Good day, ladies and gentlemen, and welcome to the Compañía de Minas Buenaventura Fourth Quarter 2018 Earnings Conference Call. At this time all participants are in a listen-only mode and please note that this call is being recorded. I would now like to introduce your host for today's call, Mr. Rodrigo Echecopar, Investor Relations. Mr. Echecopar you may begin.

Good morning and welcome everyone. Presenting on the call today is Mr. Victor Gobitz, CEO. Also present and available for your questions are Mr. Leandro Garcia, Vice President and CFO; Mr. Juan Carlos Ortiz, Vice President of Operations; Mr. Raúl Benavides, Vice President of Business Development; and Mr. Alejandro Hermoza Vice President of Sustainability. Before we get started, during today’s call we will make forward-looking statements that reflect the company's current expectations about future plans and performance. These statements rely on assumptions and estimates, and actual results may differ materially due to risk and uncertainties. I encourage you to read the full disclosure concerning forward-looking statements which is in the press release we filed on February 21, 2019. With that, I will now turn the call over to Mr. Victor Gobitz, CEO. Please go ahead.

Thank you, Rodrigo. Good morning to all and thank you for attending this conference call. We are pleased to present our results of the fourth quarter of 2018 from Compañía de Minas Buenaventura. We have prepared a short Power Point presentation which is available in our webpage. Before we go further, please take a moment to review the cautionary statement shown here on slide two. Moving on to slide three, highlights were as follows: As a key initiative, the company is implementing its De-Bottlenecking Program to increase profitability and strengthen its long term business case. As part of this strategy, Buenaventura has centralized operations, re-focused mining plans on the highest-margin areas and optimized processing facilities. As a consequence, guidance adjustments were made for certain operations. EBITDA generated during 2018 from this program reached $24 million. Additionally, with the enhanced methodology of maximizing capital allocation, 2018 capital expenditures were $111.3 million, a significant decrease compared to $259.5 million in 2017. In this fourth quarter of 2018 our EBITDA from direct operations was $68.9 million, compared to $118.9 million reported in the fourth quarter of 2017, primarily due to lower metal prices and a reduction in volume sold at the company’s Orcopampa and La Zanja mines. In this fourth quarter adjusted EBITDA including associated companies reached $148.6 million, compared to $248.4 million a year ago. In this fourth quarter net loss was $72.9 million, compared to a net income of $8.3 for the same period in 2017. The loss in this fourth quarter was primarily due to Cerro Verde´s recognition of interest and penalties in the amount of $406.6 million, 100% basis related to Cerro Verde’s royalty dispute with tax authority. . The company was compensated through its Business Interruption Insurance related to problems detected in May 2017 at El Brocal’s biggest ball mill. During the fourth quarter of 2018, the company received $28.8 million related to this claim, totaling $38.8 million. As of December 31, 2018, Buenaventura’s cash position reached $369.2 million, compared to $214.6 million in 2017. During 2018 the company’s net debt over EBITDA ratio fell from 1.4x to 0.99x. A dividend payment of $0.06 per share was proposed at the company’s Board Meeting held on February 21, 2019. Moving on to slide four, we our showing our strategic map, where we use as usual the capital being from the lower Buenaventura as a visual index for the following slides. In the coming slides we are going to discuss the financial results of the company. Moving on to slide five, financial highlights. Total revenues during 2018 were $1,167.4 million, which is 8% lower in comparison to 2018. EBITDA from our direct operations in 2018 was $315.4 million, which is 16% lower in comparison to last year, mainly due to the lower volume sold at Orcopampa and La Zanja. EBITDA including our affiliates in 2018 was $663.8 million, which is 8% lower in comparison to 2017, and our net loss in 2018 was $13.4 million compared to a net profit of $60.8 million a year ago. The net loss is mainly explained by Cerro Verde's provision for tax disputes of $460.6 million. Our CapEx has continued decreasing since the year 2016, having a value of $111 million in the year 2018. The free cash flow in the year 2018 jumped to $229 million, compared to $74 million in the year 2017. During the last quarter of 2018, Moody's upgrade our credit rating outlook from state role to positive and according to Fitch, our credit rating remains as investment-grade. Moving on to slide six. In this slide you can see the waterfall variation between the budgeted EBITDA from the whole year and the real EBITDA reached. The lower EBITDA was mainly explained by lower metal prices of gold and silver, as well as lower volume sold from Orcopampa, El Brocal and Uchuchacua, which was offset by the results of our De-Bottlenecking Program. Moving on to slide seven, here again we can the V as a visual index for analyzing the results from our portfolio of operations. Moving on to slides eight and nine, attributable production, total gold attributable production in 2018 was 603,000 ounces, which is 5% lower than the field reported last year. This reduction is mainly explained by lower product coming from Yanacocha, which was part of the mining plan and Orcopampa. As previously was announced, we decided to prioritize the De-Bottlenecking Program and operations were suspended from December 17, 2018 to January 31, 2019. Silver