Antofagasta plc

So good morning and thank you to everyone. Welcome to our full year results for 2024. I think that we have announced today a strong set of financial results with rising margins and a balance sheet that supports an attractive balance of dividends and investment growth. So before we go into the details of today's announcement, and we will cover those, a few words on copper, which I think it's important. If we look beyond the sort of short-term instability, which is always, I guess, a feature in commodities, there is a general consensus on copper's role as the metal of the future. Copper is key to electrification and energy security, and we see strong drivers of demand ahead with new demand requirements such as AI data centers, supplementing record levels of spending on more well-established areas such as electrical grids and renewables. Despite this, the other side of the equation, global supply, is facing rising challenges. Copper producers face geological and technical constraints, rising capital intensities and permitting delays, as we know, and new deposits are simply not being discovered. However, at Antofagasta, our investment case is different. We are focused on copper. We offer a balance of both growth and shareholder returns. We operate in well-established and reliable copper jurisdictions. We also have a pipeline of projects that includes new discoveries and growing reserves and resources, and we will mention some of those in more details. And sustainability remains embedded throughout our business model. So those are the sort of key features that we have. So joining me here now is our CFO, Mauricio Ortiz, who you know, and our Vice President of Sustainability, Alejandra Vial. So as ever, we begin by looking at our safety record. 2024 was another fatality-free year, which is a record that we are proud to maintain. And we also closed out the year with record performance in other indicators of safety, such as our injury frequency rate. We also saw improvements in key leading indicators of safety with a close to 40 percent reduction in high potential incidents, which includes a high potential incident free year at Saldívar. So Saldívar had no high potential incident at all, which I think is quite an achievement. Through operating with safe working environments, we build value in our day-to-day operations, which is an integral aspect of our purpose of developing mining for a better future. So good, strong safety performance. Turning now to the key highlights for the year, we delivered robust operational and financial performance in 2024, which resulted in strong revenue and EBITDA growth. We're on track to deliver material growth through the projects that we have successfully initiated in 2024. And despite our investments in growth, we're also in a position to maintain our returns to shareholders with today's proposed final dividend for the year, which equates to 50% of net earnings. Looking at the copper market in more detail, we are at a key moment with rising demand and slowing supply, which will increasingly, we think over time, put pressure on the market balance. Growth in demand is being driven by well-established themes, which we've talked about in the past, electrification, energy security, but that is being super blended by new themes of artificial intelligence, data centers, smart grids, and battery technologies. On AI, we have seen news recently that has changed people's assumptions, which is not surprising given that this is an emerging industry. We simply were not talking about AI in the same way five years ago, and therefore our understanding will continue to evolve. The key here is that new technologies such as AI will provide rising corporate demand. With copper central to so many new technologies, it is easy to build a model of rising overall demand that is not just based on one single theme. By contrast, there is no wall of new supply on the horizon. Global copper supply is facing challenges. Output from existing mines is shrinking due to great decline. New projects are not being permitted and discoveries are not being made. A shift in the market balance is underway, one that will support pricing in the medium term. We're well positioned to meet this demand through our high quality assets and growth in our portfolio that we initiated in 2024. A few words now with respect to reliable copper jurisdictions. We have 40 years of experience operating in Chile. which has long held the top position as the world's largest producer of copper. Chile has long held an investment-grade credit rating. Previous discussions relating to the new mining royalty, which you will remember, have now been concluded. And this new system came into effect at the start of 2024. So it's behind us. Locally, growth is high on the public and national agenda, as it is the case in many countries, but very especially in Chile. And we have presidential elections due to be held in November this year. Turning now to our portfolio of copper assets, through a well-funded portfolio, we have consistently maintained our margins towards the top of our industry peer group. This is principally supported by Los Pelambres and Sentinella, which represent nearly 90% of our group EBITDA, as you can see from this chart, and underscore the importance of producing copper concentrate in today's copper market. we're actively pursuing a strategy to increase our focus on copper concentrates through the Sentinella Second Concentrator Project, which will further protect our margins as we grow our production base, and which is currently being built. Sticking now in this next slide to our theme of growth, here we can see how this differentiates us from our peers. As discussed earlier in the presentation, growth is rare in the copper space, with many major producers seeing flat or declining productions in the years ahead, or growth which is much back-ended into the future. We're, in our case, able to offer both copper growth because we've got projects under construction and a resource base which got the embedded resources to deliver increased or incremental production. And also a lower risk exposure, such as the location of our portfolio being in reliable jurisdictions. Our strong balance sheet and commitment to dividends, as well as the pipeline of projects that are already in construction today. This plus puts us in an advantageous position when compared to our peers, as demonstrated here. This graph shows the sort of increasing growth rate against decreasing country risk. And you can see Antofagasta well positioned in that space. So with that, I now want to hand it over to Mauricio, our CFO, who will provide more details about the financial performance of the company last year. Mauricio.

