S O C I A L R E S P O N S I B I L I T Y. A N N U A L R E P O R T O F A C T I V I T I E S . C A J A M A R C A 2 0 0 4

T H E F UU T UU R E II SSSS T OOO D A Y

BBOARD OF DIRECTOTT RS

MMission: uphold compliance of theAAssociation's objectives by approving thestrategies, plans and annual budgets,including the development projects andprograms, channelling donations and/orresources for their execution.

Brant Hinze - ChairmanNicholas Cotts - Vice ChairmanRaúl Benavides - DirectorCarlos Santa Cruz - DirectorChris Anderson - DirectorPer KjK ellerhaug - Director

ADVISORYRR BOARD

Group of distinguisheedd iinnddiivviduals whichadvises the BBooard of Directtoors andExecutive Diirrector of the Associatiioon onall strateeggic issues, especially thooserelated to Cajamarca's sustainablleedevelooppment and the image conveyed tosocieetty by the Association.

RRooRRR sario Almenara DíazHomero Bazán ZuritaBeatriz Boza DibóóssManuel Bryrr cee MMoncloaEmilio Cachho GayosoBaltazar CCaravedo MolinariGuillermmo Frías MartinelliRógerr Guerra García CuevaJuliioo Marín RoRR dríguezSuusana Pinilla CisnerosPPablo Enrique Sánchez ZevallosFernando Silva Santisteban BernalÁngel Francisco Simón Piorno

Commitment drafted and signed by members of ALALL C Advisoryrr board.

05THEFUTUREIS

TODAY

AA

Message from the Chairman.

Committed to the development of Cajamarca.

Introduction.

I. Los Andes de Cajamarca.

What is sustainable development?

What is Los Andes de Cajamarca?

Vision.

Mission.

Principles.

II. Mechanisms for achieving greater development.

III. Summary of development projects under way.

a. Projects for tender.

b. Projects that can be replicated (directly allocated).

c. Projects under execution by Community

Development - Yanacocha.

d. Projects at closure and transfer stage.

IV. Inter-institutional relations and their contribution

to sustainable development in Cajamarca.

V. Administrative and financial management.

VI. Projections based on lessons learned

during ALAC's first year.

06

07

08

08

09

09

10

10

10

12

16

18

20

22

28

30

32

35

INDEXX

In March 200044, we initiated aa pparticipatory process when Asociación Los Andes de Cajamarca (ALAC) began its activities,

aimed at ccoontributing to social wweelfare and sustainable development of the region.

WeWW are aware that Cajamarca has aa large potential in natural resources: agriculture and livestock, forestry,yy tourism and

mining. WeWW believe that this producction base has the potential to evolve into economic activities thatt wwiillll pprroduce goods

with a hhigher value added, as wellll as driving the necessary funding to providing services and eensuring the traaiining of

human reesources. Therefore, it is necessary to develop competitive sectors by joining efforttss and forging commitmments

with econoommic agents, i.e. the reeggional government, local governments, businesses and develloopment institutions.

Asociación Los Anddes dde Cajamarca, a corporate entity sponsored by Minera YaYY nacocha, takes part in this major regional

objective and ever since its inception has been committed to generating sociallyy responsible entrepreneurial and

institutional capacities so as to improve the welfare of its inhabitants. This will bbe achieved through facilitating and

supporting of capacity building programs and projects that can generate human andd social capital in rural and urban zones

within the province of Cajamarca.

This first yearr has been veryy enriching in terms of institutional learning, durring which creativvee and innovative forrmms of

capacity buuiillding have been fuurrthered. ReRR sources have been assigned transspparently based onn the first tender process for

projects tthhat address social demaands and measured through specific criteriiaa, as well as throouugh direct allocation of moniees

to financce the replication of successssful projects, leveraging funds to the rregion by means ooff specific agreements.

Los AAndes de Cajamarca, which I am hhoonored to chair,rr is aware thatt the future is toddaay,yy this is what we are here for and

whhaat our commitment to Cajamarca is allll about.

MESSAGE FROM THE CHAIRMAN

Brant E. Hinze

Chairman of the Board

Los Andes de Cajamarca corporate founnddation was created to contribute to the pprocess of sustainable development of our

province by advancing the generation ooff creative initiatives in a joint participation byy government, private sector,rr civil society

and the population in general.

