SECURITIES AND EXCHANGE COMMISSION

FORM 20-F

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

OF THE SECURITIES EXCHANGE ACT OF 1934

OR

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

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002

OR

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

SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-14370

(Exact name of Registrant as specified in its charter)

(Translation of Registrant's name into English)

REPUBLIC OF PERU

(Jurisdiction of incorporation or organization)

CARLOS VILLARAN 790

SANTA CATALINA, LIMA 13, PERU

(Address of principal executive offices)

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

_________________

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

None

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

None

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

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

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

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.

Yes x No ¨

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

Item 17 ¨ Item 18 x

TABLE OF CONTENTS

INTRODUCTION

Presentation of Financial Information

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

Buenaventura and its subsidiaries maintain their financial books and records in Nuevos Soles and present their financial statements in conformity with accounting principles generally accepted in Peru ("Peruvian GAAP"). See Note 37 to the audited consolidated financial statements of the Company as of December 31, 2001 and 2002 and for the years ended December 31, 2000, 2001 and 2002 (the "Company Financial Statements") beginning at page F-2 for a description of the significant differences between the accounting principles followed by the Company under Peruvian GAAP and accounting principles generally accepted in the United States of America ("U.S. GAAP"), and Note 38 to the Company Financial Statements for a reconciliation to U.S. GAAP of net income and shareholders' equity for the periods covered. Pursuant to the rules of the United States Securities and Exchange Commission (the "Commission"), this Annual Report includes certain separate financial statements and other financial information of Minera Yanacocha S.R.L. ("Yanacocha"). Yanacocha maintains its financial books and records in U.S. Dollars and presents its financial statements in accordance with U.S. GAAP. See Note 2 to the audited financial statements of Yanacocha as of December 31, 2001 and 2002 and for the years ended December 31, 2000, 2001 and 2002 (the "Yanacocha Financial Statements") beginning at page F-70 for a description of the significant differences between the accounting principles followed by Yanacocha under U.S. GAAP and Peruvian GAAP, and Note 17 to the Yanacocha Financial Statements for a reconciliation to Peruvian GAAP of net income and shareholders' equity for the periods covered. Pursuant to Peruvian GAAP, financial data for all periods in the financial statements of the Company included herein have been adjusted for inflation using the Indice de Precios al por Mayor a Nivel Nacional (the National Wholesale Price Index for Peru, or the "IPM") published by the Instituto Nacional de Estadística e Informática (the National Institute of Statistics, or the "INEI"). See Note 3(c) to the Company Financial Statements. Unless otherwise specified, financial data regarding the Company is presented herein in accordance with Peruvian GAAP and in constant Nuevos Soles as of December 31, 2002, and financial data regarding Yanacocha is presented herein in accordance with U.S. GAAP and in U.S. Dollars.

The Company Financial Statements record the Company's investment in Yanacocha in accordance with the equity method. The Company's interest in Yanacocha has been calculated at 43.65 percent for the years ended December 31, 2001 and 2002, as described in "Item 5. Operating and Financial Review and Prospects-The Company-General" and Note 11 to the Company Financial Statements.

In 1989, the Peruvian accounting standards board approved the inclusion in the financial statements of each Peruvian company of the Resultado por Exposición a la Inflación ("Result from Exposure to Inflation"), which seeks to account for the effects of inflation or deflation by adjusting the value of non-monetary assets and liabilities by a factor corresponding to the inflation or deflation rate during the period covered by the financial statements. Monetary assets and liabilities are not adjusted. The net result of the adjustment is reflected in the "Result from Exposure to Inflation" line item of the income statement. This requirement was applied to the Company in 1991 and thereafter. See Note 3(c) to the Company Financial Statements. The inflation adjustment factors used in the calculation of the Result from Exposure to Inflation since 1991 are a function of the IPM. The IPM increased by 6.5 percent in 1998, 5.5 percent in 1999, 3.8 percent in 2000, decreased by 2.2 percent in 2001 and increased by 1.7 percent in 2002.

This Annual Report contains translations of certain Nuevo Sol amounts into Dollars at specified rates solely for the convenience of the reader. These translations should not be construed as representations that the Nuevo Sol amounts actually represent such equivalent Dollar amounts or could be converted into Dollars at the rate indicated as of the dates mentioned herein or at all. Unless otherwise indicated, such Dollar amounts have been translated from Nuevos Soles at an exchange rate of S/.3.515 = US$1.00, the average of the market exchange rates for the purchase and sale of Dollars on December 31, 2002. The translation of amounts expressed in nominal or constant Nuevos Soles with purchasing power as of a specified date by the then-prevailing exchange rate may result in presentation of Dollar amounts that differ from the Dollar amounts that would have been obtained by translating nominal or constant Nuevos Soles with purchasing power as of another specified date by the prevailing exchange rate on that specified date. See "Item 3. Key Information-Exchange Rates" for information regarding the average rates of exchange between the Nuevo Sol and the Dollar for the periods specified therein.

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

Certain statements contained in this Annual Report contain "forward-looking" information (as defined in the U.S. Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties, including those concerning the Company's and Yanacocha's costs and expenses, results of exploration, the continued improving efficiency of operations, prevailing market prices of gold, silver and other metals mined, the success of joint ventures, estimates of future exploration, development and production, subsidiaries' plans for capital expenditures, estimates of reserves and Peruvian political, economic and legal developments. These forward-looking statements reflect the Company's view with respect to the Company's and Yanacocha's future financial performance. Actual results could differ materially from those projected in the forward-looking statements as a result of a variety of factors discussed elsewhere in this Annual Report, including but not limited to those discussed under "Item 3. Key Information-Risk Factors".

PART I

Not applicable.

Not applicable.

Selected Financial Data

The following information should be read in conjunction with, and is qualified in its entirety by reference to, the Company Financial Statements including the Notes thereto appearing elsewhere in this Annual Report. The selected financial information as of December 31, 2001 and 2002, and for the three years ended December 31, 2000, 2001 and 2002, is derived from the Company Financial Statements appearing elsewhere in this Annual Report. The report of Medina, Zaldivar, Paredes & Asociados (a member firm of Ernst & Young Global) on the Company's 2002 Financial Statements appears elsewhere in this Annual Report. The selected consolidated financial data as of December 31, 2001 and 2000 and for the years then ended are derived from the audited consolidated financial statements audited by other auditors, Medina, Zaldivar y Asociados (a member firm of Andersen Worldwide), who have ceased operations and whose report has not been reissued in connection with this filing on Form 20-F, see page F-3. The Company Financial Statements are prepared and presented in accordance with Peruvian GAAP, which differ in certain respects from U.S. GAAP. Note 37 to the Company Financial Statements provides a description of the principal differences between Peruvian GAAP and U.S. GAAP as such differences relate to the Company, and Note 38 to the Company Financial Statements provides a reconciliation to U.S. GAAP of the Company's net income for the years ended 2000, 2001 and 2002, and shareholders' equity as of December 31, 2001 and 2002. The selected financial information as of December 31, 1998 and 1999 and for the years then ended has been derived from the Company's financial statements as of and for the years then ended, which have been audited by Medina, Zaldivar y Asociados. The operating data presented below is derived from the Company's records and has not been subject to audit. The financial information and operating data presented below should be read in conjunction with "Item 5. Operating and Financial Review and Prospects-The Company" and the Company Financial Statements and the related Notes thereto and other financial information included in this Annual Report.

____________________

________________

___________________

Source: SBS

On June 19, 2003, the offered rate for Dollars as published by the SBS was S/.3.472 = US$1.00.

Not applicable.

Not applicable.

Dependence on Joint Ventures

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

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

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

Because the Company's revenues are derived primarily from the sale of ore concentrates containing gold and silver, and Yanacocha's revenues are derived primarily from the sale of gold and silver, the prices the Company and Yanacocha obtain for gold and silver and concentrates containing such metals, and the Company's and Yanacocha's earnings, are directly related to world market prices for such metals. Such prices have historically fluctuated widely and are affected by numerous factors beyond the Company's control, including the overall demand for and worldwide supply of gold, silver and other metals; the availability and price of competing commodities, international economic trends, currency exchange fluctuations, expectations of inflation, actions of commodity markets participants, consumption and demand patterns and political events in major producing countries. For information on gold and silver prices for each of the years in the five-year period ended December 31, 2002, see "Item 4. Information on the Company-The Company-Business Overview-Sales of Metal Concentrates". On December 31, 2002 and May 30, 2003, the morning fixing price for gold on the London Bullion Market was US$342.75 per ounce and US$365.80 per ounce, respectively. On December 31, 2002 and May 30, 2003, the afternoon fixing spot price of silver on the London market (the "London Spot") was US$4.67 per ounce and US$4.56 per ounce, respectively.

The Company's and Yanacocha's activities in Peru are dependent on mining concessions for exploration and development (hereafter referred to as "mining concessions") being obtained from the Peruvian Ministry of Energy and Mines ("MEM"), in the case of the Company, and through the assignment of concessions granted to a related entity by the Peruvian government, in case of Yanacocha. In addition, the Company's and Yanacocha's activities in Peru are dependent on provisional permits for exploration and/or development rights of the area of the claim obtained also from the MEM (hereafter referred to as "provisional permits," and together with mining concessions, hereafter referred to as "mining rights"), and/or processing concessions for treatment of mining ores obtained from the MEM (hereafter referred to as "processing concessions"), previously granted by the Peruvian government with respect to the Company's and Yanacocha's mining activities, as well as compliance by the Company and Yanacocha with certain agreements entered into with the Peruvian government. Under the current legal and regulatory regime in Peru, the Company's mining rights have an indefinite term and Yanacocha's assigned mining rights have a term of 20 years, with an option to renew for an additional term of 20 years. The mining rights are maintained by meeting a minimum annual level of production or investment and by the annual payment of a concession fee. A fine is payable for the years in which minimum production or investment requirements are not met. Failure to pay such concession fees or fines for two consecutive years could result in the loss of one or more of the mining rights. The Company's and Yanacocha's processing concessions enjoy the same duration and tenure as the mining rights, subject to payment of a fee based on nominal capacity for the processing plant. Failure to pay such processing fees or fines for two consecutive years could result in the loss of the processing concessions. The Company is, and Yanacocha has informed the Company that Yanacocha is, current in the payment of all amounts due in respect to its mining and processing concessions.

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

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

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

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

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

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

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

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

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

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

From time to time, the Company has experienced strikes which have had an adverse impact on its operations and operating results. Although the Company considers its relations with its employees to be good, there can be no assurance that this situation will continue and that the Company will not experience strikes or other labor-related work stoppages that could have a material adverse effect on its operations or its operating results. Yanacocha has not experienced strikes, has no labor unions and has not entered into any collective bargaining agreements since the beginning of its operations, and Yanacocha has informed the Company that it considers its relations with its employees to be good. However, there can be no assurance that this situation will continue and that Yanacocha will not experience strikes or other labor-related work stoppages that could have a material adverse effect on its operations or its operating results. See "Item 6. Directors, Senior Management and Employees-Employees" and "Item 4. Information on the Company-Yanacocha-Employees".

