Compañía de Minas Buenaventura

Good day, ladies and gentlemen. Welcome to the Compania de Minas Buenaventura fourth quarter and full year 2022 earnings results conference call. At this time, all participants are in a listen-only mode. Please note this call is being recorded. At this time, I'd like to introduce your host for today's call, Mr. Gabriel Salas. You may begin.

Good morning, everyone, and thank you for joining us today to discuss our fourth quarter and full year 2022 results. Today's discussion will be led by Mr. Leandro Garcia, Chief Executive Officer. Also joining our call today and available for your questions are Mr. Daniel Dominguez, Chief Financial Officer, Mr. Juan Carlos Ortiz, Vice President of Operations, Mr. Aldo Massa, Vice President of Business Development and Commercial, Mr. Alejandro Hermosa, Vice President of Sustainability, Mr. Renzo Mager, Vice President of Projects, Mr. Juan Carlos Salazar, Geology and Explorations Manager, Mr. Roque Benadiez, Chairman, and Mr. Raul Benadiez, Director. Before I hand our call over, let me first touch on a few items. On Buenaventura's website, you will find our press release that was posted yesterday after market closed. Please note that today's remarks include forward-looking statements that are based on management's current views and assumptions, while management believes that its assumptions, expectations, and projections are reasonable in the view of the currently available information. Your caution not to place undue reliance on these forward-looking statements. I encourage you to read the full disclosure concerning forward-looking statements within the earnings results press release issued on February 28, 2023. Let me now turn the call to Mr. Leandro Garcia.