attributable production for 2018 was 26.9 million ounces, which shows an increase of 2% compared to the field reported last. In 2018 62.7 thousand metric tons of zinc were produced, 15% higher in comparison to a year ago. This increase was mainly due to Uchuchacua and Tambomayo higher production. And in 2018 led equity production was 38.8 thousand metric tons, which is 5% higher in comparison to a year ago. And finally our copper attributable production for the whole year was 121.8 thousand metric tons, which is also in line with the field reported last year. Moving on to slides 10 and 11, as you can see in the consolidated volume sold from our direct operations decreased in the case of gold, mainly due to lower volume sold from Orcopampa and La Zanja. In the case of silver for the year 2018 we solid 24.5 million ounces, a 1% decrease as a result of lower volumes sold at Uchuchacua. In the case of zinc, the 5% increase in the year 2018 is explained by more volume sold at Uchuchacua and Tambomayo. In the case of lead, the 4% increase in 2018 compared to the previous year is explained by more volumes sold at Uchuchacua and at El Brocal. Finally, in the case of copper, the 2% increase is explained by more volume sold at El Brocal. Moving on to slide 12, the all-in sustaining cost from our direct operations in 2018 was USD$955 per ounce of gold, 12% higher in comparison to a year ago, mainly explained by lower volumes sold at Orcopampa and La Zanja. The cost applicable to sales in 2018 were as follows: For gold USD$849 per ounce, which is 12% higher than a year ago. For silver USD$10.47 per ounce, which is 7% lower than a year ago; for lead USD$0.58 per pound, which is 16% lower than a year ago; for copper $1.55 per pound, which is 3% higher in comparison to a year ago. Finally in the case of zinc, the cost applicable to sales was USD$0.78 per pound, which is 12% lower than a year ago. Moving on to slides 13 and 14, you can see the volume of gold sold and the cost applicable to sales for each one of our gold assets. Moving on to slide 15, you can see the volume of silver as well as the cost applicable to sales for each one of the assets that are part of our portfolio. Moving on to slide 16, you can see the volume of copper and zinc sold as well as the cost applicable to sales for each of the assets that are part of our portfolio. Moving on to the slides 17 and 18, the De-Bottlenecking Program which we are implementing in our biggest underground mines is in progress. In order to become a more predictable company in terms of production and profitability, we have to fully implement the De-Bottlenecking program, which will allow us to operate efficiently and in addition increase the visibility of our ore reserves for the mine planning purposes. During 2018 we have started obtaining results in Tambomayo, Orcopampa and El Brocal, generating an additional EBITDA of $24 million. Also as you can see in the slide 18, we are providing an updated table with our main projects for 2019. During this year we are going to be able to generate in excess of $45 million due to these programs. Moving on to slide 19, this is the slide we are presenting the variation of our ore reserves. In the case of gold, in 2018 our reserves from direct operations decreased 23% compared to the previous year, mainly by the ore reclassification in Orcopampa mine. However, in the case of our total attributable gold reserves there has been a significant increase of 42% related to Yanacocha Sulfides projects. In the case of silver, both our direct operations results and our total attributable results, you can see also a significant increase in comparison to 2017. Our results from direct operations shows an increase of 24%, mainly all united by Uchucchacua and El Brocal ore reserves. Our total attributable shows an increase of 35% due to Uchucchacua and also Yanacocha Sulfides project. And finally our total copper attributable reserves in 2018 shows an increase of 10% compared to 2017. This increase is mainly explained by Cerro Verde's updated ore reserves and also Yanacocha Sulfides products and Marcapunta Norte-Sur which is part of El Brocal. Moving on slide 20, once again here we – you can see our capital B to allow, use for analyzing in more detail the updated information regarding our portfolio of projects. Moving on to slides 21, here we are presenting in one snapshot, a current development level for each one of our projects. Moving on to slides 12, 23, 24 and 25 here it's important to highlight the following aspects. In the case of San Gabriel, we have an updated Geomechanical Model and its mining method was defied. The Prefeasibility study has been assigned to AUSENCO and M3, another consultant company will add as a pre-reviewer. We expect to reach pre-feasibility phase by the third quarter of 2019, and Feasibility stage during 2020. In the case of Tantahuatay’s Sulfides the Scoping study was completed and discussed at Coimolache’s Board. We expect to reach Pre-Feasibility stage by the third quarter of 2020. In the case of Trapiche a consultant company M3 has finished the scoping valuation with no major changes. Trade off studies are in progress and geometallurgic & geomechanics drilling campaign will start in March. In this case we expect to reach Pre-Feasibility stage by the first quarter of 2020. And in the case of Rio Seco, Hatch another consultant company continues de-risking processing activities. The environmental impact assessment is in progress and the scoping stage was completed during 2018 and the Pre-Feasibility phase has been rescheduled to second quarter of 2020. Moving on to slide 26, thank you for your attention. I will hand the call back to the operator to the open the line for questions. Operator, please go ahead.

