of the periods
reported. For the years ended as of December 31, 2012, 2011 and 2010, the Company did not have any financial instrument with
dilutive effects; as a result, the basic and diluted shares are the same in all years presented.



F-161







Notes to the Financial Statements (continued)



| | 2.4. | New IFRS and IFRIC –
| | ---- | --------------------

Improvements and amendments to IFRS issued, effective
in 2012 and also those which are not yet effective, include the following:



Effective in 2012.-

There are no new or amended standards and interpretations
effective in 2012 that impact either the financial position, financial results, disclosure or stated accounting policies of the
Company.



Effective in 2013.-

| | - | IAS 1, Presentation of Financial Statements, effective for annual periods beginning on July 1, 2012. The amendments to
IAS 1 change the grouping of items presented in the statement of comprehensive income.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IAS 27, Separate Financial Statements (revised in 2011), effective for annual periods beginning on January 1, 2013. As
a consequence of the new IFRS 10 and IFRS 12, what remains in IAS 27 is limited to accounting for subsidiaries, joint arrangements
and associates in separate financial statements.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IAS 28, Investments in associates and joint ventures (revised in 2011), effective for annual periods beginning on January 1,
2013. As a consequence of the new IFRS 11 and IFRS 12, IAS 28 Investments in Associates and Joint Ventures, describes the application
of the equity method to investments in joint ventures in addition to associates.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IAS 19, “Employee Benefits (Amendment)”, effective January 1, 2013, amends the recognition and disclosure
requirements for defined benefit plans.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 9, “Financial Instruments”, effective January 1, 2015, modifies the treatment and classification of financial
assets established by IAS 39, “Financial Instruments: Recognition and Measurement”.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 10, “Consolidated Financial Statements”, effective January 1, 2013, replaces
the consolidation requirements in SIC-12, “Consolidation—Special Purpose Entities” and IAS 27, “Consolidated
and Separate Financial Statements”.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 11, “Joint Arrangement”, effective January 1, 2013, addresses inconsistencies
in the reporting of joint arrangements by requiring a single method to account for interests in jointly controlled entities. The
guidance focuses on the rights and obligations of the joint arrangement, rather than its legal form (as is currently the case).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-162







Notes to the Financial Statements (continued)



| | - | IFRS 12, “Disclosure of Interests in Other Entities”, effective January 1, 2013,
is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries,
joint arrangements, associates and unconsolidated structured entities.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRS 13, “Fair Value Measurement”, effective January 1, 2013, defines fair value,
sets out a framework for measuring fair value and requires disclosures about fair value measurements.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IFRIC
                                                                                                                           20,
                                                                                                                           “Stripping
                                                                                                                           Costs
                                                                                                                           in
                                                                                                                           the
                                                                                                                           Production
                                                                                                                           Phase
                                                                                                                           of
                                                                                                                           a Surface
                                                                                                                           Mine”,
                                                                                                                           effective
                                                                                                                           January 1,
                                                                                                                           2013,
                                                                                                                           clarifies
                                                                                                                           when
                                                                                                                           the
                                                                                                                           stripping
                                                                                                                           cost
                                                                                                                           in
                                                                                                                           the
                                                                                                                           production
                                                                                                                           phase
                                                                                                                           should
                                                                                                                           be
                                                                                                                           recognized
                                                                                                                           as
                                                                                                                           an
                                                                                                                           asset
                                                                                                                           and
                                                                                                                           how
                                                                                                                           that
                                                                                                                           asset
                                                                                                                           should
                                                                                                                           be
                                                                                                                           measured,
                                                                                                                           both
                                                                                                                           initially
                                                                                                                           and
                                                                                                                           in
                                                                                                                           subsequent
                                                                                                                           periods.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Annual
improvements to IFRS (issued in May 2012) -



| | - | IAS
                                                                                                                           1,
                                                                                                                           Presentation
                                                                                                                           of
                                                                                                                           Financial
                                                                                                                           Statements,
                                                                                                                           clarifies
                                                                                                                           the
                                                                                                                           difference
                                                                                                                           between
                                                                                                                           voluntary
                                                                                                                           annual
                                                                                                                           comparative
                                                                                                                           information
                                                                                                                           and
                                                                                                                           the
                                                                                                                           minimum
                                                                                                                           required
                                                                                                                           of
                                                                                                                           comparative
                                                                                                                           period
                                                                                                                           is
                                                                                                                           the
                                                                                                                           previous
                                                                                                                           period.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IAS
                                                           16, Property, Plant and Equipment, clarifies that major spare parts
                                                           and servicing equipments that meet the definition of property, plant
                                                           and equipment are not inventories.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | IAS
                                                                                                                           32,
                                                                                                                           Financial
                                                                                                                           Instruments:
                                                                                                                           Presentation,
                                                                                                                           clarifies
                                                                                                                           that
                                                                                                                           income
                                                                                                                           taxes
                                                                                                                           arising
                                                                                                                           from
                                                                                                                           distributions
                                                                                                                           to
                                                                                                                           equity
                                                                                                                           holders
                                                                                                                           are
                                                                                                                           accounted
                                                                                                                           for
                                                                                                                           in
                                                                                                                           accordance
                                                                                                                           with
                                                                                                                           IAS
                                                                                                                           12.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Such
improvements are effective for annual periods beginning on or after January 1, 2013.



Management is currently evaluating
the impact of the new pronouncements described above on the Company’s financial reporting and disclosures for the year 2013.



F-163







Notes to the Financial Statements (continued)



| | 3. | Cash and cash equivalents
| | -- | -------------------------



| | (a) | This item is made up us follows:
| | --- | --------------------------------



|                     |  | 2012     |           |  | 2011     | 
|-------------------- |  | -------- | --------- |  | -------- | 
|                     |  | US$(000) |           |  | US$(000) | 
|                     |  |          |           |  |          | 
|Cash equivalents (b) |  |          | 1,421,955 |  |          | 
|Cash in banks        |  |          | 5,573     |  |          | 
|                     |  |          |           |  |          | 
|                     |  |          | 1,427,528 |  |          | 



| | (b) | Cash equivalents comprises a portfolio of investments in highly marketable liquid investments (investments classified as “AAA”
by Standard & Poor’s and Moody’s), which yield variable returns, and are classified as cash equivalents because
they are readily convertible to known amounts of cash. Management plans to use them for its short-term cash needs. Because of the
short original maturity of these investments, less than 90 days, the carrying amount of these investments corresponds to their
fair value at the date of the financial statements. Changes in the fair value of these investments are insignificant.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | Trade accounts receivable
| | -- | -------------------------

Trade accounts receivable are generated primarily
from the Company’s cathode and copper concentrate sales, are denominated in US dollars, have current maturities, do not bear
interest and have no specific guarantees.



| | 5. | Other long-term accounts receivable
| | -- | -----------------------------------

Correspond to additional disbursements made by the
Company related to the monthly pre payments of income tax which might be offset with future tax debts or be recovered by a request
of refund to the Tax authority. As of December 31, 2012, these overpayments amounted to US$63,964,000 and are presented as
non-current assets in the statement of financial position.



F-164







Notes to the Financial Statements (continued)



| | 6. | Inventories, net
| | -- | ----------------

| | (a) | This item is made up as follows:
| | --- | --------------------------------



|                                                             |  | 2012     |          |   | 2011     | 
|------------------------------------------------------------ |  | -------- | -------- | - | -------- | 
|                                                             |  | US$(000) |          |   | US$(000) | 
|Finished goods:                                              |  |          |          |   |          | 
|Copper cathodes                                              |  |          | 7,481    |   |          | 
|Copper concentrate                                           |  |          | 12,728   |   |          | 
|Molybdenum concentrate                                       |  |          | 1,467    |   |          | 
|                                                             |  |          |          |   |          | 
|Balance of finished goods, see note 14                       |  |          | 21,676   |   |          | 
|                                                             |  |          |          |   |          | 
|Work-in-process  (b)                                         |  |          | 213,734  |   |          | 
|Materials and supplies                                       |  |          | 149,874  |   |          | 
|Materials and supplies in transit                            |  |          | 1,326    |   |          | 
|Less -  Provision for obsolescence of materials and supplies |  |          | (2,711   | ) |          | 
|                                                             |  |          |          |   |          | 
|Total Inventories                                            |  |          | 383,899  |   |          | 
|Less - Long-term inventories (b)                             |  |          | (188,990 | ) |          | 
|                                                             |  |          |          |   |          | 
|Current inventories, net                                     |  |          | 194,909  |   |          | 



| | (b) | Work in process inventories represent mill and leach stockpiles which generally contain lower grade ores that have been extracted
from the ore body and are available for copper recovery. For mill stockpiles, recovery is through milling and concentrating. For
leach stockpiles, recovery is through exposure to acidic solutions that dissolve copper and deliver it in solution to the extraction
processing facilities (see note 2.2(e)).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-165







