Good morning, and welcome to the Buenaventura First Quarter 2014 Conference Call. [Operator Instructions] It is now my pleasure to turn the call over to Mr. Bryan Caulkins of i-advize Corporate Communications. Sir, you may begin.

Thank you, and good morning to everyone. Welcome to Compañía de Minas Buenaventura's first quarter 2014 earnings conference call on this May 1, 2014. Today's call is for investors and analysts only, therefore, questions from the media will not be taken. Joining us from Lima, Peru are Mr. Roque Benavides, Chairman and Chief Executive Officer; Mr. Carlos Galvez, Chief Financial Officer; as well as other members of the company's senior management team. They will be discussing results for the press release issued yesterday. If you did not receive a copy of the report or you wish to join the mailing list, please contact i-advize in New York at (212) 406-3693. Before we begin, I would like to remind everyone that any forward-looking statements made today by Buenaventura's management are subject to various conditions and may differ materially. These conditions are outlined in the company's press release in the disclaimer section. We ask that you refer to it for guidance on this matter. It is now my pleasure to turn the call over to Roque Benavides, Chairman and Chief Executive Officer of Buenaventura. Mr. Benavides, please go ahead.

Thank you for attending this conference call on a holiday for Peru. This is a holiday in my country. This quarter has not been an easy one for us. There have been a number of factors that have impacted our results. We have had a strike in the Uchucchacua silver mine, we have had lower grades in terms of our other operations, but we believe that, looking forward in the course of the year, we will have much better results. During this first quarter, Buenaventura operating income was $3.5 million, and our net income was a negative $16.1 million, and our EBITDA from our direct operations was $53.3 million. EBITDA including our affiliates was $104 million. During the first quarter 2014, in terms of our operating revenues, net sales were $274 million, a 20% decrease compared to the $340.9 million reported in the first quarter of 2013. This was explained by lower metal prices, as well as reduction in gold, lead and zinc volumes sold. In the first quarter of 2014, Buenaventura's equity production, including associated companies, was 191,000 ounces of gold, mainly due to lower production at Orcopampa and Yanacocha. Silver equity production, including associated companies, during first quarter of 2014 was 4.1 million ounces. At Orcopampa, our total gold production in the first quarter was 44,900 ounces with a cost applicable to sales of $860 per ounce of gold. At Uchucchacua, total silver production in the first quarter was 2.4 million ounces, mainly due to a 7-day strike and community stoppages. The cost applicable to sales in the first quarter of 2014 was $17.51 per ounce of silver. At Mallay, total production in the first quarter, 297,000 ounces of silver with a cost applicable to sales of $14.79 per ounce of silver. At the old Julcani mine, total production was 763,000 ounces with a cost applicable to sales of $13.35 per ounce of silver. At Breapampa, total production was 21,000 ounces of gold with a cost applicable to sales of $461 per ounce of gold. At La Zanja, we had an excellent quarter with a total production of 36,000 ounces of gold with a cost applicable to sales of $535 per ounce of gold. At Tantahuatay, also, a very good quarter with a production of 32,600 ounces of gold, with a cost applicable to sales of $437 per ounce. At El Brocal, copper production was 9,792 metric tons, with a cost applicable to sales of $5,034 per metric ton of copper. During the first quarter of 2014, Buenaventura's share in associated companies was a negative $4.5 million. At Yanacocha, the gold production was 207,500 ounces of gold and the net income at this company at Yanacocha was negative $56.1 million, explained by $55.4 million write-downs of leach inventory value for La Quinua, Yanacocha and Maqui Maqui pads. At Cerro Verde, in the first quarter of 2014, copper production was 60,900 metric tons. And at this operation, the capital expenditure in this quarter was $439 million, which is part of the expansion project. At Coimolache in Tantahuatay, the attributable contribution was $4.8 million. The net income of Buenaventura in the first quarter '14 was a negative $16.1 million. In this quarter, we have been able to start up at the Huanza hydroelectric plant, and unit 2 began generating 46.3 megawatts, while unit 1 will start its commissioning in the second quarter 2014, but we are already in the process. This plant will ensure energy supply for our own direct operations and for selling to the grid. In El Brocal expansion, from 6,000 tons per day to 18,000 tons per day was completed. Production will begin in the second quarter 2014 to treat 11,000 tons of polymetallic ore from Colquijirca and 7,000 tons of copper from Marcapunta. At Tambomayo, the mine development and engineering studies are in progress. Environmental impact assessment and permitting have been filed, and production is expected by the end of 2015 or early 2016. We had a board meeting yesterday, and we have approved the new Code of Ethics, which is also in our web page for those of you that want to check on that. With this, we are open to any questions that you may have on this quarter. Thank you.