Thank you [Operator Instructions]. And we’ll take our first question from Carlos De Alba from Morgan Stanley.

Yeah hello! Good morning everyone. Thank you for the call. Just maybe, can you please comment on the situation at Orcopampa. How is the ramp up coming along after the shut down and the second, if you can just clarify on the De-Bottlenecking, the target for 2019? Is this a cumulative number or is just fewer incremental EBITDA in 2019 on the back of the 12 programs or phases that you are – or initiatives that you are implementing. And then finally, given the I guess settlement or the solution on the tax dispute that sort of where they had, how should we think about the implications of that resolution on the potential dividends that the company sort of were – might be it this year or next year? Thank you.

Thank you Carlos for your question. The first one is related to Orcopampa and the ramp up. Here it is from Carlos Ortiz who is our COO. He will answer this part.

Hi Carlos. Well, we are seeing operation as expect by early February. We are progressing with exploration with the nearby – in the near area for the mine where we are planning to centralize operating in the near future and we are expecting to have result from this early, where you can pay it by April, by the second quarter of this year and we will be reporting any progress as soon as we get good news from the exploration.

Just to summarize Carlos, in the fourth quarter of this year we expect to reach profitable result from Orcopampa. Clearly, we have – as Carlos said, we are obtaining very good exploration results. The second question was regarding the De-Bottlenecking program. Yeah, it’s a cumulative analysis. Probably I have to recall that these are the programs with the expansion of three years and we expect to increase the total EBITDA in the area of $120 million to $150 million. In the first year, in 2018 we have increased annual EBITDA in the area of $24 million. During 2019 we expect to increase that number in the area of $40 million to $50 million and in the last year, in 2020 we expect to capture the full value of this program. Your third question was regarding Cerro Verde, year clearly Cerro Verde after this, the solution to this tax dispute is it’s an asset with a long term perspective and very robust financial numbers. In the coming broad meeting that will be held on March 8, one point of the agenda is to discuss, define policy dividend. After that we will be able to share this information with you.

Alright, but do you see any potential negative implications from the EBITDA from the settlement and the tax payment.

No, because in the worst case scenario they are – Cerro Verde has the right to pay this amount in an extension of 66 months, which is very – from a treasury perspective is very, very easy, 66 months.

56?

66.

66, alright okay. Thank you very much.

They have the right to refinance the number.

Understood.

Thank you, Carlos.

Thank you, Carlos.

Thank you. We’ll take our next question from Tanya Jakusconek.

Hi, good morning everybody. Thank you very much. Maybe just coming back to the De-Bottlenecking, so I am 150% sure, you mentioned that it is cumulative. So you've done 24 million in 2018. So on a cumulative basis you are expecting you know to get to the $40 million to $50 million, another $20 million or so improvement into ‘19 is that correct?

No, it’s not correct, Tanya.

No, so its $40 million to $50 million on top of the $24 million.

Yes, on top.

On top, okay. Alright, so that’s that. Actually my big question was on the reserves. I really notice that your grade at Orcopampa, Tambomayo and Uchucchacua really fell quite substantially on your reserves. Can someone take to me about what happened at those three mines?

Yeah, thank you Tanya for the question. Its topic related to the De-Bottlenecking program. Here, Juan Carlos Ortiz will answer it.

