Good day, ladies and gentlemen, and welcome to the Compania de Minas Buenaventura First Quarter 2021 Earnings Conference Call. . Please also note today's event is being recorded. At this time, I'd like to introduce your host for today's call, Mr. Rodrigo Echecopar, Investor Relations. Mr. Echecopar, you may begin.

Thank you. Good morning, everyone, and thank you for joining us today to discuss our first quarter 2021 results. Today's discussion will be led by Mr. Leandro Garcia, CEO. Also joining our call today and available for your questions are Daniel Dominguez, CFO; Mr. Juan Carlos Ortiz, Vice President of Operations; Aldo Masa, Vice President of Business Development and Commercial; Alejandro Hermoza, Vice President of Sustainability; Renzo Macher, Project Manager. And also available for questions are Mr. Roque Benavides, our Chairman; and Raul Benavides, our Board Member.

Thank you, Rodrigo. Good morning to all and thank you for attending this conference call. Before we start this presentation, we would like to wish you, your family and friends health and well-being at this acute time. We are pleased to present the results of the first quarter of 2021 from Compania de Minas Buenaventura. We have prepared a PowerPoint presentation, which is available in our web page. Before we go further, please take a moment to review the cautionary statement shown on Slide 2. Please consider the disclosure related to the COVID-19 pandemic. Moving on to Slide 3. Highlights were as follows: EBITDA from direct operations reached $38.2 million in first quarter '21 compared to negative $6.7 million reported in the first quarter '20. First quarter '21 adjusted EBITDA including associated company reached $182.9 million compared to $30.1 million in the last quarter in the same -- in the last year in the same quarter. First quarter '21 net income of $16.4 million compared to a net loss of $68.6 million for the same period in 2020.

. And our first question today comes from Carlos De Alba from Morgan Stanley.

I have a few questions, if I may. The first one is if you could elaborate a little bit more on the $550 million debt or bond that the Board of Directors approved and that the shareholders are going to be voting upon. If you could maybe provide a little bit of background and confirm if it is -- this is related with the tax dispute and that you are right now facing in Peru? And if you could provide an update on that tax dispute, that'd be appreciated. My second question has to do with the CapEx outlook for Buenaventura. If you can confirm the number that you spent for this year, maybe you have already sort of a view for next year? And how does the Yanacocha Sulfide project, which may be approved in a few months, plays into that? How is that project going to be financed? In the release, you had mentioned it could be a $2 billion, seems like the autoclave is the route that is most likely the company will follow. So how will the project be financed? That would be great. And then finally, if there are any comments that you would like to make addressing the uncertainty that we are facing in Peru. Sort of what are the certainties that the company -- the mining companies and the structure companies in Peru have in the event that one of the candidates becomes President and carries on with the comments about maybe claiming a little bit more of the weld that the mineral resources in Peru generate?

Thank you, Carlos. Your first question was about the $500 million in negotiated obligations that we mentioned in our press release. Well, we are asking for approval to the shareholders. In order to be preferred for the debt and our obligations to . We are looking for that approval. We are making -- preparing for a plan, a complete plan to solve the current situation of Buenaventura. Well, we are expecting that approval, and we will continue and we inform which will be the way we are following and we will announce in the market. In terms of CapEx, there is no significant change in our view for the guidance for this year. We continue with the CapEx expected in the beginning of the year. And in Yanacocha, for the sulfide project, as you know, the decision will be made in the second half of 2021. We have not yet discussed how to finance this project with Newmont. And well, we are working together reviewing all the projects. And whenever the decision is made, it will be announced. And finally, the question about the political situation. Yes, it's -- now it's a special political situation for -- intra political situation in the country. However, we are sure that the country will -- the people in Peru will think profoundly the how is going to be their vote. They -- I think they will prefer the trend of development. And in the meantime, as the company, we do not make any participation or political issues or any comment about that. We continue with our work with all the sustainability we have with our people and with the communities that are in our areas. So we are expecting to continue in that way. And I don't know if you're okay, want to make an additional comment about that?

Thank you, Leandro. I don't know why they call on me always for political comments. But anyway, I think the elections have shown that there is no majority leader in Peru. Between the 2 candidates, they obtained less than 30% of total votes between the 2 that went for the runoff. So the problem being is Congress, in fact. It's a Congress that has a number of political parties, if I'm correct. 10 different political parties that are part of the Congress. And that is going to make it difficult to pass some laws. Our impression is that these elections should show that Peru continues in the trend of development. But obviously, we are not sure of what is going to happen. We think Peru has shown to be a reliable country. In economic terms, the central bank is very respected and we hope most of the parties that are in Congress will support that position from the central bank and that should give us some assurance. Difficult to say, it's 5 weeks to go until the run off and I don't think there is a clear winner yet.

. And our next question comes from Tanya Jakusconek from Scotiabank.

Roque, maybe if I could just continue, and I know you are the expert on this political situation in Peru. But just any thoughts that you might have or what you're hearing on mining laws and taxation in Peru if Castillo wins the presidential election?