Notes to the Financial Statements (continued)



| | 7. | Property, plant and equipment, net
| | -- | ----------------------------------



| | (a) | The movement in cost and accumulated depreciation accounts
as of December 31, 2012 and 2011 are shown below:
| | --- | ------------------------------------------------------------------------------------------------------------



|                                                   |  | January 1,
    2011 |           |  | Additions |  |         | Retirements
    and disposals |  |  | Transfers |   |  | December 31,
    2011 |         |   | Additions |  |           | Retirements
    and disposals |  |  | Transfers |  |  | December 31,
    2012 |       
|-------------------------------------------------- |  | ------------------- | --------- |  | --------- |  | ------- | ----------------------------- |  |  | --------- | - |  | --------------------- | ------- | - | --------- |  | --------- | ----------------------------- |  |  | --------- |  |  | --------------------- | ------
|                                                   |  | US$(000)            |           |  | US$(000)  |  |         | US$(000)                      |  |  | US$(000)  |   |  | US$(000)              |         |   | US$(000)  |  |           | US$(000)                      |  |  | US$(000)  |  |  | US$(000)              |       
|Land                                               |  |                     | 1,497     |  |           |  | -       |                               |  |  | -         |   |  |                       | -       |   |           |  | 1,497     |                               |  |  | -         |  |  |                       | -     
|Buildings
    and other constructions              |  |                     | 91,042    |  |           |  | -       |                               |  |  | -         |   |  |                       | 13,046  |   |           |  | 104,088   |                               |  |  | -         |  |  |                       | (20   
|Machinery
    and equipment                        |  |                     | 1,447,076 |  |           |  | -       |                               |  |  | (4,667    | ) |  |                       | 67,916  |   |           |  | 1,510,325 |                               |  |  | -         |  |  |                       | (101  
|Transportation
    units                           |  |                     | 8,849     |  |           |  | -       |                               |  |  | -         |   |  |                       | 2,433   |   |           |  | 11,282    |                               |  |  | -         |  |  |                       | (767  
|Furniture
    and fixtures                         |  |                     | 786       |  |           |  | -       |                               |  |  | -         |   |  |                       | -       |   |           |  | 786       |                               |  |  | -         |  |  |                       | -     
|Other
    equipment                                |  |                     | 11,862    |  |           |  | -       |                               |  |  | (129      | ) |  |                       | 737     |   |           |  | 12,470    |                               |  |  | -         |  |  |                       | (1,046
|Work in
    progress and transit units (b)         |  |                     | 69,801    |  |           |  | 195,222 |                               |  |  | -         |   |  |                       | (84,132 | ) |           |  | 180,891   |                               |  |  | 600,872   |  |  |                       | -     
|Remediation
    and mine closure costs, note 16(a) |  |                     | 3,666     |  |           |  | 3,217   |                               |  |  | -         |   |  |                       | -       |   |           |  | 6,883     |                               |  |  | 72,512    |  |  |                       | -     
|                                                   |  |                     |           |  |           |  |         |                               |  |  |           |   |  |                       |         |   |           |  |           |                               |  |  |           |  |  |                       |       
|                                                   |  |                     | 1,634,579 |  |           |  | 198,439 |                               |  |  | (4,796    | ) |  |                       | -       |   |           |  | 1,828,222 |                               |  |  | 673,384   |  |  |                       | (1,934
|                                                   |  |                     |           |  |           |  |         |                               |  |  |           |   |  |                       |         |   |           |  |           |                               |  |  |           |  |  |                       |       
|Accumulated
    depreciation                       |  |                     |           |  |           |  |         |                               |  |  |           |   |  |                       |         |   |           |  |           |                               |  |  |           |  |  |                       |       
|Buildings
    and other constructions              |  |                     | 26,019    |  |           |  | 2,786   |                               |  |  | -         |   |  |                       | -       |   |           |  | 28,805    |                               |  |  | 2,675     |  |  |                       | (17   
|Machinery
    and equipment                        |  |                     | 483,678   |  |           |  | 77,593  |                               |  |  | (605      | ) |  |                       | -       |   |           |  | 560,666   |                               |  |  | 88,346    |  |  |                       | (68   
|Transportation
    units                           |  |                     | 6,733     |  |           |  | 714     |                               |  |  | -         |   |  |                       | -       |   |           |  | 7,447     |                               |  |  | 933       |  |  |                       | (767  
|Furniture
    and fixtures                         |  |                     | 532       |  |           |  | 94      |                               |  |  | -         |   |  |                       | -       |   |           |  | 626       |                               |  |  | 87        |  |  |                       | -     
|Other
    equipment                                |  |                     | 6,428     |  |           |  | 1,055   |                               |  |  | (129      | ) |  |                       | -       |   |           |  | 7,354     |                               |  |  | 1,820     |  |  |                       | (1,058
|Remediation
    and mine closure costs             |  |                     | 2,544     |  |           |  | 189     |                               |  |  | -         |   |  |                       | -       |   |           |  | 2,733     |                               |  |  | 381       |  |  |                       | -     
|                                                   |  |                     |           |  |           |  |         |                               |  |  |           |   |  |                       |         |   |           |  |           |                               |  |  |           |  |  |                       |       
|                                                   |  |                     | 525,934   |  |           |  | 82,431  |                               |  |  | (734      | ) |  |                       | -       |   |           |  | 607,631   |                               |  |  | 94,242    |  |  |                       | (1,910
|                                                   |  |                     |           |  |           |  |         |                               |  |  |           |   |  |                       |         |   |           |  |           |                               |  |  |           |  |  |                       |       
|Net
    cost                                       |  |                     | 1,108,645 |  |           |  |         |                               |  |  |           |   |  |                       |         |   |           |  | 1,220,591 |                               |  |  |           |  |  |                       |       



| | (b) | As of December 31, 2012, the work in progress and transit units corresponded mainly to the Expansion of Cerro Verde ́s
production unit for US$439,608,000. See note 1(b).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | The Company maintains insurance on its principal assets in accordance with Management’s policies.
| | --- | -------------------------------------------------------------------------------------------------



F-166







Notes to the Financial Statements (continued)



| | 8. | Trade accounts payable
| | -- | ----------------------

Trade accounts payable are mainly originated by the
acquisition of materials, supplies and spare parts for the Company’s mining activities. As of December 31, 2012, payable
balances are related to the Mine Expansion Project, see note 1(b). These obligations are mainly in US dollars, have current maturities
and do not accrue interest. No guarantees have been granted.



| | 9. | Workers’ profit sharing
| | -- | -----------------------

| | (a) | The Legislative Decree N° 892 (L.D. 892), issued in 1996, regulates the right of workers to participate in the company’s
profits that performs activities generating third categories income and requires companies domiciled in Peru to compute and pay
to employees a share of the profits generated by the companies for which they work. The Company’s liability for worker’
profit sharing is recognized according to the policy described in note 2.3(k).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | As described in note 2.3(k), workers’ profit sharing is recognized as an operating expense in the statements of comprehensive
income. The amount of workers’ profit sharing paid to employees for the years 2012 and 2011 are recognized as a cost of sales
of goods (see note 14). Additionally, the excess between the Company’s total workers’ profit sharing liability and
the amount paid or due to employees for the years 2011 and 2010 amounted to US$21,923,000 and US$34,427,000, respectively (in 2012,
no excess of worker ́s profit sharing was calculated). The amounts for 2011 and 2010 were included as operating expenses in
the statements of comprehensive income and were paid to the Regional Government and FONDOEMPLEO within the periods established
by law.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-167







