Southern Copper (SCCO) 8-K SPCC Reports Third Quarter Financial Results

Exhibit 99.1

FOR IMMEDIATE RELEASE

SPCC REPORTS THIRD QUARTER FINANCIAL RESULTS

LIMA, PERU, October 21, 2004 - Southern Peru Copper Corporation (NYSE and LSE PCU) today reported net earnings of $131.9 million, or diluted earnings per share of $1.65, for the third quarter of 2004 compared with $36.1 million, or diluted earnings per share of 45 cents, for the third quarter of 2003.  For the first nine months of 2004, net earnings were $339.7 million, or diluted earnings per share of $4.25, compared to $76.1 million, or diluted earnings per share of 95 cents after the cumulative effect of a change in accounting principle, which reduced earnings per share by 2 cents for the first nine months of 2003.

Sales of products were $428.1 million in the third quarter of 2004 compared with $209.5 million in the third quarter of 2003.  Sales of products for the nine months of 2004 totaled $1,091.2 million compared with $552.7 million for the same period of the previous year.

The average price for copper on the London Metal Exchange (LME) and New York Commodity Exchange (COMEX) in the third quarter of 2004 was $1.29 per pound compared with 80 cents per pound for the same period in the prior year, on in both exchanges.   The average price for molybdenum, one of the Company’s principal by-products, was $16.90 per pound in the third quarter of 2004, compared with $5.67 per pound for the same period of 2003.  The price of silver, another important by-product was $6.49 per ounce on the COMEX in the third quarter of 2004, compared to $5.01 per ounce in the third quarter of 2003.

Mine copper production increased 4.1% to 226.0 million pounds in the third quarter of 2004 compared with the third quarter of last year.  This increase of 8.8 million pounds included 7.2 million pounds from the Toquepala mine, 4.5 million pounds from the Cuajone mine and a decrease of 2.9 million pounds in solvent extraction/electrowinning (SX/EW) production.  The increase in production from the Toquepala and Cuajone mines was largely the result of higher ore grades in the 2004 period.  The principal reason for the 2.9 million pound decrease in SX/EW production was lower grade of PLS (pregnant leaching solution).  Mine molybdenum production increased 15.5% to 6.3 million pounds in the third quarter of 2004 compared with the third quarter of last year.  This increase of 0.8 million pounds was principally a result of higher ore grade.

Commenting on the Company’s economic results for the third quarter of 2004, Mr. Oscar Gonzalez Rocha, President and General Director of SPCC said, “The improvement in earnings for the third quarter of 2004 is principally due to the continued robust metal prices and the slight increase in sales of Company products.”

Reporting on the Company’s investment program, Mr. Gonzalez Rocha said, “The Ilo smelter modernization project is moving ahead on schedule with detailed engineering and construction work in process in order to finish by the end of 2006.  Additionally, the Company’s leaching dumps, crushing and conveying project at the Toquepala mine is also progressing on schedule.  The leaching dumps project investment through September 2004 is on schedule.  The total budgeted investment for this project is $70 million and is planned for completion in mid-2005 with projected annual operating cost savings of $25 million.”

Southern Peru Copper Corporation is one of Peru’s largest companies and one of the ten largest copper producers worldwide.  The ownership of SPCC’s shares, either directly or through subsidiaries, is as follows: Grupo Mexico (54.2%), Cerro Trading Company (14.2%), Phelps Dodge (14.0%) and other shareholders (17.6%).

Southern Peru Copper Corporation

and Subsidiaries

SUMMARY OF EARNINGS

(Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2004		2003			2004		2003
	(in millions, except for per share data)
					%						%
Sales	$	428.1	$	209.5	104.3	$	1,091.2	$	552.7		97.4
Earnings before taxes on income and minority interest of investment shares and non-recurring items	210.1		56.3		273.2	532.7		125.1			325.8
Taxes on income	77.1		19.8		289.4	190.2		46.7			307.3
Minority interest of investment shares	1.1		0.4		175.0	2.8		0.7			300.0
Earnings before cumulative effect of the change in accounting principle	131.9		36.1		265.4	339.7		77.6			337.8
Cumulative effect of the change in accounting principle, net of income tax	—		—		—	—		1.5			—
Net earnings	$	131.9	$	36.1	265.4	$	339.7	$	76.1		346.4
Weighted average common shares outstanding (Basic)	80.0		80.0			80.0		80.0
Weighted average common shares outstanding (Diluted)	80.0		80.0			80.0		80.0
Per common share amounts:
Earnings before cumulative effect of the change in accounting principle	$	1.65	$	0.45		$	4.25	$	0.97
Cumulative effect of the change in accounting principle	—		—			—		$	(0.02	)
Net earnings - Basic and Diluted	$	1.65	$	0.45		$	4.25	$	0.95
Dividends paid	$	0.76	$	0.14		$	1.57	$	0.36

