Compañía de Minas Buenaventura

Good morning, ladies and gentlemen. Welcome to the Compania de Minas Buenaventura first quarter 2026 earnings results conference call. At this time, all participants are in a 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, Head of Investor Relations. Mr. Valencia, you may begin.

Good morning, everyone. and thank you for joining us today to discuss our first quarter 2026 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. Roque Benavides, Chairman, and Mr. Raul 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 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 results per release issued on April on April 29, 2026. Let me now turn the call over 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 talk about our first quarter 2026 performance, our main achievements, and our priorities for the future. After the presentation, we will be available for Q&A session where our team will be happy to answer your questions. Next slide, please. I will start with a summary of our operational results for the quarter. followed by an update on our permitting status. Gold production was 30,000 ounces, up 80% year-over-year, mainly due to the ramp-up operations at San Gabriel. As production volumes continue to ramp up, the company expects to begin recording sales in the second quarter of 2026. Silver production reached 3.9 million ounces, up 6% year over year, compared to 3.7 million ounces in the same period last year. This increase was mainly driven by higher production at Del Brugal. The result is in line with the mine plan for the quarter, with focus on processing ore that had been previously classified as low-grade silver ore. Utubchakwa and Tambomayo also contributed to this result. At Utubchakwa, production increased due to higher throughput and higher silver content. At Tambomayo, production improved as we prioritized higher grade ore from the upper sections of the mine. Copper production in this first quarter reached 10.9 thousand tons, down 11% year over year. This decrease was mainly driven by lower production as we focus on processing silver ore. Turning now to permitting, I will briefly review the permits received. During the first quarter of 2026, we received a stage one of the operating permit for San Gabriel. This approval authorizes us the start of operations to process and commercialize the mine ore. Also at San Gabriel, in April 2026, we received the water use license. This permit allows the storage and use of water at the Agani Dam. At Yumpac, the second ITS received in the second quarter of 2026 allows us to increase our extraction to 12,000 tons per day. In addition, we expect to receive the mine plan modification in the third quarter of 2026 as planned, which is required to achieve this level of production. At El Brocal, the first ITS approved in the first quarter of 2026 increases mine extraction capacity to 17,000 tons per day, in line with the company's medium term strategy. Finally, At Trapiche, the environmental impact assessment was approved in the first quarter of 2026. This permit provides environmental certification for the construction and operation of the project. Overall, these permitting milestones help and low capacity support ramp up and increase operational certainty across our portfolio. Moving on the next slide, I would like to summarize our first quarter results. Starting with revenues, total revenues reached $625 million in the first quarter, more than doubling year over year, reflecting stronger operating performance and a more favorable market environment. Looking at EBITDA from direct operations, we achieved $386 million. more than three times higher year-over-year, with margins improving from 41% to 62%. Stronger operations resulted in a net income of $355 million, a 142% year-over-year increase. On the capital allocation side, capex for this quarter totaled $81 million, mainly focused on San Gabriel alongside sustaining investment and Trapiche aligned with our growth priorities. After the quarter end on April 2026, Buenaventura received $59 million in dividends from its stake in Cerro Verde. Total dividends received year-to-date 2026 amounted to $157 million. Finally, all of this is reflected in our balance sheet strength. The quarter ended with a cash position of $760 million and a total debt of $708 million, resulting in a net cash positive position. Moving on the cost applicable to sales, starting with the copper cash, Changes are mainly explained by developments at El Brocal, where we see higher personal costs. These are mainly driven by increased workers' profit-sharing provisions, reflecting improved profitability. In addition, higher cement consumption and foreign exchange impact affected costs. These effects were partially offset by improved commercial terms. Silver costs increased due to higher personal costs. personal costs, together with higher commercial deductions related to escalators, mainly at Uchukchakwa and Yumba. Gold cash increased versus the same period last year due to higher personal costs, lower throughput, reducing scale efficiencies, and higher exploration costs at Ocopampa and Tambo Maya. On the next slide. We highlight our strong free cash flow generation in the first quarter of 2026. Solid operating performance supported by dividends received allow us to close the quarter with a cash position of $760 million. To conclude the presentation, I would like to share a few final thoughts. First, San Gabriel entered the ramp-up phase during the first quarter of 2026 and began contributing to Buenaventura's results in line with expectations. Number two, we continue to make progress on permitting and regulatory approvals across the portfolio, supporting the disciplined execution of the company's long-term strategy. Execution across the portfolio remained consistent, delivering predictable results and reinforcing balance sheet strength and financial flexibility. Finally, cash generation remained robust and well diversified across direct operations and affiliate companies, supported by continued dividend inflows from Cerro Verde. Thank you for your attention. I will hand the 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 today comes from Carlos de Alba with Morgan Stanley. Your line is now live. Please ask your question.

