Buenaventura Mining Co. (BVN, Financial) announced last Friday that Tambomayo, a wholly-owned mine located in Arequipa, a region in southwestern Peru, commenced the production of doré bars.
From the milling and gold cyanidation processes, the company will produce gold and silver doré bars. The company will also produce lead and zinc from the residual stage of the cyanidation process.
At Tambomayo, Buenaventura expects to reach commercial production some time in March or April of 2017 and forecasts to produce between 140 thousand and 160 thousand ounces of gold and between 3.3 million and 3.8 million ounces of silver every year.
At the end of 2015, the company estimated to have 328,064 ounces in proven and probable reserves, 10,007,166 ounces of silver, 21,571 metric tons of lead and 32,518 metric tons of zinc at Tambomayo.
The production of gold that Buenaventura estimates at Tambomayo represents approximately 22% of the company’s total gold production for fiscal year 2015. The production of silver from Tambomayo represents approximately 15% of the total silver production for that same year.
Buenaventura produced approximately 682,629 ounces of gold and 23,928,702 ounces of silver in 2015.
The company’s total gold and silver output is the result of the production from five underground mines and four open pit mines.
Buenaventura is trading at $11.74, up 46 cents or 4.08% from the previous trading day. The stock is more volatile than the market with a beta equal to 1.24.
The 52-week range is between $3.30 and $16.45. As of today, the majority of analysts recommend to hold shares of Buenaventura and the rating is 2.8. The recommendation rating ranges between 1 (Strong Buy) and 5 (Sell).
The average target price is $13.57 per share and ranges between a low of $11.90 and a high of $17.
The company has a market capitalization of $3.02 billion and the stock is trading at 0.94 times the book value and 14.78 times the Ebitda.
Buenaventura had approximately $117.24 million in cash on hand as of the most recent quarter. The total debt amounted to $655.19 million, almost all in capital lease obligations.
The company has a total of 254.19 million shares outstanding, of which approximately 56.80% can be traded on the stock market.
The Van Eck Associates Corp. is the top institutional holder of Buenaventura. As of Sept. 30, 2016, it held 15,958,928 shares valued at $220,871,563.
Disclosure: I have no position in Buenaventura.
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