Southern Peru Copper Corporation

and Subsidiaries

Average Metal Prices

	Three Months Ended September 30,					Nine Months Ended September 30,
	2004		2003		%	2004		2003
Copper (per pound - LME)	$	1.29	$	0.80	61.3	$	1.27	$	0.76	67.1
Copper (per pound - COMEX)	$	1.29	$	0.80	61.3	$	1.25	$	0.77	62.3
Silver (per ounce - COMEX)	$	6.49	$	5.01	29.5	$	6.48	$	4.76	36.1
Molybdenum (per pound - Metals Week Mean)	$	16.90	$	5.67	198.1	$	13.25	$	4.98	166.1

Metal Production and Sales

	Three Months Ended September 30,				Nine Months Ended September 30,
	2004	2003	%		2004	2003	%
Copper (000s pounds)
Mined	226,000	217,200	4.1		653,100	613,500	6.5
Refined	176,600	184,400	(4.2	)	529,400	546,500	(3.1	)
Sales	219,800	217,400	1.1		614,000	600,400	2.3
Silver (000s ounces)
Mined	1,288	1,220	5.6		3,210	3,054	5.1
Refined	896	884	1.4		2,760	2,598	6.2
Sales	1,162	1,078	7.8		3,263	2,925	11.6
Molybdenum (000s pounds)
Mined	6,281	5,439	15.5		15,992	14,524	10.1
Sales	6,344	5,500	15.3		16,087	14,620	10.0

Southern Peru Copper Corporation
and Subsidiaries

CONDENSED CONSOLIDATED STATEMENT OF EARNINGS

(Unaudited)

	Three Months Ended September 30,								Nine Months Ended September 30,
	2004			2003					2004			2003
	(in thousands, except for per share data)
							%								%
Net sales	$	428,085		$	209,486		104		$	1,091,164		$	552,712		7
Operating costs and expenses:
Cost of sales (exclusive of items shown separately below)	188,193			119,522			57		465,726			336,859			38
Administrative and other expenses	6,717			6,565			2		21,439			20,290			6
Depreciation, amortization and depletion	19,880			18,315			9		57,557			54,684			5
Exploration expense	1,578			5,914			(73	)	6,167			9,070			(32	)
Total operating costs and expenses	216,368			150,316			44		550,889			420,903			31
Operating income	211,717			59,170			258		540,275			131,809			310
Interest income	1,417			846			67		3,618			2,372			53
Other income (expense)	(787		)	(315		)	150		(2,829		)	541			(623	)
Interest expense	(2,170		)	(3,441		)	(37	)	(8,355		)	(9,654		)	(13	)
Earnings before taxes on income, minority interest and cumulative effect of the change in accounting principle	210,177			56,260			274		532,709			125,068			326
Taxes on income	77,087			19,815			289		190,213			46,726			307
Minority interest of investment shares	1,144			354			223		2,828			744			280
Earnings before cumulative effect of the change in accounting principle	131,946			36,091			266		339,668			77,598			338
Cumulative effect of the change in accounting principle, net of income tax.	—			—					—			1,541
Net earnings	$	131,946		$	36,091		266		$	339,668		$	76,057		347
Per common share amounts:
Earnings before cumulative effect of the change in accounting principle	$	1.65		$	0.45		266		$	4.25		$	0.97
Cumulative effect of the change in accounting principle	—			—					—			(0.02		)
Net earnings - basic and diluted	$	1.65		$	0.45		266		$	4.25		$	0.95
Dividends paid	$	0.76		$	0.14		443		$	1.57		$	0.36
Weighted average common shares outstanding (Basic)	80,017			80,013					80,016			80,013
Weighted average common shares outstanding (Diluted)	80,017			80,029					80,016			80,020