Thank you. Good afternoon, everyone. So I have three questions, if I may. The first one is, can you provide more color and details on how San Gabriel ramp-up is going? What are the challenges, maybe bottom legs, that you are facing at this stage, and what is the expected output for the second quarter at San Gabriel? The second question is on the Trapiche strategy. Clearly, you got now the environmental approval. You have a very strong balance sheet. Have you decided if you're going to pursue this project and build it on your own, or if doing it together with a partner is more likely? And then finally, on dividends, what are the expectations for further dividends from Cerro Verde in addition to the ones that you have received today, including the $59 million in April? Thank you.

Thank you, Carlos, for your questions. Well, beginning for the For the first question about San Gabriel, as you know, we are in the first stage of the ramp up. We have some challenges, but up to now, we are in line with expectations. Maybe Juan Carlos Ortiz can give you more details about how we are going with San Gabriel. Please, Juan Carlos.

Juan Carlos Ortiz- Sure, Leandro. And thank you, Carlos, for your question. The progress that we have in the first quarter in San Gabriel were related to the conclusion of the commissioning, the training of our team, and starting to run all the machines as a sequence, as a system, right? It's crushing, milling, sanitation, filtration of the terrace. So we have some progress in that regard. We're almost finishing with all the commissioning part, the mechanical assurance that everything is in place. Now we are training our people and start doing the fine tuning of every single circuit. For instance, we have some challenges with the high moisture of the ore getting stuck in the conveyor belt for the crushing circuit. This is going to be solved in the coming weeks first because we're entering the dry season and two because we're changing the system to remove the clays in the in the screening of the crushing circuit then in the milling circuit we have some function of electronic device we already found the trouble and we switch the the that piece that part with a new one so we are running okay right now with the grinding milling circuit In sanitation, from the mechanical point of view, we have a small challenge like the speed of the pumps and some resizing of some small boxes to avoid any potential spilling of the slurry. And in the filtration part, we are pretty much at 50 percent delivery from the vendor. We finished all the commissioning part, and now we are putting the filter presses to filter the tailings with a 50 percent progress. We are running with eight bars of pressure, and we are moving step by step up to reach the 14 bars that is considered in the design so that's from the progress in the processing plant in the tailing dam we are starting right now in the second half of may we will start putting the tailings out of the temporary reservoir start to dry the tailings and probably in june we will start placing the tailings in the tailing dam so that's going to be the first time we do that in san gabriel we need to speed up we anticipate some a training process to be transferred to the team, from the team of Tambo Mayo to the team of San Gabriel, to do exactly what we learned to do in Tambo Mayo, how to dry the tailings, how to reduce the moisture, how to place the tailings in the tailing reservoir, and how to compact those tailings. So that's exactly the agenda of the second quarter, the agenda that we have. We expect to solve most of the or the majority of the most sensitive issues from the throughput and from the mechanical availability of the processing plant in the second quarter and as we anticipated uh earlier in the previous conference call the main constraint will be the area that we have available in Italian dam it's an arrow valley and we are starting working at the bottom of the valley so we don't have that much area available Every single leaf that we compacted, we gained additional area. So gradually, we increased tonnage as an average. We expect to finish 2,000 tons per day by the end of December 2026 and reach full capacity 3,000 tons per day by the end of 2027. So that's pretty much what we're doing right now, Carlos. Thank you, Juan Carlos.

Yes. Going back to your second question about Trapiche, we are far from that decision if we go alone or we call for a partner to construct and to develop that project. We are in a stage of investigating all the geotechnical more drillings we need. Maybe Renzo can help us

and what are we are facing this this year and the following two years until we reach the feasibility study please go ahead sure carlos we're going to be continually risking the project in regards to acid consumption acid pricing and acid logistics that's going to be one of our main goals we continue exploration of the primaries and we're going to be starting

as we finish the environmental impact assessment study we're going to we're going to be starting with the next permit or the next social permit which is the previous consultation from in this case thank you going back to carlos going back to your question about dividends from cerro verde well we foresee an excellent year for for cerro verde the operations are going as planning. You know, we don't have a dividend payment policy, but I think this year in cash generation will be extremely good, but we have some expectations. Daniel, please.

Thank you, Leandro, and thank you, Carlos, for your question. Yes, as Leandro was saying, Cerro Verde will generate a lot of cash this quarter or this year, considering that the price of copper is over $12,000 per ton. We expect Cerro Verde to generate in excess of $2.5 billion of EBITDA. They have small capex, $350 to $400 million, In taxes, they should be paying around $1 billion. They don't have any debt. So the free cash flow for this year in Cerro Verde, considering the current prices for copper, should be in the order of $1.2 to $1.3 billion. They already have cash in their balance, the minimum cash required for the operations, so they should be distributing around $200 to $200 million to Buenaventura, from which they have already distributed $160 million from January to April. Thank you, Daniel.