Notes to the Financial Statements (continued)



| | 10. | Deferred Income tax
| | --- | -------------------



| | (a) | The Company recognizes the effect of temporary differences between the accounting base for financial reporting purposes and
the tax base. The composition of this item is made up as follows:
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                         |  | January 1, 2011 |         |  | Debit (credit) to
    the statements of comprehensive income |  |         | December 31, 2011 |  |  | Debit (credit) to
    the statements of comprehensive income |   |  | December 31, 2012 |        
|-------------------------------------------------------- |  | --------------- | ------- |  | ------------------------------------------------------------ |  | ------- | ----------------- |  |  | ------------------------------------------------------------ | - |  | ----------------- | -------
|                                                         |  | US$(000)        |         |  | US$(000)                                                     |  |         | US$(000)          |  |  | US$(000)                                                     |   |  | US$(000)          |        
|Income
    tax                                           |  |                 |         |  |                                                              |  |         |                   |  |  |                                                              |   |  |                   |        
|Asset                                                    |  |                 |         |  |                                                              |  |         |                   |  |  |                                                              |   |  |                   |        
|Provision
    for water plant construction               |  |                 | 24,137  |  |                                                              |  | 3,342   |                   |  |  | 27,479                                                       |   |  |                   | (27,479
|Price adjustment of cathodes
    and copper concentrates |  |                 | -       |  |                                                              |  | 22,577  |                   |  |  | 22,577                                                       |   |  |                   | (22,577
|Difference in valuation
    of inventories               |  |                 | 1,869   |  |                                                              |  | 1,086   |                   |  |  | 2,955                                                        |   |  |                   | (1,339 
|Provision for remediation
    and mine closure           |  |                 | 710     |  |                                                              |  | 163     |                   |  |  | 873                                                          |   |  |                   | 238    
|Deferred stripping costs                                 |  |                 | 731     |  |                                                              |  | (76     | )                 |  |  | 655                                                          |   |  |                   | (34    
|Provision generated by
    the special mining burden     |  |                 | -       |  |                                                              |  | -       |                   |  |  | -                                                            |   |  |                   | 6,356  
|Other
    provisions                                     |  |                 | 1,174   |  |                                                              |  | (5,355  | )                 |  |  | (4,181                                                       | ) |  |                   | 4,267  
|                                                         |  |                 |         |  |                                                              |  |         |                   |  |  |                                                              |   |  |                   |        
|                                                         |  |                 | 28,621  |  |                                                              |  | 21,737  |                   |  |  | 50,358                                                       |   |  |                   | (40,568
|                                                         |  |                 |         |  |                                                              |  |         |                   |  |  |                                                              |   |  |                   |        
|Liability                                                |  |                 |         |  |                                                              |  |         |                   |  |  |                                                              |   |  |                   |        
|Difference in depreciation
    method                    |  |                 | 189,180 |  |                                                              |  | 39,677  |                   |  |  | 228,857                                                      |   |  |                   | 17,681 
|Price
    adjustment of cathodes and copper concentrates |  |                 | 39,965  |  |                                                              |  | (39,965 | )                 |  |  | -                                                            |   |  |                   | 3,471  
|                                                         |  |                 |         |  |                                                              |  |         |                   |  |  |                                                              |   |  |                   |        
|                                                         |  |                 | 229,145 |  |                                                              |  | (288    | )                 |  |  | 228,857                                                      |   |  |                   | 21,152 
|                                                         |  |                 |         |  |                                                              |  |         |                   |  |  |                                                              |   |  |                   |        
|Deferred
    liabilities, net                            |  |                 | 200,524 |  |                                                              |  | (22,025 | )                 |  |  | 178,499                                                      |   |  |                   | 61,720 
|                                                         |  |                 |         |  |                                                              |  |         |                   |  |  |                                                              |   |  |                   |        
|Mining
    taxes, note 12(d)                             |  |                 |         |  |                                                              |  |         |                   |  |  |                                                              |   |  |                   |        
|Deferred
    asset                                       |  |                 |         |  |                                                              |  |         |                   |  |  |                                                              |   |  |                   |        
|Price adjustment of cathodes
    and copper concentrates |  |                 | -       |  |                                                              |  | (3,637  | )                 |  |  | (3,637                                                       | ) |  |                   | 4,153  
|Exploration
    expenses                                 |  |                 | -       |  |                                                              |  | (190    | )                 |  |  | (190                                                         | ) |  |                   | (302   
|                                                         |  |                 |         |  |                                                              |  |         |                   |  |  |                                                              |   |  |                   |        
|Deferred
    asset                                       |  |                 | -       |  |                                                              |  | (3,827  | )                 |  |  | (3,827                                                       | ) |  |                   | 3,851  



F-168







Notes to the financial statements (continued)







|                                                                   |  | January 1, 2011 |         |  | Debit (credit) to the statements of comprehensive income |  |         | December 31, 2011 |  |  | Debit (credit) to the statements of comprehensive income |  |  | December 31, 2012 |       
|------------------------------------------------------------------ |  | --------------- | ------- |  | -------------------------------------------------------- |  | ------- | ----------------- |  |  | -------------------------------------------------------- |  |  | ----------------- | ------
|                                                                   |  | US$(000)        |         |  | US$(000)                                                 |  |         | US$(000)          |  |  | US$(000)                                                 |  |  | US$(000)          |       
|                                                                   |  |                 |         |  |                                                          |  |         |                   |  |  |                                                          |  |  |                   |       
|Total debited (credited) to the statements of comprehensive income |  |                 | -       |  |                                                          |  | (25,852 | )                 |  |  | -                                                        |  |  |                   | 65,571
|                                                                   |  |                 |         |  |                                                          |  |         |                   |  |  |                                                          |  |  |                   |       
|Total deferred income tax liability                                |  |                 | 200,524 |  |                                                          |  |         |                   |  |  | 174,672                                                  |  |  |                   |       



F-169







Notes to the financial statements (continued)



| | (b) | For the years ended December 31, 2012, 2011 and 2010, the income tax expense recorded differs from the result of apply
the legal rate to the income before income tax of the Company, as detailed below:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                                           |  | 2012     |           |   | 2011     |  |           | 2010     | 
|---------------------------------------------------------------------------------------------------------- |  | -------- | --------- | - | -------- |  | --------- | -------- | 
|                                                                                                           |  | US$(000) |           |   | US$(000) |  |           | US$(000) | 
|                                                                                                           |  |          |           |   |          |  |           |          | 
|Profit before income tax                                                                                   |  |          | 1,215,358 |   |          |  | 1,562,117 |          | 
|Income tax rate                                                                                            |  |          | 30        | % |          |  | 30        | %        | 
|                                                                                                           |  |          |           |   |          |  |           |          | 
|Income tax expected expense                                                                                |  |          | 364,607   |   |          |  | 468,635   |          | 
|                                                                                                           |  |          |           |   |          |  |           |          | 
|Effect of change in income tax rate to 32% due to Tax Stability Agreement effective since 2014, note 12(a) |  |          | 11,583    |   |          |  | -         |          | 
|Non deductible expenses                                                                                    |  |          | 11,845    |   |          |  | 5,298     |          | 
|Special mining burden (current and deferred)                                                               |  |          | (28,823   | ) |          |  | -         |          | 
|Voluntary contribution                                                                                     |  |          | -         |   |          |  | -         |          | 
|Others                                                                                                     |  |          | (2,242    | ) |          |  | -         |          | 
|                                                                                                           |  |          |           |   |          |  |           |          | 
|Current and deferred income tax charges to results                                                         |  |          | 356,970   |   |          |  | 473,933   |          | 
|Mining taxes charge to results                                                                             |  |          | 86,318    |   |          |  | 9,785     |          | 
|                                                                                                           |  |          |           |   |          |  |           |          | 
|                                                                                                           |  |          | 443,288   |   |          |  | 483,718   |          | 
|                                                                                                           |  |          |           |   |          |  |           |          | 
|Effective income tax                                                                                       |  |          | 36.47     | % |          |  | 30.97     | %        | 



| | (c) | The income tax expenses (benefit) for the years ended December 31, 2012 and 2011 is shown below:
| | --- | ------------------------------------------------------------------------------------------------



|                                                                      |  | 2012     |         |  | 2011     |  |         | 2010     | 
|--------------------------------------------------------------------- |  | -------- | ------- |  | -------- |  | ------- | -------- | 
|                                                                      |  | US$(000) |         |  | US$(000) |  |         | US$(000) | 
|Income tax                                                            |  |          |         |  |          |  |         |          | 
|Current                                                               |  |          | 295,250 |  |          |  | 495,958 |          | 
|Deferred                                                              |  |          | 61,720  |  |          |  | (22,025 | )        | 
|                                                                      |  |          |         |  |          |  |         |          | 
|                                                                      |  |          | 356,970 |  |          |  | 473,933 |          | 
|Mining taxes                                                          |  |          |         |  |          |  |         |          | 
|Current                                                               |  |          | 82,467  |  |          |  | 13,612  |          | 
|Deferred                                                              |  |          | 3,851   |  |          |  | (3,827  | )        | 
|                                                                      |  |          |         |  |          |  |         |          | 
|                                                                      |  |          | 86,318  |  |          |  | 9,785   |          | 
|                                                                      |  |          |         |  |          |  |         |          | 
|Income tax expense reported in the statements of comprehensive income |  |          | 443,288 |  |          |  | 483,718 |          | 



F-170







Notes to the financial statements (continued)



| | 11. | Equity, net
| | --- | -----------



| | (a) | Issued capital -
| | --- | ----------------



As of December 31, 2012, 2011 and 2010, the authorized,
subscribed and paid-up capital in accordance with the Company’s by-laws and its related modifications was 350,056,012 common
shares.