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

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

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

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

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

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

Exposure to Peruvian Political Risk

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

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

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

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

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

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

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

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 ("IPC") and published by INEI, has fallen from a high of 7,649.7 percent in 1990 to 6.0 percent in 1998, 3.7 percent in 1999, 3.7 percent in 2000, -0.1 percent in 2001 and 1.5 percent in 2002. The Peruvian currency has been devalued numerous times during the last 20 years. The devaluation rate has decreased from a high of 4,019.3 percent in 1990 to 15.4 percent in 1998, 11.1 percent in 1999, 0.5 percent in 2000, -2.3 percent in 2001 and 2.0 percent in 2002. The Company's revenues are almost entirely denominated in U.S. Dollars, and its operating expenses are primarily denominated in Nuevos Soles. If inflation in Peru were to increase without a corresponding devaluation of the Nuevo Sol relative to the U.S. Dollar, the financial position and results of operations of the Company, and the market price of the Common Shares and the American Depository Shares ("ADSs"), could be affected. Although the Peruvian government's stabilization plan has significantly reduced inflation, and the Peruvian economy has experienced strong growth in recent years, there can be no assurance that inflation will not increase from its current level or that such growth will continue in the future at similar rates or at all.

Among the economic circumstances that could lead to a devaluation would be the decline of Peruvian foreign reserves to inadequate levels. Peru's foreign reserves at December 31, 2002 were US$9.6 billion as compared to US$8.6 billion at December 31, 2001. There can be no assurance that Peru will be able to maintain adequate foreign reserves to meet its foreign currency denominated obligations, or that Peru will not devalue its currency should its foreign reserves decline. See "Item 3. Key Information-Exchange Rates".

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

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

The Company prepares its financial statements using Peruvian GAAP, which differ in certain material respects from U.S. GAAP. Thus, the presentation of Peruvian financial statements and reported earnings may not be comparable to those companies whose financial statements are prepared in accordance with U.S. GAAP. See Note 37 to the Company Financial Statements for a description of the significant differences between Peruvian GAAP and U.S. GAAP, as such differences relate to the Company, and Note 38 for a reconciliation to U.S. GAAP of the Company's net income and shareholders' equity for the period included therein. In addition, since the Company is not a United States registrant, information regarding the Company may not be as readily disseminated into the market.

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

Voting Rights; Effective Control by Principal Shareholders

The aggregate percentage of the economic interest of the outstanding share capital of the Company held by Alberto Benavides de la Quintana, the Company's Chairman and former Chief Executive Officer, and certain members of his immediate and extended family and their spouses (collectively, the "Benavides Family") as of May 31, 2003 was 26.79 percent. Because of the significant ownership interest the Benavides family holds in the Company and because the Investment Shares do not have voting rights, the Benavides Family has the power to elect a significant number of the outstanding directors and has a significant influence over the outcome of substantially all matters to be decided by a vote of shareholders. In addition, under the terms of the Amended and Restated Deposit Agreement dated May 3, 2002, among the Company, The Bank of New York, as depositary (the "Depositary"), and the owners and beneficial owners of ADSs (the "Amended and Restated Deposit Agreement") relating to the Company's ADRs, if holders of ADRs do not provide the Depositary with timely instructions for the voting of Common Shares represented by such ADRs, the Depositary will be deemed to be instructed to give a person designated by the Company, which will likely be Alberto Benavides de la Quintana, a discretionary proxy to vote such shares, unless the Company informs the Depositary that the Company does not wish such proxy to be given.

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

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

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

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. The Company's registered office is located at Carlos Villarán 790, Santa Catalina, Lima 13, Perú, telephone no. 5-11-419-2538. The Company's Internet Website address is www.buenaventura.com The information on the Company's website is not a part of, nor incorporated into this document.

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

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

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

Since the late 1980s, the Company has continued its efforts to decrease its exposure to silver price fluctuations and has pursued a plan to increase its overall precious metals production and production efficiency. The Company has continued to expand its mineral resource base through the implementation of acquisition, development and exploration programs designed to increase its production and reserves of gold while maintaining its strong position in silver. As part of this strategy, the Company acquired an equity interest in Yanacocha and conducted exploration leading to the discovery of gold mineralization and subsequent production of gold in Orcopampa, Shila, Antapite and other Company mines. These initiatives have transformed the Company from primarily a silver producer into primarily a gold producer, based on allocated revenue. In 2001, gold, silver and other metals accounted for 76.05 percent, 14.75 percent and 9.2 percent, respectively, and in 2002, gold, silver and other metals accounted for 90.55 percent, 6.23 percent and 3.22 percent, respectively, of the Company's equity share of production value in its consolidated subsidiaries and Yanacocha.

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

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

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

In March 2001, the Company ceased operations at the Recuperada mine primarily due to the sharp drop in zinc prices and the flooding in October 2000 of the lower levels of the mine, where the majority of ore reserves were located. The Company made the decision to cease operations at Recuperada after exhaustive exploration conducted in the area yielded only negative results. The Company also decided to discontinue exploration efforts at Recuperada, and, as a result, all activity at the mine is suspended at this time.

Redesignation of the Company's Shares and ADSs

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

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

Until March 30, 2002, the Company held, indirectly through Condesa and Cedimin, a 100 percent interest in Minera Huallanca. On such date, the Company transferred this interest to BHL-Perú S.A.C. through the sale of all of its shares in Minera Huallanca for US$2 million. From this total, the Company will collect US$1.5 million in semi-annual installments until September 2004, and will collect the remaining US$0.5 million on September 30, 2006 as long as: (i) the level of economic reserves as measured between September 24, 2004 and September 30, 2006 allows Huallanca to produce 15,000 tons per month of mineral, and (ii) the average price of zinc is higher than US$1,050 per ton during that period. If these conditions are not satisfied, the final price for the Company's participation in Minera Huallanca will be US$1.5 million.

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

The Company views an active exploration program as its primary means to obtain new reserves. As of May 31, 2003, through an intensive exploration program, the Company holds, either directly or in conjunction with joint venture partners, 546,053 hectares of mining rights, excluding an additional 142,610 hectares in mining properties which consolidate production units, making it a major holder of mining rights in Peru. During 2002 the Company spent approximately US$7.5 million primarily on mining exploration-related investments in Peru, concentrating on the exploration and development of precious metals deposits in the following mining projects: Los Pircos, La Zanja, Mesa de Plata, Tantahuatay, Marcapunta, Jatun Orco, Huancavelica, Ccarhuarazo, Samana, Poracota and Patagonia. In 2003, the Company intends to concentrate on the Los Pircos, La Zanja, Mesa de Plata, Salpo, Marcapunta, Jatun Orco, Huancavelica, Poracota and Patagonia exploration projects. The amount spent in 2003 does not include exploration performed by operating mines within their scope.

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

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

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

The Company financed its capital expenditures in 2000 and 2001 with internally-generated funds and borrowings under its lines of credit. In 2002, capital expenditures were also financed with internally-generated funds and borrowings under the Company's lines of credit. See Notes 15 and 17 to the Company Financial Statements.

The Company has budgeted approximately US$27.3 million and US$12.7 million for capital expenditures in 2003 and 2004, respectively, of which US$6 million and US$6 million are allocated for exploration and development activities in 2003 and 2004, respectively. To fund its planned capital expenditures program, the Company plans to use internally-generated cash. See "Item 5. Operating and Financial Review and Prospects-The Company-Liquidity and Capital Resources".

The Company's ongoing projects include (i) continuing with the construction of a tunnel, the Patón tunnel, in the Uchucchacua mining unit at an estimated cost of US$4.5 million in 2003, and (ii) the construction of a new cyanidation plant and tailings dam ("presa de relaves") in the Orcopampa mining unit at an estimated cost of US$6.5 million. In the Antapite mining unit, the Company is in the process of expanding its production capacity to 450 TPD at an estimated cost of US$2.2 million. The significant increase in capital expenditures for 2002 was due to improvements in the exploration and treatment of the metals produced by the Company.

The Company initiated exploration activities for three silver, lead and zinc bearing veins in Bolivia in May 2001. In April 2001, the Company entered into an option agreement with Minera La Solución S.A., a Bolivian mining company, which requires the Company to make minimum expenditures of US$100,000 and US$200,000 for the first two years, respectively, of the agreement in the event that it decides to undertake exploration. After two years, the Company has the option to purchase 70 percent of Minera La Solución for US$1.5 million. In March 2002, the Company decided to suspend exploration activities in Bolivia due to the decrease in the price of zinc.

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

The Company principally produces refined gold and different types of metal concentrates that it distributes and sells internationally, including silver-lead concentrate, silver-gold concentrate, zinc concentrate and lead-gold-copper concentrate. The following table sets forth the production of the Antapite, Julcani, Uchucchacua, Orcopampa, Recuperada, Ishihuinca, Paula, Huallanca, Colquijirca and Shila 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.

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

In 2003 the Company expects to invest a minimum of approximately US$8.0 million in exploration and development activities (all exploration and development programs at the Company's principal mines are separate and expressed as part of mine cost structure). Exploration and development expenditures include all of the costs associated with manpower and activities such as geologists, contractors, engineering, drilling equipment, metallurgical testing and economic feasibility studies. Management for the exploration division prepares programs and budgets for individual projects each year and the Company allocates, through approval of the board, an amount to finance such exploration and development activities in those projects considered worthwhile. In light of the nature of mining exploration and in order to maintain flexibility to take advantage of opportunities, the Company allocates budgeted amounts by property or project, only in the case of high geological prospectivity as decided by management. The Company also allocates non-budgeted amounts over the course of the year to new projects based on the Company's needs and its geologists' periodic evaluations of the progress of each opportunity and its potential for development.

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

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

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The following is a brief summary of current exploration activities conducted by the Company directly and through joint ventures that are believed to represent the best prospects for the discovery of new reserves. There can be no assurance, however, that any of the Company's current exploration projects will result in viable mineral production or that any of the mineralization identified to date will ultimately result in an increase in the Company's ore reserves. Mineralization out of reserves or mineral resources as indicated by diamond drilling have been included in the Company's Annual Report 2002 from the Los Pircos, La Zanja, Tantahuatay and Marcapunta exploration projects.

La Zanja. Sociedad Minera Coshuro S.A. ("Coshuro") controls 28,299 hectares of mineralized ground in the La Zanja project, which is located 35 kilometers north-west of Cajamarca. Originally, the La Zanja project was part of the Northern Peru joint venture exploration project, which was 35 percent owned by the Company and 65 percent owned by NEM. The Company executed a carve-out agreement with NEM on August1, 2000, providing for the eventual dilution of NEM's interest in the project. The project, which is operated by the Company, consists of two discrete and superficial gold and silver oxide deposits, amenable to low-strip open pits and heap-leach operation. Mineralization out of reserves is drill proven, indicated and inferred at 18.8 million metric tons with an average grade of 1.1 grams of gold per ton. The Company has not yet tested deep oxide nor sulfide ore potential in other prospects within the property. In 2001, the Company initiated the acquisition of surface rights. In 2002, the Company advanced in the acquisition of 115 hectares in surface rights and also performed large column tests to prove amenability to cyanide leaching in heaps. As of December 31, 2002, the Company owned a 54.48 percent interest in La Zanja and NEM's interest was diluted to 45.52 percent. NEM has elected to be maintain a 45.52 percent interest in La Zanja during 2002 and 2003.

Lancones. The Lancones project is a joint venture which is 40 percent owned by Cía. Minera Totoral S.A. ("Minera Totoral") and 60 percent owned by BHP-B. The Company has an option to purchase shares representing the entire social capital of Minera Totoral. Consisting of approximately 37,500 hectares of mineralized land, the project is located in northern Peru and southern Ecuador. The project is operated by BHP-B and with an objective of identifying massive sulfide deposits in the area. In 2001, BHP-B detected three clusters of airborne gravity anomalies in prospective volcanic rocks. Detailed follow-up mapping and sampling has been performed at the Potrobayo, Cerro Colorado and Valdivia sites. In 2002, 10,000 hectares of the Potrobayo prospect were carved out from the Lancones project after negative results were evidenced by 2,012 meters of reverse circulation drilling. Reprocessing of the regional airborne gravity survey has generated new anomalies that warrant field appraisal and new claims.