The next question comes from Tana Jakuskonik with Scotiabank. Please go ahead.

Oh, great. Thank you so much for taking my questions. Good afternoon, everybody. I wanted to follow back on St. Gabriel. I appreciate all of the hard work you're doing on getting the ramp up, and there's always something going on mechanically and other. But I must say I am surprised about the clay in the ores. I didn't realize that there was clay in the ore. Can you just remind me what exactly, what mineral do you have and how are you removing this? And are you surprised you have clay in the ore?

Yeah. We do have two types of clay. I don't know how to pronounce it properly, but it's Montmorenoyite. That kind of expansive clay that we have in the deposit, it varies from 1% to 8% in different places of the deposit. When we transfer the ore from the mine, or when we extract the ore from the mine, we usually have between 4% to 5% moisture, no more than that. But when we put the ore in the stockpiling surface during the rainy season, the moisture can go up to 14%, only for the raining conditions. coming down into the stockpile. And this clay, because it's an expansive or swelling clay, I think that's a technical term, generates a lot of troubles in the crushing sequence because it's very sticky and it starts getting into the boxes in between the transfer point of the crusher into the conveyor belt or at the end of the conveyor belt into the stockpile or into the stockpile into the feeders to the mill. The solution to that There are two things that we are analyzing. Using a screen that uses water, so we can spray water on top of the ore while it's passing through the surface of the screen to remove the fine fraction. That's one option, and it's not going to take that much time. and the other is you see what we use in brocao or what we use also in hulkani that's a drum where we have like a screen around the the surface of the drum so we can wash the ore as it travels through the to the drum that is something that we use in Brocal for many, many years when we process the ore from the open pit. And also we use that in Hulcani because the ore underground also has, depending on the area, they might have a high content of clay and complicated crushing sequence. So that's going to be the solution for dealing for the clay areas underground for the next rainy season that is starting December, January next year.

Is this clay consistent throughout the ore body or is it just in patches? And have you seen, like once you get it through the crushing circuit and through the conveyor, does it negatively impact your recovery?

No, it's not impacting negatively the recovery. We need to make a little adjustment in the density of the slurry in order to reduce the viscosity. We go to 1400 grams per liter. The viscosity goes too high, so we need to go down to 1,320 grams per liter in order to have a fluid slurry that has all the rheological properties that have been designed. And then interaction between the cyanide, the gold, and the activated carbon works as planned. So it's not a sensitive issue. It's also something that we need to find a way how to operatively treat this material whenever we are bringing that into the processing plant.

Okay. And sorry, did you answer if it's all over the ore body or in specific areas?

We're studying that because we have a detailed distribution of the clay. We have information, but we have not developed a model of clay distribution in deposits. We have a distribution of gold, silver, carbon, organic carbon, but we don't have a distribution of clays. So we're working on that because we have the information in the logging record. So we are building that model in order to make probably a blending and try to avoid being over, let's say 6% total clays into the feeding of the processing plant. So right now we have certain days in which we are eight, maybe sometimes 9% clays. That's when we start getting problems along with the rainy season. So the dry season is, this is not gonna be a problem.

Okay, thank you. Thank you for the explanation on that. And the second item, maybe someone can answer for me. As you're aware, you know, with the volatility of oil prices and other things going on around the world, I just wanted to understand how you in Peru are managing, you know, supplies coming in country. And I just want to understand whether you are seeing any constraints in getting supplies into country and or to your mine sites, you know, like we did in COVID times? Are you having to increase your working capital or stockpile selective, you know, consumables? So maybe just where are you seeing any pressures on the supply chain front for your company, if any?

Thank you, Tanja. Daniel?

Thank you, Leandro. Tania, we have not seen any major disturbance or problems in the supply chain. Diesel has increased price rather than being difficult to get more diesel. The price has increased 50%. And also this component, the diesel is around 5% of the total OPEX that we have. So the percentage of increase in our costs is around 2 to 2.5%. We think that this will be the case for the entire year. Regarding the other supplies like cyanide or sulfuric acid, we don't see any problems in the supply of these reagents or supplies. We have in our mines one month of stock for the continuous operation. And also in Lima, in the port of Callao, we have an additional three months for our critical supplies. So we don't foresee any problems with any supplies.

So, Daniel, it's not a supply issue getting to site. It's more a cost issue. of, you know, it's just going to cost you more.

Yes, exactly.

Okay. And then my final question, if I can, and someone in the team wants to take this, maybe for us sitting in North America, just a flavor of, you know, with elections going on, what is happening in Peru from both, you know, fiscal regime and maybe social as well with, you know, new leader in place. Can someone... give us some insights into the politics of Peru.

