Good day, ladies and gentlemen, and welcome to the Compañía de Minas Buenaventura First Quarter 2024 Earnings Results Conference Call. [Operator Instructions] And please note that this call is being recorded. I would now like to introduce your host for today's call, Mr. Gabriel Salas, Investor Relations Officer. Mr. Salas, you may begin.

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, Chief Executive Officer. Also joining our call today and available for your questions are Mr. Daniel Dominguez, Chief Financial Officer; Mr. Juan Carlos Ortiz, Vice President of Operations; Mr. Aldo Massa, Vice President of Business Development and Commercial; Mr. Alejandro Hermoza, Vice President of Sustainability; Mr. Renzo Macher, Vice President of Projects; Mr. Roque Benavides, Chairman; and Mr. Raul Benavides, Director. Before I hand the call over, let me first touch on a few items. On Buenaventura's website, you will find our press release that was posted yesterday after the market close. Please note that today's remarks include forward-looking statements that are based on management's current views and assumptions. While management believes that its assumptions, expectations and projections are reasonable in view of the currently available information, you are cautioned not to place undue reliance on these forward-looking statements. I encourage you to read the full disclosure concerning forward-looking statements within the earnings results press release issued on April 29, 2024. Let me now turn the call to Mr. Leandro Garcia.

Thank you, Gabriel. Good morning to all, and thank you for joining us today to discuss the quarterly results of Compañía de Minas Buenaventura. On Slide 2, it's our cautionary statement, important information that I encourage you to read because of the current circumstances. Today, we will be discussing our performance for the first quarter 2024, highlighting key achievements and strategies moving forward. After the presentation, we will be available for our Q&A session, where our team will be happy to answer your questions. The next slide, please. I would like to highlight a few key areas that contribute to our strong first quarter '24 results. Our EBITDA from direct operations for the first quarter has increased 83% compared to the previous year, primarily driven by improved performance at El Brocal and Yumpag. This is also reflected in a higher EBITDA margin of 38% compared to 28% from the previous year. First quarter '24 operating income reached $46.9 million compared to the last year's of $12.6 million. Copper production increasing 26% year-over-year, driven by steady exploitation rate at El Brocal, which surpassed 10,500 tons per day in the underground mine. Silver production reached 3.1 million ounces, a significant increase compared to the 1.3 million ounces produced last year for the same period. From this, 1.5 million ounces come from Uchucchacua and Yumpag where we got approval of the final mining operating permit earlier than expected. Ore production decreased 4% year-over-year, reaching 36,500 ounces since we are now mining lower rates of Orcopampa and Tambomayo. We are pleased to inform that the dividends from Cerro Verde were received on April 26, last Friday. These dividends will strengthen our overall financial strength. Buenaventura's CapEx in first quarter 2024 totaled $58 million, which includes $38 million allocated to the San Gabriel Project. Our cash position reached $174 million with a total debt of $699 million. We continued deleveraging the company reaching a net debt EBITDA ratio of 1.78x lowest in the 2 years -- in 2 years and within our target range. Moving on to our cost structure in Slide 4, please. First quarter '24 all-in sustaining costs have reduced by 58% year-over-year. This reduction is primarily attributed to the copper production at El Brocal and silver contribution from Yumpag. However, it is important to mention that part of the Yumpag costs have been considered to be CapEx. Normalized all-in sustaining cost should be around USD 3,600 per ton of copper, still below than the previous year. Moving on the cost applicable to sales. As you can see, the prioritization of copper at El Brocal and the ramp-up in the underground mine is translating into a continuous cost reduction trend. Silver CAS has decreased year-over-year, primarily driven by higher contribution of Uchucchacua and Yumpag silver ounces. Normalized CAS, including Yumpag cost is expected to be between $17 and $18 per ounce. Gold CAS has decreased year-over-year and even quarter-over-quarter, primarily driven by higher grades and lower mill at El Brocal underground mines despite lower grades at Tambomayo and Orcopampa. On the next slide, we will be presenting the free cash flow generation. During the first quarter of 2024, we reduced our cash position by $46 million, primarily due to the intensive capital expenditures campaign, which includes San Gabriel. The EBITDA to free cash flow reconciliation is explained by the following breakdown of inflows and outlets. El Brocal, Yumpag and Orcopampa have been the main contributors for the first quarter 2024. As we have mentioned before, Buenaventura is going through a growth phase with an intensive CapEx related to San Gabriel. The previously reported dividends from San Gabriel will be registered in the second quarter of 2024. Moving on to Slide 6. In the next year, Buenaventura will be focusing most of its efforts in the San Gabriel project. On this slide, you can see the projects, the new latest progress reaching a 47% overall progress by the first quarter 2024, primarily driven by the full installation and operational concrete plan. The key milestone we are closely monitoring for the next quarter is the start of the mine development tunneling, and the start of the SAG mill assembly. On the next slide, we are showing the competition of the definite campsite that is fully operational since [indiscernible]. We have more than 2,000 sleeping beds installed considering the definite and organic concept, water treatment plants, offices and dining areas are fully operational. On the next slide, we are showing the progress -- the processing platform. Here is the milling area where we are planning to start the SAG mill assembly during the next quarter. And on the next slide, you can see the installation of the thickeners. Finally, I would like to finish the presentation with a couple of closing remarks. First, encouraging production resource at Yumpag are a clear reflection of our success delivering mining products. With final mine impairment secured we are now focusing on achieving a stable and efficient production grade at 1,000 tons per day. This will be reflected in a significant increase in revenues in the following quarter. Excellent performance at El Brocal in line with plan to reach 11 tons per day by the end of the year, supported by a positive trend in copper price. Third, we are proud to announce that we have achieved a significant progress at San Gabriel project, now standing at an impressive 47% overall completion. On track as we aim of our first gold bar by the second half of 2025. Currently, we are assessing the project CapEx to ensure an accurate total cost while define opportunities to optimize the cost structure. We continue our efforts to transform our mining operation into assets with plus 10 years of life of mine and focus on optimization them to achieve greater cost efficiency. Thank you for your attention, and I will hand the call back to the operator to open the line for question. Operator, please go ahead.