WeWW have deployed an important inniitial effort to define ssttrraattegic guiiddeelliinnes and the design of AALAL C organizational and operational

structure in order to create ann institution that addddresses local demand aannd the mining sectoor's corporate social responsibility

policy strategies. On this basiiss, and as a membbeer of civil society we are commmmitted to a new ssttyle of involvement based on a

culture of social responsibilliity,yy fostering the sstrengthening of the social and enntrepreneurial seccttors in productive areas with

market and competitive ppootential, both in thhe rural and urban contexts.

Within this perspectivee, we maintain forrmmal relations with public and private institutioonns, and national annd international NGOs to

support various proojjects such as thhee Cajamarca SME Linkages Program (with five projects being ddeveloped within this

framework), the Housing Improveement Project and Construction Sector SME Deveelopment, the “KKoK riwasi” jewellery

TeTT chnological Innnovation Center,rr annd the Development of the North-eastern ToTT urist Circuit, aammong others.

Additionally,,yy as a consequencee of the first tender for projects, characterized by the quality of tthhe professionals aannd institutions

that evaluaated said projects,, as well as the totally transparent and impartial definitions, we are ccoommitted, togethheer with local

institutioonns, to co-financingg four projects, whose amount has been incorporated into our 2004 budgeett.

The rresults obtained ffoor this year,rr presented in this annual report, represent an inter.rr -institutional eefffort for which I wwish to

extteend my special acckknowledgement to each and everyrr one of our partners and co-workers in this importtaant process of creeaating

ccaapacities for sustaaiinable development in Cajamarca.

COMMITTED TO

07THEFUTUREIS

TODAY

AA

THE DEVELOOPPMMENTT OOF CAJAMARCA

ViVV oleta ViVV go VaVV rgasExecutive Director

I. LOSANDESDECAJAMARCA.

The present document represents the report on the results obtained during the first

year of the Asociación Los Andes de Cajamarca. The results obtained are positive and

can be summarized by the successful implementation of the first Projects Tender:

thanks to the number of participants and transparency of the process, the execution of

the projects has shown important advances, good relations with stakeholders and a

financial administration that has implemented procedures and policies geared at the

efficient use of the resources in conformance with institutional objectives and goals.

In the following pages you will be better able to grasp the work being carried out by Los

Andes de Cajamarca for the benefit of the region, as well as its contribution to the

development of the Cajamarca community.

INTRODUCTION

09THEFUTUREIS

TODAY

WHAT IS SUSTAINABLE DEVELOPMENT?

It is satisfying the needs of the present and safeguarding the needs of future generations (Bruntland Commission, 1987). In

other words, it is development that leads to economic growth, increases the quality of life and social welfare in a

permanent and stable manner over time.

WHAT IS LOS ANDES DE CAJAMARCA?

It is a corporate entity sponsored by Yanacocha committed to contribute to Cajamarca's sustainable development by

providing an impulse to the creation of businesses and institutional capacities in order to improve the welfare of the

Cajamarca population within a socially responsible environment.

Los Andes de Cajamarca began its activities on March 29th, 2004 with a set objective: that in closing the mining activities,

a number of development alternatives in the tourism, agribusiness, handicrafts and construction sectors, among others,

will have been consolidated at the level of local SMEs.

In order to achieve this goal, Los Andes de Cajamarca co-finances innovative programs and projects that have a clear link

to strategies for sustainable development, selected by an annual project tender. It also allocates part of the funding to

replicate successful projects.

THE FUTURE ISTODAY

VISION

WeWW will be a corporate foundation with prestige and credibility,yy managed with the participation of the different sectors

contributing in forging Cajamarca's own sustainable development.

MISSION

WeWW are committed to the generation of business and institutional capacities aimed at improving the welfare of the

Cajamarca population.

WeWW will drive a business and institutional capacity-building program in the sectors with competitive and market potential in

the rural and urban zone of the region to contribute to the welfare of Cajamarca population.

WeWW have a commitment to contribute to the sustainable development of Cajamarca, helping to generate social and human

capital with the participation of community,yy government and private sector.rr

PRINCIPLES

Carry out our activities with ethics and transparency,yy in an efficient and effective manner.rr

Foster participation of the private sector,rr government and civil society.yy

ReRR spect local cultures.

ReRR spect the environment.

Fairness.

•

•

•

•

•

11

THE FUTURE IS TODAY

II. MECHANISMSFORACHIEVING

GREATERDEVELOPMENT.

13THEFUTUREIS

TODAY

The most important activities undertaken during 2004 are the following:

Projects Tender Process.

The invitations to the first projects tender process were sent on July 1st, 2004.