Thank you, Ivan, and good morning to everyone. I will now take us through the financial review for the year. Before we begin, however, here we can see Centinella's second concentrator project with construction work taking place in the grinding circuit. With this project, we will not only take a tangible step towards our medium-tier growth ambition, but we will also increase our margins thanks to the use of modern technologies and doubling Centinella's gold production. These attributes will help us to diversify our production base as well as deliver growth in one of the world's most established mining jurisdictions. Turning pages to our results. In 2024, we had a strong set of results. Revenue and EBITDA grew by 5% and 11% respectively, and our margins increased by 300 basis points to a strong 52%. our balance sheet remained robust, with net debt metrics remaining low, and this morning we announced our proposed final dividend for 2024. Through this strong performance, we are able to move into 2025 with a positive outlook and well-funded portfolio of projects in development. Before we move into a more detailed analysis of our 2024 financials, I would like to quickly review the progress made in financing our projects. The first point to note is that we aim to finance at the project level, as this helps to protect cash flows at the group level, which in turn helps to maintain our flexibility in our capital allocation framework. Each of our financing solutions are long-term, to mirror the life of our assets, competitive pricing, which reflects the quality of our assets, and we aim to utilize a diverse range of sources. This is how, in late 2023, when we announced the second concentrator project, we presented a funding solution that includes a four-year drawdown period whilst we are in contractual. an important consideration for modeling our cash flow in the coming years. In 2024, we issue a third corporate bond along with the water infrastructure outsourcing transaction. And finally, we expect to complete shortly a 20 years financing for Los Pelambres water infrastructure. So what we have on the screen is more than 6 billion in long-term committed financing to develop our growth portfolio. In doing so, we use a combination of financing solutions to move forward with confidence in our commitment to growth our business, alongside with preserving a strong balance sheet and delivering shareholder returns. To recap, through an innovative approach tailored to our needs, our financing strategy is a key enabler for our growth plans. In terms of operational performance, and as I mentioned earlier, production increased 1%, margin increased by 300 basis points, and our costs remain stable. On production, lower rates were compensated by higher throughput, thanks to the completion of Los Pelambres Phase I expansion, as well as operational improvement at both Antuco and Saldívar. We have maintained our costs in a competitive position in 2024, A key pillar of this was in part thanks to our successful results delivered by the competitiveness program. Along with the execution of our growth program, in 2024, we evolved our competitiveness program through an adoption of a new approach focusing on productivity. That means labor productivity, asset productivity, and inputs productivity. In 2024, The 248 million in savings achieved during the year came from a broad range of initiatives through a more productive and efficient processes. Moving to EBITDA, we saw EBITDA increase by 11% during the year and our margins increased to 52%. This growth was driven by a tight supply-demand balance in copper, a strong gold prices partially upset by temporary drop in shipments as bad weather rescheduled sales into 2025. It is also worth noting the impact of our associates and JVs as we see better results in Saldiva and the inclusion of our investment in Buenaventura for first time on a full year results. On our balance sheet, our metric remains strong with net debt EBITDA below 0.5 times And this chart demonstrates our ability to balance investment with a commitment to paying dividends, which is a core aspect of our capital allocation framework. And deep diving and explaining in detail our capital allocation framework. And as I mentioned before, a strong operating cash flow is one of Antofagasta's key attributes. And our 52% EBITDA margin is a clear demonstration of our ability to transfer positive metal prices into a strong EBITDA. The second stage of this process is to meet capital needs of our operations and shareholders with sustaining capital and our committed dividend, to which we have applied a very consistent approach over the years. We will use our strong balance sheet as we develop our growth portfolio, but this will be managed in a way that allows us to maintain our strong balance sheet at the time that we can also offer attractive returns to shareholders. Following this, we consider a range of external and internal factors, such as the outlook for copper, upcoming capital commitments, and our balance sheet to define the appropriate level of capital distribution in any given year. As such, we today announced a final dividends of 23.5 cents per share, totaling 31.4 cents per share or 50% payout ratio on our 2024 net earnings, which reflects our disciplined approach, providing the right balance between investment required for our growth phase and shareholder returns. And now I will hand it over to Alejandra, who will take us through the sustainability section. Thank you.