[Operator Instructions] And the first question will come from Cesar Perez-Novoa with BTG Pactual. Cesar Perez-Novoa: If I may, I have 3 questions. The first one relates to your guidance. Essentially, we have seen a meteoric rise in base and precious metals. And given the implications that it has for revenues and by-product credits, is management looking to review the volumes, the revenue and EBITDA that you outlined in the previous call for this year? My second question relates to cost. There was an important 71% drop CAS -- in gold Cas at Coimolache to $1,000. Is this due to higher volume or specific initiatives? I believe you mentioned in the press release that the company could not place fresh ore in the pads, which makes me think that there may be some room for improvement. And finally, at El Brocal costs went down too and wanted to understand if this was due to efficiencies attained in the first quarter or if the company used stockpiled mined inventories to dilute the costs. Those would be my questions, gentlemen.

Thank you, Cesar, for your question. In terms of if we can change the guidance, we are evaluating all the operations daily. We maybe can change the guidance at the end of the second quarter if things are -- as we are thinking that will be. In terms of Coimolache, remember that last year, we didn't produce any ounces in Coimolache. So this is a comparison this quarter to the last quarter to the first quarter of the last year. The information you have, with respect, we are not allowed to put more ore in production. It's true. We are just waiting the permit to construct, to build the new platform to put more ore. And we expect any moment that permit. But the production will begin in the first quarter of -- production of ore, we will begin in the next quarter of the following year. So we should expect to increased production of gold ounces in the second quarter of the 2025. And El Brocal actually, we are making many efforts to be more efficient. I pass the microphone to Juan Carlos, maybe he can give more color of your question.