According to the shareholders agreement of July 11,
2003, the nominal value of the shares was denominated in US dollars and amount to US$0.54 each. As a consequence of the capitalization
of restricted earnings associated with tax benefit (reinvestment credit), in December 2009, the nominal value of the share
was increased to US$2.83 each.



As of December 31, 2012 the quoted price of these
shares was US$38.00 per share (US$36.00 and US$54.10 per share as of December 31, 2011 and 2010, respectively) and their frequency
of trading is daily, as in 2011 and 2010.



As of December 31, 2012, the Company’s capital
stock structure is as follows:



|Percentage of individual interest in capital |  | Number of shareholders |       |  | Total percentage interest | 
|-------------------------------------------- |  | ---------------------- | ----- |  | ------------------------- | 
|                                             |  |                        |       |  |                           | 
|Up to 1.00                                   |  |                        | 3,121 |  |                           | 
|From 1.01 to 20.00                           |  |                        | 1     |  |                           | 
|From 20.01 to 30.00                          |  |                        | 1     |  |                           | 
|From 30.01 to 60.00                          |  |                        | 1     |  |                           | 
|                                             |  |                        |       |  |                           | 
|                                             |  |                        | 3,124 |  |                           | 



| | (b) | Other capital reserves -
| | --- | ------------------------

In accordance with the Peruvian Companies Act, this
reserve is created through the transfer of 10% of the earnings for the year up to a maximum of 20% of the paid-in capital. The
legal reserve must be used to compensate losses, and must be replaced with future earnings. This reserve may also be used to increase
capital stock but the balance must be restored from future earnings.



| | (c) | Retained earnings -
| | --- | -------------------

In accordance with the mining stability agreement entered
into with the Peruvian Government (see note 12(a)), the Company is authorized to distribute, without any restrictions, all capital
invested (except for the retained earnings capitalized in 2009 for US$800,030,000). In addition, dividends and any other form of
capital distribution to domestic entities are tax exempt. Since 2003, dividends paid to shareholders, other than domiciled legal
entities, are subject to a 4.1% income tax which is withheld and paid by the Company.



F-171







Notes to the financial statements (continued)



| | (d) | Dividend distribution -
| | --- | -----------------------

During 2012 and 2011, the Company did not pay dividends.



At the Directors’ meeting held on June 15,
2010, it was agreed to pay a dividend of US$400,000,000 (US$1.1427 per common share). Of this amount, US$257,303 corresponds to
the retained earnings as of December 31, 2009, and US$142,697,000 was applied to earnings for the year 2010. This dividend
was paid to shareholders on July 19, 2010.



At the Directors’ meeting held on November 8,
2010, it was agreed to approve the payment of dividends amounting to US$550,000,000 (US$1.5712 per common share). The total amount
of this dividend was applied to retained earnings as of October 31, 2010, and earnings for the year 2010 related to the dividend
related to the 2010 period. This dividend was paid to the shareholders on December 10, 2010.



| | 12. | Tax situation
| | --- | -------------

| | (a) | On February 13, 1998, the Company signed an Agreement of Guarantees and Measures to Promote Investments with the Government
of Peru, under the Peruvian General Mining Law. Upon approval of the agreement, the Company is subject to the tax regulations in
force at May 6, 1996. In addition, the Company has tax stability for a period of fifteen years beginning January 1, 1999
and with a maturity date of December 31, 2013.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



On July 17, 2012, the Company subscribed a new
Agreement of Guarantees and Measures to Promote Investments with the Government of Peru, under the General Mining Law and in connection
with the Expansion of Cerro Verde ́s production mining unit Project, see note 1(b). According to the management ́s option,
it will be in force in 2014. According to this agreement, from the time it is in force, the new income tax rate will be 32%.



| | (b) | The income tax rate applicable to the Company is 30% and 32% beginning in 2014 according to the paragraph above. In addition,
the Company is subject to a minimum income tax equivalent to 2% of total assets until 2013, net of accumulated depreciation and
amortization. The tax charged against earnings is the higher of the income tax under the tax stability agreements and the minimum
income tax. For the years ended December 31, 2012, 2011 and 2010, the taxable income according to the tax law is calculated
on the profit before income tax and profit sharing for such years, and the income tax calculations are as follow:
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-172







Notes to the financial statements (continued)



|                                                                                                   |  | 2012     |           |   | 2011     |  |           | 2010     | 
|-------------------------------------------------------------------------------------------------- |  | -------- | --------- | - | -------- |  | --------- | -------- | 
|                                                                                                   |  | US$(000) |           |   | US$(000) |  |           | US$(000) | 
|                                                                                                   |  |          |           |   |          |  |           |          | 
|Profit before income tax                                                                           |  |          | 1,215,358 |   |          |  | 1,562,117 |          | 
|Worker ́s profit sharing                                                                            |  |          | 81,708    |   |          |  | 143,271   |          | 
|                                                                                                   |  |          |           |   |          |  |           |          | 
|                                                                                                   |  |          | 1,297,066 |   |          |  | 1,705,388 |          | 
|                                                                                                   |  |          |           |   |          |  |           |          | 
|Less:                                                                                              |  |          |           |   |          |  |           |          | 
|Reversal of price adjustment of copper cathodes and concentrates                                   |  |          | (75,257   | ) |          |  | 133,217   |          | 
|Water treatment plant and voluntary contribution                                                   |  |          | (91,686   | ) |          |  | 13,723    |          | 
|Price adjustment of copper cathodes and concentrates                                               |  |          | (11,569   | ) |          |  | 75,257    |          | 
|Non deductible expenses                                                                            |  |          | 39,484    |   |          |  | 5,502     |          | 
|Special mining burden                                                                              |  |          | (74,891   | ) |          |  | -         |          | 
|Adjustment of inventory in process and finished goods                                              |  |          | (15,752   | ) |          |  | 3,708     |          | 
|Deduction to recalculate depreciation at an annual rate of 20%                                     |  |          | (5,564    | ) |          |  | (147,902  | )        | 
|Other additions, net                                                                               |  |          | (1,478    | ) |          |  | 2,999     |          | 
|                                                                                                   |  |          |           |   |          |  |           |          | 
|                                                                                                   |  |          | (236,713  | ) |          |  | 86,504    |          | 
|                                                                                                   |  |          |           |   |          |  |           |          | 
|Sub-total                                                                                          |  |          | 1,060,353 |   |          |  | 1,791,892 |          | 
|Workers’ profit sharing (8%)                                                                       |  |          | (84,828   | ) |          |  | (143,351  | )        | 
|                                                                                                   |  |          |           |   |          |  |           |          | 
|Net profit                                                                                         |  |          | 975,525   |   |          |  | 1,648,541 |          | 
|                                                                                                   |  |          |           |   |          |  |           |          | 
|Income tax (30%)                                                                                   |  |          | (292,657  | ) |          |  | (494,562  | )        | 
|                                                                                                   |  |          |           |   |          |  |           |          | 
|Prior years income taxes                                                                           |  |          | (2,593    | ) |          |  | (1,396    | )        | 
|                                                                                                   |  |          |           |   |          |  |           |          | 
|Total current income taxes charged to results, note 10(c) (does not include Special Mining Burden) |  |          | 295,250   |   |          |  | 495,958   |          | 



| | (c) | Peruvian Tax Authorities (SUNAT) have the right to examine, and, if necessary, amend the income tax as determined by the Company
during the last four years, calculated from the year following that in which the tax returns are filed. The income tax filings
for the years 2002 through 2011 and the value added tax filings for the period from January 2009 to December 2011 are
open to examination by The Tax Authorities. The fiscal years 2002 through 2007, has been reviewed by SUNAT, by which the Company
has been in appeal process. The years 2008, 2009 and 2010 are currently in revision process, these processes are in charged to
the legal external advisors of the Company. In Management’s and legal advisors’ opinion, they have enough arguments
in accordance to legal standards in force; consequently, they believe they will get results in favor to the Company for those processes
and any additional tax assessment would not be significant to the financial statements.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-173







