Compañía de Minas Buenaventura

Good morning, ladies and gentlemen. Welcome to the Compania de Minas Buenaventura fourth 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 you to your host for today's call, Mr. Sebastian Valencia, head of investor relations. Mr. Valencia, you may begin.

Good morning, everyone. And thank you for joining us today to discuss our four-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 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, Vice President of Geology and Explorations, Mr. Roger Benavides, Chairman, and Mr. Raúl Benavides, Director. Before I hand the 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 the market closed. Please note that today's remarks include forward-looking statements that are based on management 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 under reliance on these forward-looking statements. I encourage you to read the full disclosure concerning forward-looking statements within the earnings result that was issued on February 26, 2026. Let me now turn the call to Ms. Arleandro Garcia.

Good morning and thank you for joining us today to discuss the quarterly results of the company at the year end. On slide two is our cautionary statement, important information that I encourage you to read. Today, we will talk about our 2025 performance, our main achievements, and our priorities for the future. After the presentation, we will be available for our Q&A session, where our team will be happy to answer your questions. The next slide, I will start by providing a summary of our strong results for the year. Copper production in the full year of 2025 reached 52.4 thousand tons, down 8% over year. was mainly because the company processed stockpiles with higher precious metal content following a sharp increase in precious metal. This was in Brocal. Silver production reached 15.6 million ounces, 1% higher compared to the 15.5 million ounces produced during the same period last year, in line with our annual expectations. Gold production was 121,000 ounces, down 18% year-on-year, mainly due to lower output at Orcopampa and Tambomayo, consistent with the 2025 planned mining sequence. EBITDA from our direct operations in full year of 2025 was US$112 million, which represents an 88% increase compared to the $431.5 million in 2024. Net income for the full year was $1,830 million compared to $416 million in 2024, which includes $157.3 million from the sale of Chaupiloma. The year ended with a cash position of $530 million and total debt of $710 million, resulting in a leverage ratio of 0.22 times. Moving on to San Gabriel. As of now, San Gabriel has reached 99% overall progress. CAPEX for the project in the fourth quarter of 2025 was $153 million, primarily allocated to the completion of the processing plant construction. After the quarter ended on January 29, 2026, Buenaventura received $98 million in dividends from its stake in Cerro Verde. Finally, the Board approved a dividend of $0.9904 per share. With this approval, total dividends declared over the past 12 months reached $1.135 per share at ADS. Moving forward to our 2025 guidance. Regarding gold production, our primary focus is in San Gabriel, which is expected to become our main gold-producing asset in the coming years, playing a key role in our long-term growth strategy. We anticipate stable copper and silver production at both El Brocal and Uchuchacuayumpa, maintaining consistent output levels. For 2025, we expect total CAPEX of between $385 and $415 million, around $200 to $220 million we sustain in CAPEX, mainly focused on mine development, tailings, and ventilation at Richa del Brocal, Urchuchaco, and Yumpac, as well as readiness and wrap-up works at San Gabriel. for 2026 is expected to be between 185 and 195 million, mainly focused on the completing of San Gabriel and advancing Trapiche and Algarro. Moving on the cost applicable to sales trend, Copper cash increased in the fourth quarter of 2025, mainly due to higher personnel costs driven by improved profitability, increased cement consumption, and foreign exchange impacts at Eurocash. Silver cash increased due to higher commercial deductions and YUMPA, non-payable value and escalators. Additionally, there were increased or throughput partially offsetting lower grades at Uchuchagua and Hulcani. Gold cash has increased due to lower throughput, reducing scale efficiency at Orcopampa and Tambo Maya. On the next slide, we will present free cash flow generation. The four-quarter cash position increased during the quarter, mainly driven by net cash inflows from operating activities. Moving on to slide six, I would like to highlight a key milestone achieved last December. We produced our first dorebar at San Gabriel, and we have received the initial operating permit. The water license is expected in the coming weeks. For 2026, our production guidance is between 48,000 and 55,000 gold ounces. There are still some pending milestones to achieve full potential. These include the expansion of tailings drying areas and upgrades of the ventilation system. We expect to complete this milestone, enable a stable 2,000 tons per day throughput in the third quarter of 2026, and continued ramp up. San Gabriel's cumulative progress has reached 99% overall completion by fourth quarter of 2025, primarily driven by finishing the engineering and procurement as well as the construction at 98% of advance. On the next slide, we are showing the processing plant's progress, the primary crusher mechanical wars at 100%, The SAC and BOS mechanical wars are at 100% also. And finally, the sealed tanks mechanic wars are ended with 100% achievement. Moving on, we can see the progress of the main components of the plant. Moving on to slide nine, we are showing the progress made at the filter tailings plant, which is now complete. To conclude the presentation, I would like to share a few final thoughts. Consistent copper and silver output supported by steady operations at El Brocal, Uchuchagua and Yumpac, ensuring operational reliability. Solid performance from affiliate companies, Colmolache is operating at full capacity, while Cerro Verde distributes 98 million in dividends attributable to Buenaventura State. San Gabriel has entered in its transition phase, moving from project execution to ramp-up during the first half of 2026, positioning the operation to achieve a stable 2,000 tons per day throughput in the third quarter of 2026. environment allows us to step up exploration investment to reinforce our reserves and resources base, while advancing progressive closures to enhance efficiency. A strong cash flow generation, a solid balance sheet, and a disciplined capital allocation enable us to return in value to shareholders, reaffirming our commitment to investor returns. Thank you for your attention, and I will call back to the operator to open the line for questions. Operator, please go ahead.