Hi Tanya. As a consequence of the cost reduction that we are reaching in our operations, particularly in Tambomayo and Orcopampa, we reduce our cutoff. As a consequence of that, we increment the volume of fine gold and polymetallic material from the category of resources into reserve to be economical at this point. So that’s an increment of when the previous year was reported to us. It was not reported in our reserve. It was part of our mid-30 of services of low grade, now the jump from resource into reserve due to the reduction of the cutoff rate.

Okay, so it’s just a matter of cutoff grade at Tambomayo – at all of the operations or just all three of them had a reduction.

None of these have cross over effect that’s more sensitive on Tambomayo, Orcopampa and Uchucchacua.

Yeah Tanya, let me add just the concept of regarding through this De-Bottlenecking program we are reducing our production cost and at the end we are reducing our capital, that’s the implication.

Yeah, no I got that. It’s just there was a lot of tons added at very lower grade to really have lowered the grade by half on what the reserve grade was last year. Yeah.

But we have to remember that through these De-Bottlenecking programs we are increasing the efficiency. We are able to generate margins with low grade materials.

Okay, and at San Gabriel you mentioned you have selected a mining method for the underground. What mining method are you thinking right now?

Yeah, here its Raúl Benavides. He will answer it. Raúl Benavides: Yes Tanya. While we are using cut and fill, and that we have been checking the quality of the work and we feel very confident with cut and fill that we can work very nicely the ores in San Gabriel.

Yeah, let me add some information, that in addition to the cut and fill we will use primary and secondary stops. In the primary stops we will use segmented backfill.

Okay, so we are talking then potentially higher mining costs than you were originally contemplating when you were thinking about San Gabriel, because it’s a more selective mining method with back fill.

Not really more selective. It’s just that we are talking all the contingencies out, so that if the rough is better than what we think will increase efficiencies. So we are giving the worst case scenario into the project, so that the only – you know we can expect better things and at better costs than what we are achieving.

Okay, and then finally what were we thinking the mining method to be in the cost when you originally through about San Gabriel?

Well, we were looking long drill holes, so that we could have more efficiencies. But the problem is when you use that, you may get into problem if the rock is not competitive enough. So what we have done is go to the worst case scenario, and we are using the worst case scenario in order to run the numbers, a and the numbers are very solid with the worst case scenario, so we are very confident that we will have no problem.

Okay, thank you.

Thank you, Tanya.

Thank you. We’ll take our next question from Luis Vicente with Credicorp.

Hi Victor, hello guys. I just have a question about costs and I don’t know if you can give us some guidance for Orcopampa and Uchucchacua which I think are they minus, that they are being most affected with the De-Bottlenecking program and since this will continue on 2019, I don’t know if you can give us some guidance on the costs.

Thank you, Luis for the question, yeah. Here it’s Juan Carlos Ortiz. He will answer the – he will break down this number for Orcopampa and Uchucchacua.

Hi Luis. Well, we expect to reach by the end of the year a total cost reduction, in the fourth quarter of 2018 to fourth quarter of 2018, to the fourth quarter of 2019 of 20% to 25% cost reduction in Uchucchacua and about 10% cost reduction in Orcopampa. That’s the range we are expecting to reach by the De-Bottlenecking program along this year.

Okay, but during the De-Bottlenecking program, I mean before reaching this reduction, do you have, I mean a guidance or something you can give us?

A guidance in terms of production goals?

Yeah.

In terms of US dollar per ton, give me seconds.

Yeah, we – this year we ended up with a run of $120 in Uchuchacua, $120 per ton process and we expect to be in the low $100 by the end of the year 2019. In the case of Orcopampa, we ended up with around $350 per ton, cumulative 100% of the total of 2018 and we expect to reach about 250, 280 by the end of 2019.

Yeah, it’s a significant change for the case of Orcopampa.

Okay, okay thank you very much.

[Operator Instructions] We'll take our next question from Thiago Ojeda with Goldman Sachs.

Hi, good morning everyone and thanks for the questions. First of all, I would like to clarify that on your reported EBITDA you had the insurance gain at El Brocal of $20 million included on that and if there is any similar insurance gain expected in the future. And second, if you can provide the guidance in terms of CapEx in the situation in Quecher Main and Marcapunta would be useful. Thank you.