Notes to the financial statements (continued)



For the periods pending to examine, and due to the many
possible interpretations of current legislation, it is not possible to determine whether or not future reviews will result in tax
liabilities for the Company. In the event that additional taxes are payable, including interest and surcharges, as a result of
the Tax Authority reviews, they will be charged to expense in the period assessed. However, in Management’s and legal advisors’
opinion, any additional tax assessment would not be significant to the financial statements.



| | (d) | Mining taxes -
| | --- | --------------

As described in note 2.3(j), Law 29788 was enacted creating
a new mining tax and royalty regime in Peru. Because the Company operates under a stability agreement, it is not subject to the
revised royalty and special mining tax until its stability agreement expires on December 13, 2013. However, the Company elected
to pay the special mining tax during the remaining term of its stability agreement. For the years ended December 31, 2012
and 2011, the Company recorded a tax provision of US$82,467,000 and US$13,612,000, respectively, related
to the special mining burden. Likewise,the Company has also recognized an expense and income deferred tax amounting to
US$3,851,000 and US$3,827,000 during the years 2012 and 2011, respectively.



| | (e) | On June 23, 2004, Law No.28258 - Mining Royalty Law was approved, and requires the holder of a mineral concession to pay
a royalty in return for the exploitation of metallic and non metallic minerals, which is calculated using rates from one to three
percent of the value of concentrate or its equivalent according to the international price of the commodity published by the Ministry
of Energy and Mines.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Based on the stability contract described in the literal
(a) above, the payment of the mining royalties is not applicable to the Company, because this Law was approved after the Company
signed the stability contract with the Peruvian Government.



SUNAT has assessed mining royalties on materials processed
by the Company ́s concentrator plant which commenced operations in late 2006. These assessments cover the period October 2006
to December 2007 and the years 2008 and 2009. SUNAT has issued resolutions denying the Company’s claims. The Company
has appealed these decisions and currently has three cases pending before the Peruvian Tax Tribunal. The Company is challenging
these royalties because it believes its stability agreement provides an exemption for all minerals extracted from its mining concession,
irrespective of the method used for processing those minerals. Although we believe our interpretation of the stability agreement
is correct, if the Company is ultimately found responsible for these assessments, the amount of royalty and related interest payable
would be significant. SUNAT may continue to assess mining royalties annually until this matter is resolved by the Peruvian Tax
Tribunal.



F-174







Notes to the financial statements (continued)



| | 13. | Sales of goods
| | --- | --------------



| | (a) | For the years ended December 31, 2012, 2011 and 2010, sales of goods are made up of the following:
| | --- | --------------------------------------------------------------------------------------------------



|                                                         |  | 2012        |         |  | 2011     |  |           | 2010        | 
|-------------------------------------------------------- |  | ----------- | ------- |  | -------- |  | --------- | ----------- | 
|                                                         |  | Pounds(000) |         |  | US$(000) |  |           | Pounds(000) | 
|                                                         |  | (Unaudited) |         |  |          |  |           | (Unaudited) | 
|                                                         |  |             |         |  |          |  |           |             | 
|Copper concentrates (b)                                  |  |             | 469,644 |  |          |  | 1,544,647 |             | 
|Copper cathodes (b)                                      |  |             | 119,077 |  |          |  | 434,290   |             | 
|Other
    (primarily silver and molybdenum concentrates) |  |             | -       |  |          |  | 148,086   |             | 
|                                                         |  |             |         |  |          |  |           |             | 
|                                                         |  |             |         |  |          |  | 2,127,023 |             | 



Sales to related parties amounted to US$1,631,221,000
for the year ended December 31, 2012 (US$1,876,906,000 and US$1,868,233,000 for the years ended December 31, 2011 and
2010, respectively), which are summarized in note 17(b).



| | (b) | As described in note 2.3(b), the Company’s copper sales are provisionally priced at shipment date. As a result, as of
December 31, 2012, 2011 and 2010, the Company had embedded derivatives recorded in its statement of financial position (see
note 19). Adjustments to the provisional prices are recognized as gains and losses in sales of goods until the month of settlement.
Copper concentrate and cathode sales include adjustments to the provisional sale value generated by the changes in the fair value
of the embedded derivatives. These adjustments resulted in higher, lower and higher sales for US$86,826,000, US$208,474,000 and
US$68,457,000 in years 2012, 2011 and 2010, respectively.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | The following table shows sales of goods by geographic region based for the years ended December 31, 2012, 2011 and 2010:
| | --- | -------------------------------------------------------------------------------------------------------------------------



|                            |  | 2012     |           |  | 2011     |  |           | 2010     | 
|--------------------------- |  | -------- | --------- |  | -------- |  | --------- | -------- | 
|                            |  | US$(000) |           |  | US$(000) |  |           | US$(000) | 
|                            |  |          |           |  |          |  |           |          | 
|Asia                        |  |          | 1,267,407 |  |          |  | 1,351,762 |          | 
|South America (mainly Peru) |  |          | 389,613   |  |          |  | 445,114   |          | 
|Europe                      |  |          | 378,144   |  |          |  | 513,933   |          | 



F-175







Notes to the financial statements (continued)



|              |  | 2012     |           |  | 2011     |  |           | 2010     | 
|------------- |  | -------- | --------- |  | -------- |  | --------- | -------- | 
|              |  | US$(000) |           |  | US$(000) |  |           | US$(000) | 
|North America |  |          | 91,859    |  |          |  | 209,241   |          | 
|              |  |          |           |  |          |  |           |          | 
|              |  |          | 2,127,023 |  |          |  | 2,520,050 |          | 



| | (d) | Concentration of sales -
| | --- | ------------------------

For the year 2012, 77% of the Company’s sales
were to related entities (Freeport-McMoRan Corporation (“FMC”), Sumitomo Metal Mining Company and Climax Molybdenum,
which is a wholly owned subsidiary of FMC) and the rest, with international third parties. For the years 2011 and 2010, 74% and
79% of the Company’s sales were to these related entities.

F-176







Notes to the financial statements (continued)



| | 14. | Cost of sales of goods
| | --- | ----------------------

For the years ended December 31, 2012, 2011 and
2010, the cost of sales of goods is made up of the following:



|                                                  |  | 2012     |         |   | 2011     |  |         | 2010     | 
|------------------------------------------------- |  | -------- | ------- | - | -------- |  | ------- | -------- | 
|                                                  |  | US$(000) |         |   | US$(000) |  |         | US$(000) | 
|                                                  |  |          |         |   |          |  |         |          | 
|Opening balance of finished goods (see note 6(a)) |  |          | 14,908  |   |          |  | 16,505  |          | 
|                                                  |  |          |         |   |          |  |         |          | 
|Materials and supplies                            |  |          | 362,382 |   |          |  | 315,518 |          | 
|Labor                                             |  |          | 110,156 |   |          |  | 134,813 |          | 
|Worker’s profit sharing                           |  |          | 81,737  |   |          |  | 121,347 |          | 
|Depreciation and amortization                     |  |          | 95,872  |   |          |  | 84,061  |          | 
|Energy                                            |  |          | 73,136  |   |          |  | 69,259  |          | 
|Third parties services                            |  |          | 88,489  |   |          |  | 74,202  |          | 
|Management fees (see note 17(a))                  |  |          | 18,210  |   |          |  | 20,003  |          | 
|Other costs                                       |  |          | 26,456  |   |          |  | 23,021  |          | 
|Variation of inventories in process               |  |          | (48,099 | ) |          |  | (19,121 | )        | 
|Ending balance of finished goods (see note 6(a))  |  |          | (21,676 | ) |          |  | (14,908 | )        | 
|                                                  |  |          |         |   |          |  |         |          | 
|                                                  |  |          | 801,571 |   |          |  | 824,700 |          | 



| | 15. | Selling expenses
| | --- | ----------------

For the years ended December 31, 2012, 2011 and
2010, selling expenses are made up of the following:



|                      |  | 2012     |        |  | 2011     |  |        | 2010     | 
|--------------------- |  | -------- | ------ |  | -------- |  | ------ | -------- | 
|                      |  | US$(000) |        |  | US$(000) |  |        | US$(000) | 
|                      |  |          |        |  |          |  |        |          | 
|Concentrate’s freight |  |          | 74,816 |  |          |  | 79,097 |          | 
|Commissions           |  |          | 2,759  |  |          |  | 3,035  |          | 
|Cathode’s freight     |  |          | 1,099  |  |          |  | 1,480  |          | 
|                      |  |          |        |  |          |  |        |          | 
|                      |  |          | 78,674 |  |          |  | 83,612 |          | 



| | 16. | Commitments
                                                                                      and contingencies
| | --- | -------------------------------------------------------------------------------------------------------------------



| | (a) | Environmental matters -
| | --- | -----------------------

The Company’s mining and exploration activities
are subject to environmental protection standards. In order to comply with these standards, the Company has obtained the approval
for the Environment Adequacy Program (“PAMA”) and of the Environmental Impact Studies (EIA), required for the operation
of Cerro Verde’s production unit.