Thank you, Tania. Well, finally, the two candidates that will pass for the ballot are not finally defined. Keiko Fujimori is for sure there. but still counting the votes for Rafael Lopez Aliaga and Roberto Sanchez. But the important thing here is the new composition of the Senate and the deputy cameras. If you see those results, you will appreciate the decision that it's more center and center-right. We do not foresee any changes in legislation. Of course, there will be some demands, but I think we feel comfortable with how this new Congress has been elected. That will guarantee some kind of peace in terms of of new ideas or new things that normally the social unrest can ask. And the campaign has been quite easy, has not been with much problems in the regions. So we are confident that business area and business performance will go ahead well in the following years.

So can we assume that there's no changes to taxes and or royalties?

There should be some voices that will ask, but I don't think that the composition of the new Congresses will pass that call.

Okay. And what about on the permitting front? Is there the potential for this new government to make permitting and getting permits a lot easier?

Well, it depends on who is finally the winner. We try always to communicate the difficulty and the bureaucracy and the length that it takes to be granted of a permit. So it's a common ask from the mining sectors and from the investor sector to facilitate the granted on permitting, right?

We all hope, right. Thank you for taking my questions.

Thank you, Tanya.

As a reminder, if you would like to ask a question, please press star then one to join the question queue. The next question comes from Cesar Perez-Novoa with BTIG. Please go ahead.

Yeah. Going back to the San Gabriel contained clay, if I heard correctly, when you incept the screen mesh panel, which I think it's what you're going to use. Will that have an impact over OPEX at the mine? And will this have any additional capex spent? I guess not. But I want to confirm if this is technically feasible or not.

Well, we're in the stage of developing the options. As I mentioned, we have two options, to have what we call a banana screen, that's something that has a shape with a high slope at the beginning, and then you wash water at the top. That machine costs in the order of $300,000, probably at a rule of thumb, three to one The total capital for that piece of machinery being working on site is around $1 million. That will be the additional capital we need to incur to ensure that Clay is not going to be a problem in the crushing and grinding in the future. From the operating point of view, Maybe, I don't know, $0.10 per ton. It's a very, very small additional cost that we expect to run these additional circuits in Saint-Gabriel. So it's more on the capex of the year, additional $1 million to add this component to the flow sheet of the processing plant.

Okay, no, that's very clear. Thank you very much. It's essentially an irrelevant cost for the incremental spend. Thank you. 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.

Thank you, operator. The fourth question comes from Jordan Rosano from CalPASAP. We have seen some cost pressures related to personal expenses. Is this something you expect to continue through the year? And could you provide more color on the main drivers behind this increase and whether it's related to wage adjustments, higher headcount, contractor costs, or the ramp-ups of San Gabriel?

Thank you, Sebastian. Basically, the increase in the costs related to personal is coming from the higher workers' profit sharing. As we are having higher profits in Buenaventura and in Brocal, we have to pay more for workers' profit sharing. So it has increased from 2.5 million last year to almost 19 million this year. Most of this goes to the cost of sales for each mine, and also it goes to the administrative expenses. In terms of wages, there have been no major increases. We have increased only with the inflation rate. And in terms of headcount in the mines, specifically El Brocal and Uchukchakwa. We had additional operators for the new equipment, but these have not made a big difference compared to last year. So, basically, the difference is because of the higher workers' profit sharing.

Thank you, Daniel. And the final question comes from Jaime Ayalde from Sinoar Capital. Is Buenaventura corporate policy still to remain and hedge in copper, gold and silver?

Yes, Sebastian. Yes, our policy right now, really, we can hedge, but we prefer not to hedge. We will go with the market. As probably everybody is aware, we have a lot of problems with TUNAT in the past for some hedging. And as far as I know, any audit from Sunat of the mining companies is positive, and we prefer not to hedge for the time being.

Thank you, Aló. At this time, there are no further questions. I would like to turn the call over to the operator.

That concludes the question and answer session of today's conference call. I would like to turn it back over to management for closing remarks.

Thank you and after, before we finish, I want to thank Alejandro Hermosa, our Vice President of Sustainability, that this is his last conference call with us. He has been with us almost 25 years. He has been an important part of this team. And of course, we foresee continue Alex to be continued part of our family. And doors always are open and we will miss a couple of coffees with you. Thank you, Alex, for all your effort and the best for you in this new stage. And for all that you are with us today, I would like to thank for your time and effort dedicated to joining us. Your participation and input are greatly appreciated. Thank you again and have a wonderful day.

Ladies and gentlemen, that concludes Buena Ventura's first quarter 2026 earnings results conference call. We would like to thank you again for your participation. You may now disconnect.