Compañía de Minas Buenaventura

Good day, ladies and gentlemen. Welcome to the Compania de Minas Beneventura third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. Please note that this call is being recorded. I would now like to introduce your host for today's call, Mr. Rodrigo Achacapar, Investor Relations. Mr. Achacapar, you may begin.

Good morning, everyone, and thank you for joining us today to discuss our third quarter 2020 results. Today's discussion will be led by 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, Raul Benavides, Vice President of Business Development, Alejandro Hermosa, Vice President of Sustainability, and also available for your questions will be Roque Benavides, our chairman. This conference will include forward-looking statements which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statement should be considered in conjunction with cautionary statements within our earnings release and risk factor discussions. I encourage you to read the full disclosure concerning forward-looking statements within the press release we filed on October 29, 2020. In addition, it is important to note that these statements include expectations and assumptions, which we will share related to the impact of the COVID-19 pandemic. As seen on slide two, our forward-looking statements also provides information on risk factors, including defects related to COVID-19 that could affect our financial results. In particular, there is significant uncertainty about the duration and complemented impact of the COVID-19 pandemic. This means when Aventura's results could change at any time and the impact of COVID-19 on the company's business results and outlook is a best estimate based on the information available as of today's date. Please note that in the interest of safety, we are again utilizing a more visual approach in exercising social distances while conducting this call this quarter. We would ask you to please bear that in mind in light of any potential technological difficulties which could occur. At this time, let me now turn the call over to Leandro Garcia. Leandro, please go ahead.

