BCP recommends buy Buenaventura

Peru's Banco de Credito (BCP) has upped its recommendation for the shares of local precious metals miner Buenaventura (NYSE: BVN) to "buy" from "hold," the bank said in an analyst report. The bank forecasts an upside of 22.1% for Buenaventura's ADRs, setting a target price of US$30.60 apiece in 2004. BCP bases its recommendation on the company's "solid operating margins," the outlook of higher production from its own operations (including the start up of La Zanja end-2005), and changes to its hedge book, the report said. Peru's largest precious metals miner, Buenaventura posted a net profit of US$157mn in 2003, a 37.2% increase on the previous year. However, due to a charge on its hedge book, the company's final profit last year came in at US$48.2mn. The company said at the end of last year that it had decided not to hedge any more and was evaluating opportunities to buy back its nine-year hedge book. Buenaventura has the Orcopampa and Antapite gold mines in Arequipa and Huancavelica departments respectively and the Uchucchacua silver mine in Lima department. It also has a 43.65% stake in the 2.8Moz/y Yanacocha gold mine, the region's largest.