30 profiles were submitted, out of which 16 were developed at project level, 8 of

these were finalists and 4 were selected after a transparent and rigorous

evaluation and selection process with the participation of consulting companies

and independent professionals.

The projects selected were: Productive development of the Caesalpinea spinosa

Kuntze (spiny holdback) as a model of organic and agro-industrial eco-business

venture, promotion of the planting of chamomile and its transformation into

essential oils for revenue generation and job creation in the province of

Cajamarca, technology-assisted production of guinea pigs as an economically

feasible alternative; and competitive production of native Cajamarca varieties of

potato as a response to new market opportunities. Co-financing has been

provided by ALAC in an amount of S/. 1,042,844, with counterparty contributions

in cash and kind for S/. 1´310,679, which will benefit directly a total of 530 rural

families.

PosterfortheIProjectsTe

nder2004.

Buildingcapacitiesofmorepeople

Strategic alliances.

A number of strategic alliances have been established in three sectors: firstly, with local entities whose role is to promote

economic development and local competitiveness and that are part of the Regional Council for Micro and Small Businesses

(COREMYPE), a forum in which it actively participates, as part of the promoting group of Cajamarca Region

Competitiveness program. This program will be executed with financing from the La Libertad-Cajamarca Comprehensive

Development Program (PRODELICA). A second sector is that of development projects financing entities, such as

FONDOEMPLEO and FOMIN/BID, having underwritten agreements for co-financing of projects during the next three years; at

an operative level, alliances have been made with stakeholders for the execution of development projects.

Base line study.

A base line study for the province of Cajamarca was

promoted through a representative inter-institutional

commission, the same having been produced by the

SASE consulting company. It contains valuable

information on the following aspects: preparation

methodology, geographical and historical references

for the province, results of the province and its twelve

districts base line with economic, social,

environmental, and political institutional indicators,

with digitalized theme and geo-referenced maps.

The information containing the base line study was

published and distributed among the Cajamarca

institutions and organizations. The methodology will be

transferred to public and private entities who display

interest in its updating, and inter-institutional

agreements will be subscribed to that effect.

15THEFUTUREIS

TODAY

LosAndesdeCajamarcaportal:allthe

inform

ationonInternet.

Implementation of communications strategies.

The communications strategies are aimed at creating and

promoting the Association's image among the main

stakeholder groups, as well as providing precise

information about their ends, objectives, and activities.

The chief activities being promoted are:

Preparation of 2004 communications plan (objectives,

logo design and motto).

Design and production of information material

(brochure, bulletin).

Design and development of official Website:

www.losandes.org.pe

Strategy for promoting and spreading information on

the first projects tender.

Organization of events with stakeholders.

•

•

•

•

•

III. SUMMARYOFDEVELOPMENT

PROJECTSUNDERWAY.

17THEFUTUREIS

TODAY

Working forourcommunityDuring 2004 three types of projects have been executed: projects tendered under the first summons carried out by Los

Andes de Cajamarca, replicable projects (directly assigned) and projects whose execution was begun with the Community

Development department of Minera Yanacocha and have continued under ALAC supervision.

Results at December are explained as follows:

Jobs and wages

804 4,575

PRINCIPAL IMPACTS GENERATED BY PROJECTS(at 31 December, 2004)

Organizationsinvolved

Revenuegeneration (US$)Jobs Wages Number Funds placed ($)

2´918,939 7,960 90 422 513,490 49

TrainingN° Persons N° Businesses

Credits granted

150familiesbenefitedbythisproject.

PROJECTS FOR TENDER.

Four projects have been financed under this scheme, two of which began execution in December of 2004:

Technology-assisted production of guinea pigs as an economically feasible alternative.

It is part of the group of projects that won the first tender and its purpose is to increase the production and productivity

of guinea pig breeding among 150 families in the zones of Aliso Colorado and Quishuar Corral by means of the following

expected results: 150 training modules installed and

operating, a processing centre, training for 150

producers on aspects inherent to management and

breeding of guinea pigs, 120 credits granted, a guinea

pig producers' association established, operating and

marketing 30,000 guinea pigs by the end of the project.

The results expected are aimed at achieving the

project's sustainability by means of capacity

strengthening and mechanisms for market linkages.

The advance of the project with respect to its

timetable for 2004 is 92%, corresponding to the

installation of 23 modules out of 25 foreseen for guinea

pig breeding. The overall advance represents 3%, since

activities only began in the month of December.

a.