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 difficult time. We are pleased to present the results of the third quarter of 2020 from Compañía Minas Buenaventura. We have prepared a PowerPoint presentation that is available in our webpage. Before we go further, please take a moment to review the cautionary statement shown on slide two. Please consider the disclosure related to the COVID-19 pandemic. Moving on to slide three, highlights were as follows. Third quarter 2020 EBITDA from direct operations reflected a positive trend on both a sequential year-on-year basis, despite the effects of COVID-19 on Buenaventura's operation during the quarter. EBITDA from direct operations reached 68.5 million for the third quarter 20 compared to 26.5 million dollars in two quarter 20 and 58.4 million reported in three quarter 19. The third quarter adjusted EBITDA including associated companies reached 183.9 million compared to 168.2 million in third quarter 19. Third quarter 20 capital expenditures were 12.6 million compared to 28 million for the same period in 2019. Third quarter 20 net income was 24.4 million compared to $4.5 million for the same period in 2019. The company's deep bottlenecking program continued to progress at a reduced level during the third quarter of 2020. The program's 2020 focus is on Buenaventura's Tambo Mayo, Uchuk Chacua, and El Rocal Miles. Buenaventura's cash position reached $265 million for the third quarter of 2020. the company has released its update guidance for the full year 2020. In line with the company's ongoing focus on cash preservation, on October 29, 2020, yesterday, Buenaventura successfully recognized the final $113 million leasing payment for its Huanza hydroelectric power plant, effective November 2, 2020. This extends the maturity by 18 months bullet at rate of LIBOR 30 days plus 2.10%. Moving on to slide four and five, nine month, 20 monthly production and 20, 20 guidance. For transparency matters, we have decided to report the monthly detail of our production so you can appreciate in which way the COVID-19 has impacted our operating results. You can see a positive trend in terms of production in most of our operations. Additionally, we have included our 2020 operating guidance for your reference. In the case of Tambomayo, the guidance for gold production is between 70,000 and 74,000 ounces. In the case of Corcopampa, the guidance for gold production is between 40,000 and 42,000 ounces, showing the positive exploration results obtained during the year. In the case of Coimbatore, the guidance for gold production is between 100,000 and 106,000 ounces. In the case of La Sanja, the guidance for gold production is between 13,000 and 16,000 ounces. In the case of Llanacocha, the estimate gold production is 335,000 ounces, as announced by Neymar. In the case of Vulcani, the guidance for silver production is between 1.4 and 1.6 million ounces, showing a recovery in the last quarter. In the case of Uchuchagua, This mine did not achieve full capacity during the third quarter 2020, mainly due to a reduced workforce and shortage of workers required to successfully operate at full capacity. 2020 operating guidance for silver is between 4.4 and 5 million ounces. In the case of brocal, the guidance for copper production is between 33 and 36 thousand metric tons. For zinc, the guidance is in the range of 48 and 51,000 metric tons. This shows that in the last quarter, we will be changing the mix of production, focusing more on copper than zinc. Moving on to slide six, financial highlights. Total revenues during the third quarter were $228.2 million, which is 1% lower in comparison to the third quarter of 2019. This was primarily due to a decrease in volume sold of gold and silver. EBITDA from our direct operations in the third quarter of 2020 was $68.5 million in comparison to $58.4 million in the third quarter of 2019. EBITDA, including our affiliates in this quarter, was $183.8 million, which is 9% higher in comparison to the third quarter of 2019. And the net income in this quarter was $24.4 million compared to a net income of $4.5 million a year ago. The capex has decreased to $12.6 million in the third quarter of 2020 compared to $28 million in 2019. The free cash flow in the third quarter of 2020 was $76.6 million compared to $10.8 million of free cash flow in the third quarter of 2019. Moving on to slide seven and eight, attributable production. The gold attributable production in the third quarter of 2020 was 81.6 thousand ounces, which is 33% lower than the figure reported on the same quarter of the previous year. This decrease was mainly explained by lower production in Tambo Mayo and Llanacocha. Silver attributable production for this quarter was 3 million ounces. which shows a decrease of 40% compared to the figure reported on the third quarter of 2019. This is mainly due to less production in our Uchubchagua mine. In the third quarter of 2020, 15.9 thousand metric tons of zinc were produced, a 22% increase compared to the third quarter in 2019. This is mainly due to a 72% decrease in production of zinc at our Uchukchakwa mine. In the case of lead, equity production was 7.3 thousand metric tons in the third quarter of 2020, which is 20% lower in comparison to the third quarter of 2019. Finally, our copper attributable production for lead. third quarter of the year was 25,000 metric tons. This reduction is mainly explained by a 32% decrease in production at Brocal and 18% decrease in production in Cerro Verde. Moving on to slide 9, all-in sustaining costs and costs applicable to sales. The all-in sustaining costs from our direct operations in the first nine months of the current year increased to US$1,286 per ounce for gold, mainly due to lower gold ounces sold in the period. The costs applicable to sales for the nine-month period of 2020 were as follows. For gold, US$1,035 per ounce, which is 3% higher than a year ago. For silver, US$16.96 per ounce, which is 50% higher than than a year ago. For lead, US$1,181 per metric ton, which is 4% lower than a year ago. For copper, US$5,019 per metric ton, which is 7% lower in comparison to a year ago. Finally, in the case of zinc, the cost applied to sales was US$1,181 $789 per metric ton, which is 11% lower than a year ago. Moving on to slide 10, the debottlenecking program for the third quarter 2020. As a result of the company's debottlenecking program, we are gaining mining cost efficiency that particularly upset lower production output. As you can see, results for the third quarter were positive. generating $7.1 million of additional EBITDA. Additionally, the company continues to enhance its current mining plans in order to focus on high-grade areas while maintaining a focus on exploration and cost reduction efforts. You can see more details about the exploration program with the appendix of this presentation. Moving on to slide 11, pipeline of projects update. Here, we are presenting in one snapshot the current development level for each one of our projects. Moving on to slide 12, San Gabriel. The feasibility study is at 76% progress and is expected to be completed by the end of the year. The construction permit is already submitted for approval and we aim to start construction by the second quarter of 2021. Moving on to slide 13, Trapiche, the pre-feasibility study with M3 is at 86% progress and is expected to be completed by the end of the year. On-site column testing activities are delayed until the first quarter 21 due to COVID restrictions. The feasibility study will begin after test completion. Moving on to slide 14, Rio Seco. The feasibility study is expected to be concluded in the first quarter of 21. The AEA will be filed by the end of 2020. This project will unlock value for our copper portfolio. Moving on to slide 15, Tantahuatay's sulfide project. This is a standalone business case. We expect to reach pre-feasibility stage by 2021. We are currently preparing the AER process initial documentation. We have already finished tailing down basic engineering. Thank you for your attention. I will hand the call back to the operator to open the line for questions. Operator, please go ahead.