Thank you, Gabriel, and good morning to all, and thank you for your attending to this conference call. We are pleased to present the results for four quarter and full year 2022 from Compania de Minas 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 number two. Moving on to slide three, the highlights were as follows. Fourth quarter 2022 EBITDA from direct operations was $66.9 million compared with the U.S. $59.7 million reported in four quarter 21. Full year EBITDA from direct operations reached $473.1 million, a significant increase as compared to $204.4 million for the full year 2021, and includes $300 million resulting from the sale of Buenaventura State in Yanacoche. Four-quarter 22 net income reached $68.7 million compared to a $222.3 million net loss for the same period in 2021. The four-quarter 21 result includes a net loss of $301 million from discontinued operations, mainly due to the reclassification of Buenaventura's interest in Yanacocha. Full year 22, net income was U.S. dollars $602.9 million compared to a $262.8 million net loss for the full year 2021. Four-quarter 2022 exploration and operation units increased to $27.2 million compared to $15.5 million in four-quarter 2021. This increase was aligned with the company's revised strategy to increase its focus on exploration in order to extend the life of mine of our old units. Full year 2022 exploration at operating units increased to $80.8 million from $56.4 million in full year 2021. Buenaventura's cash position reached $253.9 million as of December 31st, 2020. Net debt decreased to $484.6 million with an average maturity of 3.4 years. All quarter, 22 capital expenditures were $58.8 million compared to the $32.1 million for the same period in 2021. Full year 2022 capital expenditures reached $152 million compared to $90.3 million in last year. Full year 2022 CAPEX includes $34.7 million related to the San Gabriel project and $30.4 million related to the June project. On December 20, 2022 Cerro Verde paid a total dividend of $250 million. Buenaventura received $49.8 million relative to its stake in Cerro Verde. The total dividend received by Buenaventura in full year 2022 was $79.1 million. Mining operations at La Zanja were halted in October 2022 when phase four mining was completed. However, Bleaching will continue to the extent that it remains profitable while Buenaventura continues exploration related to the underground copper-gold sulfide project. Buenaventura's board of directors has proposed a dividend payment in the amount of US$0.073 per share , aligned with the company's commitment to shareholder value. Moving on to slide four. social, environmental, and political challenges. Today, Buenaventura's on-site operations have been operating normally, while off-site logistics have encountered some delays. Despite the social issues, there has been no damage to Buenaventura's property or assets, and all other Buenaventura mining assets are operating under normal conditions. Moving on to slide five, financial highlights, Total revenues during the fourth quarter were $246 million, which is 3% lower in comparison to the fourth quarter of 2021. The full year 2022, total revenues decreased to $825 million compared to $901 million during the full year 2021. As we mentioned before, Our EBITDA from direct operations for fourth quarter 2022 was $77 million in comparison to $60 million during the fourth quarter of 2021. EBITDA from direct operations for the full year 2022 decreased to $173 million in comparison to $204 million during the full year of 2021. These figures exclude the Yanacocha transaction Also, our net income for the fourth quarter of 2022 was $69 million in comparison to a net loss of $22 million during the same period in 2021. Net income for the full year of 2022 reached $603 million compared to a $263 million net loss for the full year 2021. The capex increased to $59 million in the fourth quarter of 2022 compared to the $32 million in the fourth quarter of 2021. In the full year 2022, capex total $152 million, a 68% increase in comparison to the full year of 2021. Moving on to slide six and seven, attributable production. The gold at the root of production in the fourth quarter of 2022 was 53,000 ounces, which is 10% lower than the figure reported on the same quarter in the previous year. This decrease is mainly explained by lower production at Tambomayo, in line with the planned mining sequence of low and lower grade. The full year of 2022 Total gold attributable production was 206,000 ounces, 4% higher than the same period in 2021. Silver attributable production for this quarter was 1.7 million ounces, which shows a decrease of 25% compared to the figure reported on the fourth quarter of 2021. During the full year of 2022, Silver attributable production was 6.8 million ounces, 43% lower than the full year of 2021. This decrease was mainly explained primarily due to the suspension of Uchuchacua's operation, as was previously announced, and a change of the mine plan sequence at El Broca. In the fourth quarter of 2022, 5,000 metric tons of zinc were produced, a 45% decreased compared to the fourth quarter in 2021. The full year, 2022, zinc production reached 28,000 metric tons, 33% lower than the same period in 2021. In the case of lead, equity production was around 3,000 metric tons in the fourth quarter of 2022, which is 30% lower in comparison to the fourth quarter of 2021. The full year of 2022, lead production was approximately 15,000 metric tons in comparison to the 21,000 metric tons in 2021. Finally, our copper attributable production for the fourth quarter of the year was close to 31,000 metric tons during the full year 2022. Copper attributable production was 116,000 metric tons, a 13% increase compared to the same period of 2021. Moving on to slide eight, all-in sustaining cost and cost applicable to sales. The all-in sustaining cost from our direct operations in the full year 2022 increased by 2% to US$1,564 an ounce of gold. The cost applicable to sale for the full year 2022 were as follows. For gold, $1,153 per ounce, which is 4% lower than a year ago. For silver, $19.60 per ounce, which is 4% higher than a year ago. For lead, $1,329 per metric tonne. which is 10% lower than a year ago, for copper, $6,613 per metric ton aligned with the full-year 2021 fee. Finally, in the case of zinc, the cost applied to sales was $2,812 per metric ton, which is 24% higher than a year ago. Moving on to slide 9, pipeline of project update. Here we are presenting in one snapshot the current development level for each one of our projects. Moving on to slide 10, sorry, San Gabriel. Engineering and procurement work offsite activities progress as planned by a significant 64% and 83% respectively. relative to a total target set for the project completion. These thereby reduce overall project uncertainty, and potentially enable the recovery of a portion of time lost related to this project relative to its targeted completion. Tyne Ausenko's EPCM contract and awarded power line boot contract. Moving on to slide 11, Trapiche started the second set of on-site column metallurgical testing and ROM metallurgical leaching test, environmental impact assessment and social engagement fieldwork progressing as planned. Thank you for your attention. I will hand the call back to the operator to open the line for your questions. Operator, please go ahead.