Buenaventura Mining Company (NYSE:BVN) (10.65% in Azvalor International*)
After reaching a recent peak of $17.5 per share, boosted by the recovery in gold and silver prices, shares have dropped by more than 10% following the latest quarterly results. The disappointment came from the lower production and lower grades in its Cerro Verde copper mine, which is actually due to special, non-repeatable stripping work already completed. The company clarified that it projects a significant improvement in production volumes and costs in the short term. Interestingly, this situation went practically unnoticed by the very few analysts who cover it.
In Buenaventura we accumulated a positive return of almost 30%. However, we believe its share price is NOT only far below its value, but has not reflected at all the recent rebound in gold and silver prices.
From azValor's second-quarter 2019 shareholder letter.