Thank you, sir. We will now begin the question and answer session. To ask a question, you may press star and then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star and then two. At this time, we will pause for a moment to assemble our roster. And our first question today will come from Diago Oje of Goldman Sachs. Please go ahead.

Hi, good morning. Thanks, everyone. My first question is regarding the full restoration of the ramparts. What you're looking for in terms of volumes for next quarter and what should we expect in terms of costs? How do you see the improvement on costs? going forward and and regarding a capital location what are you looking in terms of capital location for next year if you can provide uh you know a little bit more than narrative on on cash generation expectations and capex and potential dividend strong celebrities thank you thank you in the case of of cost and we expect

to kind of reduce a little our costs, our costs applicable to sales in all our mines. We expect to have a reduced cost in Tambomayo, Cantabatay, Jultani, and Colquejir, Canmarca Punta. In the case of Tambomayo, for example, we expect to finish our gas for the whole year between $750 to $800. In Olkopampa, around $1,000. In Tantawatay, around $850, $800 per ounce. In Uchukchakwa, we expect to have around $19, $18 per ounce. In Julcani, also $19. And in the case for zinc, in Colquijirca, around $1,800 per ton of zinc. And in copper for Marcapunta, around $5,200 per ton. In the case of CAPEX, we expect to finish this year with a total investment, a total investment in our minds between $45 million to $65 million, sustaining and greenfield CAPEX. I don't know. What was your second question, sorry, Tiago?

Sure. It's more, you know, about the capital allocation in general terms. So what's expected in terms of CAPEX, but also what they're looking to do with the cash generation and if there is any chance of potential dividends from Salvador.

Well, our CAPEX for this year, without... considering the construction of San Gabriel, will be around $120 million. Our cash generation will be mainly our efforts to increase our explorations in our own mines. And the cash generation is a... a discussion that is still pending with Freeport. They are concluding this 2020 year with a high level of cash, but up to now we have not discussed what to do with that cash.

Okay, thank you. And Leandro, just going back on the cost, are you expecting to reach 100% now in the fourth quarter and 100% of production in the fourth quarter?

No. We are actually trying to get more production to try to collect all our workforce. For Chacua, it has been a very difficult quarter, and we expect the last quarter to be almost very look like our third quarter. Maybe Juan Carlos Ortiz can give us more color with Chacua.

Thank you Leandro. Yes, in Utuk Chaco we're putting a lot of effort now with a limited workforce available at the site with a lot 30% production and focus on it's been mine development that's There have been some delays in that particular activity in the mine due to the reducing workforce, and we are focused on catching up with the proper rate of mine development in the folk water. So we will be at almost 30% production with the available workforce and catching up with mine development.

Okay, thank you.

Again, if you would like to ask a question, please press star and then one to join the queue. Our next question today comes from Carlos de Alba of Morgan Stanley. Please go ahead.