Thank you, Leandro. Thank you, for the question. Yes, with this increase in price of gold, there is a lot of incentives to increase production. We are reviewing our mining plans but at this moment, we are looking more to be in the upper range of our guidance, the annual guidance. So probably we're going to be more closer to the upper range in that guidance. Any formal review, Leandro commented, will be probably announced if there is any for the next conference call. In the case of Coimolache, last year, at the end of last year in December, we had a window of opportunity because there was no rain in the area. So we placed almost 200,000 tons of ore in the path in the last few days of 2023. So we have an advanced work in 2023. And that's the reason we have the ounces of gold in 2024 that part of the call was done, was incurred during the last quarter of 2023. So that's the reason we have a good looking the cost -- in the CAS cost of Coimolache. But as Leandro mentioned, we stopped the production of fresh ore in February this year. We will be waiting for the permits and the construction of the new areas in the path, probably the permit by the end of the year and construction at the same time, the operation of new -- the breaking of fresh ore will be in the first quarter of next year and probably the ounces of gold start coming down from the path in the second quarter of 2025. So probably in the coming quarters, the cost of Coimolache -- the CAS cost of Coimolache will be coming slightly up because we are not doing more fresh ore and production of gold will start to decrease in the coming quarters until the year that we will resume the production of fresh ore. And regarding El Brocal, yes, there was a lot of improvements in the operation, we are close to 10.5 kilotons per day in production. We are looking forward to reach 11,000 tons per day by the end of the year. We are well track on that purpose. And we are reducing cost. We have been done this increase in production without any additional people or any additional scope or track. It's just a matter of improvement. We put underground dispatch system that is helping a lot to increase the productivity of our equipment, and we are reaping the results of that investment in the previous quarter. So just more on the improvement and operational expertise that we are working off the benefits and getting this no cost in El Brocal.

Daniel, I think has a couple of additional comments for you, Cesar.

Good morning, Cesar. Just to put some numbers to your question regarding the EBITDA. At the beginning of the year, we considered the metal prices of $8,500 for copper, $1,900 for gold and $23 for silver. And our EBITDA was an estimated EBITDA of between $250 million and $270 million. Today, we have higher prices and considering $9,000 for copper, 2,100 for gold and $2,500 for silver in addition to the production from Yumpag that is coming along since March, we are estimating a consolidated EBITDA of between $300 million and $320 million. That will be the improvement of the additional EBITDA that we expect. Cesar Perez-Novoa: Okay. Daniel, so it's a large $50 million string at the EBITDA level.

The next question will come from Carlos De Alba with Morgan Stanley.

A couple of questions. First one, can you please quantify what the impact was of not having -- not taking the cost of Yumpag through the P&L and since they were capitalized according to the exploration permit as definitely, that was a positive surprise, but I just wanted to understand how much of a EBITDA impact that represented the fact that it was not run through cost, but taken to CapEx. And second, any comments on Cerro Verde? We saw that Cerro Verde paid $29.4 million for the second quarter dividends. That is down from the $41-or-so million level that the company had paid in the last [indiscernible]. Can you provide any color? Is the expectation that this is the new range that we will see in the coming quarters? Or do you think that there is upside to increase but not what you think, but more like what Freeport has said they will do.

Thank you, Carlos. Thank you for your question. Well, the impact of the cost assigned to the CapEx instead of the operating cost, it's kind of difficult to calculate, but we expect the cost of Yumpag will be around $16 per ounce -- between $16 and $17 per ounce. From beginning the second quarter, we will have the exact calculation revealed in our financial state. In the case of Cerro Verde, the dividends, actually, we were not expecting any dividends in this quarter coming from the profit from them, which for us was a surprise. But still, we maintain the expectation to have in the total of the year, total dividends between $120 million and $150 million. We believe that with this level of prices that figure can be completed at the -- fulfilled at the end of the year. I don't know, maybe Juan Carlos or Daniel want to add some comment.

Yes, regarding the Yumpag, we have a total CapEx total of $8 million in the first quarter. That was not only part of the operation, but it's the whole package of construction was breaking the ore and transportation of ore into the Uchucchacua facility. So as Leandro mentioned, it's kind of a bulk number, but probably more linked to the production not only from the quarter, but for at least the whole year. So it's a number that need to be taken with caution because it didn't match exactly the amount of ounces of silver that we produced in the quarter. It's a combination of properly CapEx and part of the effort dedicated to creating the ore and transport of the ore from Yumpag into the Uchucchacua processing facility. Maybe Daniel has some color or the specifics.

I would like to comment about Cerro Verde question. We -- at this level of prices, Cerro Verde should be generating an EBITDA of around $1.8 billion. The working capital that we expect is around $0.7 billion to $0.8 billion, with very small CapEx, around $300 million to $350 million, which gives us a free cash flow of around $750 million. These are at level of prices of close to $9,000. Having there, the minimum cash already in their balance, they should be distributing dividends in the order of $750 million, which gives us the $150 million that Leandro mentioned at the beginning.