Los Pircos. The Los Pircos project is a joint venture with MDG. As of January 2001, the Company has spent US$300,000 and MDG has spent US$700,000 to complete Stage 1 of the contract. MDG has an option to acquire a 51 percent interest in the project if, in addition to replacing the Company as the operator as of October 5, 2002, it invests, at its own risk, an additional amount of US$2.0 million in advanced exploration efforts over a period of 2 years. Consisting of 14,972 hectares, the project is located east of Chiclayo in the Western Cordillera of Cajamarca, approximately 690 kilometers northwest of the city of Lima. The project is currently being operated by MDG and has as its primary objective the exploration of precious metal veins of epithermal character. To date, the Company has located, mapped and sampled five principal veins, which have shown strong anomalous gold and silver values. The principal vein, the Diana vein, has a central section of 380 meters with average widths of 2.10 meters and grades of 8 grams of gold per ton and 300 grams of silver per ton. First pass drilling with a total 3,566 meters in 2002 over the Diana vein system indicated resources of 203,680 metric tons at 18.3 grams per ton of gold and 17.4 ounces per ton of silver in veins with an average thickness of 2 meters.

Patagonia. The Patagonia project is a joint venture between the Company, Yamana Resources Inc., Yamana Resources Ltd., Recursos Yamana Ltd., Recursos Yamana S.A. (the owner of the mining concessions) and Lorenzon Ltd. (a company owned by the Hochschild Group). The Company has an option to purchase 50 percent of the shares of Recursos Yamana Ltd. after three years and an investment of US$2.85 million and an option to purchase an additional 16.67 percent after US$3.0 million is invested in the project. The Company has invited Lorenzon to share the risk in this investment. Consisting of 127,927 hectares, the project is located in southern Argentina, 60 kilometers northeast from the Anglo Gold Cerro Vanguardia gold mine in the Santa Cruz province. To date, the Patagonia project has two main prospective areas identified; namely Martinetas and La Paloma. In 2002, the Company focused on the Martinetas area, with a trenching and sampling program following two sets of gold bearing veins. During first quarter of 2003, the Company conducted a 2,500 meter diamond drilling campaign over Martinetas and results are expected shortly. The Company plans to focus on the La Paloma region to discover new prospective areas in its extensive land holdings in the region in 2003.

Poracota. The Poracota project, operated by the Company, is a joint venture between Southwestern Resources Corp. ("SWG") and TCL. The project encompasses 6,674 hectares and is located 35 kilometers west of the Orcopampa mine in southern Peru, owned by Minas Poracota S.A. (a subsidiary of Minera del Suroeste S.A.C.). The Company has an option to acquire a 50 percent interest in Minas Poracota S.A. with a US$4.6 million payment to SWG. The Company has agreed to invest US$0.4, US$1.0 and US$1.6 million in 2003, 2004 and 2005, respectively, to exercise a second option for an additional 25 percent interest from TCL. Thereafter, the Company may exercise an option to acquire a 50 percent interest of Minas Poracota S.A. The epithermal high sulfidation system comprises two main areas: Poracota and Perseverancia. In the first quarter of 2003, an assessment drilling campaign was initiated in both the Poracota and Perseverancia area.

Salpo. Grupo Wiese owns mining concessions that encompass 6,271 hectares in northern Peru, 70 kilometers east from Trujillo, through Minera Salpo S.A. The Company has an option to acquire a 51 percent interest of Minera Salpo S.A. if it invests US$2.0 million in exploration. Salpo is an historical mining district characterized epithermal veins rich in gold and silver . In 2002, the Company reopened mines along the Salpo and Milluachaqui veins to conduct mapping and sampling, that have demonstrated 4 to 6 grams of gold per ton and 15 to 20 ounces of silver per ton in a thickness of 0.6 to 1.0 meters. During 2003, the Company plans to initiate tunneling and conduct a drilling campaign to generate reserves and discover new mineral resources.

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

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

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

Huancavelica Project. The Huancavelica project is wholly owned and operated by the Company. Consisting of 55,600 hectares, the project is located in several prospects of the Huancavelica region. The Company initiated exploration efforts in 1994 with the purpose of identifying base-metal skarns and/or disseminated precious metal deposits along the Cenozoic volcanic belt. During 2002, the Company focused exploration activities in epithermal precious metal deposits hosted in volcanic formations; two new deposits were discovered and claimed in the Pampa Andino and Minasnioc prospects. A trenching and first-pass drilling program will be initiated in Pampa Andino, wholly owned and operated by the Company, during 2003. The Minasnioc prospect will be explored in conjunction with ABX according to a joint venture agreement which is currently being negotiated.

Jatun Orco. The Jatun Orco project is wholly owned and operated by the Company. Consisting of 16,200 hectares of mining properties, the project is located 20 kilometers north of the Antapite mine in the headwaters of the Ica valley. The Jatun Orco project is the outcome of a regional exploration program designed to focus on gold exploration in Huancavelica. Epithermal veins, located in the Jatun Orco Norte, Jatun Orco Sur and Karla prospects, have sporadic high-grade gold and silver leakage anomalies. The Company's exploration efforts in 2002 included 2,289 meters of diamond drilling to intersect the principal veins and to determine their thickness and precious metal grades to a depth of approximately 300 meters. Although results were poor, given the coarse-gold nature of the known mineralization, an advanced exploration program of 1,500 meters was initiated in 2003 to test for grade continuity along the Mercedes and Capicua veins in the Jatun Orco Sur prospect.

Franja Sur. The Franja Sur project is wholly owned and operated by the Company. Consisting of 70,108 hectares, the project is located in the departments of Arequipa and Puno in volcanic rocks of south-eastern Peru. After regional reconnaissance and selection of mineralized areas, the Company is currently conducting initial mapping and sampling at several project sites, including the Pichacani prospect which has demonstrated a strong mercury and tellurium anomaly. The Company's geologists are exploring the Pichacani prospect for gold by trenching and first pass diamond drilling.

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

Cedimin. Cedimin S.A.C. is wholly owned by the Company and controls 57,735 hectares of owned and leased mining concessions, manages and conducts explorations efforts in the Mesa de Plata project on behalf of Compañía Minera Colquirrumi S.A., in the Tantahuatay project on behalf of Compañía Minera Coimolache S.A. as well as in the Crucero project and the surrounding are of the Shila and Paula mines in southern Peru. During 2002, Cedimin invested US$ 2.5 million in exploration.

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

Substantially all of the Company's metal is sold to smelters and traders in concentrate form, including silver-lead concentrate, silver-gold concentrate, zinc concentrate and lead-gold-copper concentrate. The majority of the Company's sales are made under one or three-year, U.S. Dollar-denominated contracts, pursuant to which the selling price is based on world metal prices as follows: generally, in the case of gold and silver-based concentrates, the London Spot settlement prices for gold, less certain allowances, and the London Spot or the United States Commodities Exchange settlement price for silver, less certain allowances; and, in the case of base-metal concentrates, such as zinc, lead and copper, the London Metals Exchange settlement prices for the specific metal, less certain allowances. Sales prices vary according to formulas that take into account prevailing monthly 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 the Company's average annual gold and silver prices per ounce for each of the last five years are set forth below:

____________

Some of the sales contracts the Company enters into with its customers state a specific amount of concentrate the customer will purchase. The Company has sales commitments from various parties for virtually all of its estimated 2003 production; however, concentrates not sold under any of the Company's contracts may be sold on a spot sale basis to merchants and consumers.

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

________________

(1) Does not include refinery charges and penalties incurred in 2002, 2001 and 2000 of S/.143,552 (US$40,817), S/.163,619 (US$45,875), and S/.170,190 (US$48,079) respectively.

The Company sold its concentrates to 15 customers in 2002. Approximately 60 percent, 54 percent and 45 percent of the Company's concentrate sales in 2000, 2001 and 2002, respectively, were sold outside Peru. Set forth below is a table that shows the percentage of sales of concentrate from the Company's mines, and of sales of gold bullion that were sold to the Company's various customers from 2000 to 2002.

Under the terms of the Noranda sales contract dated January 15, 2001, the Company is required to supply Noranda with approximately 4,000 wet metric tons ("WMT") per year of Uchucchacua silver-lead concentrates from February 2001 to December 2003. The price of the concentrate supplied under the contract is based on specified market quotations minus deductions.

Under the terms of the Pechiney World Trade (USA) Inc. ("Pechiney") sales contract, dated February 2, 2001, the Company is required to supply Pechiney with a single shipment of 4,000 WMTs per year of Uchucchacua silver-lead concentrates in 2001, 2002 and 2003. The price of the concentrate supplied under the contract is based on specified market quotations minus deductions.

Under the terms of the Doe Run S.R.L. ("Doe Run") sales contract dated January 25, 2001, the Company is required to supply Doe Run with a minimum of 15,000 WMTs per year of Uchucchacua silver-lead concentrates to be delivered during 2001, 2002 and 2003. The price of the concentrate supplied under the contract is based on specified market quotations minus deductions.

Under the terms of the Consorcio Minero S.A. ("Cormin") sales contract dated December 18, 2001, the Company is required to supply Cormin with 10,000 WMTs in 2002 and 9,200 WMTs in 2003 of Uchucchacua's zinc concentrates. The price of the concentrates supplied under the contract is based on specified market quotations minus deductions.

Under the terms of the Cormin sales contract dated November 26, 2002, the Company is required to supply Cormin with 4,000 WMTs of Uchucchacua's silver-lead concentrates in 2003. The price of the concentrate supplied under the contract is based on specified market quotations minus deductions.

Under the terms of the Cormin sales contract dated March 21, 2003, the Company is required to supply Cormin with 12,000 WMTs of Orcopampa's silver-gold concentrates production from April to September 2003. The price of the concentrates supplied under the contract is based on specified market quotations minus deductions.

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

The Company also sells refined gold, which is derived from its operations at Orcopampa, Shila and Ishihuinca and processed at its industrial plant at Metalúrgica Los Volcanes S.A. and a local smelter in Lima, to one customer, Johnson Matthey Public Limited Company ("Johnson Matthey"), which further refines the gold. Under the terms of the Johnson Matthey sales contract, the Company supplies Johnson Matthey, at Johnson Matthey's option, with gold assaying in excess of 75 percent gold and approximately 20 percent silver, monthly from January 1, 2002 to December 31, 2003. The price of the gold supplied under the contract is determined based on, for the gold content, the quotation for gold at the London Gold Market PM fixing in U.S. Dollars, and for the silver content, the quotation for silver at the London Silver Market spot fixing in U.S. Dollars, minus, in each case, certain minimum charges, as well as charges for customs clearance and treatment of the gold (which varies depending on its gold and silver content). The contract also provides that the Company may elect to have its material toll refined at Johnson Matthey's Royston U.K. works and returned to the Company's account for sale to third parties. Under the terms of the contract, the Company is responsible for delivering the gold to Johnson Matthey's designated flight at the Lima airport.

