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.