Financing sources Total Budget Aggregate of executed Budget for 2005

ALAC

FONCREAGRO

TOTAL

S/. 262,500.00

S/. 830,289.04

S/. 1´092,789.04

S/. 100,438.36

S/. 108,787.50

S/. 209,225.86

S/. 162,061.64

S/. 599,882.50

S/. 761,944.14

19THEFUTUREIS

TODAY

Productive development of spiny holdback.

This is a project that won the first tender, whose

objective is produce sustainable jobs and revenues on

the basis of the planting of 62,500 spiny holdback

seedlings with guaranteed genetic quality, originating

from selected trees, complementing the management

of the trees with pruning, spacing and plant health,

thus increasing production from 12 to 24 kg/year.

The project will also contribute to build capacities of 50

farmers in planting techniques, forest management and

use of fruit, as well as of two organizations able to

operate as businesses.

The project displays an advance of 14% due to the fact

that it began its activities in December of 2004 and

should be completed by October of 2007.

Spinyholdbackseedlings.

50trainedin

theproductionofspinyholdback.

Financing Sources Total Budget Aggregate of executed Budget for 2005

ALAC

ADEFOR

TOTAL

S/. 257,862.50

S/. 142,540.00

S/. 400,402.50

S/. 20,892.50

S/.9,092.99

S/. 29,985.49

S/. 103,787.00

S/. 52,188.04

S/. 155,975.04

Combayo

Windows.

Violeta

Vigoexp

lainingthe

scopeoftheproject.

IntegratingtheNorth-Eastern

Tourism

Circu

it.

PROJECTS THAT CAN BE REPLICATED (DIRECTLY

ALLOCATED).

Two important projects will be executed under this

scheme:

Competitiveness of MSMEs (Micro, small and medium-

sized companies): Consolidating the development of

the North-Eastern Tourist Circuit destinations (CTN).

After having concluded the project's first phase in

March of 2004, applications were made to the

Multilateral Investment Fund (FOMIN/BID) for the

continuity of the project, obtaining its participation

from the design to the eligibility of the same at a board

meeting held in September of 2004.

It has a budget of US$ 1,318,664. It has co-financing

commitments from the Multilateral Investment Fund

(FOMIN) of the Inter-American Development Bank for an

amount of US$ 798,431, Los Andes de Cajamarca will

contribute an amount of US$ 271,833 and FONDOEMPLEO

will provide US$ 100,000. The remainder is contributions

by the companies involved. The execution of the project

will be undertaken by the Cajamarca Regional Tourism

Chamber (CARETUR Cajamarca).

The target group is made up by 200 micro, small and

medium companies of the North-Eastern Tourist Circuit

operating in the accommodation, restaurant and tour

operator sectors that will have the CTN seal. On a

complementary basis, promotion and development of

tourism macro products will take place.

b.

21THEFUTUREIS

TODAY

Increasingproductionwith1,950hectaresplantedwithce

reals.

Capacity building of cereals production in Cajamarca.

An agreement has been signed with the Foundation for Agricultural Development-FDAfor the execution of this project

that requires a budget of US$ 470,642, to be financed in the following manner: Los Andes de Cajamarca US$ 214,642 and

the National Job Training and Employment Promotion Fund will contribute US$ 256,000. A target of 1,950 hectares

planted with cereals during the project's three growing seasons, increasing the productivity of starchy corn by 125% and

of barley and wheat by 110%, generating 39,000 new wages.

PROJECTS UNDER EXECUTION BY COMMUNITY DEVELOPMENT - YANACOCHA.

The following projects are being executed under this scheme:

Cajamarca SME Liase Program.

This program's purpose is to contribute to improve production, administrative and financial management of local

micro-businesses in order to enhance their competitiveness, aiding in the expansion and diversification of their

markets. Its strategy is based on training, technical assistance, and commercial links.

The program is based on a strategic alliance with the International Finance Corporation (IFC) and technical support

from Swisscontact, Recursos S.A.C.,Aid to Artisans, Technoserve, Colectivo Integral de Desarrollo and the Institute for

Bank Training - Recursos S.A.C. consortium, in order to work on 5 projects:

Local suppliers capacity building project.