[Operator Instructions] And our first question comes from Karel Luketic with Bank of America.

I have 2 questions. The first one is regarding Yanacocha. Two things at Yanacocha. Could you please help us understand if the leach inventory adjustment you mentioned in the press release also impacted the reported EBITDA and the cost reported by Newmont? And if you could please explain or provide us an update of what to expect in terms of tonnage and costs for the remaining of the year in Yanacocha? That's my first question.

Certainly, this quarter has been a low in terms of production at Yanacocha, and we expect this production to raise during the next quarters. The -- in terms of the -- of the adjustment that they have made, Carlos, can you please help us on the...

There was a write-down in terms of the inventory value. As you know, what we have to do is to assess this inventory at cost or market value, the lower. And well, we had assorted inventory, assorted new costs that with the prices reduction. Finally, we have an adjustment of this amount. In total, $50 million, $54 million.

Okay, that's great. My second question is, could you provide an update on the Chucapaca and Conga projects, please?

On Chucapaca, you mentioned?

Yes, please.

Chucapaca, as we take it creatively, we are in the process of acquiring the lands, the immediate lands. And we have decided to put it on standstill for the time being until we reach an agreement, because if not, we are generating expectations, which we cannot cope with, if we are not able to acquire those lands. So we, essentially, are doing very little at Chucapaca at this moment.

That's great. And on Conga?

Conga, we have continued building the internal roads needed for the development of the project. As you know, the Chailhuagón project, the Chailhuagón dam was finalized last year. And essentially, we are cautious because of the election period. As you know, in Cajamarca, in all of Peru, there will be regional elections in October, and we don't want to be a subject of discussion. So we have decided to build those roads and wait and see. That's the situation at Conga.

Our next question comes from Carlos de Alba from Morgan Stanley.

Carlos, let me just go back to the question about the write-offs. This is the fourth quarter where Yanacocha has leach inventory write-downs. And I just want to understand, what is the logic of having these on a scattered basis, as opposed to having just one write-down? And if you can tell, would you expect that we're done with this situation or should we perhaps see more in the coming quarters, now that the gold prices and silver prices have rebounded year-to-date? Just any clarification there will be great.

Well, thanks, Carlos, for your question. [indiscernible] clarify something, information. During the last quarter, last year [ph], we included an impairment, impairment to other investments, okay, that according to our international IFRS statutes [ph], we have to account a report. We find we are not talking about this impairment. We are talking about a write-down from the current operations or value of our inventories. As you remember, what we have to do is to assess these inventories, as I explained, at cost or market value, which is the lower. And this was positive and this was fine while the price of gold was higher than what we had. Remember that this is a variable [ph] rate that incorporates the issue of the grades. If you exploit lower grades and [indiscernible] lower grades, you have certain volumes that do not really comply with the economic values. And this is finally the adjustment.

All right. Got it, but -- sorry -- last quarter there was an impairment charge of $453 million, which I understand is related to the investment of Yanacocha and the value of that investment, but there was also a $43 million charge on write-down for La Quinua and Yanacocha and Maqui Maqui pads, which is I guess, similar to what we have seen this quarter. And then, so the question, if it is related to gold prices, gold prices went up in the quarter. So it's basically the impact of the lower ore grades of what has been putting on the pads?

Yes, it's related to the lower grades on the recovery.

All right. All right, okay, understood. And then my second question is regarding the expectations for all grades in the coming quarters, at the Chipmo mine. If you can give us any guidance there, we appreciate it.

At the Chipmo mine?

This is Francois Muths, our Chief Operating Officer that will be...

This -- the first quarter, we produced at the Chipmo mine almost 45,000 ounces of gold. And we expect to produce in the second June quarter around 48,000, 49,000 ounces of recovery of gold at the Chipmo mine. The grades will be around 13.5 grams per ton.

That will be higher than the first quarter.

A little bit higher at the -- in the first quarter, the greater...