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

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

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

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

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

Mining concessions have an indefinite term, subject to payment of (a) an annual concession fee of US$3 per hectare claimed and (b) an annual fine if a minimum annual production of US$100 per hectare is not achieved before the expiration of the sixth year, following the year after the year in which the title of the concession is granted, of US$6 per hectare will be payable starting in the seventh year following the year after the year in which the title of the concession was granted until the year in which such minimum annual production is achieved; and if the failure to comply with the minimum annual production continues after the eleventh year following the year in which the title of the concession was granted, the penalty will increase to US$20 per hectare starting in the twelfth year counted since the year in which the title of the concession was granted. The fine may be avoided, however, by demonstrating investments in the mining rights during the previous year of amounts more than ten times greater than the fine to be paid. In order to calculate the production of and investment in each mining right, the titleholder may create an operating unit (Unidad Económica Administrativa) provided the mining rights are all within a radius of five kilometers. Failure to pay such concession fees or fines for two consecutive years will result in the loss of the mining right. Processing concessions have an indefinite term, subject to payment of a fee based on nominal capacity for the processing plant. No other payments or royalties are required by the Peruvian government for the Company to maintain mining and exploration property rights in full force and effect. As of 2002, the annual concession fee and the annual fine will be calculated pursuant to the provisions of Supreme Decree No. 010-2002-EM, effective since March 10, 2002. The Company paid approximately US$1.1 million, US$1.1 million and US$1.2 million in fees for mining rights for the years ended December 31, 2000, 2001 and 2002, respectively, approximately US$5,496, US$5,540 and US$4,687 in fees for processing concessions, respectively, and is current in the payment of all amounts due in respect of its mining rights and processing concessions.

As of May 31, 2003, the Company, directly and indirectly, through subsidiaries or in conjunction with joint venture partners, owns and administers approximately 688,663 hectares devoted to mineral exploration and mining operations. Mining rights related to the current operations are provisional permits or mining concessions. Almost all of the mining rights related to the current operations already are provisional permits or mining concessions. The mining rights and processing concessions are in full force and effect under applicable Peruvian laws. The Company believes that it is in compliance with all material terms and requirements applicable to the mining rights and processing concessions and that it is not subject to any condition, occurrence or event that would cause the revocation, cancellation, lapse, expiration or termination thereof, except that the Company may, from time to time, allow to lapse, revoke, cancel or terminate mining rights and processing concessions that are not material to the conduct of its business. The principal mining rights and processing concessions are (i) with respect to the Company's mines, new applications filed for mining concessions, provisional permits and mining concessions at Julcani, Uchucchacua, Orcopampa, Colquijirca, Ishihuinca, Antapite, Paula, Huallanca and Shila; and (ii) with respect to the Company's current exploration projects, new applications filed for mining concessions, the provisional permits and the mining concessions at the Tantahuatay project, the Ayacucho project, the Totoral project and the Huancavelica project. The principal processing concessions are the processing concessions of the concentrators at Julcani, Uchucchacua, Orcopampa, Colquijirca, Ishihuinca, Antapite, Paula and Shila and the processing plant Los Volcanes in Orcopampa.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Compañía de Minas Buenaventura S.A.A
Corporate Structure

Cedimin, wholly owned by the Company, is a mining and facilities holding company. At December 31, 2002, Cedimin held a 50 percent interest in Minera Shila, a 40 percent participation in Minas Conga, a 40 percent interest in Chaupiloma and an indirect 51 percent participation in Minera Paula 49 S.A.C. ("Minera Paula") held through Minera Shila. See "-The Company-History and Development" and "-S.M.R.L. Chaupiloma Dos de Cajamarca" below. See "-The Company-History and Development" for a description of the legal proceedings in the Peruvian courts concerning the ownership of certain shares of Cedimin originally held by BRGM. Through its direct ownership in Chaupiloma, Cedimin receives a portion of the royalty revenues paid by Yanacocha to Chaupiloma equal to such ownership interest.

As of January 2, 2003, Minera Shila S.A.C. merged into Cedimin. Due to Buenaventura's and Condesa's, Cedimin's shareholders, interests in Minera Shila prior to the merger, their interests in Cedimin increased from 0.0009 percent and 99.9991 percent, respectively, to 44.83 percent and 55.17 percent, respectively, after the merger.

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. The Company, Cedimin and NEM own a 20 percent interest, a 40 percent interest and a 40 percent interest, respectively, in Chaupiloma. The Company, directly and indirectly, through its interest in Cedimin, owns a 60 percent interest in Chaupiloma.

Conenhua is an electrical distribution company that provides a significant portion of the electrical needs of the Company through its transmission facilities. The Company owns 100 percent of Conenhua and manages its operations. Conenhua obtained the concession for power transmission in the Huancavelica area in 1983, enabling the Company to buy energy from Electro Perú and to transmit electric power to the Company's mining facilities through its own facilities. The provinces of Huancavelica, Angaraes, Acobamba and Castrovirreyna are now connected to the system. Conenhua also provides electric power to other mining companies in the area. In 2002, Conenhua sold 7.9 million kilowatt hours ("kWh") in Huancavelica. Revenues generated by Conenhua benefit the Company in the form of operational costs savings at the rate of US$0.11 per kWh regarding thermoelectric generation costs. Conenhua has become the operator of Paragsha II-Ucchuchacua, the power line which provides electricity to the Ucchuchacua mine and two other mines. In 2002, Conenhua provided 91.9 million kWh to those mines. In 2002, Conenhua provided 194.7 million kWh to Yanacocha. In 2002, Conenhua's revenues amounted to US$6.4 million.

In October 2001, Conenhua completed the construction of two transmission lines, one between Trujillo and Cajamarca and the other between Cajamarca Norte and La Pajuela, for which final concessions were granted by Supreme Resolution No. 165-2001-EM. In addition, Conenhua completed the construction of a substation in Cajamarca Norte, in order to provide electricity to Yanacocha, in October 2001. These projects, which required an investment of approximately US$17.5 million, has significantly reduced the cost of energy for Yanacocha. Also in 2001, Conenhua constructed a 4.5 kilometer electrical distribution line for Empresa Minera Iscaycruz's electrical distribution system in the industrial area of Antapite and a 9 kilometer transmission line between Huancarama and Manto to improve the supply of energy for Orcopampa. In 2002, Conenhua constructed the Ares Huancarama 25.5 kilometer transmission line, which includes a substation in Huancarama. Conenhua has increased the power of the Huancarama substation to 8 mega-volt ampere to meet electrical demands from production units at the Orcompampa, Shila and Paula mines. In addition, Conenhua installed a 2.5 mega-volt ampere transformer at the substation in El Palmar to increase the level of electric tension and efficiency of production at the Antapite mine.

On January 1, 2002, the Company transferred electrical energy generation activities available in the department of Huancavelica to Conenhua. As a result, Conenhua acquired the Huapa hydroelectric plant and is currently leasing the Tucsipampa and Ingenio hydroelectric plants. In 2002, these plants generated 18.1 million kWh.

Buenaventura Ingenieros S.A. ("BISA"), a wholly owned subsidiary of the Company, has provided mining sector geological, engineering, design and construction consulting services for the last 23 years. During this time, BISA has consulted in Peru, Chile, Argentina, Mexico and Ecuador on a range of projects, operations and expansions. In 1995, BISA created an environmental services group. 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 the Company and its affiliates. In 2000, 2001 and 2002, BISA participated in 155, 114 and 117 projects, respectively, for domestic and international mining industry customers in Latin America, including the preparation of Environmental Impact Studies and Environmental Adaptation Programs. In 2002, BISA's revenues amounted to US$4.6 million.

BISA has continuously upgraded the technology it requires to perform its services. In 2001, BISA successfully completed the design, supervision and construction of the Antapite mine. In 2002, BISA's principal engineering ventures focused on the construction of a number of projects for Yanacocha and the supervision of the Company's construction of the Patón tunnel at the Uchucchacua mine. In addition, BISA provided geological and project assistance to a number of other mining companies in 2002.

Coshuro, which began operations in December 1995, was created jointly by the Company and NEM to conduct gold mining exploration in the Yanacocha volcanic belt. Coshuro was 35 percent owned by the Company until December 20, 2000, on which date NEM transferred 10.9 percent of its interest in the Coshuro to the Company. As a result, the Company currently holds a 45.9 percent interest in Coshuro.

The Colquijirca mine is wholly owned by El Brocal. 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. In March 1999, the Company bought an additional 30.4 percent interest in Inversiones Colquijirca, thereby increasing its interest in Inversiones Colquijirca to 51.94 percent. In turn Inversiones Colquijirca holds 51 percent of El Brocal, which provided the Company with a 26.5 percent interest in El Brocal's mining properties. In April 1999, the Company consolidated Inversiones Colquijirca's financial statements, and thus El Brocal's financial statements, with those of the Company, effective March 1, 1999. Other unrelated mining investors hold the balance of the share capital of Inversiones Colquijirca. In July 1996, TCL, a Canadian mining company, acquired 25.5 percent of Inversiones Colquijirca from a group of Peruvian investors.

From December 31, 2001 to January 2002, the Company acquired shares in Inversiones Colquijirca, increasing its interest from 51.94 percent to 59.66 percent, in connection with Inversiones Colquijirca's capital increase. In January 2002, the Company sold 0.64 percent of its interest in Inversiones Colquijirca, decreasing its participation from 59.66 percent, as of January 2002, to 59.02 percent, as of December 31, 2002, and acquired a 2.25 percent interest in El Brocal on the Bolsa de Valores de Lima (Lima Stock Exchange), increasing its interest in El Brocal's mining properties to 32.83 percent. Additionally, in November 2002, the Company distributed stock dividends, which in the aggregate were equivalent to S/.2.8 million, in the form of El Brocal shares.

In January 2003, El Brocal conducted a US$1 million capital increase to finance the exploration of the Marcapunta deposit, reduction of the arsenic content and enhancement of the gold content of the deposit's copper resources. The Company participated in this capital share increase by exercising its and TCL's interest in El Brocal, through each of their interests in Inversiones Colquijirca, to invest approximately S/.1,500,000. As a result, the Company's interest in Inversiones Colquijirca increased from 59.02 percent to 59.90 percent.

The Company holds 10 percent of Ferrovías Central Andino S.A. ("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 will provide transportation for concentrates from El Brocal's mining operations at a lower cost.

The Company holds a 9.17 percent interest in Sociedad Minera Cerro Verde S.A., which owns the Cerro Verde copper deposit located approximately 1,100 kilometers southeast of Lima. The Peruvian government previously owned and operated the mine. In November 1993, the Cerro Verde operation was privatized. Cyprus Amax (now Phelps Dodge) bought 91.7 percent and, pursuant to Peruvian privatization laws, the employees of Cerro Verde purchased approximately 8.3 percent of the shares of Cerro Verde. Cyprus Amax paid US$35.44 million for its equity interest in Cerro Verde and made a US$485 million capital commitment to finance the development of the facilities. To date, total investments in Cerro Verde equal approximately to US$433.3 million. In 1997, Cyprus Amax estimated economic reserves of 70.2 metric tons with a copper grade of 0.532 percent in Cerro Negro, but because of the decline in copper prices at the end of 1997 decided to postpone development of the site indefinitely. Phelps Dodge is currently the operator and senior partner (82.5%) of Cerro Verde. In 2002, the mine produced 86,410 metric tons of copper cathodes, compared to 76,995 metric tons produced in 2001. It is estimated that Cerro Verde contains over 1.2 million metric tons of recoverable copper and over 28,661 hectares of mining concessions in its mining district. In 2002, Cerro Verde obtained ISO 14001 certification. In addition, positive results from a pre-feasibility study of the primary sulfide deposit were achieved and the study will continue in 2003.

