Compania de Minas Buenaventura SAA (NYSE:BVN) Is It As Precious As The Metals It Mines?


Dallas, Texas 01/31/2014 (FINANCIALSTRENDS) – Is Compania de Minas Buenaventura SAA (NYSE:BVN) the gold standard in investments? Once gold was considered as the best investment around. Returns were steady and the investment was considered as totally risk free.

Change In Fortunes:

However, all these things changed after a drastic fall in gold prices.  And it also changed the fortunes of the miners like Compania de Minas Buenaventura SAA (NYSE:BVN). The company is engaged in mining of precious metals like gold and has several assets. As a secondary line of business, the company also provides electrical utility services to other mining companies. But mining remains its core business. And it suffered heavily on account of the drop in commodity prices and in particular due to the heavy drop in prices of Gold. Many governments, facing weakening currencies and a bulging trade deficit tried to control purchase of gold. In particular, the Indian government clamped down on the purchase as well as import of gold in a move to check investments in gold. These moves sent the prices southwards as India is one of the largest consumers of gold.

It was not only gold that was affected, prices of other precious metals also nose dived. The demand has stabilized to a large extent mainly on account of the higher discounts offered. But prices are yet to regain lost ground.

The Diversity:

Compania de Minas Buenaventura SAA (NYSE:BVN) is well placed as it mines gold, silver, lead, zinc and copper. The mines are also geographically spread and are mostly owned by the company. It has a strong management team, large portfolio of mining projects as well as equity investments. It is also one of Peru’s largest publicly traded precious metal companies.

The recent shakedown has made its valuations quite cheap from a long term investment prespective.

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