And that will continue until the end of the year, that's the situation, yes.

So the 48,000 to 49,000 ounces is the expectation for the second quarter? And this is a level that you expect to see also in the remaining of the year?

Yes, at the end of the year, until the end of the year.

Until the end of the year, all right. And what does the mining plans suggest for next year?

The next year, we have to -- that will depend on the result of the explorations. But we would do all of our efforts for maintaining that level of production.

Our next question comes from Alex Hacking with Citi.

My question is on the El Brocal expansion. In the press release, you discussed that you're going to be running the -- there at 7,000 tons per day on the copper ore from Marcapunta and 11,000 tons per day on the polymetallic ores. So once this capacity is running like at a full rate, should we expect that the copper production should be relatively stable with where it is now, maybe like 40,000 tons a year? And then the polymetallic production, the silver, the zinc and the lead, should we expect that to return back to the levels of 2007, 2008? I guess, that's my question. Like how much output of each metal should we be expecting from El Brocal going forward?

No, and you should be expecting this copper production, yes, a very stable production. Then the grades at the open pit at the lead, zinc, silver area have come down, and I don't think we can expect a 2007 production, but it will be a steady production and we would have an 11,000 tons per day capacity to process those concentrates or those ores.

Yes, we are going to increase in the same grades. And for sure, our expectation is to have an important cost -- cutting costs.

Reduction.

Reduction, yes.

Okay, it's clear. And a second question, if I may. At Rio Seco, the manganese plant, could you maybe give us an update there on the ramp-up process? Is everything working as expected? And should we start to see some downward trend in the cost of production from Uchucchacua as a consequence?

Essentially, the Rio Seco plant has been built to add value to the concentrate coming from Uchucchacua. I would like Raul Benavides to explain what is going on in Rio Seco. Raul, please? Raúl Benavides Ganoza: Yes, Carlos. The Rio Seco plant is running and processing about 120 tons of concentrate per day, and that's about the rate that it was designed, it was designed for 140, but it depends on the amount of [indiscernible] manganese-silver concentrates produced by Uchucchacua. So essentially, we have solved the problem of the manganese in the Uchucchacua concentrates, and the leaching is working very nicely. Our sulfuric acid plant is working perfectly, and we are having some problems to generate crystals for the manganese. And we're struggling with that. We're producing some manganese sulfate by spray dryer, but we should solve this issue of the crystals, the crystallization of the manganese sulfate if not for sure.

The thing is we are already producing this concentrate free of -- or with much lower manganese content than what we have worked with leaching from Uchucchacua. That is adding value to Uchucchacua's production and that we are very pleased with.

[Operator Instructions] And our next question comes from Santiago Perez with Crédit Suisse.

I wanted to go back to Yanacocha a little bit. Have you set any advances in [indiscernible]? And also, in terms of reserves, with what you have now, the permits you have now in line, what is the mine life of this current production, with everything you have now, with no additional permits, no works? And also, could you comment more on the inventory write-downs? Given that Carlos just mentioned that these ones were related to ore grades, can you give us color on what you expect for more rates in order for us to understand if these write-downs should be coming also in the next quarters?

The thing is [indiscernible] nothing has happened. It is -- we have not advanced anything, so it is the same as in the past. In terms of reserves, we continue to have reserves [indiscernible] in the next 4 or 5 years, and -- but we continue exploring at Yanacocha. I don't want -- Carlos, if you want to add.

Yes. Well, we do not expect additional write-downs. But we don't know. It's probably the [ph] view according to the evolution of the operations. But in principle, what we have done is adjust whatever we know at the end of the quarter.

Perfect, Carlos. And could you add, give us some color as to how much of this was affected cash, and what is the cash position in Yanacocha?

Well, the cash position is Yanacocha is close to $300 million. They continue keeping the cash in order to give [indiscernible] in the event if we have to develop the project. On the other hand, we continue generating cash. The net results have been affected mainly for -- not only the prices, but especially for the provisions that we have included. In our operations, in Yanacocha and overall by and large adjusting whatever, we intend to cooperate with the [ph] DNS.

Perfect. So just to be clear, the write-down now, the $40 million -- sorry, the $54 million you mentioned earlier were all cash?

No, this is not total cash, 50% of that is cash. And 50% is not.

Our next question comes from Karel Luketic with Bank of America.