Great. That would be great news. Just to follow up on that, Daniel. Is this -- has this been approved by Cerro Verde's Board? Or is just an expectation at this stage?

These are numbers -- sorry.

No. Go on, sorry.

These are numbers that were shared by Cerro Verde, of course, at lower price of copper. We have adjusted them internally. But there is no -- as you know, there is no dividend policy, but what they normally do is to pay dividends of the -- in excess of the cash that they have -- in excess of the minimum cash that they have, which is $500 million.

[Operator Instructions] Our next question will come from Tanya Jakusconek with Scotiabank.

Daniel, I just have some very simple modeling questions for you, and then I have some other questions on the assets. So can I just start on the simple modeling questions? Can I just -- your D&A was kind of low at $42 million in Q1, as was your G&A at $10 million and as was the CapEx at $58 million. Can you review with me what you're expecting for those 3 numbers for the year?

For the D&A, as you know, we -- in the last 2 quarters of last year, we had -- we recognized the first stripping that we had in the asset for El Brocal reserves. So in the first quarter, it was a minimum of $5.5 million that we recognized related to this -- to the deferred stripping. In the third and the fourth quarter, this amortization was over 23 -- $20 million, $23 million. So what we expect for the following quarters is something about $35 million from depreciation and amortization.

$35 million a quarter for the next 3.

Yes. For quarter for D&A.

Okay. And then G&A.?

G&A. As you know, we have sold Contacto, and there is a decrease in G&A from that. We are not considering any more the Contacto figures And we have been doing also other adjustments to our expenses. For example, we have reduced the size of our location, our headquarter. So we expect per quarter around $12 million of G&A.

Okay. Perfect. And then the CapEx, which I think was originally guided around $300 million for the year, it looks like you would have only done $58 million in Q1. So is that $300 million still viable?

Yes. San Gabriel should be catching up the rate of expenditures. So we still believe that the total CapEx for this year should be between $300 million and $320 million.

Okay. All right. That's perfect. Those are the easy ones. Maybe still to you, Daniel, because this does impact the balance sheet. Can you just give me an update? I know on Q4 call, I asked about the sale of the Yanacocha royalty. I thought we mentioned it would be done in April. Can we just talk about the balance sheet? Yes, we are going to get monies coming from the Cerro Verde dividend, which is great. But can you talk to me about what else are you seeing in terms of sources of cash besides your operating cash flow that's coming from your mind, but other sources of cash from sales and/or banks and lending?

Yes, apart from our operating or EBITDA generated by our operations, we do expect the sale of one asset. We should be receiving this year between $180 million and $200 million from that sale. Then we expect the Cerro Verde dividends, which could be between $120 million and $150 million. And in addition to that, we have already compromised 3 RCFs, revolving facilities, with 3 local banks. And these are -- these 3 facilities are up to $200 million. Currently, they are undrawn, but probably we will use them between the third and fourth quarter in order to fund any requirement for San Gabriel.

Okay. And the one asset sale, is that an asset or a royalty like -- there's a difference, one is an asset and one is the royalty.

It's a royalty.

It's a royalty. Okay. That's helpful. And then if I could ask one more question. I am very interested in San Gabriel and what is happening there. And I see from the slides that you are -- you've done quite a bit. You've got the SAG that you've got to assemble, you've got the underground tunneling -- the development of the underground ramp. And I guess it's ramp on additional declines and levels. Can someone just walk me through the second half of this year into 2025, again, what needs to be done? And then Daniel, for you, the last capital, I remember on this mine was $450 million to $470 million. Can you let me know how much we have spent to date and when we're getting this new CapEx number?

Of course Tanya. Here with us is Renzo Macher. He can explain to you all your questions in San Gabriel.

Hi, Tanya. So what's coming in -- as you can see in the pictures and there's great progress in San Gabriel. Earth moving is out of the way of the critical path. And we have started with all the concrete placement. And we have the mechanical steel and piping contractor on site. So we're going to see a lot of advancement in that area. The underground contractor for development in the mine, it's already on site. So we're going to see the first -- in the next quarter, we're going to see the first mine development advancing. And the electrical and signal contractor, we shall be closing that contract towards end of May, beginning of June. So you're going to see all those 3 main contracts, which is pretty much all of them. The remaining big contracts fully onboard and producing [indiscernible]. Again, we have this 98% of engineering and procurement. So it's about managing this advantage in favor of the project.