Thank you. We will now begin the question and answer session. To ask a question, dial in by phone and press star, then 1 on your telephone keypad. Make sure your mute function is turned off, and if you are using a speakerphone, please pick up your handset before pressing the keys. to withdraw your question, please press star, then two. The first question comes from Carlos de Alba with Morgan Stanley. Sir, your line is live. Please proceed with your questions.

Yeah, good morning, everyone. Thank you. So first one is maybe on CAPEX. Leandro, significant increase on CAPEX versus what, expectations are in the sell-side consensus and also are probably more intriguing versus what you guys told us just a few months ago in your investor day. So maybe can you please provide some detail as to what happened in those last months that led the company to significantly revise all the capex? I have a couple of other questions.

Thank you, Carlos, for your question. Mainly, primarily in San Gabriel, the pending works are related to earthworks and continue for the ramp up of the project. Maybe Renzo can explain the pending issues to be resolved and have the production steady.

Yes, sure. Hi, Eric. Hi. Yes, effectively, we are going to be, we have some remaining works on airworks, especially after the rainy season, where we're kind of all the water systems and the roads are starting to be tested with rain. So there's some minor blocks, semi-failures that we need to cover and fix. and some channels to redirect water that are going to need additional care. And we need to continue with the grouting for the water dam, for the last part of the grouting. So that plus closing some contracts for some additional quantities and material in the plant that is already finished.

And all these failures just eventuated or the company discovered them as the ramp-up started?

Well, when we finish the earthworks, it's still untested. So we're currently in the middle of the rainy season. So you keep finding things that can be improved or things that need some extra work to be finished. If there are certain roads that are not working as expected and we need to do alternative roads, and some areas can be accessed with that. But anything may here.

Okay. All right, thank you. And then on San Gabriel, thank you for the color on the ramp-up. Just maybe what is behind the lower guidance for production this year? You know, similar, I guess, to CAPEX, a little bit of a surprise, or a surprise, given that just a few months ago you got it to a higher number.

Yes, Carlos. As we anticipate, we continue working in the ramp-up and putting all the things away and ordered to reach by phases the production of the design plant. So we are going to reach the 3,000 tons per day next year. We are making all the efforts to reach as soon as possible, but we foresee a production of 2,000 tons per day all this year. Actually, the ventilation, we have to improve the ventilation in order to work on the high-grade areas. a little flexibility of the higher grade areas, so we are planning to work in only three galleries. Well, maybe Juan Carlos can give the exact explanation of the component of our production.

Yes, Leandro, thank you. Well, number one, as you mentioned, Leandro, is the All the components that are still pending for construction and permitting, we will finalize the construction and get the permit granted, the final operational permits by the second quarter of this year. At that time, we will have all the area for drying the tailings and for compaction of the tailings inside the reservoir all set up. We have partial permits already set up for commissioning, and we have to have these definitive permits by the second quarter of this year. In addition to that, the mine is rescaling the production plant because after the accident that we had late December last year, we need to redesign the ventilation sequence. We need to triple the amount of air pressure that we need to push into the galleries in order to dilute all the gases that we have underground. In order to that, we are bringing more ventilators, more fans, more electrical devices in order to power this equipment. And the consequence of that also in order to have a higher control of the ventilation and the risk linked to gases underground is that we are losing part of the flexibility that we expected to have in 2026. Flexibility in order to mine high-grade areas in six different levels Now we're going to be restricted to mine only in three levels. So by throughput, it will be the same. By the gold grade, it will be lower. We are not mining high-grade areas. We are going to be restricted to three levels in which we need to mine the high grade and the average grade to complete the throughput that we compromised with the processing plant. The main reason, therefore, is the lower grade that we are mining in this initial year, 2026.