Two quick follow-ups. If you could provide us an outlook for 2014, in terms of what to expect of attributable gold production and the other metals as well, and an outlook for CapEx in 2014 as well, that would be great.

Gold production [indiscernible].

The gold production, we continue expecting something in the overall by 900,000 ounces in total attributed [indiscernible] only 50% or less coming from the operation we manage, and 50% of that from Yanacocha. The question is that, as it was mentioned, the first half of the year Yanacocha's production, and it has been announced previously, will be lower than the second half of the year production. In our side, there is [ph] very little production, pretty low, according to our expectations. In the case of Orcopampa, as [indiscernible] have mentioned, that we are doing our best to compensate that with Breapampa, La Zanja and Tantahuatay productions. So this is our way to compensate [indiscernible]. In the case of [indiscernible], we continue aiming to be close to the 20 million ounces. Unfortunately, the first quarter was not as good as we expected. But we believe that we are going to have the opportunity to resume the rate of production we expected. So now, we are looking at total silver production available to us in the order of 20 million ounces.

And in terms of CapEx for 2014?

I'm sorry, for the CapEx, we are aiming to something in the order of $280 million, which includes the Julcani [ph], the expansion project conviction [ph] that happened during the first quarter of this year, instead of last quarter last year. Taking away this, we are talking about between $240 million to $260 million. And going forward, we expect to maintain a weight [ph] in the order of $230 million, $240 million for our other projects, consumer [ph] -- that for the time being, the projects we have are mainly [indiscernible] on one hand, that we will invest and build $120 million for a couple of years each year. Then we have to complete the construction of Alejandra, which is the 12 [ph] -- our [indiscernible] exploration and progressing in [indiscernible], and that's it.

Our next question comes from Tanya Jakusconek with Scotiabank.

I have a couple of questions, probably for Carlos. I just wanted to just check on what our copper and zinc guidance is for 2014?

The copper production will be in the level of 70,000 to 75,000 tons per year, [indiscernible] mainly, the attributable production from [indiscernible] plant at our silver production of Brocal. This will happen this year and next year, and our expectation is to reach close to 150,000 tons when it is all ready [ph] to begin the expanded production. In the case of zinc, the [indiscernible] the production not really with the order of 40,000, 45,000 tons per year.

Okay. And then, we noticed that you did not sell all of the metal that was produced in Q1, especially copper. Will that, Carlos, be sold in Q2?

So I didn't see no major delays, if I may ask, Tanya. There have been no major delays. Everything that is produced is being sold. It may have had a short delay, but nothing much.

Okay. And then can you tell me what exactly is a contingency expense? What is it in the income statement? We can see the number, but I just wanted to understand what exactly is it?

The contingent -- the -- okay, okay, okay. No, what happened is that we are negotiating with the community also or unit, an area...

An area of Uchucchacua.

an area of Uchucchacua. The expansion of our [indiscernible], this is a procedure that we try to manage during the latest 6 years and it was almost impossible to reach the terms because we had no counterpart to negotiate. At this point in time, we are -- we have our counterparts with the community have finally elected a board [indiscernible] and well, now we are negotiating with them. And the total value of our best assessment of our leaching [indiscernible] this amount. So -- but this is part of having [ph] that we have to consider on incorporating [ph] [indiscernible]. Eventually, if we reach the terms, we will be right on target [ph] to pay back almost in -- during the year.

Okay. So this is your best guesstimate of what has to be paid out at this point in time?

Yes. Absolutely, yes.

And then lastly, can you give us the guidance for exploration for 2014 for your operating and non-operating properties, because exploration looked like it was very high in Q1?

Yes. Well, in our non-operating explorations, our budget is in the order of $65 million to $70 million. That, as -- if you would understand, these exploration process or budgets includes not only the actual jobs that we have to pay, but also there are [indiscernible] in these communities, in these exploration areas, and these could happen at any point in time. So this is not an average that we will pay quarterly -- eventually, [indiscernible] not be in agreement with communities and not to pay anything. But this is how we would budget. In the case of the exploration in the operating areas, sounds pretty high yet, but this is therefore we are [ph] earn out now, in order to repay and replenish ourselves, especially in [indiscernible].

Do you have a number for us for 2014 for operating exploration?

Well, I believe that we continue expanding where we have [indiscernible] during this quarter.