Yeah, good morning, everyone. Thank you very much. So just maybe following up to make sure that I understood correctly. So the CAPEX, can you mention again the CAPEX that you see for 2020 and maybe if you already have a ballpark figure for 2021, that would be great, particularly if you can also break down how much of that 2021 number and 2020, if you have it, are allocated to San Gabriel. And my second question is regarding cost. Thank you for the details on the different mines for the full year. But maybe more broadly, can you comment, Leandro, on the cost performance? The number in the third quarter came significantly above what we were expecting, and therefore, even though volumes also did better, the EBITDA generated by the company was still lower than what we expected, and I think what the consensus was expecting. I would have thought that with the increase in production and the high-grading strategy that the company had put in place, costs would perform better. When I looked at the silver, particularly cash for the full nine months, it's up 50%. Gold is much more reasonable, only up 3%. Do you have a sense of how much this increase in cost are related specifically with the lower production that you experienced this year, and particularly in the third quarter where shipments and production I think surprised positively, but yet the cost didn't see the benefit of the higher unit, yeah, the higher volume. Thank you.

Hi, Carlos. How are you doing? Well, in terms of CapEx, as I told you, no taking into consideration San Gabriel, we expect to invest between $100 and $120 million. The investment in San Gabriel will depend on the permits that we are chasing and we are transmitting with the government. But in any case, the construction will begin in the second quarter. We are expecting that in the second quarter of 2021. You know, the capex is around $400 million, so that should be the amount of investment.

In terms of post... Sorry, Andrew, that 100 to 120 was for 2020.

No, no, no, this is from 2021. Yes, for 2020... we expect to have between 45 and 65. Got you. All right. Thank you. In the terms regarding the cost of goods sold, please, you have to keep in mind that all the operating costs that were registered in the second quarter and in the third quarter while we were not producing in some of our units have been reassigned or re-accounted in the cost of goods sold. So there is a significant increase in the cost of goods sold and a decrease in the gross margin. That's why maybe take your calculations out of our actual figure. In the second quarter, we registered in the operating expenses, not in the operating cost, but in a discussion with our external auditors, they suggest us to move and make a reclassification from operating expenses to operating costs. That's maybe the difference and the total amount of this extra cost and extra, sorry, the cost that cannot be absorbed by the production is around $29 million.

And of those $29 million, about, if I remember correctly, about 9.2 happened in the third quarter, right?

Yes, it can be. In the third quarter, it was a lower amount than in the second quarter.

Right. And how do you see that in the fourth quarter, given the full year guidance, production guidance that you provided?

As respect of the whole cost? No, just to the unabsorbed cost due to production and stuff. No, there should not be any unabsorbed cost because we already have some production in all our mines. When this account or this amount is registered in an absorbed cost, when we don't have any provision where to assign that post.

All right. Great. Thank you very much. And then just if I may give one final question on the de-bottlenecking program. Great progress in the third quarter, 7.1. It still fell short of the budget of 12.1. What explains the difference for a quarter of the budgeted number didn't materialize? Is this related to the ramp up in production and the disruption in general that you had still in the third quarter? Or is there anything else that you can point out specifically that explains the gap?

Well, basically, the reason the gap is COVID-related reasons, but maybe Juan Carlos can give more explanation of this devotomaking delay.

Sure, Leandro. Yeah, as you mentioned, it's mostly related to COVID operational disruptions. In Tambo Mayo, some of our plans were based on mine development, reduction in overheads in the mine. We couldn't achieve fully these targets because we have a lot of time during the quarter as terra maintenance in operation, so we couldn't develop the mine or change the mine design as expected during these weeks of the third quarter. The same was for Uchukchakwa and the big savings that we consolidated during the quarter was the high grading of copper ore in the underground mine of Brocao. That was the most significant activity for the deep-water mining project with this quarter. That was with the limited workforce that we have, we focused on these high-grading copper pillars recovery in the underground mine. So basically, not achieving the expectation was COVID-related, and with the limited workforce and the limited time for activities in the mines was in particular focused on a workout underground mine.

Thank you very much, Juan Carlos and Leandro. Thank you.

Our next question today is from Leopoldo Silva of Lorraine VL. Please go ahead.