Project executed by Recursos S.A.C. It has fulfilled 97% of the goals foreseen; the most important achievements are:

21 producers of goods and services for various sectors of the area have created 567 jobs and have made new

investments for an amount of US$ 54,773. Strengthening of 10 companies through training and technical assistance

allowing them to improve their levels of investment, productivity and market diversification, achieving an initial

level of certification with CERTIPYME on internal organization standards. 14 consultants were trained to provide

business development services (SDE). Deals closed for an approximate amount of US$ 1'000,000 through the day-long

sessions and business round tables with the participation of 120 companies; this is the second year that these sessions

are successfully held, on the basis hard work aimed at bolstering institutions. The day-long sessions are one of the

activities proposed by the suppliers' strengthening program (IFC, Swisscontact, Yanacocha y Recursos S.A.C.), to allow

local companies to access better and greater practical information on their neighboring markets and on the demands

posed by the diversification of clients, products and services.

c.

1.

•

23THEFUTUREIS

TODAY

Ourhandicraftswere

admired

atinternationalfairs.

Cajamarcabusinessesmodernize

anddiversify.

Handicrafts in Cajamarca: ABC.

It began its activities in January of 2003 and will

conclude in March of 2005. This is being executed

by Aid to Artisans with the following results: 61

artisans in seven groups, one of ceramics and the

other six of Cajamarca and Chota textiles, have

been trained and have received technical

assistance provided by local and international

experts in design and production techniques,

creating 32 full-time jobs and 69 part-time ones.

The 2004 sales volume was US$ 19,846 FOB,

channelled through national exporters.

Modernization and diversification of agribusiness in

Cajamarca.

The project, executed by Technoserve, began its

activities in July of 2003 and will be completed by

May of 2005. At December 2004, its average

overall advance was 96% and the most important

results were: training and technical assistance for

18 companies, 14 of which have graduated;

US$ 47,663 in infrastructure investments by the

companies; 12 companies (80%) calculate their

costs adequately and operate legally; market

diversification and sales for US$ 1'367,343.

•

•

Business Day-long

sessions and Round

Tables: in 2004

deals were closed

for an amount of

approximately

US$ 1'000,000.

Deve

lopingmanage

mentca

pacities.

Access of SMEs to the financial system.

The Project is executed by the Institute for Bank

Training working in a consortium with Recursos

S.A.C. since March 2004 and will be completed in

August of 2005. Its average aggregate execution at

December was 50% and the results achieved were:

40 companies diagnosed, 16 financial consultants

trained, and preparation of the financial guide for

SMEs and dissemination of best practices at a

financial day session.

Access of micro-businesses to the financial system.

The project was executed by the Colectivo Integral

de Desarrollo from March of 2004 and will end in

March of 2005, displaying an overall advance in

execution of 78% at December 2004. The most

important results were: 64 micro-businesses

diagnosed, 19 consultants trained in micro-business

management, 25 entrepreneurs are being trained

and nine companies receive technical assistance

through the project in order to allow them to

access the financial system.

•

•

Financing Sources Budget for 2005

YANACOCHA

INTERNATIONAL FINANCE CORPORATION - IFC

TOTAL

Total Budget

US$ 46,100

US$ 1´500,000

US$ 1´546,100

Aggregate of Executed

US$ 45,083

US$ 1´305,800

US$ 1´350,883

US$ 1,000

US$ 194,200

US$ 195,200

25THEFUTUREIS

TODAY

Exclusive

design

erjewels.

SamplesofCITEproduction.

CITE Koriwasi jewellery.

This project has been under execution since October of 2003 and will conclude in October of 2006. The average overall

advance is 29%, with the most important results being: 107 trained in jewellery production, 16 businesses receiving

technical assistance, participation in five exhibitions, three commercial events in the national context, one

commercial event in Colombia, and US$ 7,260 in sales of intermediate products.

2.

Financing Sources Total Budget Aggregate of Executed Budget for 2005

YANACOCHA

MINISTRY OF FOREIGNN

TRADE & TOURISM

TOTAL

US$ 1´000,000

US$ 150,000

US$ 1´150,000

US$ 697,894

US$ 78,901

US$ 776,795

US$ 300,000

US$ 50,000

US$ 350,000

Improvingtheyield

indairyproduction.

Modernization of dairy production in Cajamarca valley (PROPIAGA).

The project's objective is to improve the yield of dairy cattle in Cajamarca valley through the production and

marketing of the “Total Blended Ration” (RTM) as a complete fodder administered in a system of stable farming.

The project is going through a stage of redesign and

reprogramming of activities based on three

conditions proposed by FONDOEMPLEO: the first,

referred to the technical and economic

reformulation of the project, including upgrading the

production process for the RTM, which has been fully

executed; the second, that the auditors' observations

be lifted has been fully complied with, and the third,

that 60% of the contributions pledged by the partners

should be completed, currently under resolution.

