Contents 1 ANNUAL REPORT 2014 WORLD CLASS PERUVIAN MINING Contents 2 ANNUAL REPORT 2014 Contents 3 Pedro Brescia Cafferata Don Pedro Brescia Cafferata, who served as our company’s CEO from 1977 to 2013, passed away on December 21, 2014. The Board of Directors, Managers and all MINSUR collaborators will remember Don Pedro with great esteem, admiration and appreciation. His vision, leadership and exemplary working capacity were essential pillars for the progress of our institution and of many other companies, contributing to the well being of thousands of Peruvian families. Contents 4 CONTENTS LIABILITY STATEMENT LETTER FROM THE PRESIDENT OF THE BOARD 1. THE COMPANY 3.3 Explorations 4. GENERAL INFORMATION 1.1 Historical Overview 3.4 Reserves and Mineral Resources 4.1 Corporate Name 1.2 Vision, Mission and Values 3.5 Human Resources 4.2 Corporate purpose and duration 1.3 Directors and Managers 3.6 Social Management 4.3 Incorporation and registration in the Public Registry 3.7 Environmental sustainability management 4.4 Economic Group Water 4.5 Share capital, number and nominal value of shares 2. ECONOMIC AND SECTORAL CONTEXT Permits and planning 4.6 Types of shares and shareholding structure 2.1 Economic Environment Environmental management 4.7 Evolution of stock price 2.2 Peruvian mining sector in 2014 Rehabilitation and closure 4.8 Tax treatment 3.8. Health and safety 4.9 Judicial, administrative or arbitration proceedings 3.9. Commercialization 3. RESPONSIBLE AND SUSTAINABLE The tin market MANAGEMENT The gold market 5. CORPORATE GOVERNANCE 3.1 Our operations 3.10. Results 5.1 Professional trajectory of Directors San Rafael Mining Unit Financial Results 5.2 Other aspects related to the Board of Directors Smelter Plant and Refinery in Pisco Liquidity 5.3 Professional trajectory of Managers Pucamarca Mining Unit Capital and financing 5.4 Board of Directors and Managers’ remuneration Mineração Taboca S.A. Officers responsible for preparing 3.2 Investments in subsidiaries the financial statements Contents 5 LIABILITY StateMENT The document hereof contains truthful and sufficient information on the business development of MINSUR SA in 2014. Notwithstanding the issuer’s responsibility, the undersigned are responsible for its content pursuant to the applicable legal provisions. Lima, March 26, 2015 JUAN LUIS KRUGER FORTUNATO BRESCIA SAYÁN/ MOREYRA/ GERENTE PRESIDENT OF MANAGER/ THE BOARD OF DIRECTORS/ Contents 6 LETTER FROM THE PRESIDENT OF THE BOARD OF DIRECTORS Dear shareholders: in our units. Furthermore, a remarkable areas of influence. an impact in operation management and momentum was generated to obtain the profitability. However, the financial results of I am pleased to present the Annual Report highest safety standards in the company’s From an operational point of view, in the year are still solid. Sales in 2014 reached 2014 and the audited Financial Statements, operations. The result has been satisfactory: 2014 we have had an increase of treated US$ 760.2 million, while net income which summarize the most significant facts not only the lost-time injury frequency rate tonnage, both in San Rafael Mining Unit reached US$ 84.9 million. of the company’s management, pursuant to (LTIFR) fell 67% in comparison to the 2013 and Pucamarca. This enabled us to partially the requirements of the Superintendency of rate, but also Pucamarca –in its second offsetlower tin and gold grades in both MINSUR financial strength was also Securities Market. year of operations as a MINSUR unit- has mining units in line with the projections of reinforced by the international issuance of recorded four million man-hours with no our mining plan. Senior Notes through a private placement 2014 has been a year of great challenges accidents resulting in loss of days, thus In our subsidiary Taboca in Brazil, we have of a US$ 450 million nominal value, at a for our country, our economy and our achieving recognition as the safest open- achieved a substantial improvement in our 6.25% coupon rate. The issuance received company. A deteriorated international pit mine in Peru by winning the first prize operating results, producing 5,010 tons a BBB- rating granted by Standard & Poor’s environment and the drop in private in the XVII National Mining Safety Award, of fine Tin, doubling the production of the Financial Services, a BBB- rating granted investment resulted in a 2.4% growth of organized by the Mining Safety Institute last three years, and beating niobium and by Fitch Ratings and “Baa3” granted by the country’s economic activity in 2014, (ISEM). tantalum production records. Moodys, which places our company in an reflected in its GDP, the lowest rate since outstanding position in the international the 2009 international crisis. Together with our safety approach, we have Resources and reserves have also capital market. This note issuance ensures implemented a world-class environmental grown in San Rafael and Pucamarca. the financing capacity of MINSUR’s long- In a scenario as described above, the management system consolidating our Exploration endeavors have supported