Founded in Peru in 1992, Yanacocha is the largest gold producer in Latin America. Yanacocha produced 2,285,584 ounces of gold in 2002, its eighth full year of operations. Yanacocha's operations are located in the Andes mountains in Northern Peru in the area of Cajamarca, located approximately 600 kilometers north of Lima and 45 kilometers north of the City of Cajamarca at an altitude of 4,000 meters above sea level. As of December 31, 2002, Yanacocha's proven and probable reserves were estimated to be 32.6 million ounces of gold representing a 4.7 percent decrease over Yanacocha's proven and probable reserves, which were estimated to be 34.2 million ounces of gold as of December 31, 2001. The decrease in reserves of gold was mainly due to mining depletion. As of December 31, 2002, Yanacocha's non-reserve mineralized material of gold was 3.7 million ounces, representing a 9.8 percent decrease from Yanacocha's non-reserve mineralized material of gold of 4.1 million ounces as of December 31, 2001. Newmont Mining has not quoted silver reserves at Yanacocha for the last year due to recovery issues.

Yanacocha has the right to use mining rights with respect to 129,621 hectares of land, approximately 10,340 of which are being used in Yanacocha's current mining operations and the remainder of which are being explored by Yanacocha. Chaupiloma holds the mining rights with respect to these hectares and has assigned the mining rights related to 129,621 hectares to Yanacocha, covered by 171 mining concessions and four provisional permits. See "-Mining and Processing Concessions". Yanacocha has acquired or is in the process of acquiring the surface rights with respect to 17,201 hectares of surface land, including the 6,671 hectares currently used in its mining operations, and has obtained beneficial easements with respect to certain surface land above the mining rights currently assigned to it as well as certain other surrounding areas.

At December 31, 2002, Yanacocha operated five open-pit mines: Carachugo, Maqui Maqui, Cerro Yanacocha, San José and La Quinua. Cerro Yanacocha began production in the last quarter of 1997 and is the first of a number of mines that Yanacocha anticipates developing in connection with the Cerro Yanacocha deposit complex, which Yanacocha's management believes may contain significant gold mineralization. See "-Exploration" for a description of the Cerro Yanacocha deposit complex. In 1997, Yanacocha discovered a colluvial gold deposit at La Quinua which indicates that the Yanacocha mining district may contain other colluvial deposits. During 1998, Yanacocha discovered a deposit of an estimated 660,000 ounces of gold at Cerro Negro. In 1999, an epithermal deposit at Cerro Quilish was discovered, which contains an estimated 3.1 million ounces of gold. In 2000, one drill hole at Corimayo was the most successful in Yanacocha history, resulting in 1,400 feet of 0.1 ounce of gold per ton with one segment of 143 feet showing 0.43 ounce per ton material. Significant sulfide materialization, both copper and gold, also was discovered at Cerro Yanacocha and Chaquicocha. Activities in 2001 and 2002 resulted in the identification of a continuous, high-grade zone at Corimayo, which can be traced for at least 600 meters in a north-south direction and contains a significant volume of oxide material with grades of 5 to 20 grams per metric ton common through this zone. In October 2001, La Quinua, a 272-hectare gold deposit with a leach pad located at La Pajuela, started operations. In 2002 a new high-grade zone was discovered southeast of known Corimayo mineralization, with an initial intercept of 144 feet at 0.52 ounce per ton. In 2003, exploration efforts will focus on the further investigation of the sulfide mineralization in order to determine its extent and to evaluate processing options. In 2003, exploration efforts will focus on the further investigation of the sulfide mineralization in order to determine its extent and to evaluate processing options.

In 1994, its first full year of production, Yanacocha produced 304,552 ounces of gold, 551,965 ounces in 1995, 811,426 ounces in 1996, 1,052,806 ounces in 1997, 1,335,754 ounces in 1998, 1,655,830 ounces in 1999, 1,795,398 ounces in 2000, 1,902,489 ounces in 2001 and 2,285,584 ounces in 2002. Yanacocha expects production to increase by 17.6 percent from the 2002 production level to 2,688,000 ounces in 2003. Yanacocha believes that it was one of the world's lowest cash cost gold producers in 2002, with a cash cost per ounce of gold sold of US$134. Yanacocha's cash cost per ounce of gold sold was US$123 in 2001, US$96 in 2000, US$111 in 1999, US$104 in 1998, US$95 in 1997, US$107 in 1996 and US$119 in 1995.

Yanacocha expects production of silver in 2003 to remain at approximately the same level as the 2002 production level of 2.3 million ounces. Yanacocha reduces the cash cost of gold with sales of silver, which is considered a by-product. Silver production was 24,467 ounces in 1993, Yanacocha's first full year of production, 97,349 ounces in 1994, 180,619 ounces in 1995, 182,879 ounces in 1996, 163,366 ounces in 1997, 457,183 ounces in 1998, 826,120 ounces in 1999, 1,536,587 ounces in 2000, 1,466,172 ounces in 2001 and 1,921,670 ounces in 2002.

Yanacocha is owned 51.35 percent by Newmont Mining, through its wholly owned subsidiary Newmont Second, 43.65 percent by the Company through its 100 percent owned subsidiary Condesa, and 5 percent by IFC. Yanacocha is managed by NEM. See "-Management of Yanacocha-General Manager/Management Agreement". Since 1992, aggregate capital contributions of US$2.3 million have been made by Condesa, Newmont Second and IFC to Yanacocha. No dividends were paid by Yanacocha during its development years, 1992 through 1994. In 1995, Yanacocha paid an aggregate amount of US$61.0 million in dividends, of which US$22.3 million were in respect of 1994 earnings and US$38.7 were in respect of 1995 earnings. In 1996, Yanacocha paid US$78.0 million in dividends: US$37.6 million in respect of 1995 earnings and US$40.4 million in respect of 1996 earnings. In 1997, Yanacocha paid an aggregate amount of US$115.3 million in dividends, of which US$40.0 million were in respect of 1997 earnings and US$75.3 million were in respect of 1996 earnings. In 1998, Yanacocha paid an aggregate amount of US$73.2 million in dividends in respect of 1997 earnings. In 1999, Yanacocha paid an aggregate amount of US$80 million in dividends in respect of 1999 earnings. No dividends in respect of 1998 earnings were distributed by Yanacocha. Instead, cash that would have been paid was used by Yanacocha for property, plant and equipment in a US$122 million reinvestment program. In 2000, Yanacocha paid an aggregate amount of US$60 million in dividends in respect of 2000 earnings and increased the reinvestment program by US$71 million. The reinvestment program totaled US$193 million at December 31, 2000, which amount was capitalized during 2001. In 2001, Yanacocha paid an aggregate amount of US$10 million in dividends in respect of 2000 earnings and elected to reinvest US$80 million from 2001 profits based on a new reinvestment program for the years 2001 to 2004. In December 2001, the MEM approved the 1998 reinvestment program (increased in 1999) for US$206.5 million. As a result, an additional US$13.5 million was capitalized. In 2002, Yanacocha paid an aggregate amount of US$50.7 million in dividends in respect of 2001 earnings and elected to reinvest US$80 million from 2002 profits.

On October 31, 1999, pursuant to a public deed, Yanacocha changed its legal structure from a corporation to a partnership, changing its name from "Minera Yanacocha S.A." to "Minera Yanacocha S.R.L." As a result, Yanacocha (i) cannot have more than 20 partners; (ii) its capital stock is represented in participations; (iii) is not required to maintain a legal reserve (See Note 10 to Yanacocha Financial Statements); and (iv) will not receive a different income tax treatment under Peruvian law than it did as a corporation.

In October 2000, a long standing dispute over Yanacocha shares involving the Company, Newmont Mining and their former partners in Yanacocha, BRGM and Normandy, was settled. In the settlement BRGM, Normandy and their related entities agreed to desist from continuing all pending litigation and arbitration claims against the Company, Newmont Mining and the government of Peru and not to initiate new claims. See "-The Company-History and Development". The resolution of this matter permitted the Company and Newmont Mining to unitize their properties in Northern Peru into Yanacocha including, among other properties, those owned by Minas Conga and the China Linda lime plant.

Yanacocha's capital expenditures from its formation in 1992 through 2002 have related principally to the development of the Carachugo, Maqui Maqui, San José, Cerro Yanacocha and La Quinua mining operations, the construction of the two plants at Carachugo and Yanacocha that include a leach solution processing facility and a smelter at each plant, the construction of two carbon column plants, at Cerro Yanacocha and La Quinua, the acquisition of both new and used mining equipment, and the expansion of the leach pads for the Carachugo and Maqui Maqui mining operations, and for the Cerro Yanacocha and La Quinua mining sites. Yanacocha's capital expenditures from its formation through December 31, 2002 totaled approximately US$1,208.8 million, including capital expenditures of US$279.2 million in 2000, US$292.7 million in 2001 and US$145.8 million in 2002. Capital expenditures in 2002 were lower than in 2001 mainly because expenditures on pad expansions at La Quinua (Stages 2 & 3), Carachugo and Yanacocha, were smaller than expenditures on construction during 2001, which included the completion of La Quinua Stage 1 for US$92 million, the expansions of pads at Yanacocha (Stage 4) and Carachugo (Stage 9) for US$41.7 million, and the acquisition of mine equipment for US$74 million, which supported the mine plan in 2002. See "-The Company-History and Development".

Yanacocha anticipates that its capital expenditures for 2003 will be approximately US$259 million (including the capitalized exploration costs referred to above), which Yanacocha plans to use primarily in the completion of pad expansions at La Quinua (Stage 2) and Yanacocha (Stage 5), the construction of carbon column facilities at La Quinua and Yanacocha as part of the inventory reduction plan, the pad expansion at La Quinua (stage 4) and Yanacocha (stage 6), the continuation of the site wide management plan to control sediment and chemistry, and the purchase of additional mine equipment. Yanacocha expects that it will meet its working capital, capital expenditure and exploration and development requirements for the next several years from internally-generated funds, cash on hand, borrowings from banks and financial institutions and the remaining proceeds from a May 1997 US$100 million asset securitization financing transaction backed by Yanacocha's sales receivables (the "Yanacocha Receivables Securitization"). 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 development requirements, or that external funding will be available for such purpose 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-Exploration and Development Costs; Capital Expenditures".

Yanacocha currently operates five open-pit mines (Carachugo, Maqui Maqui, San José, Cerro Yanacocha and La Quinua); a 190 million ton-capacity leach pad at the Carachugo mining site; a 60 million ton-capacity leach pad at the Maqui Maqui mining site; a 390 million ton-capacity leach pad at the Cerro Yanacocha mining site; a 450 million ton-capacity leach pad at the La Quinua mining site; two pregnant solution ponds at the base of each leach pad; two plants at Carachugo and Yanacocha that include a leach solution processing facility at each plant and a smelter at the Carachugo plant; and a water treatment plant. The Carachugo, Maqui Maqui, San José and Cerro Yanacocha mining operations began operations in August 1993, October 1994, January 1996 and the last quarter of 1997, respectively. A fifth open-pit mine, La Quinua, started operations in October 2001. The Carachugo and San José mining operations are located within two kilometers of each other and share the same leach pad and pregnant solution pond. The same processing plant and water treatment plant are utilized by the Carachugo and San José mining operations. The Maqui Maqui mining operation, which is four kilometers from the Carachugo and San José mining operations, has its own leach pad and pregnant solution pond but shares the processing plant and the water treatment plant with the Carachugo and San José mining operations. The Cerro Yanacocha mining operation has its own leach pad, pregnant solution pond and processing plant, but shares the smelter with the Carachugo mining operation. The La Quinua mining operation has its own leach pad and pregnant solution ponds, but shares the processing plant with Yanacocha Norte.