Okay. So these 3 contracts are going to be placed, it looks like in Q2. So the concrete, steel, the underground development and the electrical, right, these 3 are going to be placed in -- or awarded in Q2. Then you're going to have all of that work, obviously done Q2 onwards. And then when do we actually expect the mill to start to turn wet commissioning, dry commissioning? When are we expecting that?

We already have, from those 3 contracts you mentioned, the concrete, mechanical pipe and steel, it's already signed and it's running now. Underground is fine and we'll be producing now. And electrical and signal is the one that we need to -- we're at the final stage of the bidding process. So it should be finished in May and awarded in May. Now in the pictures, you can see that we are constructing the mill already. Foundations, the first foundations have been put. Towards the -- we're going to be finishing construction towards the early second quarter of next year, and that's kind of when the commissioning is going to start.

Okay. And how long do you think commissioning will take? Is it like 60% of capacity for 30 days in terms of getting to commercial production?

Towards early fourth quarter, we shall be.

Okay. So Q4, it's going to take you 2 quarters to go to commercial.

Yes. I mean we are very advanced in -- we're going to be very advanced in construction, so we can start commissioning earlier, for sure.

Okay. Okay. So that commercial, I should -- yes, I should start thinking commercial in Q4. That's when we start taking this through the income -- through revenue. Okay. And Daniel, just for you, can I just get an update on the CapEx number, like $450 million to $470 million was the last number I have. Maybe you can give me a little bit of an idea when a new one is coming and where are you seeing changes in this CapEx number, positive and negative?

Yes, Tanya. We are still evaluating the total CapEx. We will have a better figure for the next quarter conference call. But we expect -- from the initial CapEx of $470 million, we expect around 10% to 15% increase. And currently, we have been -- we have already disbursed, since 2022 until the end of last quarter, $220 million for San Gabriel.

Okay. That's great. And then I guess, in Q2, someone can give me an idea about when you're doing your development, how the development is coming in terms of costing for the underground as well?

Tanya, if I may pass the microphone to Aldo, we want to make a little more -- give you a little more color about the sale of Yanacocha.

Yes, Tanya. I want to clarify a little bit the time for the sale of the royalty of Yanacocha. We have time until July 15. If we don't reach the price, the target price, we can go to the second phase and ask for a lower price, first to new one and then to the interested in that royalty. But the idea is to try to finish that sale during this year. But in the first stage, we have time until July 15.

Okay. So if I understand correctly, you have until July 15 in this first phase. If you do not get the price you want, then you go to a second phase. And how does the second phase differ from the first phase? Is it just different party?

Only a lower price. Only a lower price.

Only a lower price, okay? So what about then -- can you go back to Newmont because Newmont, I think, has the right of first refusal on it?

It's a right of first offer. It's a little bit different, but we have to ask for a price from new one. If they don't accept to buy at that price, we also can go to the market again. This is our deal.

Okay. Got it. Okay. All right. So if we don't get anything by July 15, then we're going to phase 2.

Yes. Exactly.

Ladies and gentlemen, with that, we will be concluding today's audio question-and-answer session. I would like to turn the floor back over to Gabriel Salas, Investor Relations Officer, for any webcast questions.

Thank you, operator. The first question comes from Orlando Barriga from CrediCorp Capital. Can you please comment on commercial deductions? They decreased in a per ton of unit sold basis. So I would appreciate some color on that.

Thank you for the question. It happened 2 things in the market. The first one is that the commercial direction has gone lower a lot. We have better commercial terms for this year. That's why one of the reasons why the commercial terms is going down. And the second one was that we sold 13 dry metric tons of concentrate during the first Q with no worse in Brocal. And that gives us, of course, better terms and lower deductions. That was the 2 main reasons why the deduction was so low in this quarter.

Thank you, Aldo. At this time, there are no further questions. I would like to turn the call over to the operator.

That concludes the question-and-answer session for today. I would like to turn it back over to management for any closing remarks.

Thank you, operator. Before we finish today's conference call, thank you -- I want to thank you very much for making the time to join us and be interested in our company. Thank you again, and have a wonderful day.

Ladies and gentlemen, that concludes today's conference call. We would like to thank you again for your participation. You may now disconnect.