Thank you, Juan Carlos. Sorry. And then maybe one more. With a very significant increase in gold and silver prices, I mean, others as well, but is the company foreseeing any changes in the mining plan that was presented late last year? And maybe the guidance will change. Can you offer some color there?

Well, we have reviewed the mining plans of all our operations, and, well, the only change we have foreseen, realized, is this San Gabriel, right? In copper, we still with the same objective, and silver also.

Thank you. I'll get back on the queue. Thank you.

The next question is from Tanya Jakuskonek with Scotiabank. Please go ahead.

Oh, great. Good morning, everybody. Thank you for taking my questions. Just if I could finish off on San Gabriel. I just want to make sure I understand. It's not the growth capital of 185 to 195. How much of that is San Gabriel? And what is going to the earthworks and what's going to ventilation?

Thank you, Tanya. Thank you for your question. Maybe, Renzo, you have the figures there?

Yes, hi. Thanks for the question, Daniel. Yeah, from that, in San Gabriel, San Gabriel is going to be like $160 million. That includes the closing of all the contracts that we have. That's probably half of that. And the other half is additional work in the airworks. I think the ventilation is more in the sustaining topics.

Okay. So you've put it there. Okay. Understood. And maybe if I could just get Daniel to just give me some more guidance. I found the expiration in G&A was lower than I expected in Q4. So can you give me some guidance on G&A for 2026 expiration and dividends from Yanacocha, including the dividend payout, whether you're reviewing that with your board meeting in March.

Thank you for the question, Tanya. The G&A that we expect for the entire 2026 will be around $60 to $70 million. which is similar to what we reported in year 2025. This increase compared to previous years is because the workers' participation in profits, number one, and number two, due to the stronger Peruvian currencies. Then for explorations, we have the explorations in the mining sites, in the operating sites, which will be around $60 to $70 million. We have increased our budget in explorations because we are focusing on more labors in San Gabriel, in Brocal, and Uchuchacoayú impact. And also, in the non-operating sites, we'll be disbursing some cash for the other projects that we have, Greenfield projects, and this will be around 20 to 30 million dollars. Our total budget for explorations is between 90 and 100 million dollars, compared to the 70 million dollars that we have been disbursing in the past. And finally, sorry. And finally, for dividends, what we expect to receive from Cerro Verde this year is around $200 million, a little bit higher than what we received in year 2025. And what we decided at the board meeting yesterday was that we were going to pay for this time, as the prices are going well and our capex for Sangavir has basically been completed, we will pay 40%. of the net income of the previous year from 2025. Remember that our dividend policy is not less than 20% of the net income of the year. We have increased that to 40%, and we will continue evaluating in the future depending on the prices and also with our CAPEX program.

Okay, thank you for that. And then just maybe my last question. question comes on permits and just on Cameloche sulfides. Are we still looking for that study to come out in Q1 on the Cameloche sulfide? No, I think it was H1, the conceptual study on the project. And then on the permitting side, just on San Gabriel, I know we're waiting for this water permit. What's taking so long? And then asset sales, if I could. Where is that going on some of your asset sales, and are we hoping to get those done this year?

Thank you, Tanja. For the first question, the COI Molache, we are just ending the study. We have to discuss internally with Southern and ESPRO which are the following steps we need. We should inform to the market in the first half of this year what are the following positive news for the project. So we continue working on that, but we have to well, put it in the board of Coimbatore and get the approval to continue. In terms of what's the following, the San Gabriel, yes, the authority has already visited us. We are just waiting for the the permit to be signed. So we expect in the following couple of weeks, we hope to receive, to be granted of this permit. And the last question about was?

Asset sale, yeah.

Well, the asset sale, yes, yes, sorry. um continue evaluating the the this asset um we are uh in the in the last part of the make taking a taking a decision and as soon as we arrive to a conclusion we we will inform it to to to the market okay so we're still planning maybe

Yes, Tanja, we will make a huge analysis about the asset sales. We haven't taken a decision yet if we are going to sell or not, but you have to take into consideration that this increase in precious metals prices, really you have to think a lot if you want to sell or not an asset right now. But we are still analyzing, and we will take a decision very soon.