The most important advances made are: construction

and implementation of the feeding centre, which at

December 2004 presented a 20% advance and

training of 25 dairy farmers in the use of new

technologies in the intensive breeding of dairy

cattle, representing a 13% advance of the total

planned.

3.

Financing Sources Total Budget Aggregate of Executed Budget for 2005

YANACOCHA

FONDOEMPLEO (DONATION)

FONDOEMPLEO (LOAN)

TOTAL

S/. 958,918

S/. 600,000

S/. 824,566

S/. 2´383,484

S/. 569,974

S/. 192,355

S/. 492,164

S/. 1´254,493

S/. 388,944

S/. 407,645

S/. 331,402

S/. 1´127,991

Buildingabetterfuture.

27THEFUTUREIS

TODAY

Microfinancing of housing and development of

small businesses in Cajamarca (CHF).

The project began operations in July of 2003 and will

be completed by December of 2007. Its aim is to

contribute to improve housing conditions and access

to the same based on the offer of a suitable housing

model and technical assistance for self-construction.

The project displays an overall 33% progress with

respect to total goals that must be achieved by

December 2007. The most important achievements

are: placement of 422 loans for US$ 513,490 of the

portfolio disbursed, benefiting 5,389 persons directly

involved; 1,802 families, 270 micro-businesses and

3,317 construction workers. Non-performing loans

are 1.97%, a low rate taking into account the risk

level of the sector towards which the credits are

aimed.

4.

Financing Sources Total Budget Aggregate of Executed Budget for 2005

YANACOCHA

COMMUNITY, HABITAT &

FINANCING (CHF)

TOTAL

US$ 813,000

US$ 2´000,000

US$ 2´813,000

US$ 813,000

US$ 130,000

US$ 943,000

_

US$ 500,000

US$ 500,000

PROJECTS AT CLOSURE AND TRANSFER STAGE.

These projects have completed execution and are in the process of financial closure, and will be subsequently transferred

to the corresponding entities:

Comprehensive management of solid wastes in Baños del Inca.

The project was completed in October 2004 with 100% of the goals for that year being met as well as 103% of the

project's total results, the most important achievements being: construction and management of the facilities for

handling of solid wastes; 255 families take part in neighborhood committees, a reduction of 10% was achieved in solid

wastes at their final destination, 55 families improved their diets by eating greens produced in their own vegetable

gardens. The project has also contributed to the

institutional strengthening and capacity-building of

four organizations, 210 teachers and 500 students in

the design, selection and management of solid

wastes, which will contribute toward the

sustainability of the project.

The project was executed by the Association for

Local Development (ASODEL) and will be delivered to

the District Municipality of Baños del Inca for its

administration, the latter having acquired machinery

for the collection of solid wastes. The operation of

the facilities will be carried out with the

participation of independent recyclers.

1.

Financing Sources

YANACOCHA

AMERICAS FUND

COUNTERPARTY: ASODEL, MUNICIPALITY AND BENEFICIARIES

TOTAL

Total Budget

US$ 100,000

US$ 100,000

US$ 37,350

US$ 237,350

Aggregate of Executed

US$ 100,000

US$ 100,000

US$ 37,350

US$ 237,350

Compost

produce

ratfullca

pacity.

29THEFUTUREIS

TODAY

Financing Sources Total Budget Aggregate of Executed Budget for 2005

YANACOCHA

AMERICAS FUND

TOTAL

US$ 59,940

US$ 59,794

US$ 119,734

US$ 59,940

US$ 41,496

US 101,436

_

US$ 18,298

US$ 18,298

Eco-tourism as a source of sustainable development for Cajamarca.

The objective of the project is to promote an eco-tourism and trekking project in Cajamarca that can contribute toreactivate trade, handicrafts, agriculture, services and the fostering of local cultural values, the rescue andconservation of archaeological remains, trying to integrate tourist circuits to the great Inca road within a 60 km.stretch to establish four trekking routes, hiking and eco-tourism.

The project displays a compliance with goals of 60% and has been executed by the Society for the Rescue of theCajamarca Ecosystem (APREC).

Program for environmental education.