Thank you, Mauricio, and good morning, everyone, and thank you for joining us today. Sustainability is central to our purpose, which is developing mining for a better future. In this section, I would like to guide you through a few of the recent developments that demonstrate our commitment to sustainability. We understand the need to prioritize sustainability as this helps us to unlock value for all of our stakeholders. Through safe operations, community partnerships, and strong efforts to minimize our environmental footprint, we can realize the full potential of our workforce and operations. Moving to reflect on the sustainability highlight of 2024, we achieved a record year in safety. And I will tell you more on this in the next slide. We have target and ambition to signal our commitment to sustainability and demonstrate how we are progressing. In building a more balanced workforce, you will see that we are approaching 30% for female representation. In respect of decarbonization, we set new targets in 2024, having achieved our previous emission reduction target, subject to technical and financial evaluation of each technological solution for decarbonization. With our suppliers for a better future program, where we work with local suppliers to raise standards, we have also set a range of targets and metrics which we are tracking well against. Finally, water has been a key consideration for us, and we are in the middle of transitioning our portfolio to minimize the use of continental water. The second phase of work for Los Frelambres desalination plant is underway with the first phase in full operation since 2024. Both Centinela and Antucoya are already running on seawater. Saldívar is the final piece and we have submitted the environmental study that proposed to transition this operation across to seawater or third-party sources. Taking a moment to reflect on safety since 2024 was a record year. Ivan has already touched on the high level achievement here, but I would like to highlight a range of factors behind this result, which you can be seen in the left. Our operations remain fatally free, which is the most important result. Los Pelambres reduced its injury frequency rate by more than a third, and the transport division managed to achieve a 50% reduction year-on-year, which is a demonstration of the effective delivery of our approach to safety across our divisions. Focus now on Somos Choapa, which is our main program for communities engagement in the areas connected to our largest mind, Los Belambres. Here, we celebrated 10 years of this program in 2024. What is special about this program is our long-term partnership with local communities. Over the course of 10 years, we have been involved in more than 150 projects where we aim to generate value for local stakeholders by working with them directly to understand what they really need to help their communities develop. Shown here are some of the projects completed as part of this program, which has prioritized water availability given the ongoing drought in the Chihuahua Valley, as well as infrastructure projects and capacity building in healthcare, education, and sport facilities. And with that, I hand back to Iván, who will take us through the final section of today's presentation. Thank you.

Great. Thank you, Alejandra. So moving now to a growth pipeline, which was an area where we made significant progress in 2024. We have our ambition to grow our portfolio, and here we can see the steps required to achieve this. On the one hand, we have growth in the short term at Los Pelambres, which relates to grades. We are currently in a two-year lower grade window in 2024 and 2025, and next year we expect to see higher grades as mine development progresses. At Sentinella, our growth is driven by increasing throughput rates as we add the second concentrator, where we have a resource of more than 5 billion tons. By adding capacity, we are able to optimize the value generated from this operation. And then beyond this and further to these steps, we have a range of other growth and development projects. These additional options include, very importantly, the Los Pelambres Development Options Project, which is to extend the life of the mine to 2051. And we submitted the EIA for this project in late 2024. That's an important milestone project. Because we've now initiated the process of securing that permit, which will allow us to unlock the resource base beyond the current mine plan of 2035. Now, I would like to share with you some of the pictures of our work in the projects that we are building. This is Sentinella. the construction of the second concentrator. And as you can see, it's well underway and progressing on time and on budget. I think these are very impressive pictures because, I mean, a year ago, there was essentially nothing on this ground. And now we've got the structures being built. We have been pleased by the progress made to date and we have good teams delivering this progress. It is taking shape well with initial ground works completed in a number of areas and foundations being laid at sites such as the primary crusher or re-handling system and main concentrator site. To give an idea of scale, as of the end of December, we have now mobilized more than 8,000 contractors to site, people that are actually working and sleeping on site to be able to deliver the work that we need to accomplish. Finally, as a demonstration of Sentinella's quality, through advancing the second concentrator project, we have now been able to add the Encuentro sulfide pit to our ore reserves estimate. which adds more than 700 million tons of quality ore. As such, all reserves at Sentinella have grown by 35% and now stand at 2.6 billion tons. That's something that we've added for the first time in the declaration of reserves this year and which you will find in our report. Turning now to Los Pelambres, which is another key district where we are doing construction work. We have two distinct projects that will be the foundation for future growth. We have now more than 2,500 contractors deployed across the two projects, with work advancing on budget and on schedule. On the left, construction work with the concentrator pipeline is progressing in two areas, the lower section of the route between Los Vilos and the coast and El Mauro, and the higher section of the route, which involves several bridges and tunnels as the pipeline approaches Los Belambres itself. On the right, full construction work at the desalination plant to expand it is now underway, with the existing plant already having the footprint laid out for the expansion, as shown in this picture. So good progress made in Los Pelambres as well, both in the water system and also in the concentrator pipeline, which we're now replacing. Looking at exploration, just briefly, we have Cachorro and Anciero, which we've mentioned in the past, where our exploration teams continue to develop value. Cachorro is located in North Chile, between Sentinela and Antucolla, and can potentially benefit from the existing local infrastructure there. At a copper grade of more than 1%, it is a standout prospect for exploration in Chile right now. And we also have a permit which we've submitted at Cachorro, which is essentially intending to develop further the prospect there, doing more explanation, building an exploration tunnel and other infrastructure. And finally, we have our 19% investment in Buenaventura. We're engaging well together and looking to understand where there might be opportunities to add value in the future. So to conclude, In the next slide, today's presentation, a reminder of our investment case. We're a pure play copper producer with high margin assets and a significant growth program underway. Today's financial results are robust and our balance sheet and financing strategy are key enablers for delivering our growth ambitions. 2024 was a pivotal year for us as we commence a number of major projects that will help to deliver growth. This combination of attributes sets us apart from others in the mining industry, offering investors a clear pathway to invest in copper, a critical material in the future of energy security and electrification. Finally, we continue to operate with sustainability as an integral part of our strategy our purpose and our business, helping us to generate value throughout our business and realizing our purpose of developing mining for a better future. Thank you. So that concludes the presentation and we'll now move to questions.

