When the Spanish conquistador Pizarro and his army plundered Peru and demolished the Incan Empire in the 1530s, their greed for the legendary gold riches of the region largely drove their actions. In fact, Pizarro collected more than $100 million worth of gold as ransom for the Incan Emperor Atahualpa, only to have him executed soon after.

Almost 500 years later, from the same capital city of Lima, which Pizarro established, Peru's Buenaventura (NYSE: BVN) is the new emperor when it comes to amassing precious metals. With its shares up almost 200% over the past year, Peru is once again exporting its material wealth in a big way.

The company released earnings last week amid reports of labor strikes at four of its six wholly owned mines, with workers demanding their share of company profits under a new Peruvian law. And since the company reported a 43% increase in 2007 EBITDA earnings at those mines, it's clear why laborers are eager to see their fair share.

Despite a 36% rise in 2007 net sales on improving prices for gold, silver, and lead, net earnings for the year fell 36% because of a $186 million nonrecurring charge associated with the unwinding of gold hedge positions. A Fool's take on this item will depend on his or her projections for the price of gold, but Buenaventura is not the only major miner to be opting for full exposure to the price of gold, and gold's rise from less than $300 per ounce in 2002 to nearly $1,000 today has been nothing to sneeze at. Because I believe gold is heading higher still, I view this move as a great investment in future gains.

The portion of Buenaventura's results that caught my attention related to the company's joint venture with Newmont Mining (NYSE: NEM) at Yanacocha, Latin America's largest gold deposit. Gold production at Yanacocha plummeted 40% from 2.6 million ounces to 1.56 million in 2007, and Newmont is forecasting only slight production increases for 2008. In an arrangement similar to the recently announced 60%/40% venture between Barrick Gold (NYSE: ABX) and Goldcorp (NYSE: GG) for a gold project in the Dominican Republic, Newmont operates the Yanacocha mine, while Buenaventura owns a 43.6% share.

With 27.5 million ounces of proven and probable gold reserves at Yanacocha alone, there is little question of Buenaventura's long-term potential to generate income. Provided the company moves quickly to resolve its labor dispute and Newmont Mining resumes production growth at Yanacocha sooner rather than later, then Foolish investors will continue to feel bueno about Buenaventura.

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