Compañía de Minas Buenaventura

Good day, ladies and gentlemen, and welcome to the Campaña de Minas Buenaventura first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. Please also note today's event is being recorded. At this time, I'd like to introduce your host for today's call, Mr. Rodrigo Echikapar, Investor Relations. Mr. Echikapar, you may begin.

Thank you. Good morning, everyone, and thank you for joining us today to discuss our first quarter 2021 results. Today's discussion will be led by Mr. Leandro Garcia, CEO. Also joining our call today and available for your questions are Daniel Dominguez, CFO, Mr. Juan Carlos Ortiz, Vice President of Operations, Aldo Massa, Vice President of Business Development and Commercial, Alejandro Hermosa, Vice President of Sustainability, Renzo Majer, project manager. And also available questions are Mr. Roque Benavides, our chairman, and Raul Benavides, our board member. This conference call will include forward-looking statements which are subject to various risks and uncertainties. That would cause our actual results to differ materially from these statements. Any such statements should be considered in conjunction with statements within our earnings release and risk factors discussions. I encourage you to read the full disclosure concerning forward-looking statements within the first release we filed on April 29, 2021. In addition, it is important to note that these statements include expectations and assumptions which will be shared related to the impact of COVID-19 pandemic. As seen on the slide two, our forward-looking statements also provides information on risk factors, including the effects related to COVID-19 that could affect our financial results. In particular, there is significant uncertainty about the duration and contemplated impact of the COVID-19 pandemic. This means when Aventura's results could change at any time and impact and the impact of COVID-19 on the company's business results and outlook is a best estimate based on information available as of today's date. Please note that in the interest of safety, we are again utilizing a more virtual approach in exercising social distancing. While conducting this call this quarter, this quarter. We will ask you to please bear that in mind in light of any potential technological difficulties which could occur. At this moment, let me turn the call over to Mr. 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 first quarter of 2021 from Compania Emina's Buenaventura. We have prepared a PowerPoint presentation, which 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. EBITDA from direct operations reached 38.2 million in first quarter 21 compared to negative 6.7 million reported in the first quarter 20. First quarter 21 adjusted EBITDA, including associate company, reached 182.9 million compared to 30.1 million in the last quarter in December, in the last year in December quarter. First quarter 21, net income of 16.4 compared to a net loss of 68.6 million for the same period in 2020. First quarter 21 exploration and operating units increased to 9.3 million compared to 6 million in first quarter of last year. This increase was due to an internal policy change to boost exploration activities despite COVID-19 personnel restriction at some of our operations. First quarter 21 capital expenditures were 13.1 million compared to 10.7 million for the same period in 2020, when Aventura's cash position reached 225.4 million for the first quarter 2021. Moving on to slide four, financial highlights. Total revenues during the first quarter were $185.9 million, which shows a 62% increase comparing to total revenues in the first quarter of 2020. Increased commodity prices, including lead, supported the net sales figures despite reduced volume sold. EBITDA from our direct operations in the first quarter of this year was $38.2 million in comparison to negative $6.7 million in the first quarter of 2020. EBITDA, including our affiliates in this quarter, was $182.9 million, which is significantly higher than the figure of this quarter in 2020. This increase mainly comes from better results from Cerro Belo. And the net income in this quarter was $18.1 million compared to a net loss of $80.4 million a year ago. The cap has increased to $13.1 million in the first quarter of 2021 compared to $10.7 million in the third quarter of 2020. The free cash flow in the first quarter of this year was $8.1 million compared to $22.3 million of free cash flow in the first quarter of 2020. Moving on to slide five and six, attributable production. Total goal attributable production in the first quarter of 2021 was 662.9 thousand ounces, which is 29% lower than the figure reported on the same quarter of the previous year. This decrease was mainly explained by lower production in Yenipochtli. Silver attributable production for this quarter was 3.5 million ounces, which is in line compared to the figure reported on the past year. This is mainly due to less production in Uchulta. The first quarter of 2021, 9.3 metric tons of zinc were produced, a 27% decrease compared to the first quarter in 2020. This is mainly due to a 47% decrease in production of zinc and our . In the case of lead, equity production was 4.4 thousand metric tons in the first quarter of 2021, which is 37% lower in comparison to the first quarter of 2020. Finally, our copper Agri-routable production for this quarter was 24,000 metric tons in line with the figure reported in the first quarter of 2020. Moving on to slide seven, all-in sustaining cost and cost applicable to sales. The all-in sustaining cost from our direct operations in the first quarter of 2021 decreased by 21% to 1,000 $631 per ounce of gold. The costs applicable to sales for the first quarter of 2021 were as follows. For gold, $1,295 per ounce, which is 14% lower than a year ago. For silver, $19.39 per ounce, which is 17% higher than a year ago. For lead, $1,321 per metric ton, which is 6% lower than a year ago. For copper, $5,594 per metric ton, which is 8% higher in comparison to a year ago. Finally, in the case of zinc, the cost applied to sales was $2,059 per metric ton, which is 8% higher than a year ago. Moving on to slide eight, pipeline of projects. Here we are presenting in one snapshot the current development level of each one of our projects. Moving on to slide nine, San Gabriel. We are working with the authorities to resume the consulta previa process aiming at completion by the second half of 2021. Additionally, we are currently working to obtain the construction permit. We have already submitted the water dump construction permit. Moving on to slide 10, Trapiche, we are working with the communities on defining development opportunities to support the second environmental impact assessment workshop by the end of three quarters of 21. We continue with the chloride leaching test, obtaining good results and evaluating its inclusion in the EIA. Moving on to slide 11, Rio Seco, we are executing solvent extraction tests to increase gold and silver residue value. Also, we are currently working on responding to EIA-issued observation work. Moving on to slide 12, tantalum disulfides, formal latches board approved viability stage. We are currently defining a drilling contractor to increase resource certainty. Thank you for your attention. I will hand the call back to the operator to open the line for questions. Operator, please go ahead.