A Golden Opportunity.

Alberto Benavides the patriarch of Peruvian mining, strikes it rich.

HAD IT NOT BEEN FOR YANACOCHA, now Latin America's premier gold mine, Buenaventura would probably have remained a family business. But to develop its assets, Alberto Benavides de la Quintana, the company's founder and driving force for almost half a century, sold shares to partners and the market to raise money. The gamble paid in spades: The mine has transformed Buenaventura into one of the hottest-performing companies in Latin America. In fact, for the 12 months ending in June 1999, the firm's sales had grown 75% to almost US$90 million, with profits increasing more than one-and-a-half times to $43 million.

In many ways, the mine is the crowning professional achievement for Benavides, who, now nearing 80 years of age, is the undisputed patriarch of Peruvian mining. Stooped and now obliged to walk with a stick, he remains remarkably agile, both physically and mentally. He is up every morning at dawn for a rigorous exercise program and a healthy swim, and is at his Lima office desk by 9am. Chance encounter. As the name of his mining group, Buenaventura or "good fortune," suggests, Benavides' success owes a little to both luck and hard work. In 1952, while he was exploring in the remote high Andes, he met Swissborn mine-owner Bruno Tschudi. The chance encounter changed his life.

Tschudi was looking to lease an ailing silver mine named Julcani. In what he calls a "crazy risk," Benavides took it for a year with an option to buy. In 1953, he formed the Buenaventura company and in subsequent years added other silver and gold mines--Uchuchaccua, Orcopampa and Recuperada--to the group.

Benavides was a true mine owner, but he still had not made a huge discovery. That big break came in the early 1980s. Benavides had been associated for many years with France's Bureau de Recherches Geologiques et Minieres (BRGM) in prospecting. Yanacocha, a deposit in the northern Peruvian department of Cajamarca, looked promising and the partners managed to convince Newmont of the United States to join them in exploratory drilling. Amounts invested initially were modest but they soon knew they had something unusual.

However, Peruvian political uncertainty, economic chaos and terrorism delayed the development of Yanacocha for more than a decade. It finally fell to Benavides to convince a group of New York investors in July 1992. The night before his meeting, all the windows of his Lima home had been blown out in a nearby Shining Path bomb blast, but, despite his honest appraisal of an overtly discouraging environment, he won another green light from Newmont and BRGM to break ground at Yanacocha. Greedy gold miners. The decision paid handsomely. Yanacocha is a gold miner's dream: its ore is tipped on to leaching "pads" without prior crushing. Pour on acid and the gold simply trickles out of the ground. The partners recovered their $45 million initial investment in seven months.

Like the stereotypical greedy gold miners, though, the partners were soon torn over money. France's BRGM wanted to sell part of its operations to Normandy Mining Ltd., but Buenaventura and Newmont sued on the grounds that they had the right of first refusal. And so started one of Peru's most bitter legal battles ever.

Half a decade later, Buenaventura and Newmont--the U.S.-based mining firm is now the lead shareholder in the Yanacocha mine--prevailed in the Peruvian courts. Adding insult to injury, the court settled the conflict at the original value of BRGM's almost 25% shareholding. While the partners were bickering, it had soared in value, increasing fivefold to roughly $500 million.

Nor was the court conflict the only turbulence in those years. The weather itself turned rough, with first El Nino and then La Nina hammering the Andean operations, washing out mountain roads.

Nonetheless, the mine went forward. By 1998, sales topped $395 million and profits $122 million. With a 44% share, Buenaventura was sitting atop a gold mine. Continual new discoveries from an aggressive ongoing exploration program have boosted reserves, extending Yanacocha's life to between 15 and 20 years.

Benavides, however, believes Peru's mining potential is still barely tapped. Every week, project ideas stream across his desk. His fascination with the complex mineralogy of the Andes never wanes. "The main problem is to sort out the best. There's so much potential you hardly know where to start," he says.

Benavides should know--he started the mining boom years ago.