At Carachugo, Maqui Maqui, San José and Cerro Yanacocha, ore is mined by a sequence of drilling, blasting, loading and hauling to the leach pads. The mined ore is not crushed or pre-treated because the ore is porous and readily percolates barren solution and is in an oxide rather than sulfide material. Therefore, ore is transported directly from the open-pit mines as run-of-mine ore to the Carachugo leach pad, in the case of the Carachugo and San José mining operations, to the Maqui Maqui leach pad, in the case of the Maqui Maqui mining operation, and to the Cerro Yanacocha leach pad in the case of Cerro Yanacocha mining operation. This allows for relatively rapid and inexpensive gold production because crushing or additional oxidation processing costs are not incurred. However, at La Quinua, where the ore contains a high amount of clays and requires the addition of cement to insure proper percolation, a belt agglomeration process has been included. The rest of the mining process at La Quinua is the same as that at Carachugo, Maqui Maqui, San José and Cerro Yanacocha. At all five mining operations, waste is dumped in nearby specially conditioned areas. Ore is heap-leached and the resulting pregnant solution is collected in each leach pad's pregnant solution pond. Pregnant solution is pumped to the corresponding processing plant located near the Carachugo or Yanacocha leach pad. In order to enhance processing capacity, a carbon column plant has been built at La Quinua; pregnant solution is enriched at this stage and then pumped to Yanacocha's processing plant. At the processing plant, the gold is extracted using the Merrill-Crowe process and the resulting gold concentrate is then smelted, producing doré bars currently assaying approximately 70 percent gold and 30 percent silver. In the case of Cerro Yanacocha the wet precipitate is delivered to be smelted in Carachugo's facility, and doré bars assay approximately 40 percent gold and 60 percent silver. The doré bars are transported from the processing plant by an outside security firm and refined outside of Peru. See "-Transportation and Refining". The excess barren solution from the processing plant is pumped back to the Cerro Yanacocha, Maqui Maqui and Carachugo leach pads for use in further heap-leaching. The leaching process is generally a closed system; however, during periods of high rainfall, additional water enters the process. This excess water is treated at Yanacocha's water treatment plant, which has been designed to discharge water that meets drinking water standards 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, Permitting and Environmental Matters".

Electric power for Yanacocha's operations is currently provided by a local power company. Yanacocha can also rely on twenty diesel generators it owns which have an aggregate power generation capacity of 16,000 kilowatts ("kw"). 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 kilovolt ("kV") power line originating in Trujillo, which is owned by Buenaventura and has the capacity to provide up to 150 megawatts ("MW") to Yanacocha. In addition, a 60 kV power line routed through Cajamarca, permits Yanacocha to receive up to 15 MW. This power line is used only in emergencies. See "Item 5. Operating and Financial Review and Prospects".

Water for Yanacocha's operations comes from several lakes and wells. All excess water used by Yanacocha undergoes water treatment at the water treatment plant described above. Set forth below are certain unaudited operating data for the years shown for each of Yanacocha's mining operations that were then in operation:

Exploration expenditures amounted to approximately US$11.2 million, US$9.5 million, US$10.3 million, US$12.0 million and US$11.1 million in 1998, 1999, 2000, 2001 and 2002, respectively. These expenditures have resulted in the identification of several deposits, which have been advanced to reserves and non-reserve mineralized material, including Carachugo, Maqui Maqui, San José, Cerro Yanacocha, La Quinua, Cerro Negro, Cerro Quilish, Chaquicocha, El Tapado, and Corimayo. Exploration and development continue at Corimayo to define the limits of this oxide mineralization system and to determine the extent of high-grade mineralization in this body. Oxide mineralization has also been identified on the surface and in drill holes at Quecher Norte where development and exploration activities will advance this new discovery. Lastly, exploration funds have been used to identify deep sulfide mineralization beneath the oxide deposits at Cerro Yanacocha and Chaquicocha. This material contains both gold and copper, and exploration efforts will continue in order to determine the extent of this material and to evaluate various processing options.

Yanacocha's exploration and development expenditures include all of the costs associated with exploration activities such as drilling, geologists and metallurgical testing. Yanacocha prepares a budget for each year and allocates an amount for exploration and development activities. In light of the nature of mining exploration and in order to maintain flexibility to take advantage of opportunities that may arise, Yanacocha does not allocate the budgeted amount by property or project. Rather, Yanacocha allocates the budgeted amount over the course of the year to each project based on Yanacocha's needs and its geologists' periodic evaluations of the progress of each project and its potential for development.

Yanacocha intends to continue to develop the Cerro Yanacocha, La Quinua, Chaquicocha, Cerro Negro, Corimayo, El Tapado and Quecher Norte deposits over the next several years, while continuing to explore the remainder of the Yanacocha district along with the adjacent Minas Conga and Solitario holdings. In addition, Yanacocha will continue the exploration of the deeper gold and copper mineralization in the Cerro Yanacocha complex and beneath other deposits. For 2003, Yanacocha has estimated US$15.9 million for exploration and development which will be expensed, and an additional US$3.9 million that will be capitalized and that relates to development activities for ore bodies that are currently classified as reserves. This budgeted amount will be expended mainly on the Corimayo, Cerro Yanacocha, La Quinua, and Cerro Negro deposits along with an extensive oxide exploration program through the Yanacocha district. In addition, funds have been allocated to continue the exploration and evaluation of the deep sulfide mineralization at Cerro Yanacocha and Chaquicocha.

In 1997, Yanacocha discovered an important colluvial gold deposit at La Quinua, which indicated that the Yanacocha mining district may contain other colluvial deposits. During 1998, Yanacocha discovered a deposit of an estimated 667,000 ounces of gold at Cerro Negro. In 1999, an epithermal deposit of an estimated 3.1 million ounces was discovered at Cerro Quilish. In 2000, one drill hole at Corimayo was the most successful in Yanacocha's history, resulting in 1,400 feet of 0.1 ounce of gold per ton with one segment of 143 feet at 0.43 ounce per ton material. Significant sulfide materialization, both copper and gold, also was discovered at Cerro Yanacocha and Chaquicocha. Activities in 2001 and 2002 resulted in the identification of a continuous, high-grade zone at Corimayo, which can be traced for at least 600 meters in a north-south direction and contains a significant volume of oxide material with grades of 5 to 20 grams per metric ton common through this zone. At the end of 2001, Corimayo contained 2.94 million ounces of reserve (1.22 million ounces) and non-reserve (oxide) material. In 2002 a new high-grade zone was discovered southeast of known Corimayo mineralization, with an initial intercept of 144 feet at 0.52 ounce per ton. In 2003, exploration efforts will focus on the further investigation of the sulfide mineralization in order to determine its extent and to evaluate processing options.

The doré bars produced at Yanacocha's operations in Peru are transported to refineries outside of Peru (currently, in Switzerland and England) using an outside security firm, Securicor International Services USA Inc. ("Securicor"), which in turn subcontracts the work in Peru to a local security firm, Hermes Transportes Blindados S.A. Under the terms of the transportation contract entered into between Yanacocha and Securicor, the risk of loss with respect to the doré bars produced by Yanacocha transfers from Yanacocha to Securicor when the doors of the security transport vehicle at Yanacocha's mine site are closed and the doré bars have been signed for by a representative of Securicor's transporting company. Securicor is responsible for transporting, storing, guarding and delivering the doré bars from Yanacocha's mine site to a strong-room vault at the Kloten-Zurich Airport in Switzerland or at the Johnson Matthey refinery in Royston, England. Liability for any damage to or loss of doré shipments while under Securicor's custody at the mine site or in transport to the delivery point is assumed by Securicor, up to a maximum of US$100 million per shipment. Accordingly, Yanacocha limits its shipments to US$100 million in value, with the average shipment being US$9 million in value.

Upon delivery by Securicor to the refiner, Johnson Matthey, or the refiner's designee at the Kloten-Zurich Airport, Commerzbank SA, the refiner assumes all risk of loss and damage to the doré bars until Yanacocha is credited with the appropriate gold amounts within the time frame specified in each refining contract. Prior to assaying, the doré bars are transported to the refinery where they are melted, weighed and sampled in the presence of a representative of Alfred Knight Ltd., a professional assayer retained by Yanacocha. Each of the refiner and Alfred Knight, on behalf of Yanacocha, takes samples from the melted doré to assay. Alfred Knight independently assays Yanacocha's sample at its laboratory. The refiner and Alfred Knight then exchange assay results and use the arithmetic mean of the results for a settlement assay. If the results of Alfred Knight's and the refiner's assays differ by more than a certain amount, then a mutually agreed upon third party assayer will determine the final result assay.

Yanacocha currently has refining contracts with Commerzbank and Johnson Matthey to refine doré bars produced at Yanacocha's processing facility. Under the terms of the contracts, the gold is toll refined and returned to Yanacocha's account for sale to third parties. Yanacocha ships doré bars for refining to one of the refineries owned by Commerzbank in Switzerland (through its affiliate Argor-Heraeus S.A.) and to Johnson Matthey's refinery in England. The output from such refineries is London Good Delivery gold and silver. Yanacocha is charged a predetermined fee for the refinement. The refining contracts are entered into each year for a one year term. The current refining contracts expire on October 31, 2003. Yanacocha enters into one-year refining contracts because management believes that in the current increasingly competitive marketplace, it will be able to negotiate better pricing in each future year. Further, if marketplace fundamentals shift, Yanacocha is confident that it can readily secure longer-term refining arrangements.

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

Delivery is made once a week and payments are collected the day of confirmation. The payment price for the gold consists of (i) the market price at the confirmation of the sale and (ii) 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.

At December 31, 2002, Yanacocha had 1,810 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 eight percent of the annual pre-tax profits of their employers (the "Employee Profit Sharing Amount"), four percent of such profits to be distributed based on the number of days each employee worked during the preceding year and the remaining four percent of such profits to be distributed among the employees based on their relative salary levels. 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 Yanacocha to the Fondo Nacional de Capacitación Laboral de Promoción del Empleo (FONCAL PROEM), a public fund to be established to promote employment and employee training.

Under Peruvian law, Yanacocha may dismiss workers for cause by following certain formal procedures. Yanacocha may dismiss a worker without cause, provided that Yanacocha pays 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. Recent 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 Yanacocha's 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 one month's salary for each full year worked plus the pro rata portion for any uncompleted year. Pursuant to a modification in January 2001 of the Peruvian labor laws enacted in 1991, Yanacocha's obligation to deposit funds for severance payments in a bank account, for the benefit of each employee, in both May and November of each year has been temporarily replaced with an obligation to deposit a monthly payment equal to 8.33 percent of the each employee's salary. The term of this modification has been extended until November 2004.

Yanacocha's employees receive the benefit of one of two types of pension arrangements. All workers can choose to enroll in the system of the Oficina de Normalización Previsional (the Public Pension System, or "ONP") or in a privately-managed system of individual contribution pension funds ("AFPs"). Yanacocha is required to withhold from the salary of each employee enrolled in the ONP system 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 between 11.5 percent and 12 percent of such employee's salary, and pay such amount to the respective AFP. Yanacocha has no liability for the performance of these pension plans.

In addition, Yanacocha pays to ES SALUD (the new social security agency) nine percent of its total payroll for general health services for all employees. Prior to May 1997, Yanacocha was required to pay to ES SALUD one percent of its payroll for blue collar employees for employment-related illness and accidents. In addition, Law 26790 also requires Yanacocha to provide private insurance representing an average payment equal to 1.55 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. Yanacocha also must pay a total of 2 percent of its total payroll for the Extraordinary Solidarity Tax.