Okay. Okay. Thank you.

The next question is from Cesar Perez-Navoe with BTG Patchwall. Please go ahead.

Cesar Perez- Yes. Good morning, gentlemen. My question relates to . Could you comment on why cost applicable to sales rose 16 percent in the quarter? I believe you attribute this to larger throughput of low-grade mineral, but also there are some commercial deductions, and you also mentioned increased non-payable value. Can you please explain this, what it is? And my second and final question would be regarding guidance. Thank you for GNA and exploration data, but it would be really useful if you could complement this, if possible, with revenues and EBITDA for 2026. Thank you.

Thank you, Cesar. Happy to count on your questions.

Maybe I will explain a little bit about these reductions in June. The escalation, yes, of course. Go ahead. Cesar, thank you very much for your question. We have two main reasons here. The first one is when you sell silver concentrates with less than 2,500 grams, usually the payable for that concentrate is between 60 and 70%. When you sell silver concentrate with higher than 2,500 grams, the payable is between 90 and 95%. In the last quarter, we produced more silver concentrate with lower grade. That's why the reduction is a lot more. And the other reason is the escalators. We have escalators closest in our contracts. And due to a sharp increase in the price of silver, right now these escalators are applying to the contracts. What does it mean? That if the upper range of the escalator is $50 per ounces and the price of silver is $100, apply a percentage of the price. You understand?

Yes, yes, I do, I do. All right. Okay, so those would be the two main reasons.

Thank you.

That results answer your question, Cesar?

Yes, and if possibly you could provide some guidance for EBITDA or revenues. Daniel, please.

Hello, Cesar. Thanks for your question. If we consider prices at levels of $4,500 for gold, $70 for silver, and $12,000 for copper, we should be in the range of revenues at $1.8 to $2 billion. This includes close to $100 million of sales from the concentrate that we buy from Cerro Verde, from Freeport. The EBITDA that we expect for the total year will be around $800 million and $1 billion.

All right, Daniels. Thank you very much.

The next question is from Fernando Gil with Engesa Sao Paulo. Please go ahead.

Hi. Thank you for taking my questions. Just a quick question regarding the invested-day targets. I remember you announced that three mines are under permanent strategic review, Orcopan, Patagonia, or Hukani. Could you tell us what is the current status of these mines? Are you studying to do some action separately or together? And has there been any process, formal process, for any kind of sale? Yeah, that would be it. Thank you very much.

Thank you, Fernando, for your question. Well, we already began the process and analyzing feasibility of selling these units, these mines. However, as Aldo explained minutes before, with the increasing price in metal in prices of gold and silver, we are reanalyzing the possibility. We have been continuing advancing on this process. We are close to make a final decision, and if there are, there will be sold apart each by each unit, separate or as a whole, we were open to all the possibilities, but by now, the higher possibility, the best alternative is If we sell it, to sell it separately.

Okay, thank you.

Again, if you have a question, please press star, then 1. The next question is a follow-up from Carlos de Alba with Morgan Stanley. Please go ahead.

Yeah, thank you. Just on dividends. Like the $0.99 per share approved by the board, when do you expect to pay that? And also the $200 million in expected dividends from Cerro Verde, when do you expect you will get that money?

Yes, this proposal of dividends has to be approved by the in the shareholder meeting no but daniel please go ahead yes the the dividend payment should be for april

the second quarter of this year. And regarding Cerro Verde's dividend, we have already received in January $100 million from Cerro Verde, and we expect $50 million by July and another $50 by the fourth quarter of this year.

So that's $150, but I thought you said $200.

Yes, $100 in January. Yeah. $50 million in July, and in the fourth quarter, another $50 million. Okay, got it. Thank you.

Ladies and gentlemen, with that, we will be concluding today's audio question and answer session. I would like to turn the floor back over to Sebastian Valencia, Head of Investor Relations, for any webcast questions.

Thanks, Alberto. At this time, there are no further questions. I would like to turn the call over to Leandro Garcia.

Thank you, Sebastian. Well, before we conclude today's conference call, I would like to thank you for the time and effort dedicated in joining us today. Your participation and input are greatly appreciated. Thank you again, and have a wonderful day.

Ladies and gentlemen, that concludes Buena Ventura's fourth quarter 2025 earnings results conference call. We would like to thank you again for your participation. You may now disconnect.