F-177







Notes to the financial statements (continued)



On October 14, 2003, Law N°28090 was enacted,
which regulates the commitments and procedures that entities involved in mining activities must follow in order to prepare, file
and implement a mine site closing plan, as well as the respective environmental guarantees that assure compliance with the plan
in accordance with protection, conservation and restoration of the environment. On August 15, 2005, the regulations regarding
this law were approved. During 2006, in compliance with the mentioned law, the Company completed the closing plans for its mine
site. On October 5, 2009 the MEM issued Resolution N°203-2009 MEM – AAA, approving the mine closure plan of the
Company.



On September 2012, the company presented to the
Ministry of Energy and Mines an updated mine closure plan. Based on this new closure plan, the Company recalculated its mine closure
provision (adjustment of US$ 72,512,000 to the asset and liability of the mine closure provision as of this date). See Note 7.



The estimate of remediation and mine closing costs is
based on studies prepared by independent consultants, who comply with the current environmental regulations. This provision corresponds
mainly to the activities to be performed in order to restore the areas affected by mining activities. The main tasks to be performed
include ground removal, revegetation labor and dismantling of plant and equipment.



The table below presents the changes in the provision
for remediation and mine closure:



|                                |  | US$(000) |       
|------------------------------- |  | -------- | ------
|                                |  |          |       
|Balance as of January 1, 2010   |  |          | 3,667 
|Accretion expense               |  |          | 180   
|Other adjustments               |  |          | (360  
|                                |  |          |       
|Balance as of December 31, 2010 |  |          | 3,487 
|Accretion expense               |  |          | 357   
|Other adjustments               |  |          | 3,217 
|                                |  |          |       
|Balance as of December 31, 2011 |  |          | 7,061 
|Accretion expense               |  |          | 239   
|Changes in the estimates        |  |          | 72,512
|                                |  |          |       
|Balance as of December 31, 2012 |  |          | 79,812



According to the Company’s accounting policies,
the provision for remediation and mine closure represents the present value of the costs that are expected to be incurred in the
closure period of the operating activities of the Company. Closure budgets are reviewed regularly to take into account any significant
change in the studies conducted. Nevertheless, the closure costs of mining units will depend on the market prices for the closure
works required, which would reflect future economic conditions. Also, the time when the disbursements will be made depends on the
useful life of the mine, which will be based on future metals prices.



F-178







Notes to the financial statements (continued)



As of December 31, 2012, the future value of the
provision for closure of mining units and environmental liabilities was US$145,881,000, which was discounted using the annual risk-free
rate of 4.65%, resulting in an updated liability of US$79,812,000 (as of December 31, 2011, the future value of the provision
for closure of mining units and environmental liabilities was US$100,481,000 and was discounted using an annual risk-free rate
of 6.19%, which resulted in an updated liability for US$7,061,000). The increase presented in the mine closure plan in 2012 was
due to the update of costs related to the future closure of PAD 4B and additional deposits for clearing. Additionally, as a result
of the Expansion Project, the useful life of the mine and exploration time has been significantly reduced. The Company considers
that this liability is sufficient to meet the current environmental protection laws approved by the MEM.



The Company has issued letters of credit to Ministry
of Energy and Mines amounting to US$12,838,000 to secure mine closure plans for its mining unit.



| | (b) | Water treatment plant -
| | --- | -----------------------

On August 2, 2006, the Company and a committee
comprised of the civil society and authorities of Arequipa (“the Committee”) signed an agreement by means of which
the Company agreed to finance and implement the technical studies and plans necessary to construct a fresh water treatment plant
in Alto Cayma and a waste water treatment plant. The agreement established that the costs to be incurred in the construction of
the drinking water treatment plant will be assumed by the Company and those of the waste water treatment plant by the municipalities
of the province of Arequipa.



On September 18, 2009, the Company contracted with
Consorcio Alto Cayma (comprised of the following companies: Befesa, Graña y Montero and Aguas de Sevilla) for the design,
construction and commissioning of the water treatment plant.



On July 26, 2012, through Municipal Agreement 104-2012,
the Company formally transferred the water treatment plant (“PTAP II”) to the Municipality of the province of Arequipa
as a public infrastructure project.



| | (c) | Construction of the Waste Water Treatment Plant
| | --- | -----------------------------------------------

During 2011, the Company completed the feasibility study
for a major expansion of its concentrator and leaching facilities (see note 1(b)). As a result, the Company determined that the
project will require the use of additional water resources apart from those currently used in the concentrator plant. In order
to carry out the project, the Company has offered, to the authorities of Arequipa as part of the Expansion Project, to finance
the construction of the waste water treatment plant.



F-179







Notes to the financial statements (continued)



In September 2011, the Company reached an agreement
with the Regional Government and the Service of Potable Water and Serewage of Arequipa S.A. (SEDAPAR), to finance as part of the
expansion project, the engineering and construction of the waste water treatment plant of Arequipa, which will be used by the Company
to supplement existing water supplies to support the potential concentrator expansion. In December 2012, the Company received
approval of the Environmental Impact Study from the Peruvian Ministry of Energy and Mines.



| | (d) | Construction of Bamputañe Dam -
| | --- | -------------------------------

On December 29, 2004, the Company signed an electric
power supply agreement with Empresa de Generación Eléctrica de Arequipa S.A. (“EGASA”) for attending
part of its mining operations. Under this agreement, EGASA committed to supply electricity at a fixed commodity price for the period
January 1, 2007 to December 31, 2015, and the Company committed to construct the Bamputañe Dam located in the
Santa Lucía district, in the province of Lampa, in the department of Puno, Peru. At that date, the construction budget related
to the project was estimated to be US$5,000,000. On June 11, 2008, EGASA and the Company signed an addendum to the contract
for the construction of the Bamputañe Dam, in which the parties recognized and declared that the Bamputañe Dam construction
budget would be significantly higher than amount estimated initially. The updated construction budget was estimated at approximately
US$14,000,000.



On December 1, 2009, the Company formally transferred
the Bamputañe Dam to EGASA, and the final cost of the dam amounted to US$11,390,000. This agreement allows the Company to
obtain electrical energy at a fixed rate during a period of nine years. Accordingly, the Company recognized a future economic benefit
and disbursements related to the construction of the Bamputañe Dam as an intangible asset in the statement of financial
position, which is being amortized over the nine year term of the contract.



As of December 31, 2012, the Company’s intangible
asset, net of its amortization, for the future benefit of the supply of electrical energy at fixed prices is US$4,890,000 (US$6,519,000
as of December 31, 2011. During years 2012 and 2011, the Company recognized an amount of US$1,630,000 for each year related
to the amortization in the statements of comprehensive income.



| | (e) | Voluntary contribution of 3.75% of net income -
| | --- | -----------------------------------------------

On December 21, 2006, the Peruvian Government released
Supreme Decree 071-2006-EM regulating the terms and conditions under which a voluntary contribution would be paid annually by mining
companies in Peru. Under this regulation, the Peruvian government established the requirements for the agreements that would be
negotiated individually by the mining companies. This regulation established that the contribution:



F-180







Notes to the financial statements (continued)



| | (i) | Was equivalent to 3.75% of net income,
| | --- | --------------------------------------

| | (ii) | Was paid for 2006 and the subsequent four years, dependent on the level of international metal prices, and
| | ---- | ----------------------------------------------------------------------------------------------------------

| | (iii) | Was not tax deductible.
| | ----- | -----------------------



The rate of the voluntary contribution was broken down
as follows:



| | - | 2.75% for the Local Mining Fund
| | - | -------------------------------

| | - | 1.00% for the Regional Mining Fund
| | - | ----------------------------------



On November 8, 2007 the Company signed the contract
of voluntary contribution with the Peruvian State, which complied with the requirements described previously and covered the five
year period from 2006 through 2010. Total voluntary contributions paid by the company under this contract were US$146,859,000 (which
included contributions of US$41,081,000 for the year 2010 which has been reflected in operating expenses in the statements of comprehensive
income).



