Compañía de Minas Buenaventura

Good day, ladies and gentlemen, and welcome to the Campaña de Minas Buenaventura first quarter 2023 earnings results conference call. At this time, all participants are in a listen-only mode, and please note that this event is being recorded. I would now like to introduce your host for today's call, Mr. Gabriel Salas, Investor Relations. Mr. Salas, you may begin.

Good morning everyone and thank you for joining us today to discuss our first quarter 2023 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 Maher, Vice President of Projects, Mr. Juan Carlos Salazar, Geology and Explorations Manager, Mr. Roque Benavides, Chairman, and Mr. Raul Benavides, Director. Before I hand out 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 close. Please note that today's remarks include forward-looking statements that are based on management's current views and assumptions. While management believes that its assumptions, expectations, and projections are reasonable in the view of the currently available information, you are cautioned not to place a new reliance on these forward-looking statements. I encourage you to read the full disclosure concerning forward-looking statements within the earnings results press release issued on April 27, 2023. Let me now turn the call to Mr. Leandro Garcia.

Thank you, Gabriel. Good morning to all, and thank you for attending this conference call. We are pleased to present the results for the first quarter 2023 from Compania de Minas, Buenaventura. We have prepared a PowerPoint presentation, which is available on our web page. Before we go further, please take a moment to review the cautionary statement shown on slide number two. Moving on to slide three, highlights were as follows. First quarter, 23 EBITDA from direct operations was $51.6 million compared to the $86.9 million reported in the first quarter of 2022. EBITDA results do not include $300 million from the sale of Buenaventura Steak in Llanacocha. First quarter 2023 EBITDA, including Ashes' company, reached $181.9 million compared to the $233.7 million in the first quarter of 2022. Again, EBITDA results do not include the $300 million from the sale of Buenaventura Steak in Llanacocha. First quarter 23 net income from continuing operations reached $72.2 million compared to U.S. dollar $134.7 million net income from continuing operations for the same period in 2022. El Brocal or mine from its open pit was stockpiled during the first quarter of 2023 and was not treated during the quarter. Underground mine production increased to 9,350 tons per day during the first quarter of 2023 compared to the 7,100 tons per day in the first quarter of 2022. as part of the ramp up to reach 10,000 tons per day during 2023. This stockpiled lead and zinc ore will be treated at Borcal's processing plant in the second quarter of 2023. Buenaventura's cash position reached $173.1 million as of March 31, 2023. Net debt increased to $556.8 million with an average maturity of 3.1 years. First quarter 2023 capital expenditures were $36.2 million compared to $19.9 million for the SAME PERIOD IN 2022. FIRST QUARTER 2023 CAPEX INCLUDES 9.7 RELATED TO THE SAN GABRIEL PROJECT AND 8.8 MILLION DOLLARS RELATED TO YUNPAC PROJECT. ON MARCH 24, 2023 SERRO VERDE ANNOUNCED A TOTAL DIVIDEND DISTRIBUTION OF 250 MILLION DOLLARS. BUENA AVENTURA WILL RECEIVE 49 million relative to its stake in Cerro Verde on April 28, 2023. During the first quarter of this year, operations at Julcani were suspended for 10 days in February 2023 related to anti-government protests which adversely impacted production and mine development. Operations were fully reestablished on February 16, 2023. The company plans to recover this production in subsequent quarters and expects to meet 2023 production guidance. Moving on to slide four, our financial highlights. Total revenues during the first quarter were $186 million, which is 20% lower in comparison to the first quarter of 2022. As we mentioned before, our EBITDA from direct operations for first quarter 2023 was $52 million in comparison to $87 million during the first quarter of 2022. Again, these figures exclude the Anacocha transaction effect. Also, our net income from continuing operations for the first quarter of 2022 was $73 million in comparison to a net income from a continuing operations of $135 million during the same period in 2022. The CAPEX increased to $36 million in the first quarter of 2023 compared to the $20 million in the first quarter of 2022. Moving on to slide five, attributable production. Total gold attributable production in the first quarter of 2023 was 39,000 ounces, 21% lower than the figure reported in the same quarter of the previous year. This decrease is mainly explained by La Zanja mining operations suspension since the fourth quarter of 22 and lower production of Coimbatore as mining and ore stockpiling were temporarily suspended in the fourth quarter 2022. Silver attributable production for this quarter was 1.1 million ounces, which shows a decrease of 38% compared to the figure reported on the first quarter of 2022. This decrease in production was primarily due to the Brocal underground mine being the sole producing mine during the first quarter of 2023. as with the adverse impact of the 10-day suspension of activities at Julcani due to protests as described. Finally, our copper attributable production for the first quarter of the year was close to 29,000 metric tons, a 7% increase compared to the same period in 2022. Moving on to slide six, all-in sustaining cost and cost applicable to sales. The all-in sustaining costs from our direct operations in the first quarter of 2023 increased by 44% to US$1,924 per ounce of gold. The costs applicable to sales for the first quarter of 2023 were as follows. For gold, US$1,124 per ounce, which is almost equal to a year ago. For silver, 21.5 US dollars per ounce, which is 41% higher than a year ago. For lead, 1394 US dollars per metric ton, which is 1% higher than a year ago. For copper, 6738 US dollars per metric ton, which is 2% higher in comparison to a year ago. Finally, In the case of zinc, the cost applicable to sales was $1,966 per metric ton, which is 31% lower than a year ago. Moving on to slide seven, our pipeline of projects update. Here we are presenting in one snapshot the current development level for each of our projects. Moving on to slide eight, our projects. In the case of UMPAC, our Bramford project, we are focused on development of main ramps and exploration tunnels. Updated geological model suggests the opportunity to increase mineable grade with less mining development. Environmental permit for underground exploration granted in February 2023. Environmental permit for mining expected on May 2023. In the case of San Gabriel, our Greenfield project, we have finished the Arani campsite. The Petar is to start in May and definite campsite is to start in July. Authority admitted the power line environmental impact assessment currently programming the third workshop by the third quarter of 2023. Working with the regional government on road maintenance and right of way. We have reached an agreement with community on oil transport fees. Thank you for your attention, and I will hand the call back to the operator to open the line for the questions. Operator, please go ahead.