Yanacocha has entered into arrangements with independent contractors who are responsible for the security services and staffing for several operational and administrative areas. At December 31, 2002, independent contractors employed an average of 4,200 persons who worked at Yanacocha's operations.

Yanacocha has experienced no strikes, has no labor unions and has not entered into any collective bargaining agreements since the beginning of its operations. However, there can be no assurance that this situation will not change, and it is possible that Yanacocha may have labor unions in the future. Since commencement of operations, Yanacocha's rate of turnover has been less than ten percent per year. Yanacocha considers its relations with its employees to be good.

Since its formation,Yanacocha has been attentive to its relationship with the community in the fields of social relations and development.

During 2002, the External Affairs Management, an internal department within Yanacocha, through its Community Relations and Rural Development Management Offices and its Institutional Relations and Urban Development Management Office, established social development programs that address 65 rural communities and the city of Cajamarca. To implement these programs and their projects, Yanacocha developed active relationships with more than 40 domestic and foreign institutions and organizations, including FONDOEMPLEO, Nestlé Perú, Antares, Adaminya, Asodel, Foncreagro, Cenfotur, Aprec, Asociación Yanacocha, Pro Naturaleza, Pronamachcs and Pronaa, among others, and thereby instituted programs in an amount exceeding US$7 million.

As of 1993, Yanacocha has invested nearly US$25 million (including the total investment made by Yanacocha in social development programs) in educational, health, social infrastructure (schools and medical posts) and productive infrastructure projects (rural electrification, roads, transformation plants, business promotion programs, local tourist programs, livestock and agricultural assistance programs).

During 2002, "Fondo Cajamarca Sostenible", a civil association to which Yanacocha intends to provide its support, was created as a result of Yanacocha's and other local institutions' efforts to encourage local development.

Yanacocha employs a security force of over 248 persons with respect to its mining operations, including the processing plant, 14 persons with respect to its headquarters in Lima and 8 persons with respect to the road to the coast. No terrorist incidents have been recorded against Yanacocha's personnel or property at its mining operations or at its headquarters in Lima.

All of the mining concessions and provisional permits that have been assigned by Chaupiloma to Yanacocha were claimed prior to 1991. Chaupiloma is owned 40 percent by NEM and 60 percent by the Company directly and through its affiliate Cedimin.

Yanacocha's exploration activities encompass 129,621 hectares of land. Chaupiloma holds the mining rights with respect to these hectares and has assigned the mining rights relating to 129,621 hectares to Yanacocha, which are covered by 171 mining concessions and four provisional permits. Although Chaupiloma has not assigned the mining rights to the remaining hectares to Yanacocha, Chaupiloma permits Yanacocha to explore these hectares. Currently, five of the mining concessions assigned to Yanacocha are being utilized for mining operations. They are Chaupiloma Tres, Chaupiloma Cuatro, Chaupiloma Cinco, Chaupiloma Seis and Chaupiloma Doce. The Carachugo mine and the San José mine are located on the mining concessions of Chaupiloma Tres, Chaupiloma Cuatro and Chaupiloma Cinco; the Maqui Maqui mine is located on the mining concessions of Chaupiloma Seis and Chaupiloma Doce; the Cerro Yanacocha mine is located on the Chaupiloma Uno and Chaupiloma Dos mining concessions and the La Quinua mine is located on the Chaupiloma Dos, Chaupiloma Once, Chaupiloma Veintiuno, Chaupiloma Cuarentidos, Chaupiloma Cincuenticuatro, Mirtha III, La Providencia and El Sol No. 4 mining concessions. Five mining concessions have been assigned to Yanacocha by Chaupiloma pursuant to two assignments of mining rights, both with an initial term of 20 years expiring in 2012, renewable upon Yanacocha's request for an additional 20-year term. Yanacocha pays a royalty to Chaupiloma for the right to mine the five mining concessions of 3 percent of the net sale value of all ore extracted from these mining concessions after deducting refinery and transport costs. For 2002, Yanacocha paid royalties of US$21.6 million to Chaupiloma. The other mining concessions and provisional permits have been assigned to Yanacocha by Chaupiloma on comparable terms.

According to Peruvian mining law, the assignee in an assignment of mining concessions assumes all the duties and rights of the holder of the concession. Management of Yanacocha believes that the mining concessions assigned to Yanacocha are in full force and effect under applicable Peruvian laws and that Yanacocha is in compliance with all material terms and requirements applicable to the mining concessions and is not experiencing any condition, occurrence or event known to it that would cause the revocation, cancellation, lapsing, 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.

Yanacocha has been actively pursuing the acquisition of the land surface or obtaining easements relating to land positions containing prospective geological exploration targets, deposits that can be 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 17,201 hectares of the surface land covering its Carachugo, Maqui Maqui, San José and Cerro Yanacocha mining operations and the La Quinua, Cerro Negro and Cerro Quilish deposits. In addition, Yanacocha has acquired 3,200 hectares of surface rights with respect to the Minas Conga deposits. See "-The Company-History and Development".

In addition, Yanacocha is subject to the Urban Mining Concessions Law which was released on
December 19, 1998. See "-The Company-Regulatory Framework-Mining and Processing Concessions".

Yanacocha has a processing concession from MEM for its processing plant. The processing concession has an indefinite term, subject to the payment of a fee based on nominal capacity for the processing plant. Yanacocha paid approximately US$122,000 in fees for the processing concession for the year ended December 31, 2002 and is current in the payment of all amounts due in respect of its processing concession.

No other payments or royalties are required by the Peruvian government for Yanacocha to maintain in full force and effect its rights to the properties it is mining or exploring.

Yanacocha is subject to the 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 "-The Company-Regulatory Framework-Mining and Processing Concessions" for a general description of Peruvian regulations of mining companies. 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 Yanacocha's plans and operations for the review and approval of various Peruvian government entities, including the MEM, the Ministry of Agriculture and the Ministry of Health. Yanacocha is required to file and obtain approval of an EIS for each of its mining operations before being authorized to operate such mine. EISs for the Carachugo, Maqui Maqui, San José, Cerro Yanacocha and La Quinua mining operations have been approved. Yanacocha has submitted certain supplemental EISs pursuant to the requirement to submit an EIS each time a project's production is expanded by more than 50 percent. All supplemental EISs submitted by Yanacocha to MEM to date have been approved. After an EIS is approved and the mine is placed in operation, a governmental-accredited environmental auditing firm is required to audit the operation two times per year. Each of the Carachugo, Maqui Maqui, San José, Cerro Yanacocha and La Quinua mining operations has been and continues to be audited as required and no material pollution problems have been identified.

Yanacocha's corporate policy is to operate in compliance with all material 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. Additionally, Yanacocha has agreed to several environmental covenants in loans with the IFC that require Yanacocha to comply with relevant World Bank environmental guidelines and World Bank occupational health and safety guidelines, and such covenants are monitored annually by IFC. See "-Trust Certificates and IFC Loan Documents". Yanacocha charges to income US$3.00 per ounce of gold sold, which represents the cost of the eventual closing of its mines appearing on the balance sheet under Reclamation Liability.

The Company has been informed by Yanacocha that Yanacocha's management believes that its operations are conducted in accordance with all material applicable laws and regulations. All future exploration and development projects require or will require a variety of permits. Although procedures for permit applications and approvals are customarily faster in Peru than in the United States, permitting procedures are still complex, time-consuming and subject to potential regulatory delay.

The Company has also been informed by Yanacocha that Yanacocha's management does not believe that existing permitting requirements or other environmental protection laws and regulations applicable to Yanacocha will have a material adverse effect on its business, financial condition or results of operations. However, Yanacocha's management recognizes the possibility that additional, more stringent environmental laws and regulations may be enacted in Peru, which could result in significant additional expense, capital expenditures, restrictions or delays associated with the development and operation of Yanacocha's properties. Neither the Company nor Yanacocha can predict whether Yanacocha will be able to renew its existing permits or whether material changes in existing permit conditions will be imposed. Non-renewal of existing permits or the imposition of additional conditions with respect to Yanacocha could have a material adverse effect on Yanacocha's financial condition or results of operations.

The Company has been informed by Yanacocha that Yanacocha's management believes that it is in compliance with all material regulations and international standards concerning safety.

In June 2000, a transport contractor of Yanacocha spilled approximately 11 liters of mercury near the town of Choropampa, Peru, which is located 53 miles southwest of the mine. Mercury is a by-product of gold mining and was sold to a Lima firm for use in medical instrumentation and industrial applications. A comprehensive health and environmental remediation program was undertaken by Yanacocha. In August 2000, Yanacocha paid under protest a fine of 1,740,000 Nuevos Soles (approximately $0.5 million) to the Peruvian Government. Yanacocha entered into settlement agreements with a number of individuals impacted by the incident. In addition, it has entered into agreements with three of the communities impacted by this incident to provide a variety of public works as compensation for the disruption and inconvenience caused by the incident.

On September 10, 2001, Yanacocha and other defendants were named in a lawsuit by over 900 Peruvian citizens in Denver District Court of the State of Colorado. This action seeks compensatory and punitive damages based on claims associated with the mercury spill incident. This action was dismissed by the Denver District Court on May 22, 2002 and this ruling was reaffirmed by the Court on July 30, 2002. Plaintiffs' attorneys have appealed this dismissal.

In July 2002, other lawsuits were instituted against Yanacocha, various wholly owned subsidiaries of Newmont Mining Corporation and other defendants in the Denver District Court for the State of Colorado and in the United States District Court for the District of Colorado, by approximately 140 additional Peruvian plaintiffs and by the same plaintiffs who filed the September 2001 lawsuit. These actions also seek compensatory and punitive damages based on claims associated with the mercury spill incident. All but one of these lawsuits has been stayed pending the outcome of the appeal in the September 2001 matter. A motion to stay the one remaining lawsuit is currently pending before the Court.

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 previously have entered into settlement agreements with Yanacocha.

Yanacocha cannot predict the final outcome of any of the above-described lawsuits but considers that any adverse decision will not have a material effect on its financial condition or results of operations.

As of December 31, 2002, Yanacocha has expensed approximately $6.8 million, net of insurance refunds, for public works, remediation efforts, personal compensation and the fine. Yanacocha cannot predict the likelihood of any additional expenditure related to this matter.

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, 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. During 2002 and 2001, Yanacocha received US$6.3 million and US$3.1 million, respectively, from its insurance program in connection with the mercury spill and expects to receive further insurance payments to cover most of the remediation expenses Yanacocha incurred as a result of the accident.

In 1997, Yanacocha issued debt through the sale of US$100 million Series A Trust Certificates to various institutional investors. The proceeds from the trust certificates were primarily used to finance the Cerro Yanacocha project. At December 31, 2002, 2001 and 2000, US$44 million, US$64 million and US$78 million, respectively, was outstanding under this financing. Interest on the trust certificates is fixed at 8.4 percent and repayments are required quarterly through June 2004. Trust certificates are secured by certain of Yanacocha's assets and are also secured by future gold sales through a trust agreement with The Bank of New York.

In order to finance the La Quinua project, Yanacocha obtained a credit facility from IFC. Pursuant to an agreement dated December 22, 1999, IFC agreed to extend to Yanacocha a loan in the amount of up to US$20 million (Tranche A) to be repaid no later than December 15, 2009, and a second loan in the amount of up to US$80 million (Tranche B) to be repaid no later than December 15, 2006. As of December 31, 2002, 2001 and 2000, US$50 million, US$100 million and US$45 million, respectively, was outstanding under this credit facility. This credit facility is available on a revolving basis and contains financial covenants similar to the previous IFC loans. These covenants consist of affirmative and negative covenants, including, but not limited to the restriction on paying dividends if after giving effect to such payment (a) the current liquidity ratio is less than 1.2:1, (b) the debt to equity ratio is no greater than 70:30, (c) the trailing four quarters debt service coverage ratio is less than 1.3:1, or (d) the reserve coverage ratio is less than 2.0:1. During the revolving period, an interest rate of LIBOR plus 2.375 percent for Tranche A and LIBOR plus 2 percent for Tranche B, will be paid quarterly.