So if I use -- sorry, if I use $32 million per quarter, is that a reasonable number?

Yes, it could be $40 million [indiscernible]. Yes, $40 million per quarter.

That's the order of magnitude and you all understand that exploration is fundamental for a mining company like Buenaventura, especially in underground mining.

Our next question comes from Carlos De Alba with Morgan Stanley.

Just wanted to understand, Roque, Carlos, if -- is there anything else, in terms of lower expenses, lower cost, that we should expect in the next few quarters coming from the turnaround plan that the company put together in -- during the third quarter of 2013? Or basically, all of the benefits had already come through?

Well, it is a process. The stopping of operations is a process and you cannot stop everything from one day to the other. And we're going to see cost reductions in the course of the year, and -- but most of the "benefit" has been shown, no? We haven't...

Well, yes, it's an indicator [ph] of our general [indiscernible], the amount we reported this quarter, was impacted by no more than [ph] $10 million dilution [ph] so we should do [ph] something there. On the other hand, the impact of the generation, the power generation within the company. We are not going to purchase energy through third parties but will be an internal effect. So that means in the order of $5 million to $7 million per quarter impact in our P&L. And finally, when you -- once you complete or when we complete the ramp-up of our operations in Brocal, it [ph] will be an important contribution. We obtain [indiscernible] in the order of less than $1 million in this quarter without having any expanded production in Brocal. Our expectation is prices of copper, zinc and silver and lead, [indiscernible] we should think [indiscernible] the order of $60 million to $65 million EBITDA from this operation, something that was not good during the third quarter [indiscernible].

Sorry, the $60 million to $65 million EBITDA in El Brocal that you mentioned is for the year?

It's for the year, yes. In spite of the fact that we hadn't had any good contributions for this expansion during the first quarter.

But -- so how much was the EBITDA of El Brocal in the first quarter, Carlos?

It was in the order of $10 million or $15 million. I don't have the figure, but I should get [indiscernible] later on.

Our next question comes from Héctor Collantes with CrediCorp Capital. Héctor Collantes: I just had 2 brief questions. The first one is related to -- what is expected for Orcopampa costs? If I remember, you were reaching the richer areas perhaps by the second half of the year. And therefore, the [indiscernible] and mine development will go down. So shall we expect this cost to pull down in the second part of the year, perhaps 2015? And the other question is, even though it's the earlier stages, what is it that you look now at Tambomayo, and for the 2016 start? Is there any guidance on perhaps the output that is being looked for, and perhaps just a little bit of it [indiscernible] of that would be very, very good.

We were not able to understand very well your question. You were -- the first question was on cost structure? Héctor Collantes: Yes. Perhaps I can say it again. In Orcopampa, I was just wondering whether the second half of the year, we'll see a diminishing of the cost, because as I remember, the mine development plans to reaching the richer areas might be coming in line. So I'm just wondering whether it is coming sooner or later.

In Orcopampa, we will continue with our intensive exploration, and we don't foresee substantial reduction in costs in Orcopampa, essentially, because we are investing in replacing reserves and increasing the ounces produced there. So there would be no cost reduction in the course of the year. And the second question please. Héctor Collantes: The second is about Tambomayo. What is it that you are looking now, what is going on? Just a brief overview would be nice.

Well, Tambomayo is something that we feel very proud about. We are increasing the resources there. We are continue finding additional veins and structures and as I say, increasing our resources. We are working intensively. We are looking after -- in the environmental -- we have -- the environmental impact studies have been approved and submitted, so that should be approved shortly. And then after, we will continue as fast as we can. The permitting issue in Peru is difficult but not impossible. And the authorities are doing all their best efforts in reducing the timing for obtaining all this permitting. But Tambomayo is -- continues to be a great expectation for all of us in Buenaventura. We expect to be introduction, I always keep saying by the end of 2015 or early 2016, but it will be in that area that we will be producing.

[Operator Instructions] There are currently no questions in the queue at this time, so I would like to turn the call over to Mr. Benavides for closing remarks.

So thank you, again, for joining us in this quarter. We can assure you that we will continue working very hard on including our operations, exploring intensively and getting back to the levels of production that we have mentioned before, and that you can be sure that Buenaventura will succeed in all that we expect [ph]. Thank you for having us, and have a good day. Thank you.

Thank you, ladies and gentlemen. This concludes today's teleconference.