Compañía de Minas Buenaventura

Good morning, ladies and gentlemen. Welcome to the Compania de Minas Buena Ventura First Quarter 2025 Earnings Results Conference Call. At this time, all participants are in listen-only mode. And please note that this call is being recorded. I would now like to introduce your host for today's call, Mr. Sebastian Valencia of Investor Relations. Mr. Valencia, you may begin.

Good morning. And thank you for joining us today to discuss our first quarter 2025 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 Maza, 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, Vice President of Geology and Explorations, Mr. Roque Benavides, Chairman, and Mr. Raul Benavides, Director. Before I handle the call over, let me first touch on a few items. On Buena Vendura's website, you will find our press release that was posted yesterday after the market closed. Please note that today's remarks include forward-looking statements, and they are based on management's current views and assumptions. While management believes that these assumptions, expectations, and projections are reasonable in view of the current available information, you are cautioned not to place any reliance on these forward-looking statements. I encourage you to read the full disclosure concerning forward-looking statements within the earnings press release issued on April 30, 2025. Let me now turn the call to Mr. Leandro Garcia.

Thank you, Sebastian. Good morning and thank you for joining us today to discuss the quarterly results of the company. On slide two is our cautionary statement, important information that I encourage you to read. Today, we will be discussing our performance for the first quarter of 2025, highlighting key achievements and strategies moving forward. After the presentation, we will be available for our Q&A session where our team will be happy to answer your questions. Next slide, please. I would like to highlight a few key areas that contribute to our strong first quarter 2025 results. Our first quarter 2025 EBITDA from direct operations was $126 million, compared to $95 million reported in the first quarter of 2024. This performance is also reflected in a higher EBITDA margin of 41% compared to 38% in the previous year. First quarter 2025 net income was $140 million compared to $61 million in net income for the first quarter of last year. The year ended with a cash position of $648 million and a total debt of $862 million, resulting in a leverage ratio of 0.46 times. This debt level increased against the previous quarter, as it includes Buenaventura 2032 notes. It also considers only the outstanding amount of our 2026 notes. The total capex for the quarters amounted to $36 million, with $22 million allocated to the San Gabriel project. On April 23, 2025, Buenaventura received 49 million in dividends related to its stake in Cerro Verde. In the first quarter of 2025, silver production reached 3.7 million ounces, 20% higher compared to the 3.1 million ounces producing during the same period of last year. Of this total, 2.2 million ounces came from Yumpac due to full-scale operations. Copper production decreased 21% year-over-year, primarily due to the remaining El Brocal open pit inventories, which were processed in the first quarter of 2024. Gold production was 27,988 ounces, compared to 36,593 ounces produced in the first quarter of 2024, primarily due to the decreased production at Tambumayo and Ropampan, partially offset by increased production at La Zanca. Finally, consolidated reserves have been updated as of the end of 2024. Gold reserves have increased by 482,000 ounces. Silver reserves have increased by 61 million ounces, and copper reserves have increased by 253,000 tons. Moving on to our cost structure in slide four, the holding sustaining cost for the first quarter of 2025 decreased by 83% compared to the same period in the previous year. It is important to highlight that the year-over-year decrease in all-in sustaining costs was primarily driven by lower commercial deductions and higher by-product credits. Moving on to the cost-applicable-to-sales trend. As you can see, copper, cash, cost-applicable-to-sales, increased year-over-year mainly due to lower by-product credit contributions at El Brocal. Silver cash has increased year over year, but was consistent with the expectations for this quarter. Gold cash has increased year over year, primarily driven by lower volumes in grades at Tambomayo and Orcopan. On the next slide, we will present free cash flow generation. The first quarter 2025 cash position increased during the quarter, mainly driven by net cash inflows from financial activities. An additional $100 million was raised through the bond issued in February 2025 and the remaining amount of the 2026 bond. In addition to these drivers, the EBITDA to free cash flow reconciliation reflects Buenaventura's significant capex investment related to San Gabriel. Moving on to slide six, this slide shows San Gabriel's cumulative progress, reaching 79% overall completion by the first quarter of 2025, primarily driven by finishing the engineering and procurement, as well as the construction as 75% of advance. As of March 2025, San Gabriel's total capex has reached $505 million. The guidance for the full year 2025 has been revised to the range of $220 to $250 million. The construction timeline remains on schedule. We anticipate commencing the ramp-up phase in the third quarter of 2025. followed by the production of the first gold bar in the fourth quarter of 2025. However, this milestone remains subject to the timely approval to the necessary permits. On the next slide, we are showing the processing plant's progress that will operate at 3,000 tons per day. Currently, the primary crusher mechanical works are at 100%. The sack and bolt mechanical works are at 98%. And finally, the sealed tank's mechanical works are at 97%. Moving on, we can see the progress of the main components of the plant. Moving on to slide 9, we are showing the progress at the filtered tailings plant that currently is at 74%. To conclude the presentation, I would like to share a few final thoughts. San Gabriel continues to advance steadily with 79% overall progress and on track to produce its first gold bar in the fourth quarter of 2025. Jumpac is proving to be a key growth driver, delivering 2.3 million ounces of silver in the first quarter and generating a strong cash flow. We are also driving growth by increasing our gold silver, and copper reserves, led by the strength of our flagship operations. And finally, our focus strategy remains unchanged. We are committed to our corporate guidelines, prioritizing reserve growth, EBITDA maximization, and cost efficiency at our flagship mines and in our strong pipeline of projects. Thank you for your attention. hand the call back to the operator to open the line for questions. Operator, please go ahead.