this term projects. operational endeavors of MINSUR during environmental standards, and we have performance. the year have been accompanied by an promoted the sustainable development of The company’s organization has also been active cost reduction strategy, with an our environment, accompanied by trust The fall of prices in the last quarter of the consolidated by the creation of a Corporate emphasis on productivity improvement relationships with the communities of our year, particularlyof the tin price, has made Project Management department, to Contents 7 implement projects allowing us to set the foundations of our future. Our achievements in the year would not have been possible without the invaluable contribution of our shareholders, clients, suppliers and collaborators and, without a doubt, of the communities in the areas where our mining operations are located. We thank them all for accompanying our management in 2014, as well as for their trust and collaboration. I want to offer a special word of recognition to Don Pedro Brescia Cafferata, who chaired our Board of Directors for more than 35 years, and whose passing away in the end of 2014 affected us deeply. His leadership, determination and commitment to service are values that are a part of MINSUR and a legacy for all our collaborators. Fortunato Brescia Moreyra PRESIDENT OF THE BOARD OF DIRECTORS Contents 8 THE COMPANY 01 Contents 9 MINSUR has more than 37 years MINSUR is also majority shareholder of shares of Marcobre S.A.C., which of experience in the Mining Sector, of Minera Latinoamericana S.A.C., develops a copper ore project called and since the beginning it has stood which in turn is the main shareholder Mina Justa, located in the district out for its commitment to corporate of Mineração Taboca S.A., a company of San Juan de Marcona, in Ica. It responsibility and the development of that operates Pitinga mine in the State is worth mentioning that Cumbres the country. It meets the highest quality of Amazonas (Brazil), from where tin, Andinas S.A. is the main shareholder and safety standards, uses cutting-edge niobium and tantalum are extracted. of Compañía Minera Barbastro S.A.C., technology and is governed by the current Taboca is also the owner of Pirapora which has a polymetallic project in the environmental regulations. Furthermore, Smelting Plant in Sao Paulo. Through region of Huancavelica, and of Minera aiming at achieving excellence, it has subsidiaries, Minera Latinoamericana Sillustani S.A.C., which holds several designed special programs to ensure a S.A.C. is also a shareholder of Melón concessions in the Puno region. better care of the environment and to favor S.A., leading company in the production the progress of neighboring communities and marketing of cements, concretes, of the areas in which it operates. Following mortars and aggregatesin the Chilean this philosophy, MINSUR has become market. a solid, successful and internationally renowned company. Besides, MINSUR is majority shareholder of Cumbres Andinas S.A., 1.1 Historical Overview which owns –through subsidiaries- 70% MINSUR is a company founded in 1977, after the transformation of the Peruvian branch of MINSUR Partnership Limited of Bahamas, called MINSUR Limited Company, which operated in Peru since 1966. Mainly devoted to exploration, exploitation and processing of mineral deposits, MINSUR is the leader of the international tin market. It has ventured in the gold market through its Pucamarca mine, which started operations in January 2013. The other two production units of the company areSan Rafael mine and the Smelting and Refining Plant in Pisco. Contents 10 MISSION To generate value transforming mineral resources in a sustained manner. VISION To develop and operate world-class mining assets, being a reference in terms of safety, operational efficiency, socio-environmental responsibility and people development. VALUES Safety, excellence, commitment, integrity, responsibility and trust. Contents 11 DIRECTORS AND MANAGERS BOARD OF DIRECTORS MANAGEMENT PRESIDENT EXECUTIVE DIRECTOR DIRECTOR OF PROJECTS Fortunato BRESCIA MOREYRA Fortunato BRESCIA MOREYRA MARCO HERRERA RAMÍREZ VICEPRESIDENT GENERAL MANAGER DIRECTOR OF HUMAN RESOURCES ALEX Fort BRESCIA JUAN LUIS KRUGER SAYÁN GUILLERMO DEFILIPPI RODRIGUEZ (UNTIL SEPTEMBER 30, 2014) DIRECTORS Álvaro ESCALANTE RUIZ (FROM OCTOBER 1, 2014) ROSA BRESCIA DE Fort DIRECTOR OF ADMINISTRATION AND FINANCE MARIO BRESCIA MOREYRA Álvaro OSSIO GUIULFO(UNTIL DECEMBER 31, 2014) GENERAL DIRECTOR OF MINERAÇÃO TABOCA PEDRO BRESCIA MOREYRA Gianflavio CARROZZI KELLER(FROM JANUARY 1, 2015) Itamar DUTRA PEREIRA DE RESENDE MIGUEL ARAMBURÚ ÁlvareZ-CALDERÓN DIRECTOR OF CORPORATE AFFAIRS INTERNAL AUDITOR A brief summary of the professional career of each of the GONZALO QUIJANDRÍA FERNÁNDEZ Rafael SALAZAR TAFUR board members may be found below in the “Corporate Governance” section. DIRECTOR OF NEW BUSINESS DEVELOPMENT A brief summary of the professional career of all Management GONZALO FREYRE ARMÉstar team members may be found below in the “Corporate Governance” section.