Through Supreme Decree 071-2006-ME, this contract expired,
and, therefore the Company did not recognize any voluntary contributions expense for the years 2012 and 2011. In Management’s
opinion, the Company has met all requirements set in the mentioned Supreme Decree 071-2006-ME and has no further obligations or
commitments.



| | 17. | Transactions with related parties
| | --- | ---------------------------------



| | (a) | On June 1, 2005, the Company and Minera Freeport–McMoRan South America S.A.C. signed an agreement where Minera Freeport–McMoRan
South America S.A.C. was appointed as the general manager of the Company. Charges for management services, which are recognized
in the statements of comprehensive income, amounted to US$18,210,000 for the year 2012 (US$20,003,000 and US$17,850,000 for the
years 2011 and 2010, respectively). See note 14.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-181







Notes to the financial statements (continued)



| | (b) | During the years ended December 31, 2012, 2011 and 2010, the Company recognized the following
sales of goods to related parties:
| | --- | --------------------------------------------------------------------------------------------------------------------------------



|                                            |  | 2012     |           |  | 2011     |  |           | 2010     | 
|------------------------------------------- |  | -------- | --------- |  | -------- |  | --------- | -------- | 
|                                            |  | US$(000) |           |  | US$(000) |  |           | US$(000) | 
|                                            |  |          |           |  |          |  |           |          | 
|Sales of goods to related parties           |  |          |           |  |          |  |           |          | 
|Freeport-McMoRan Corporation (c)            |  |          | 845,417   |  |          |  | 1,004,362 |          | 
|Sumitomo Metal Mining Company, Ltd. (d)     |  |          | 693,945   |  |          |  | 729,446   |          | 
|Climax Molybdenum Marketing Corporation (e) |  |          | 91,859    |  |          |  | 143,098   |          | 
|                                            |  |          |           |  |          |  |           |          | 
|Total revenues                              |  |          | 1,631,221 |  |          |  | 1,876,906 |          | 



| | (c) | On October 15, 2006, the Company signed a long-term contract with FMC through in which it committed to sell 20% of its
annual copper concentrate production from its primary sulphide processing plant. Terms of the contract are reviewed annually. For
the year 2012, the sales of concentrate copper to FMC amounted to US$746,721,000 (US$689,813,000 and US$725,863,000 in 2011 and
2010, respectively).
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Company also sells copper cathodes based on availability.
According to the terms of the sales of copper cathodes to FMC, agreements are made for each shipment. For the year 2012, sales
of copper cathodes to FMC amounted to US$98,696,000 (US$314,549,000 and US$318,948,000 in 2011 and 2010, respectively).



| | (d) | On June 1, 2005, the Company signed a long-term agreement with Sumitomo Metal Mining Company Ltd., in which it committed
to sell 50% of its annual copper concentrate production from its primary sulphide processing plant, through December 31, 2016.
Contract terms are revised annually.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | On October 1, 2006, the Company signed a long-term agreement with Climax Molybdenum Marketing Corporation, a wholly owned
subsidiary of FMC, in which it committed to sell 100% of its annual molybdenum concentrate production, at a price based on theMetals Week Dealer Oxide price and under a delivery type known as CIF (cost, insurance and freight). Terms of the contract
are reviewed annually.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | As a result of sales of goods to related parties, the Company had trade accounts receivable from related parties and also has
the following trade payables to related parties as of December 31, 2012 and 2011:
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-182







Notes to the financial statements (continued)



|                                                    |  | 2012     |         |  | 2011     | 
|--------------------------------------------------- |  | -------- | ------- |  | -------- | 
|                                                    |  | US$(000) |         |  | US$(000) | 
|                                                    |  |          |         |  |          | 
|Accounts receivable from related parties            |  |          |         |  |          | 
|Freeport - McMoRan Corporation                      |  |          | 203,644 |  |          | 
|Sumitomo Metal Mining Company, Ltd.                 |  |          | 108,507 |  |          | 
|Climax Molybdenum Marketing Corporation             |  |          | 6,411   |  |          | 
|                                                    |  |          |         |  |          | 
|                                                    |  |          | 318,562 |  |          | 
|                                                    |  |          |         |  |          | 
|Accounts payable to related parties                 |  |          |         |  |          | 
|Freeport - McMoRan Corporation                      |  |          | 3,844   |  |          | 
|Minera Freeport – McMoRan South America S.A.C.      |  |          | 2,795   |  |          | 
|Freeport - McMoRan Sales Company                    |  |          | 1,442   |  |          | 
|Freeport McMoRan  South America Inc. Chilean Agency |  |          | -       |  |          | 
|                                                    |  |          |         |  |          | 
|                                                    |  |          | 8,081   |  |          | 



Terms and transaction with related parties -

Transactions with related parties are made at normal
market prices.Outstanding balances at year-end are unsecured, interest free and settlement occurs
in cash. There have been no guarantees received or provided for any accounts receivable or payable to related parties. As
of December 31, 2012 and 2011,the Company had not recorded any impairment of accounts receivables from related parties.



| | 18. | Earnings per share
| | --- | ------------------



Basic earnings per share are computed by dividing
net earnings for the period by the weighted average number of shares outstanding during the year. Basic and diluted earnings per
share have been determined as follows:



|                                              |  | 2012 |                |  | 2011 |  |                  | 2010 | 
|--------------------------------------------- |  | ---- | -------------- |  | ---- |  | ---------------- | ---- | 
|                                              |  |      |                |  |      |  |                  |      | 
|Net profit for the year                       |  |      | US$772,070,000 |  |      |  | US$1,078,399,000 |      | 
|Weighted average number of shares outstanding |  |      | 350,056,012    |  |      |  | 350,056,012      |      | 
|Basic and diluted earnings per share          |  |      | US$2.21        |  |      |  | US$3.08          |      | 



Basic and diluted earnings per share are calculated
by dividing the net profit of the period by the weighted-average number of outstanding shares for the year.



F-183







Notes to the financial statements (continued)



| | 19. | Embedded derivative
| | --- | -------------------



As is indicated in note 2.3 (b), the exposure to the
risk of changes in the market prices of copper and molybdenum is considered as an embedded derivative and it is related to the
commercial contracts. As of December 31, 2012 and 2011, provisional prices of the estimated future prices (in copper and molybdenum
pounds) and their final maturity periods were as follow:



|            |  |                          |         |  | As of December 31, 2012
|----------- |  | ------------------------ | ------- |  | -----------------------
|            |  | Pounds payable
    (000) |         |  | Maturity               
|            |  |                          |         |  |                        
|            |  |                          |         |  |                        
|Copper:     |  |                          |         |  |                        
|Concentrate |  |                          | 218,571 |  |                        
|Molybdenum  |  |                          | 3,125   |  |                        
|            |  |                          |         |  |                        
|            |  |                          |         |  |                        



|            |  |                          |         |  | As of December 31, 2011
|----------- |  | ------------------------ | ------- |  | -----------------------
|            |  | Pounds payable
    (000) |         |  | Maturity               
|            |  |                          |         |  |                        
|            |  |                          |         |  |                        
|Copper:     |  |                          |         |  |                        
|Concentrate |  |                          | 234,084 |  |                        
|Cathode     |  |                          | 4,247   |  |                        
|Molybdenum  |  |                          | 6,381   |  |                        
|            |  |                          |         |  |                        
|            |  |                          |         |  |                        



The final pricing estimated by the Company as of December 31,
2012 and 2011 were based on LME information.