Well, again, I go back to what I said. In Congress, there is no majority group. So whatever comes out of Congress, whatever law is given in Peru will require the consensus of a number of political parties. It is funny, I am no expert, Tanya. Certain politics in Peru is something that is very difficult to understand. But essentially, we can -- candidates say that they are going to do such and such. But at the end of the day, they will have to discuss these matters with the other political parties. And I hope that the right analysis is made in the sense that what we need is laws that attracts more investment in order to develop our resources and other activities in Peru. So I think if Mr. Castillo is the winner, which I -- as I said, there is no clear winner at this point in time, he will have to get to consensus with other groups.

Great. Thank you so much, Roque, for that color. I appreciate it. All the world obviously is looking forward to seeing what comes out of Peru in the next short while. If I could move off Peru and maybe just move to the financing plan, can I just confirm that your debt is sort of the route that you are going? Or are asset sales still an option for you?

Thank you, Tanya, for your question. Maybe Daniel can make more comments about this -- for your question. Go ahead.

Yes, Tanya, thanks for your question. The debt that we are planning to -- that we are evaluating is to pay 100% of the SUNAT controversy that we have. As you know, starting in July, we should start paying to the SUNAT the initial amount and then continue with the other installments. So with this debt, with this liquidity, we should pay 100% of our controversy with SUNAT. And we are still evaluating the asset sale as you mentioned in order to increase our liquidity and also to improve our debt ratios.

Yes. I was just going to ask what you think is an appropriate leverage ratio for Buenaventura.

We think that's between 2.5x and 3x net debt ratio is a good ratio for Buenaventura.

Okay. And can I ask where we stand on the -- because we've got to obviously San Gabriel capital to coming forward if we want to build that mine. We obviously have the Yanacocha Sulfides, your portion of the capital there. Can I ask just maybe your strategy on funding of these? And where does the Cerro Verde dividend stands?

Okay. Thank you, Tanya. Well, as you know, we have a variety of investments to evaluate. We -- as you know also, we are working on choosing a group or type of assets that we will sell. We are evaluating all the alternatives. And with that, we should pay the current debt we have with the syndicate debt. With that, we get free of covenants, and we can expand our line of credit in order to finance, as you know, our most important project today that is . So we are working on that. And we feel that we can continue with this investment proposal we have on this -- on our project. I don't know if Renzo wants to make some comments about the -- our San Gabriel project, additional comments about capital.

Well, more then, that's kind of what it's holding us from starting construction is the construction permit. And mainly the social part of it that has been -- we have been working with the government over that permit for the last 2.5 years or so. We have been impacted by the recent elected community authorities. But we see from all these discussions with the government that there is an interest in pushing San Gabriel forward because it's going to help a lot into reviving the Peruvian economy. Social distancing measurement has not played in our favor lately. So our best guess is that we are going to have the construction permit in the second half of this year, as we stated in the press release. Meanwhile, we are continue advancing engineering to mitigate any possible delays with the project.

Okay. So my understanding, I think, is that you're looking to finance San Gabriel from your credit facility once you're able to alleviate some of the covenants. Is that correct?

Sorry. Sorry, once a minute. Yes, that's correct.

Okay. And what about our Cerro Verde dividend? Will that be coming any time soon? And can that be used for Yanacocha Sulfides portion of your CapEx there?

Well, as you know, we are about to receive a dividend in these days. I think between today and on Monday, we will receive the first dividend, which -- with the prices we have of the copper today, the current prices, we are expecting more dividends in the future and will, but this is not already defined with our partners in Cerro Verde. So of course, we expect more dividends, but -- and also can be the way to finance our own projects also.

Okay. I think those monies within the joint venture at the asset level that could help finance some of Yanacocha, right?

Excuse me. Excuse me, Tanya, I didn't get your question.

Yes. So I'm just trying to understand 2 things. One, how big is the Cerro Verde dividend that we're going to get? And number two, how much money is in the Yanacocha joint venture that can be used to pay for this project?

Okay. The current cash that Yanacocha holds in the balance sheet is around $800 million. So $816 million, I think. That is roughly the amount. And if we see the CapEx that we are expecting for the sulfide project, it's around $2 billion. We also think that Yanacocha by itself can finance by its own. The rest of the money, the money they need to build the project, the sulfide project, it's $1.2 billion. And of course, maybe there you can ask for some warranty from the partners. But we think that they are capable to finance by itself.

Okay. And maybe just lastly, what size of dividend are we expecting from Cerro Verde?

Dividend from Cerro Verde? The size. Well, the last one is announced $200 million. So our part is $39 million, our share.

Okay. So we're expecting something in that order?

Yes.

And ladies and gentlemen, with that we'll conclude today's question-and-answer session. At this time, I'd like to turn the conference call back over to Mr. Garcia for any closing remarks.

Sorry, I wasn't here. Thank you for -- before we finish today's conference call, thank you very much for making your time to be here and we wish you a wonderful day and please be safe in this moment. Thank you.

Ladies and gentlemen, that concludes Buenaventura's first quarter 2021 results conference call. We would like to thank you again for your participation. You may now disconnect your lines.