Hi. Good morning, Leandro. How are you? So I wanted to ask, first of all, I apologize if maybe what I ask has already been asked. I just came to a call. My question is regarding your exploration and I see that so far nine months on the year, you have spent less than half than what you spent on 2019 in exploration. And I wanted to ask you how successful, if you can comment, have been your results, particularly in Tambomayo and Orcupampa? Has the COVID restrained you from doing all the exploration that you wished you have done? And what should we expect? Perhaps is the higher prices that will be embedded in reserves, will those be enough to restore enough for a good 2021 for Urcupampa or Tambomayo? And if you can give color of your next reserve release in any sense that you can, in any extent that you can go. Thanks.

Thank you, Leopoldo. Yes, first of all, to clarify, this gap of exploration expenses is mainly due to the difficulty to work in COVID situation. We have difficulties in the workforce and also for the workforce for our explorations program. but once we could get all the people, all the workforce, we are doing the most of our efforts to get back in the explorations activity and we are very positive with the results that we are having in this this last month and we expect to maintain the same levels of reserves at the closing of this year on December. Maybe Juan Carlos and also for another time can give us more color to the explorations situation in our mines. Please, Jorge.

Jorge Andro, yes, with Ascubation, there was obvious difficulty to bring people up to the mine site to resume all the drilling activities, but we already have all the teams outside right now. we have five driven whole machines in tambomayo according to the plan right now drilling four of them underground and one of them in surface it's every word so we don't have to steal the result of the campaign it's ongoing in rocopampa we have four drill holes working right now there is one more bringing on board in the next week so we will have five as planet for for Ocopampa in November. We have good results in Ocopampa underground. Probably by the end of the year, we will have some results reflecting an increase on resources, monetary reserve, because here we work, maybe some inferred resources at this time. But high-grade wood veins nearby the operation, so we expect to have a smooth 2021 year for Copampa, running at an average of around 4,000 ounces of coal per month next year. In the other mines that we are consuming activities of exploration, in Brocada, we have five drill holes working right now, two in surface, three underground. In La Zanja, we have two drill holes working. They are getting good results in in a different kind of structure sulfites high high grade veins sulfites underground and in chukcha we have seven drill holes machines working right now uh having good results some of them are in infield drilling work activities as usual part of the ongoing activities um the majority of them uh four of them are of exploration underground We are having good results, but it's an ongoing campaign. We don't have consolidated figures of increased results. Probably by the end of the year, as usual, when we report our balance of resources and reserves, we can share some more specific numbers on the result of these exploration efforts.

Okay, thanks. Thanks very much. Very clear.

Another thing to point out is that the government opened the economy by phases, right? And exploration was after the beginning of our operations. So that is another point of delay in our exploration program.

And the prices, the current prices of the precious metals, at least, would let you increase, perhaps, your operating rates, maybe sacrificing some higher costs, but profiting from the moment?

Leopoldo, can you repeat this? I didn't hear you very well.

yeah sorry so um the these higher precious metals prices would allow you or would you be keen to to increase your production rates and maybe at higher costs in on those mines but perhaps on mining uh resources not reserves and that that at a 1300 Dollars an ounce of gold maybe are non-economical, but at 2,000 the ounce would be. Would you be able to increase costs, maybe sacrificing some additional costs?

Okay, I understand your question. We are in the process of making our operations planning in November. and we should evaluate there which is the best mining plan for all our mines. And that mining plan considers, as always, the price and the ore, the level of ore, and all the content in the ore that we have more available. We should evaluate that in November, and we will evaluate, of course, the current prices, which is our objective EBITDA that we would like to have in 2021.

All right. Well, thanks very much.

Our next question today is from Tanya. of Scotiabank. Please go ahead.

Good morning, everyone. Thank you for taking my question. I wanted to ask about your reserves and resources. So if I understand you correctly, will you be changing the price assumptions that you used at the end of 2019 and move them up in 2020? Is that what I'm understanding?

No, no, no. This is for our mining plan. The reserves, we have a procedure to fulfill with the SEC procedures. That answer was regarding all our mining plans for next year.