F-184







Notes to the financial statements (continued)



| | 20. | Financial risk management
| | --- | -------------------------



The Company’s activities are exposed to different
financial risks, the main risks that could adversely affect the Company’s financial assets and liabilities or future cash
flows are: the risk arising from changes in market prices of minerals, interest rate risk, liquidity risk, credit risk and capital
risk. The Company’s financial risk management program focuses on mitigating potential adverse effects on its financial performance.



Management knows the conditions prevailing in the
market and based on its knowledge and experience, reviews and manages the risks which are summarized below. Board of Directors
reviews and approves the policies to manage each of these risks.



| | (a) | Market risk -
| | --- | -------------

Commodity price risk -

The international prices of copper and molybdenum have
a significant impact on the Company’s operating results. The price of copper and molybdenum has fluctuated historically and
is affected by numerous factors beyond the Company’s control. The Company manages this risk through the use of sales commitments
with customers. The Company does not hedge its exposure to price fluctuation.



Embedded derivative –

As described in note 2.3 (b), the Company has price
risk through its provisionally priced sales contracts, which provide final pricing in a specified future month (generally three
months from the arrival date) based primarily on quoted LME monthly average prices. The Company receives market prices based on
prices in the specified future period, which results in price fluctuations recorded through revenues until the date of settlement.
The Company records revenues and commercial at the time of shipment, based on the current LME prices, which results in an embedded
derivative on the provisionally priced contracts that are adjusted to fair value through revenues each period, using the period-end
forward prices, until the date of final pricing. To the extent that final prices are higher or lower than what was recorded on
a provisional basis, an increase or decrease in revenues is recorded at each reporting period until the date of final pricing.



The table below summarizes the effect on profit before
income tax and workers’ profit sharing caused by changes in the copper and molybdenum price. This analysis is based on the
assumption that the copper price has increased or decreased by 10% while all other variables are held constant. The 2012 positive
scenario uses prices between US$/pound 3.95 to 3.96 (US$/pound 3.78 to US$/pound 3.80 in the year 2011); whereas the negative scenario
uses prices between US$/Lb 3.23 to 3.24 (US$/pound 3.09 to US$/pound 3.11 in the year 2011).



F-185







Notes to the financial statements (continued)



|                                                       |  | Effect on profit before income tax |        
|------------------------------------------------------ |  | ---------------------------------- | -------
|                                                       |  | US$(000)                           |        
|December 31, 2012                                      |  |                                    |        
|Increase in copper and molybdenum international quotes |  |                                    | 61,634 
|Decrease in copper and molybdenum international quotes |  |                                    | (61,634



Exchange rate risk –

As described in note 2.3(a), the Company’s financial
statements are presented in US dollars, which is the functional and presentation currency of the Company. The Company exchange-rate
risk arises mainly from deposits, taxes, compensation and other accounts payable in currencies other than the US dollar, mainly
Nuevos Soles. The Company mitigates its exposure to exchange-rate risk by carrying out almost all of its transactions in its functional
currency and Management maintains only small amounts in Nuevos Soles to cover its needs in this currency (i.e., taxes and compensation).



During 2012, the Company has recorded net gains net
from exchange differences of US$3,149,000 (net gains of US$1,924,000 and US$669,000 during the years 2011 and 2010, respectively),
from the translation of balances in Nuevos Soles to the US dollars.



| | (b) | Liquidity risk -
| | --- | ----------------

Liquidity risk arises from situations in which cash
might not be available to pay obligations when they become due. The Company maintains adequate liquidity by properly managing the
maturities of assets and liabilities in such way that allows the Company to maintain a structural liquidity position (cash available)
enabling it to meet liquidity requirements properly. Cerro Verde sells cathode and copper and molybdenum concentrates to recognized
companies in the mining sector worldwide. In addition, the Company currently has the possibility to obtain funds from financial
institutions if it is required to meet its contractual obligations.



F-186







Notes to the financial statements (continued)



The following tables show the expected aging of maturity of
the Company’s obligations as of December 31, 2012 and 2011:



|                        |  | On demand |   |  | Less than 3 months |  |         | 3 to 12 months |  |  | 1 to 5 years |  |  | Total    |      
|----------------------- |  | --------- | - |  | ------------------ |  | ------- | -------------- |  |  | ------------ |  |  | -------- | -----
|                        |  | US$(000)  |   |  | US$(000)           |  |         | US$(000)       |  |  | US$(000)     |  |  | US$(000) |      
|                        |  |           |   |  |                    |  |         |                |  |  |              |  |  |          |      
|As of December 31, 2012 |  |           |   |  |                    |  |         |                |  |  |              |  |  |          |      
|Trade accounts payable  |  |           | - |  |                    |  | 146,354 |                |  |  | -            |  |  |          | -    
|Other accounts payable  |  |           | - |  |                    |  | 27,671  |                |  |  | 1,265        |  |  |          | 540  
|                        |  |           |   |  |                    |  |         |                |  |  |              |  |  |          |      
|Total                   |  |           | - |  |                    |  | 174,025 |                |  |  | 1,265        |  |  |          | 540  
|                        |  |           |   |  |                    |  |         |                |  |  |              |  |  |          |      
|As of December 31, 2011 |  |           |   |  |                    |  |         |                |  |  |              |  |  |          |      
|Trade accounts payable  |  |           | - |  |                    |  | 44,177  |                |  |  | 11,773       |  |  |          | -    
|Embedded derivate       |  |           | - |  |                    |  | 74,370  |                |  |  | 887          |  |  |          | -    
|Other accounts payable  |  |           | - |  |                    |  | 18,239  |                |  |  | 9,851        |  |  |          | 1,298
|                        |  |           |   |  |                    |  |         |                |  |  |              |  |  |          |      
|Total                   |  |           | - |  |                    |  | 136,786 |                |  |  | 22,511       |  |  |          | 1,298



F-187







Notes to the financial statements (continued)



| | (c) | Credit Risk -
| | --- | -------------

The Company’s exposure to credit risk arises from
a customer’s inability to pay amounts in full when they are due and the failure of third parties in transactions of cash
and cash equivalent transactions, which is limited to balances deposited in banks and financial institutions and for trade accounts
receivable at the date of the statement of financial position. To manage this risk, the Company has an established treasury policy,
which only allows the deposit of surplus funds in highly rated institutions, by establishing conservative credit policies and through
a constant evaluation of market conditions. Consequently, the Company does not expect to incur in losses on accounts involving
potential credit risks.



The concentration of credit risk also exists when economic
changes occur, in industry or geography that affects third parties in the same way. The Company’s customer portfolio is primarily
three customers, which are related companies with solid financial structures.



The credit risk is limited to the book value of financial
assets on the statement of financial position date, which consists mainly of cash and cash equivalents, trade accounts receivable
from third parties and trade accounts receivable from related parties. The Company does not use derivative instruments to hedge
its exposure to credit risk.



| | (d) | Capital management -
| | --- | --------------------

The objective is to safeguard the Company’s ability
to continue as a going concern in order to provide returns for shareholders and benefits for stakeholders and maintain an optimal
structure that would reduce the cost of capital.



The Company manages its capital structure and makes
adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company controls
dividend payments to shareholders, the return of capital to shareholders and the issue of new shares. No changes were made in the
objectives, policies or processes during the years ended December 31, 2012 and 2011.



| | 21. | Mineral reserves (unaudited)
| | --- | ----------------------------



As of December 31, 2012 and 2011, the Company’s
proven and probable mineral reserves were:



|                     |  | MT (000) |           |  | Grade | 
|-------------------- |  | -------- | --------- |  | ----- | 
|                     |  | 2012     |           |  | 2011  | 
|                     |  |          |           |  |       | 
|Mineral for leaching |  |          | 202,153   |  |       | 
|Mineral for milling  |  |          | 3,992,384 |  |       | 



F-188







Notes to the financial statements (continued)



Copper production in thousands of recoverable pounds
for the years ended December 31, 2012 and 2011 was as follow:



|             |  | 2012 |         |  | 2011 | 
|------------ |  | ---- | ------- |  | ---- | 
|             |  |      |         |  |      | 
|Cathodes     |  |      | 118,703 |  |      | 
|Concentrates |  |      | 475,771 |  |      | 



Average LME price per metric ton of copper for the
years ended December 31, 2012 and 2011, was as follows:



|       |  | 2012   |       |  | 2011   | 
|------ |  | ------ | ----- |  | ------ | 
|       |  | US$/MT |       |  | US$/MT | 
|       |  |        |       |  |        | 
|Copper |  |        | 7,950 |  |        | 



F-189