So yes, we will start with questions. You have to take your microphone. Jason, you can start. Yes, you can take your microphone. You have to press and hold.

Test, test. Okay, it's working. It's Jason Faircloth, Bank of America. You talked about the pickup in production just from grades. How do we think about the path from here to 900,000 tons? Because I think that's something that people in the market seem to be missing. But is it completely back-end loaded, or do we get a bit of a gradual ramp up towards 900? Yeah.

So the buildup is... Firstly, I would say if you look at Pelambres, securing the availability of water was an important element to be able to run that facility at full capacity. And then combined with that, an increasing grade, which we expect to see in 2026. So that will deliver additional production as a first step in Pelambres. And it's, I would say, the first building block. Then the second one is obviously the project that we're undertaking at Sentinella. I mean, that is material is significant. When we finish there by 2027, according to the current schedule, then going into 2028, we will have 170,000 tons of additional copper equivalent production coming out of the new facility. And those building blocks therefore take us close to the 900,000. And then we've got Saldívar, which we expect to be able to renew the permit and continue to grow production there on the basis of increasing recoveries. And then on the back of that, if you think about the longer term growth beyond these projects, we've got the life extension at Belambles. So those are the building blocks that take us there. So the aspiration of getting close to 900,000 is something that we foresee at the end of the decade.

Just to follow up on Zaldívar, I think... Mark Bristow has said that that is non-core acid for BEREC. Is that something that you would do some math on?

We own half of Saldívar. We're operators at Saldívar. And... We think it's got a upside, which is interesting, you know, in terms of the mining of the primary sulfide. And therefore, all our focus now is concentrated on extending the permit and being able to understand that full value and realize that full value out of the current mine plan and the primary sulfide. I think as with any investment alternative, we would look at it in the context of our capital allocation and how it ranks against other alternatives. You see that today we're very busy allocating capital to Sentinella and Pelambres, and therefore, from that point of view, there is tough competition, if you want, for other alternatives. We also operate Saldívar, and therefore, this is strictly an economic choice, because from an operator point of view, we're already in there. So if something were to happen, we would look at it in light of our capital allocation against alternatives that we could have. But as I say, we are quite busy today.

Thank you.

Press and hold.

Hi, it's Ian Rosso from Barclays. Just following up on Zaldivar, so you've received the third round of questions. Can you give us a bit of an update there? When do you expect to submit that? Obviously, May deadline is not far away. How should we think of... What's the delta on cash if you actually have to close it? I see you submitted a closure plan. in terms of the closure costs versus keeping it open?

Essentially, I would say that we have the permit which expires in May, and there have been two main areas of work. One was litigation, which was outstanding, which was outstanding against other companies and Saldívar, and that has been settled, which I think is good news, and therefore that's behind us. And then the second one is the permit. And the permit essentially in Chile has three rounds of submissions and questions. We've completed the first one. We've completed the second one. And we got a response on the second one promptly, which was, you know, we filed that in December. We got a response in January, which is a good sign in terms of, you know, the time of response. And we're about to submit the third round shortly. So we're talking probably in a timeframe which can be measured in weeks. And then we would be into the final rounds of comments at that time, which is sort of timely, considering that certainly we have an expiry in May. So that's the timing of this final third round. It's a few weeks away. ahead where we should be submitting this. Now, we are working on the assumption that that permit will be renewed. As you've mentioned, for regulatory purposes, we had to submit a temporary closure plan, but that does not involve a permanent closure to the facility. So there are no permanent closure costs involved. This is a temporary closure because we think that a water solution will be will provide a bridge to the long-term development of the project that we see which uh takes mining to around 2050 which is included in the ei permitting now we've done that for regulatory purposes only because you know we need to to do that but our base assumption is that you know we renew the permit and that's what we've included in our guidance and the aim and objective which we're working with the authority in this final round to be submitted in a few weeks.

Thanks. And then just a follow-up question from Maurizio on the financing side. So you mentioned, obviously, looking at the water financing, it looks like your DMC project, that was about 60% from debt. Should we expect that percentage to continue into 2025? So you spent about a billion dollars on it and you raised financing or increased drawdown on that loan of 60%. So should we expect similar numbers in 2025?

So, well, in Sentinella, as we said, we have an investment of $4.4 billion. We already secured project financing for two and a half. And with the water transaction, we were able to achieve two goals. One, to descope the 4.4, outsourcing the construction of the expansion in a space of $380 million. and also to monetize the existing water infrastructure in 600 million figures. So, all in all, we have the 2.5 and the 1 billion financing. The thing that we are doing and how we are managing the CAPEX there is basically being able to draw down from the project financing at the time that we are also drawing down from a committed shareholder agreement that we commit in Antofagasta and Marubeni according to our percentage. 70% Antofagasta, 30% Marubeni. And as we draw down from the project financing, we are drawing down from the shareholder facility as well.

Sorry, and the water financing, I was referring to Los Palombres. You talk about a new financing in February. Should we expect all of the capex going into that project to be funded from that facility?

Well, basically what we are doing there is we are financing at the water company level, at a water infrastructure level, obtaining a 20 years financing. And the proceeds will be to either refinance existing debt projects and finance the expansion of the water assets. We need to allocate that final decision.