Southern Peru Copper Corporation

and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2004			2003			2004			2003
	(in thousands)						(in thousands)
OPERATING ACTIVITIES:
Net earnings	$	131,946		$	36,091		$	339,668		$	76,057
Cumulative of effect of the change in accounting principle, net of income tax	—			—			—			1,541
Depreciation, amortization and depletion	19,880			18,315			57,557			54,684
Capitalized mine stripping	(7,403		)	(9,981		)	(25,111		)	(29,223		)
Minority interest of investment shares	1,144			354			2,828			744
Cash provided from (used for) operating assets and liabilities	39,945			6,660			30,190			5,562
Other, net	7,370			2,265			11,166			7,630
Net cash provided from operating activities	192,882			53,704			416,298			116,995
INVESTING ACTIVITIES:
Capital expenditures	(48,330		)	(18,362		)	(109,972		)	(34,366		)
Other, net	—			52			—			55
Net cash used for investing activities	(48,330		)	(18,310		)	(109,972		)	(34,311		)
FINANCING ACTIVITIES:
Debt incurred (repaid)	—			—			(55,000		)	50,000
Escrow (deposits) withdrawals on long-term loans	—			—			(5,241		)	183
Dividends paid	(60,413		)	(10,826		)	(125,386		)	(27,308		)
Distribution to minority interest	(471		)	(84		)	(978		)	(267		)
Treasury stock and investment share purchases, net	(6		)	(189		)	(33		)	(495		)
Net cash provided from (used for) financing activities	(60,890		)	(11,099		)	(186,638		)	22,113
Effect of exchange rate changes on cash	2,982			69			3,457			2,615
Net increase in cash and cash equivalents	$	86,644		$	24,364		$	123,145		$	107,412

Southern Peru Copper Corporation

and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEET

(unaudited)

		September 30, 2004		December 31, 2003		Variance
		(in thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	418,617	$	295,472	41.7	%
Accounts receivable, net		183,986		89,238		106.2
Inventories		106,998		76,692		39.5
Other current assets		15,411		14,549		5.9
Total current assets		725,012		475,951		52.3
Net property		1,175,026		1,118,202		5.1
Capitalized mine stripping, net		234,164		215,207		8.8
Intangible assets		106,941		109,007		(1.9	)
Other assets		15,673		12,385		26.5
Total Assets		$	2,256,816	$	1,930,752	16.9	%
LIABILITIES
Current liabilities:
Current portion of long-term debt		$	26,504	$	60,000	(65.5	)%
Accounts payable		75,560		48,322		56.4
Accrued liabilities		204,665		78,875		159.5
Total current liabilities		306,729		187,197		63.9
Long-term debt		267,539		289,043		(7.4	)
Deferred income taxes		116,890		110,075		6.2
Other liabilities and reserves		20,545		15,854		29.6
Asset retirement obligation		5,549		5,267		5.1
Total non-current liabilities		410,523		420,239		(2.3	)
MINORITY INTEREST		9,808		7,913		23.9
STOCKHOLDERS’ EQUITY
Common stock (a)		261,946		261,875		—
Retained earnings		1,267,810		1,053,528		20.3
Total stockholders’ equity		1,529,756		1,315,403		16.3
Total Liabilities, Minority Interest and Stockholders’ Equity		$	2,256,816	$	1,930,752	16.9	%
(a) Common Shares:	Authorized	34,009		34,099
	Outstanding	14,116		14,113
Class A Common Shares: Authorized and Outstanding		65,901		65,901

Southern Peru Copper Corporation
and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2004			2003			2004			2003
	(in thousands)						(in thousands)
CAPITAL STOCK:
Common Stock, balance at beginning and end of period	$	143		$	143		$	143		$	143
Class A Common Stock, balance at beginning and end of period	$	659		$	659		$	659		$	659
ADDITIONAL PAID-IN CAPITAL, balance at beginning and end of period	$	265,745		$	265,745		$	265,745		$	265,745
TREASURY STOCK:
Balance at beginning of period	$	(4,658	)	$	(4,810	)	$	(4,672	)	$	(4,810	)
Used for corporate purposes	57			34			71			34
Balance at end of period	$	(4,601	)	$	(4,776	)	$	(4,601	)	$	(4,776	)
RETAINED EARNINGS:
Balance at beginning of period	$	1,196,276		$	1,003,133		$	1,053,528		$	979,649
Net earnings	131,947			36,091			339,668			76,057
Dividends paid	(60,413		)	(10,826		)	(125,386		)	(27,308		)
Stock awards	—			—			—			—
	1,267,810			1,028,398			1,267,810			1,028,398
TOTAL STOCKHOLDER’S EQUITY	$	1,529,756		$	1,290,169		$	1,529,756		$	1,290,169