Yes, no, I appreciate the budgets will be done at the higher pricing. I'm just trying to understand. So will you use the three-year rolling average for your pricing for your reserves and resources? Is that what you're going to use, the SEC format for that?

Yes, Tanya. That is how we calculate our reserves.

Okay. And then, you know, you mentioned on the drilling side that, you know, you're going to be replacing your reserves and resources. I know that your mine plans have changed this year and you are mining higher grade materials, so you're going after that. How does that change your mine plan for what you were going to do in 2021?

Well, now our effort is to searching in our exploration effort is to searching to replace those high-grade areas. As you may hear, Juan Carlos, we, in all our minds, are in very high activity in that matter. We should be having results for the very close 2021. We still... making our plan to given the prices and given the content that we find. Maybe Juan Carlos can give more explanation in the strategy.

Sure, Leandro. The strategy for high-grading, we are planning to extend that. We have the visibility to extend that to the end of the year. And we know that the COVID probably will be around for way more time, a few quarters, two, three quarters more. So the strategy also that is being developed for the budget of 2021 is to see if we can continue with, let's say, some sort of high grading probably not as higher as in the third and ongoing quarter but still higher than the average for the early part of 2021 that's a general strategy we are developing in detail all the mining plans to see this uh viable to develop this strategy and do an analysis mine-to-mine. It's different in each case. In an open pit, sometimes it's very difficult. It's a more fixed sequence of mining. But in the underground mines, where we have several lanes to mine, we can change a little bit the sequence without the compromise of any long-term problem. And we will try to do that in the first half of 2021 as well.

Sometimes when one does high grading up front, you compromise your reserves and you compromise some of your oral body longer term. So are you saying that the undergrounds, you're just going to be moving to higher grade areas so there's no compromise in your reserve basis?

That's correct. We need to be very cautious, as you mentioned. It's a strategy that is valid for a kind of short period of time without compromising the overall mining sequence of the mine. So, yeah, we need to be very cautious. That's the reason we are working on that right now. The target is to try to keep up with the high grades within the first half of the in 2021 but we need to validate that sequence and once we have everything we can get back and share the information but that's kind of the general strategy at this point okay and then maybe i just can ask one other question on ucha chaco like when do you expect that mine to be back at full capacity in 2021

And then will you be reporting your monthly data? Like will you be reporting like November, October number for us in November or were you just showing it to us in the quarterly data? I'm just trying to understand if it's going to just be shown in the quarterly data monthly or will you be announcing monthly data going forward for us?

In terms of our releases, For this year, in order to have the same transparency, we decided to report monthly our production figures. So you should expect our production release month by month. And in terms of Chacua, well, Juan Carlos will continue

Yes, as I mentioned before, we are right now pretty much at 30% capacity on the processing plant. The efforts on the ground are shared between production as well, mine development and exploration. We were having a delay based on COVID of mine development, and we will catch up with this delay along the next months, probably up to January we will complete reached the point where we can start making a ramp up from 30% up to maybe 70%, 80% in the coming months. So it's one of the mines that has been more heavily impacted by the COVID. We have some instability of how many people we can schedule from week to week. So the general plan is that from moving from 30% for the next 2-3 months and based on the development, how fast we achieve our target of mine development, we start building a ramp up, a gradual ramp up. So at this point it's kind of uncertain how fast can we go, but the general strategy is to move from 30% up to 70% in the early months of 2021.

Okay, great. Thank you so much.

Tanja, only to clarify, sorry. We are going to report our production figures at the end of the quarter, but we are going to report it month by month.

Yes, I was trying to clarify that not in like December you're going to be reporting just the you know, October, November number, but you're going to report monthly when you report at the end of the quarter.

Yes, yes.

So in, you know, January or February, you'll report all of the numbers.

In January, we should send the information by month.

Yeah, okay, okay. Thank you. Maybe if I could just ask one other question just on – Just on your dividend policy, what do you need to see to reinstate the dividend?