Okay, thank you.

Dan?

Thanks. Excuse me, sorry, Dan Major from UBS. A couple of questions. Firstly, on Centinella, you've included in your slide for the first time in a while the optionality for a second phase of growth that I think you presented earlier. I don't know, five, seven years ago when the project was at an earlier stage. Should we read that that is something that, you know, has moved up the priority list? Now you've got visibility on the construction for phase one.

it's something that we consider an option and we continue to look at it that way rather than something that we have or see closer to a commitment at this stage. I mean, obviously the focus is on building the first phase That will deliver around 95,000 tons a day of capacity. And this potential extension could take us to 150. But while we are doing study work on this, I think it's an option which we have not decided to implement. you know, pursue in any different way than we've discussed in the past. So we highlight because we think, you know, there's certainly potential to undertake it, but we're still looking at it as an option rather than something that we would at a firmer stage.

Okay, thanks. And then maybe a follow up with that on this CapEx theme at Sentinel. You've included the one billion development of the sulphides in Cointreau. Would that be something that would be part of the mine plan as we stand or would that be associated with a further expansion? And then can you remind us on the mine life of the cathode or the oxide production? Yeah.

So, yeah, we expect to, and this we had shared before, to start opening up the Encuentro sulfide mine later at the end of this year or beginning of next year. And therefore, that's part of the program that we have for capital spend. And that would be reported within the sort of mine development elements. But we would probably show it separately so that you have the information. around the quantum. Now, that is intended to feed the new concentrator. As you know, the feed to the new concentrator comes from the Esperanza Sulpit, which we're operating today, and it'll gradually move over time to the Encuentros Sulfate. So that is essentially moving according to our plan. With respect to cathodes, we had actually, just to mention, a record year of production in 2024. Cathodes at Sentinella produced over 100,000 tons, which I think was quite an achievement. And We are now mining from one pit which we expect will essentially continue to extract ore until I think it's 2027 and then sort of we got into a lower grade zone. So you know, there is a limited time in which we will continue to operate from the pits that we currently have to provide for the oxide. And that's, you know, something that we, it's factored into our plants. And that's why also the second concentrator comes in at the same time to, you know, compensate for some of that drop. Now, we are, I must say, in the process of looking at other options that we can supply to the SXCW. And we've got a couple of satellite ore bodies you know within the district which could provide for an extended use and that's something that we're looking at and that we will share you know shortly when we sort of have a clearer view with respect to that potential ability can you hear me now

First question, going back to the 900,000 ton midterm production outlook. Sounds like the Centinella cathodes is part of the base case to get to that number. Could you confirm that? And B, Zaldivar also needs to be in operation into the 2030s to maintain that 900,000 tons. So you didn't talk a lot about Cooper Clore T today. Could you give us an update there and Are you confident that by 2028, when any temporary permitting extension you get at Zaldivar expires, you will be in a position to use either your own leaching technology or some alternatives to get to that 900 in a sustained way?

Yeah. So the first point is, yes, the assumption is that Saldivia continues operating. So and that's part of a buildup of the construction blocks to get close to 900,000. And in the case of the cathodes at Sentinella, we are assuming that some of that will drop, but there will be a level of production. below what we have today, that, you know, we would be part of that block as well. But it's further small. And that fits into what I've been saying about alternatives that we're looking at to be able to use that infrastructure. Now, on Cuplo Clor, I think we had a... a good progress in 2024, one of the things that we decided to do was to engage third parties. I mean, other mining companies which might be interested in this technology. And we actually got quite a significant uptake in that. And actually, we are therefore proving for them, you know, their ore with this technology on a commercial scale. It's trial still, but I think the uptake has been good and it's proving to have consistent results across many ore types, you know, from our mines and from other mines. So I think the step that we set ourselves to achieve in 2024 was about testing the validity and efficiency of this technology with other ore types from third parties, and that has had good results. Now, we are thinking that the core of this will be used at Saldívar, so that the extension of Saldívar will be based, especially the primary sulfide, will be based on this technology. So that is what our base assumption is. And for that, we finalized a pre-feasibility study, and now we're going into a feasibility phase, which will provide for a larger scale test on Saldívar. But that is the basis on which we are we are working. The cuproclorte, in very simple terms, combines the principle of chemical leaching through chloride and other components with heat. And what we've done is separately tested both to work, and they have tested at a pre-feasibility level. So I think from that point of view, we're positive about where things are going. We've seen other technologies in the market that have had variable results. I think we've been more consistent, but we've been also quite conservative with respect to the steps that we're giving with respect to establishing the validity of this technology. But as we've moved forward in this step where we've tested it with other ores from third parties, it's been confirmed that it works according to the parameters that we've set up. So we continue to make progress in this line, and we are considering this as the base technology for Saldívar primary sulfides.

Great, thank you. And just as a follow-up to that, do you feel that the current JV structure Is the optimal ownership if you were to push ahead with such a technological solution that is proprietary to you? How do you share the economics with Barrick if you are the one providing the technology? Would a simpler 100% ownership make more sense if you were to deploy CapEx and a new technology?