Thiago, thank you. Yeah, your first question is related to the insurance policy. We don't expect any problems as we faced in 2018. But this number is – at the end this money, in some sense it’s the insurance company’s recognition, the loss of production and the loss of profitability coming from El Brocal. So also that mean that we have a very good policy insurance that cover all of our mines you know, because my number was very significant. So but, your question is you expect something similar this year? No, the answer is no. And your second question was related to CapEx. Here is Leandro Garcia, our CFO, he will answer it.

Yeah, we are – hi Thiago. We are planning – we have budgeted for this year 2019 to have CapEx between $80 million and $120 million, the same level of last year.

Can you just discuss a little bit the next phase on the Quecher Main in Marcapunta.

Each of our mine is, as you know it’s under development. It’s under control of – you know its part of Yanacocha. When we discuss about our CapEx we are not concealing this number, but clearly the cash position in Yanacocha is very strong. So this trade doesn’t require any fund from the stakeholders. You see this is your – concerning your question. And the second one…

No, my question is more when, when – sorry, no my concern is more when the projects will be – build a plan, when it will be in operation, more fine lines.

Yeah, they started in the last year in 2018, in the last quarter, they started to put some minerals in the paths. So they – in the last quarter of this year, Quecher Main will be in full products, so it was a very successful period. And in the case of your second question or another question was related to Marcapunta. Marcapunta is an expansion of the higher end operation, on the ground operation. So it is not significant in terms of CapEx you know. It’s more related to solve some restrains, some modern things.

Thank you.

Thank you, Thiago.

Thank you. We'll take our next question from John Bridges with JP Morgan.

Thank you. Good morning Victor, everybody. Just following on from Tanya’s question may be, the mining method. It’s not uncommon to sort of start off with a conservative mining method like cut and sell and then as you get comfortable with the rock, maybe go to a cheaper method. Is that something that might happen?

Yeah, so this helps it soften, but here's Raúl. Raúl Benavides: Yes, hello John. Yes, you know it happens. The rock is not homogeneous, so when you get into operations you normally have some bad and good rock. What we are assuming is that the worst case, because we have some elements that the rock is not good. But I mean it always happens in mining that you run into better quality rock and there will be probably an opportunity to reduce cost using long drill holes and more efficient mining methods. What we were doing is just again trying to use the worst case scenario, so that we are in the safe way in any case.

Yeah, we like good surprises on this side of the street. Just on the forecast for 2019, you have them individually in your release, but I wondered if you have a sort of some guidance as to what the totals were for gold, silver and maybe the base metals.

Yeah, give me a second, but we in the – during our Investor Day we intent to present to the market the production and also the production cost for the coming three years, will we have enough time to share this information, but here we have some numbers. In the case of gold, we will produce in the range of 600,000 ounces of gold and in the case of silver, in the range of 24 million to 26 million ounces. In the case of lead, we will produce in the range of 50,000 to 55,000 metric tons of lead and in the case of zinc in the range of eight to 100,000 metric tons of zinc. And finally in the case of copper, including our equity participation in Cerro Verde, in the order of 125,000 to 145,000 metric tons of copper.

Okay, great. And then presumably, is that going to be rather stable over the next three years or is it going to be a pickup from Tambomayo?

Yeah, we prefer to analysis this information in terms of profitability. We have a more detailed analysis in addition to production and costs in terms of profitability, and as I said, I will like to share this information with you in our coming Investor Day.

Okay, I appreciate that. Thanks guys. Best of luck!

Thank you, John.

Thank you. We’ll take our next question from Carlos De Alba from Morgan Stanley.

Yeah sorry, my question was asked already. Thank you very much.

Okay, thank you Carlos.

Thank you [Operator Instructions]. It appears to be there are no future questions at this time. I will now turn the call back over to Victor Gobitz.

Okay, thank you. Thank you again everyone for joining our conference call this morning. As Buenaventura team, we are committed to developing the full potential of our existing assets, through our De-Bottlenecking program, prioritizing the long term perspective in order to become a more profitable company in terms of production and profitability. Furthermore, we are implementing a disciplined process for value generation through enhanced methodology in order to optimize our capital location. To let you know, we will be attending the BMO's Global Metals & Mining Conference next week in Miami. And finally, we are glad to invite you to our Investor Day that will take place on Thursday March, 7 in New York. Please contract our IR team for further information. Thank you again and have wonderful day!

Thank you. This does conclude today’s conference. We appreciate your participation. You may disconnect your lines at this and have a great day!