Yesterday we had the Board of Directors and that issue came to the discussion. And we will expect our Board of Privy to see which is the global situation, which is the very next future in those months. So then we should take make the decision.

Would it be that you would need to see that all the minds are back up and running at full capacity, including Uchachakwa, and there's no COVID, and then you feel comfortable at that point? Is that what you're trying to assess?

Yes. Yes.

Okay, great. Thank you so much.

Thank you.

Again, to ask a question, please press star and then one. Our next question today is from Keita Kamiyama of BNP Paribas. Please go ahead.

Yes, thank you, everyone. Thank you for the conference. Just one question more focused about El Brokal and concerning the debacle-making program. How can you explain actual third quarter figures compared to the budgeted one? It's much more higher. than the budgeted one for El Brokal for the first pillars recovery with high copper grades.

Thank you. Thank you for your question. Yes, this quarter has been a very good quarter for our El Brokal. We have some operating equipment. We didn't have any disturbance of communities, only the COVID situation, but we achieved some stability, operating stability. And all, of course, the efforts of our operating people to maintain the production. Even Given that we have eight days maintenance period for one of our plants, we reach this stability and the production was very stable. Maybe Juan Carlos can give us more color of this.

In the third quarter, we speed up the stripping of one section of the open pit so we can reach ahead of time a high-grade area of the open pit. That area is already mined right now. And we continue to mine around that wall and finish the north face of the open pit in this quarter. Later, in the coming months, we will switch operation from the north to the south, and we will increase copper production because copper is on the south side of the open pit, and the northern part that was more polymetallic will be depleted, mostly depleted. So we will start now a transition from polymetallic ore in the open pit to copper in the southern part of the open pit. So particularly at this quarter, the increase in production was by speeding up the stripping in the northern part reaching the high-grade polymetallic ore ahead of time and include that in the in the production area from the underground mine the production of the pillars we have high-grade copper pillars between two to three percent copper in certain areas of the underground mine. So with the limited workforce that we have, we put a lot of effort to recover those pillars and bring that production into the processing plant. That was the reason we have an increase in the production. We keep up with the production of copper even with a limited workforce. Regarding the bottlenecking program, yes, as I mentioned, the effort that we put was in this particular activity of recovering the high-grade copper pillars to increase the copper production. The copper was in a very good price along the quarter, so it was a double effect, increasing rates and increasing and capture a good price. So a convenient effect helped us a lot during this quarter in Brocal.

Okay, thank you very much. And one more question. Would you have more more detailed forecasts about especially El Brocal? For instance, CAPEX for the full year 2020 and the forecast for 2020 and some details about the expected production mix? Because I saw that the copper production decrease while the zinc one increase?

Well, for in the terms of cost, we expect finish in the open pit mine with around of $1,800 of gas. And in the underground mine, around $5,200 per ton of copper. In terms of capex, we are estimating to finish this year with around $18 million of capex. And for the next year, we don't have up to now the final figure because we, as I told you before, in November we have our operating planning sessions and in that moment we are going to define the following year CAPEX for all our units.

Okay, thanks a lot.

You're welcome.

Ladies and gentlemen, at this time we will conclude the question and answer portion of today's conference. At this time I would like to turn the conference back over to Mr. Garcia for closing remarks.

Thank you. Before we finish today's conference call, I would like to transmit to all of you that our first commitment is to maintain our workforce healthy, applying the strictest protocols to guarantee their safety in this pandemic environment. Then we want to assure that we will continue making great efforts to recover our output in all our operating units as it was before the effects of COVID-19. We still apply the strategy of working on high-grade ore with a parallel effort in geology to replace those areas for the upcoming months. Finally, we want to confirm that we maintain our effort also to preserve our cash position as a very important objective in this pandemic scenario. Thank you very much for making the time to join us today, and have a wonderful day. Thank you.

Ladies and gentlemen, that concludes Buena Ventura's third quarter 2020 results conference call. We would like to thank you again for your participation, and you may now disconnect.