We see the ownership conversation as a separate one, as a different one. And obviously, these technologies, any new technology, you know, with us or with third parties would be subject to some form of commercial arrangement that we would have to enter into. But we see the ownership discussion as a different one. Thank you.

Press and hold.

Alan Spence from BNP. Just a bit of a follow-up on CoupaCore. Just my understanding, as you're thinking about trialing it on these external ore sources, is the longer-term plan that you would lease the technology to those companies, or you would do it in-house, like a toll processing company?

I mean, the primary purpose of the development of this technology is to be able to use it within our facilities. But it's a patented technology. And therefore, you know, we see that there is commercial opportunity here as well. We are the priority is internal use. And that's the first call on this technology. But we are advancing some of these trials with third parties because we've seen interest. It's a way of validating, you know, the technology as well. And if we see a commercial opportunity, we would certainly want to continue. look at it and use it in that way, but with a clear priority to be used in our facilities as the first port of call.

Okay, understood. How far away do you think you are from understanding the level of commercial scale, just on the external opportunity, be it from a volume or a monetary benefit?

I mean, the potential is quite significant when you look at, especially in the case of Chile, how the oxides which use most of the XEW facilities is being depleted across the several facilities. But these trials are giving us the first insight view of that appetite. But I think it's too early days to comment. But if you judge or use as a benchmark, you know, the capacity of SXCW, which will become progressively available, the potential is material.

Thank you. And then one last one, I probably know the answer, but a bit over a year on from your initial Bonaventura stake, any updated thoughts you can share around these potential value creation opportunities?

Yeah, I think on that one, we entered it with the view of being part of a bigger game plan, which is our entry into Peru. And from that point of view, we see it as a long-term opportunity In Peru, we're doing exploration. Actually, last year, we established our full team there, and we are pursuing some targets outside of Buenaventura. And Buenaventura is the other leg of our entry into Peru. And therefore, we look at it in that long-term strategy. So I've got nothing specific to share beyond the fact that we've joined the board, we're working with the company, with the other owners involved, and getting a much better understanding of the portfolio and the opportunities there, but nothing more specific. But I think you need to judge this in the context of the long-term entry into Peru that this represents. And therefore, we are taking our time to understand and to leverage that for the opportunities that we see both in Buenaventura and in other places in Peru. But it's going well. I mean, we're pleased with where things have gone and we will continue to work on that view with a long-term perspective.

All right. Thank you very much.

I think it's working.

It is working. Okay, fantastic. Bob Brackett at Bernstein. A question. How would the outcome of the Chilean presidential election impact your medium or long-term strategy?

I think we, I mean, it wouldn't change, I would say, in a meaningful way, you know, the way that we developed our strategy. We have a very well-established presence in Chile with our operations. And I would say the institutional arrangements that are associated to mining in Chile have very solid foundations from the point of view of how they work. I think that the most significant improvement that we see is creating a better permitting system. And I think this government has had a first attempt at that, which is a step forward. I would expect that whatever sign the new government that comes into Chile in the next cycle will take that up to try to further develop efficiency around the permitting. Because I think there's been two big priorities that have now taken certain central stage for the people. One is economic growth and investment that needs to be recovered and increased. And certainly the competition from Argentina next door is creating some momentum around that or extra momentum around that. And the other one is security in the streets. And I think those are the kind of things that worry people. So those I would expect to be in the agenda of any new government. And that would be a continuation, especially on the permitting side, of easing of some of the permits. Now, with respect to where we are, I mean, we have secured the permits for the expansion that we're making at Pelambres and Sentinella. I think we've just filed the Pelambres life extension, which is a very important permit because it involves continuation, you know, from 2035 onwards and very specially extending the permit for the tailings. We've had a very good reception of that permit. We've worked with the communities on that one. So we're looking at it favorably. And I think any, therefore, extra efficiency which is introduced in the system, we expect will benefit that permit. We think that permit will take at least a couple of years to see the light. And therefore, that will certainly fall within the new government. And therefore, that will be a focus of our engagement. But with respect to our strategy, what we're doing in terms of how we look at our assets, developing them, the competitiveness of our cost, which is central to our strategy, the sustainability, it's beyond the cycles of presidential elections that may happen.

A bit of a follow-up to that. You've laid out the building blocks to 900,000 tons. A million tons a year is a nice round number, an aspirational target. What would the building blocks to get to a million tons a year look like? And what would that timing look like?

Look, even in discussing the 900,000, we're talking about approaching that number. I think we're not fixated with a number. And I understand that people... become quite attracted to that idea. But in the end, what we want is profitable tons and tonnage. And that's what we're here to do. So we want tonnage that will deliver value, economic value. So you could think of a sequence like we were talking earlier with respect to a second concentrator or an expansion of the concentrator at Sentinella, but it needs to make economic sense to us. So if you add all those, like that project, and potentially, you know, additional milling capacity at Belambres, you could potentially achieve that. But we're not thinking of a business that way. I mean, again, we want to focus on delivering value on the projects that we're constructing. And then tonnage, which adds up from that and on new projects, needs to be tonnage that adds value. So we have no fixation with a million tonnes, or even 900,000 tons. I mean, it's an aspiration. We want to get closer. We see some building blocks to get there. But it's value what we're after. You've seen in this round of results that we've increased our margins to 52%. It's a very healthy number. And that's out of working costs, you know, and ensuring that what we produce delivers cash flow in the end. So that's our main driver.