The project was executed by the Peruvian Foundation for Nature Conservancy (ProNaturaleza) and its objective is tocontribute to the training of teachers and students within the area of influence of Yanacocha's operations who will besocially responsible and adequately informed. Its strategy focussed on the training of teachers in the educationalcentres in urban and rural areas. The results achieved are: 184 teachers trained in environmental subjects andconservation for the curricular development of the same; 6,358 students trained in recycling, bio-orchards, and raisingof smaller farm animals; 33 schools received guides for teaching and for practical projects applicable to educationalcentres.

2.

3.

Qap

aqÑan

,deve

lopmentroute.

IV. INTER-INSTITUTIONAL

RELATIONSANDTHEIR

CONTRIBUTIONTO

SUSTAINABLEDEVELOPMENT

INCAJAMARCA.

31THEFUTUREIS

TODAY

In addition to their specific concrete objectives, the various projects promote the strengthening of institutional and human

capacities of those involved, thus contributing to increasing the human and social capital stock, fundamental elements for

sustaining development processes.

Together with other stakeholders a number of events have been organized, co-organized, and supported, among which

were the presentation of the book “Social Responsibility: Fundamentals for competitiveness and sustainable development”

with the presence of authors Matilde Schwalb and Oscar Malca from the Universidad del Pacífico, a presentation in the

“Mining and Development” workshop on the role of foundations and non-profit associations in mining companies, the

“Presentation of Asociación Los Andes de Cajamarca” workshop, the formulation of the Regional Council for SMEs' plan,

among others.

There are currently 49 stakeholder representatives in the different projects being co-financed by ALAC.

Event Location

Mining and Sustainable Development

Workshop

Strategic Alliances for Sustainable

Development Workshop

Peru 2021 - Corporate Social

Responsibility Expofair

Business Round Table 2004

Mining and Sustainable Development

Workshop: Presentation of Los Andes

de Cajamarca

Business Breakfast - Presentation of

Los Andes de Cajamarca

Signing of Agreements with the winners

of the First ALAC Projects Tender

Invitation to the Fifth Tender Fondoempleo

and signing of the agreement

for the cereals project with the FDA.

Presentation of Los Andes de Cajamarca

in the Peruvian Institute of Mining Engineers

Peru 2021 - Symposium on Corporate

Social Responsibility.

Presentation on book on Social Responsibility

Aimed at

Yanacocha supervisors

Stakeholders and entities entrusted

with project execution

Businessmen, NGO or cooperation

agencies representatives, and students

Local and nation-wide companies

Yanacocha upper management

Representatives of mining companies,

foundations and cooperation agencies

Stakeholders and project executors

Stakeholders and project executors

Businesspeople, mining engineers, students

and NGO or cooperation agency

representatives.

Businesspeople, representatives of

foundations, NGOs or cooperation agencies.

Stakeholders and entrepreneurs

Cajamarca

Cajamarca

Lima

Cajamarca

Cajamarca

Lima

Cajamarca

Cajamarca

Lima

Lima

Cajamarca

N˚ Participants

35 persons

60 persons

1,500 persons

350 persons

20 persons

50 persons

175 persons

200 persons

200 persons

350 persons

150 persons

V. ADMINISTRATIVEAND

FINANCIALMANAGEMENT.

Important administr ative activ ities carried out.

Design and implementation of ALAL C strategic guidelines and organizational

structure.

Assignment of personnel.

Implementation and equipment of facilities.

Design and implementation of accounting procedures for the institutionn and

the projects.

Orientation and training project execution teams in administrativee and

financial aspects related to the projects.

2004 Budget execution.

ALALL C budget for 2004 was US$ 2'151,100, out of which US$ 1'916,791 were

executed, i.e. 89% of the year's budget.

Finnancial Statements.

The results of the economic and financial situation of ALALL C at December 31,

2004 wwere presented in the Balance and Earnings Statement.

•

•

•

•

•

ALAC BUDGET

NOT EXECUTED11%

EXECUTED89%

US$ 234,309

US$ 1´916,791Budget

Executed

Not Executed

Total

Amount

US$ 1´916,791

US$ 234,309

US$ 2´151,100

Percentage

11%

89%

100%

33THEFUTUREIS

TODAY

ITEMIZED EXECUTION OFEXPENDITURES

Item

Projects

Implementation

Operatives

Administrative

Total

Amount

US$ 1´488,774

US$ 112,545

US$ 41,951

US$ 273,521

US$ 1´916,791

Percentage

77.67%

5.87%

2.19%

14.27%

100%

80%

70%

60%

50%

40%

30%

20%

10%

0%Projects Implementation Operatives Administrative

77.67%

5.87% 2.19%

14.27%

US$ 802,488

US$ 1´700,006

ALAC32%

COUNTERPARTY68%

PROJECT LEVERAGE

The financing of both the projects tendered as well as

those receiving direct allocations from ALAC totals

US$ 802,488, and the total co-financing by other entities

and those taking part is US$ 1´700,006, with a leverage for

each dollar financed by ALAC of US$ 2.12, equivalent to

212%.