Yanacocha has a US$40 million line of credit with Banco de Crédito del Perú, which expires in July 2004 and has an interest rate of LIBOR plus 0.75 percent until June 2003 and LIBOR plus 2 percent from and after July 2003. At December 31, 2002, 2001 and 2000, the outstanding amount under this line of credit was US$6 million, US$13 million and US$8 million, respectively.

Yanacocha also has a US$20 million line of credit with BBVA Banco Continental, which expires in June 2003 and has an interest rate of LIBOR plus 0.8 percent. At December 31, 2002, no amount had been borrowed under this line of credit.

All Yanacocha debt is secured by certain restricted funds and by substantially all of Yanacocha's property, plant and equipment.

Yanacocha is governed by the Ley General de Sociedades Peruana (the "Peruvian Companies Law") and the estatutos (the combined articles of incorporation and by-laws) of Yanacocha (the "Yanacocha By-Laws").

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 development of a project in the area owned by Yanacocha (other than the Carachugo mine and processing facilities).

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, 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.

Choropampa. On September 10, 2001, over 900 Peruvian citizens initiated a lawsuit in the Denver District Court for the State of Colorado against Yanacocha and other defendants in connection with the mercury spill near the town of Choropampa, which is described in "Regulation, Permitting and Environmental Matters" above. The action seeks compensatory and punitive damages on the basis of various claims arising from the accident. This action was dismissed by the Denver District Court on May 22, 2002, and this ruling was reaffirmed by the Court on July 30, 2002. Plaintiffs' attorneys have appealed this dismissal.

In July 2002, Yanacocha and other defendants were served with other lawsuits in the Denver District Court for the State of Colorado and in the United States District Court for the District of Colorado, by approximately 140 additional Peruvian plaintiffs and by the same plaintiffs who filed the September 2001 lawsuit. These actions also seek compensatory and punitive damages based on claims associated with the mercury spill incident near the town of Choropampa. All but one of these lawsuits has been stayed pending the outcome of the appeal in the September 2001 matter. A motion to stay the one remaining lawsuit is currently pending before the Denver District Court.

Additional lawsuits relating to the mercury spill 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 previously have entered into settlement agreements with Yanacocha.

Neither the Company nor Yanacocha can reasonably predict the final outcome of any of the above-described lawsuits but each considers that any adverse decision will not have a material effect on its financial condition.

Cerro Quilish. Yanacocha is involved in a dispute with the Provincial Municipality of Cajamarca regarding the authority of that governmental body to regulate the development of the Cerro Quilish ore deposit (which contains reserves of 1.9 million equity ounces). Cerro Quilish is located in the same watershed in which the City of Cajamarca is located. The Municipality has enacted an ordinance declaring Cerro Quilish and its watershed to be a reserved and natural protected area. Yanacocha has challenged this ordinance on the grounds that, under Peruvian law, local governments lack authority to create such areas. In May 2002, the Peruvian Constitutional tribunal was fully empanelled in Lima to hear the case. The case was heard in early 2003 and the Tribunal held, on April 7, 2003, that Yanacocha's right to prospect and explore, according to its mining concessions, are free and clear from encumbrance.

However, the Tribunal has required Yanacocha to complete and Yanacocha is committed to completing a full environmental impact study, conducted by independent and certified organizations or institutions, prior to initiating any development at Cerro Quilish, and will adopt mitigation measures necessary to protect the quality and quantity of the water supply of the City of Cajamarca. While the central government has the primary responsibility and the necessary technical expertise to regulate this matter, the Company is also committed to working with the local government and other affected stakeholders in completing the required studies and designing and implementing any necessary mitigation measures.

Other than the legal proceeding described above, Yanacocha is 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. For information regarding the legal proceedings relating to the ownership of Yanacocha's equity, see "-The Company-History".

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. Wayne W. Murdy, Chairman and Chief Executive Officer of Newmont Mining Corporation has been appointed Chairman of Yanacocha's Executive Committee and Alberto Benavides de la Quintana, Chairman of the Board and Chief Executive Officer of the Company, has been appointed as the Vice Chairman of Yanacocha's Executive Committee. 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 the place of a member with all of their authority when the 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.

The Yanacocha By-Laws provide that the Yanacocha Partner's Meeting has the power to appoint and remove the Manager of Yanacocha; the Executive Committee has the power to appoint and revoke other officers of Yanacocha, determine their duties and compensation and grant and revoke powers of attorney. NEM was named as Yanacocha's Manager according to a publicly filed deed, and it continues to hold that position. NEM's duties as the Manager are defined in the Management Contract (the "Management Contract"), dated February 28, 1992, as amended, between Yanacocha and NEM. Pursuant to the Management Contract, NEM 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 NEM. NEM, 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 bad management of Yanacocha, except for reasons beyond its control, NEM is unable to substantially complete the agreed work programs. In exchange for its services as Manager, NEM 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, NEM may charge Yanacocha for the salaries of employees of NEM or its affiliates who are directly involved in the operation of Yanacocha. In 2002, Yanacocha accrued fees of US$4.6 million owed to NEM and its affiliates under the Management Contract.

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.

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.

Property, Plants and Equipment

The Company's Property

In March 2001, the Company ceased operations at the Recuperada mine primarily due to the sharp drop in zinc prices and the flooding in October 2000 of the lower levels of the mine, where the majority of ore reserves were located. The Company also decided to discontinue exploration efforts at Recuperada, and, as a result, all activity at the mine is suspended at this time. See "-The Company-History and Development-History." Until March 30, 2002, the Company held, indirectly through Condesa and Cedimin, a 100 percent interest in Minera Huallanca. On such date, the Company transferred this interest to BHL-Perú S.A.C. through the sale of all of its shares in Minera Huallanca for US$2 million. See "-The Company-History and Development-Recent Developments".

The Company's mining operations are located throughout Peru. The Company's Julcani mine is located in the province of Angaraes in the department of Huancavelica, approximately 500 kilometers southeast of the city of Lima. The Company's Uchucchacua mine is located in the province of Oyón in the department of Lima, approximately 265 kilometers northeast of the city of Lima. The Company's Orcopampa mine is located in the province of Castilla in the department of Arequipa, approximately 1,350 kilometers southeast of the city of Lima. The Company's Recuperada mine is located in the province of Huancavelica, in the department of Huancavelica, approximately 500 kilometers southeast of the city of Lima. The Ishihuinca mine, which is operated by a majority-owned subsidiary of the Company, is located in the province of Caravelí in the department of Arequipa, approximately 780 kilometers southeast of the city of Lima. The Antapite mine, which is operated by a majority-owned subsidiary of the Company, is located in the province of Huaytara in the department of Huancavelica, approximately 434 kilometers southeast of the city of Lima. The Shila mine, which is operated by a wholly owned subsidiary of the Company, is located in the province of Castilla in the department of Arequipa, approximately 1,350 kilometers southeast of the city of Lima and 100 kilometers south of the Company's Orcopampa mine. The Paula mine, which is operated by a wholly owned subsidiary of the Company, is located in the province of Castilla, approximately 1,400 kilometers southeast of the city of Lima and 140 kilometers south of the Orcopampa mine. The Huallanca mine, which until March 30, 2002 was operated by a wholly owned subsidiary of the Company, is located in the province of Bolognesi in the department of Arequipa, approximately 440 kilometers north of the city of Lima. The Colquijirca mine, which is operated by a majority-owned subsidiary of the Company, is located approximately 320 kilometers east of Lima and 10 kilometers south of the city of Cerro de Pasco. The Yanacocha mine, in which the Company has a 43.65 percent interest, is located in the province and department of Cajamarca, approximately 850 kilometers north of Lima.

Orcopampa

The Orcopampa mine is wholly owned and operated by the Company. The Company leases the rights to the mining concessions of Orcopampa from a group of private investors. The lease agreement expires in 2013 and stipulates a payment from the Company equal to 10 percent of its net sales revenues. Operations started in the Orcopampa mine in 1965. In 2002, the Company made lease payments of US$3.6 million. The Company operated Orcopampa as a silver mine until the late 1980s, when the Company also began to mine gold-bearing veins. In December 1996, Orcopampa S.A., then owner and operator of the Orcopampa mine, merged into the Company. As a result of the merger, Orcopampa S.A. assigned, and the Company assumed, the right to the mining concessions of Orcopampa. At December 31, 2002, the net total fixed assets of Orcopampa were approximately S/.64.8 million (US$18.5 million).

The Orcopampa mine is located in the province of Castilla in the department of Arequipa, approximately 1,200 kilometers southeast of the city of Lima at an altitude of between 3,800 and 5,000 meters above sea level. Access is by a 192-kilometer unpaved public road, which connects to the Pan American highway, and by air strip.

Mining at Orcopampa is conducted underground using either mechanized cut-and-fill stopping or shrinkage stopping methods. Ore is processed at a mill located at Orcopampa. The mill, which has a rated capacity of 1,200 DST per day and which had a 91.8 percent utilization rate in 2002, utilizes both bulk flotation and gravity concentration processes. The mill at the Orcopampa mine was last modernized and expanded to operate at its current capacity in 1989. Further additions include the installation of a 12'x16' ball mill to improve grinding conditions at the end of 2002. The ball mill commenced operations in March 2003.

Flotation concentrates are exported to different smelters around the world, while gravity concentrates are treated at Los Volcanes, a small cyanidation plant located next to the Orcopampa mill which has been in operation since 1989. Until the end of 2001, Los Volcanes produced gold/silver electrolytic precipitates which were smelted and refined in Lima and then sold to Johnson Matthey. During the second half of 2001, the Company installed a Merrill-Crowe circuit and a smelter which began operations in that year, allowing the Company to produce doré bars from the gold and silver produced in the cyanidation plant of Los Volcanes during 2002.

Results of exploration conducted in the Nazareno vein, changes in the characteristics of the ore obtained from the development of the vein and recent metallurgical tests performed during 2002 have suggested the replacement of the floating process with direct cyanidation of the ore. This change will allow the Company to increase gold and silver recoveries, as well as to eliminate transportation of concentrates, since all gold and silver will be shipped as doré bars. The cyanidation plant is expected to begin operations by the end of 2003.

Electric power is generated and supplied by a 3,900 kw hydroelectric plant and power line, connected to the Peruvian national electricity grid on September 12, 2002, owned by the Company and, when water is scarce, by a 3,976 kw diesel generator. Water for operations at Orcopampa is obtained from a lake and three rivers.

In 2001, the Company continued exploration activities in the Nazareno vein, and three of the most recent drill holes performed in the western section of the vein indicate that economically viable mineralization extends over that area. Another drill hole performed in the eastern part of the Prometida vein indicated a strong possibility of further ore shoots in both the Prometida and Nazareno veins. As a result, the Company initiated construction of a 560 meter shaft in the central part of the Nazareno vein in 2002. In March 2003, operation of the new shaft commenced with a depth of 380 meters. The shaft will allow for hoisting the total volume of ore production and waste, replacing the use of trucks and thus reducing the cost of operations. The development of the Prometida vein has led to the discovery of new mineral reserves.

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.