Yeah, on your CapEx guidance, I mean, this year in 24, your CapEx was 5% to 10% less than what you had planned because of currency and less hot mine development market. So given that condition still seems to be continuing that way, the 3.9 billion, is there probably a 5% to 10% cushion there? And related to that, from a cash flow perspective, given the Marubeni payments that are coming in, Would it be right to think something like 3.9 billion minus 300 million would be the cash flow impact of the projects for 2025?

Okay, the 3.9 is on the basis of the 100%. Sure. So you may want to take that. But before we go there, with respect to CapEx, I mean, we have three elements at play when we look at 2024. I mean, one was exchange rate. The other one was more slack in the construction market. And therefore, we've secure some rates in some specific types of work which have been lower than expected. And then there are some facing of activities in other projects. So we think the best estimate that we have today for 2025 is the 3.9. And I think... Given what happened in 2024, we will look to provide more information if that becomes available throughout the year. But that is our best estimate today.

Well, before we look at 2025, just adding something to what Ivan said regarding the 2.4 final figure in 2024. you need to also take into account that the final number was considering the water transaction, the water outsourcing transaction, and the 2.7 was not included in the number. So it's part of the explanation why 2.4 is lower than 2.7. And looking forward in 2025, well, the $3.9 billion is a 100% basis. The main building blocks are around the second concentrator and the two projects that we're undertaking in Palambres. In terms of cash flow impact, we have two things. We have the certainty of having a strong economy. a sponsorship, even Antofagasta Maruveni in Sentinella, but also we have the flexibility to use different sorts of finance. So I'm not able to today to forecast how much will be the net impact. The thing that I will say that we have, we have secure financing at the project level in order to unlock the value of our assets and distribute capital to different uses. Yeah.

Ben Davis from RBC. Just to be interested to get your views on the Chinese copper smelter market and the overcapacity we're seeing there, and also whether that's leading to any possible strategic changes from your side and how you sell it, whether you do more on the spot market rather than mostly a contract.

So, I mean, it's obviously well documented that there is... ample capacity for smelting and refining globally, and which has led to very low TCRCs. We expect that that will continue for some time, considering the balance of where things stand today. That's favorable to us as a mining producer. We have a book where most of our sales go to Japan, and therefore we have, I would say, a very balanced portfolio. And We're not contemplating significant shifts or changes in the way that we structure both our geographical distribution or the terms of our contracts currently. Now, we obviously get the benefit of lower TCRCs. The condition of each individual smelter is different. Some are able to run at very low cost. They get extra revenue from the sale of acid or the recovery of other metals which are contained in concentrate. And so it's very important to understand the specifics of each smelter because it's not only TCRCs that make their revenue. But we expect that favorable condition to remain for some time. But no, no change expected in the distribution of our sales portfolio or the terms.

We'll move now to our moderator to take the questions that come from the line.

If you would like to ask a question from the Zoom webinar, please use the raise hand function at the bottom of your Zoom screen. Once called upon, please unmute your audio to ask your question. If you have joined via a phone line, please press star nine. Our first question comes from Matt Green at Goldman Sachs. Please unmute your line and ask your question.

Hi, good morning. Just a Quick question. Well, I've got two questions. First one's on Centinella. You had some issues mid-year with, I guess, mine development. You had to catch up and that led to a reliance on stockpiles, which I guess caused a bit of an underperformance in the concentrator. Are you now on top of that development? Are you confident that the mine plan will deliver the quality of ore to the mill in 2025? Yes. Okay. Okay. Great. And then just on CapEx, you know, we've seen inflation easing, I guess, in Chile. You know, you've demonstrated in your cost space that you've seen some tailwinds on FX. How much of that are you seeing in CapEx? Because, Marisha, if I recall, some of your EPC contracts in Centernet are fixed. Are you seeing the benefit translate into CapEx in 25? And then just taking a step back, labor is obviously OK at the moment. You're the only one sort of executing growth. How do you think about potentially accelerating some of the capital deployments this year ahead of some of your peers before they mobilize? And I guess, do you see labor as possibly the key constraint here over the medium term in terms of execution risk around new projects? Thanks.

Just on the labor side, I think we are getting the benefit of being able to build with really no competing project in Chile, which is very advantageous, as sort of we found out, both in terms of speed of response of construction crews and teams and of the sort of labor availability. Now, we are scheduled to finish our construction by 2027. And therefore, in that land, in that sort of timeframe, we don't see a lot of competing projects coming up. And therefore, you know, we should be beyond that date when some of the bigger, you know, projects that are being sort of penciled coming into construction, which I think it's quite positive. So that is an advantage that we think we will carry through the full construction period, which is, as I say, extremely positive. Now, in terms of accelerating our capex, I think we're... very much focus on these two projects they have execution schedules which are um i would say quite solid uh the ability to accelerate them bring forward we don't think it's uh it's material um obviously if there are opportunities you know we would we would do that but we don't think that that is available in any material way. So we will continue to build for the schedules that we have. As I say, if there are minor opportunities here and there, we will pick them up because the projects are going well. But we've got, I think, the benefit of building during a time in which there is little competition of scale.

