Bolsa de Lima (BVL)

[El Mago]

MINERA BROCAL ------ Silver production at Peru's Sociedad Minera El Brocal polymetallic mine is expected to remain strong at least through the first half of this year after production of the metal increased 133% in 2006 on higher ore grades, an official of a minority partner said on Thursday. El Brocal churned out 10.27 million oz of silver in 2006, an increase of 133.7% compared with a year earlier, according to results released by Compania de Minas Buenaventura.

"This has been an exceptional year for silver (at El Brocal) and we can almost assure that we will continue with this level of production through the first half of 2007, but we cannot say if it will continue in the second half of the year," Buenaventura Chairman Roque Benavides said on a conference call. Buenaventura owns a 34.29% stake in the mine. He said a pilot plant for El Brocal's Marcapunta copper project is currently being used to process zinc-silver-lead ore until the company obtains permits to process copper. El Brocal also produced 72,433 mt of zinc in 2006, up 15% from 2005. Benavides said he expected 2007 zinc production to be in line with last year's level.

He also said that Buenaventurahopes to obtain the necessary environmental permits to allow construction of an open pit facility at La Zanjagold deposit in northern Peruby 2008. Exploration was disrupted at the mine in 2004 when opponents of the project set fire to the camp. Carlos Galvez, the company's chief operating officer, told Platts that relations with the communities in the area of the mine are cordial although opposition by some sectors remains. La Zanjawill be able to produce 100,000-150,000 oz/year of gold.

Regarding production projections, Galvez said he expects Buenaventura to produce more than 400,000 oz of gold this year in equity production and hopes to match the 15.4 million oz of silver produced last year