Assets

Current Assets

Cash and Banks

Miscellaneous accounts receivable

Total Current Assets

Non-current assets

Property, machinery & equipment

net of depreciation

Total Non-current Assets

Total Assets

1´177,958

277,011

1´454,969

136,932

136,932

1´591,901

91%

9%

100%

Liabilities and Equity

Current liabilities

Accounts payable

Other accounts payable

Total Current Liabilities

Non-current liabilities

Deferred donations

Total Non-current Liabilities

Equity

Capital donations

Total Equity

Total Liabilities and Equity

15,751

2,167

17,918

1´437,050

1´437,050

136,933

136,933

1´591,901

1%

90%

9%

100%

BALANCE AT 31 DECEMBER, 2004Expressed in New Soles

Donations made

( - ) Project subsidies

Margin

( + ) Other income

( - ) Operating and

administrative expenses

Deficit/Surplus

849,597

325,409

524,188

1,849

526,037

0

100%

38%

62%

0.3%

62%

0.0%

EARNINGS STATMENTExpressed in New Soles

35THEFUTUREIS

TODAY

AA

VI. PROJECTIONSBASEDON

LESSONS LEARNEDDURING

ALAC'S FIRSTYEAR.The main lessonnss lleeaarrnneedd during the first year of management

that will sseervrr e to reformulattee some priorities and intervrr ention

strateggiiees are summarized as f olloowws:

With relation to project finance:

More specific financing credit lines to concentrate resources in strategic areas of development.

Improve the level of coordination with local public institutions.

Disseminate information and train existing public and private entities and organizations on the projects tender fund and

the formulation of projects in accordance with the criteria established in the tender rules.

With regard to the project execution and stakeholders:

Promote greater involvement in the projects of existing social organizations and public entities.

Change the monitoring focus, less control-oriented and more focussed toward a joint exercise allowing for learning by

the parties involved.

Encourage the entities entrusted with the project execution to carry out the monitoring of those involved in both the

project and its surroundings so as to enhance performance.

Take the closure plan and project transfers into account from the moment of signing the agreement in order to

contribute to suitable accountability and sustainability.

Projects must be laboratories for joint execution (mini-networking) that allow for extracting lessons learned for the

future social network aimed at the development of Cajamarca.

Increased flexibility and simplification in the presentation of financial reports and accounting by the entities entrusted

with project execution.

In the relationship with development stakeholders:

Display greater efforts with strategic actors in local development to involve them in the debate, analysis and undertaking

of joint actions for the development of the region.

Together with the participation of public sector, business sector and civil society, draft a transfer plan for ALAC toward

new institution-building that represents Cajamarca society.

At Institutional level

The first year of operations for ALAC represents an initial learning process that has allowed us to validate our intervention

strategy, organize ourselves, develop administrative and project management tools, strengthen our work team, establish

linkages and understand better the stakeholders who take part in the execution of the projects as well as the public and

private organizations involved in local development processes.

Our active participation in the various existing public forums such as the Regional Council for micro and small businesses

and the Regional Exports Commission are needed in order to deliver our contributions as well as to allow us to insert

ourselves in the province's development processes.

•

•

•

•

•

•

•

•

•

•

•

ALACTEAM.Violeta Vigo Executive Director

Flavio Flores PPre-Investment Coordinator

Ana Araujo MMoonitoring and Evaluatio n Coordinnaator

Ina Castillo Admmiinistration and Finance Coo rrddinator

Sandra Sánchez Adminniistrative Assistant

Gianccaarrlo Navarro Consultaant - Communications

Óscar Sannttisteb an Consultanntt - M onitoring andd Evaluatio n

José Ramíreezz General Serrvvrrrr ices Support

Design and layout:

Kick-Off & Asociados.

Photography:

Archives: ALAC / Yanacocha.

Printer:

Grambs Corporación Gráfica.

Jirón Jequetepeque 776,

Urbanización El Ingenio,

Cajamarca, Perú.

Phone: (51-76) 36-6961

Fax: (51-76) 36-9438

asociacion@losandes.org.pe

www.losandes.org.pe