I will stress that today the name of the game for Antofagasta is discipline from the operational cash flow point of view and also from the project execution. So as Ivan said, if we see some opportunities, I will say that there's limited appetite to take those opportunities, but because we are focused on delivering what we are committing, which is Centinella Second Concentrator and Pelambas.

Our next question comes from Edward Goldsmith at Deutsche Bank. Please unmute your line and ask your question.

Hi, good morning. Two questions from my side. Firstly, on the twin metals project in the US, are you seeing any change in stance on the project from the new administration? And then secondly, on the competitiveness program, how much conservatism is built into the 100 million guidance this year, given you exceeded the guidance last year? And do you see any further low hanging fruit with regards to cost reductions beyond 2025?

I'll have Mauricio, you may first want to take the competitiveness one and I'll talk about twin metals later.

Okay, good. Well, in the competitiveness program, we are proud to what we have done in 2024. Basically, we evolved our program into focusing productivity, labor productivity, asset productivity and input productivity. There is a broad range of examples. I wouldn't say that we're long-hanging fruits, but the results of the effort and innovation of our crew at the different companies. In terms of 2025 target, I would say that, and bear in mind that that is an incremental target, so we are maintaining and and preserving the 248 million in savings that we delivered in 2024 and in excess of that we are going to increase another 100 million uh incremental to that figure yeah so basically targeting as i said labor productivity that is is important as we are optimizing the number of people in our assets and that allows us to um that allows us to reduce the number of people and also to optimize the headcount and optimize the cost associated to local currency. That is how I would say it.

On twin metals, where we are, we've got basically, there's two leases, as you know, where we have litigations because those were taken, we think, in a in an arbitrary way, and that's what we're litigating. we have been looking at ways of resequencing the project in a way that essentially would have us mine another area first and therefore developing it through a different sequence, which is more based initially on state-owned leases rather than on federal leases. Now, I think that's the path that we're pursuing and that we continue to work on. With the change in administration, what do we expect to see is a more friendlier business environment for investments in mining and copper included. And therefore, we will expect to see that manifest itself in some way, but we're not sure. have not changed our original plans, which is basically to continue to pursue the litigation and the sort of re-sequencing of the project at this stage. So expect to see more as things sort of evolve. And we will respond accordingly. Now, I think it's very important for us to ensure, however, that whatever different opportunity, if one comes, exists, does provide stability for a multi-year period. If you will record on the leases that were litigating, we had actually developed a mine plan of operation. We had submitted that mine plan of operation for an environmental review. And when there was a change in administration, that sort of happened. was reversed. So it's very important to have the certainty of a multi-year period for the development of this project. And therefore, we're looking at that being as a key element in the sort of a strategy going forward. But currently, therefore, these leases, a few of them are in the courts, and we are positive about what that means. may lead us to over time and then looking at re-sequencing the project. So that's where we stand today.

As a reminder, if you would like to ask a question, please use the raise hand feature. Alternatively, if you have dialed in by phone, please press star nine to raise your hand. And once you've been invited to ask your question, please unmute and ask your question. As we have no raised hands at the time, I will now pass back to Rosario, the moderator in the room. Thank you.

Jason.

So just to follow up, Kachoro looks kind of interesting. I mean, it's 1.26%. You've got 3 million tons of copper in the ground. What are you waiting for?

Yeah, well, we are... expecting to make some, you know, I would say important progress now. We have submitted a permit, which is required, and this is where permitting comes and it's important, to be able essentially to continue to drill what we have left, but also to be able to build access roads and potentially a tunnel. And so that's the next phase that's coming. We submitted that permit early this year. And because it's an exploration permit, we think, you know, we will take shorter than a more conventional operating permit. Once we get that, you know, we'll certainly be jumping into exploration. I mean, continuing to understand the oral body and then building potential processing alternatives. We did finish a scoping study which shows, you know, the potential of the oral body. As you say, what we know now in the declaration is that it's of significance in terms of volume and grade. And therefore, we're quite excited about what might come from that. And therefore, I think we are... moving fast in the sense that we've got the permit in, you know, we need to now move ahead when that permit is approved to build infrastructure that will allow us actually to get to the ore body and being able to finalize, you know, the knowledge of the geology but actually uh through direct access to your body so good progress there and and and and we look forward to something which we may be able to and that's the concept um send to be processed either than to go your sentinel and that's that's what we're thinking now so sharing part of infrastructure that we have in place what's the earliest it could be in production is this still minimum five years away or is this ten years away how do i how do i think about that

between those two.

Ian? Hi, Ian Rousseau. Just to follow up on Jason's question, how deep is that deposit? About 300, 350. Okay, thanks.

Thank you. With that, we will close our full year results presentation. Thank you for joining us and we invite you to join us in tea and coffee back in the lobby.

Thank you.