Good day, ladies and gentlemen. Welcome to the Compañía de Minas Buenaventura Fourth Quarter 2023 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. Gabriel Salas, Investor Relations. Mr. Salas, you may begin.

Good morning, everyone, and thank you for joining us today to discuss our fourth 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 Hermoza, Vice President of Sustainability; Mr. Renzo Macher, Vice President of Projects; Mr. Juan Carlos Salazar, Vice President of Exploration; Mr. Roque Benavides, Chairman; and Mr. Raul Benavides, Director. Before I hand 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 the market closed. 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 view of the currently available information, you are cautioned not to place undue 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 February 29, 2024. Let me now turn the call to Mr. Leandro Garcia.

Thank you, Gabriel. Good morning, and thank you for joining us today to discuss the quarterly results of the company. On Slide 2 is our cautionary statement, important information that I encourage you to read this. We assume that you have already read the full year 2023 results reported yesterday. Moving on to the next slide. Our presentation will cover the five main topics shown on this agenda and will be followed by our Q&A session, where our team and myself will be happy to answer your questions. Let's begin with some overview of the key highlights of the 2023. Our EBITDA from direct operations for 2023 has increased 38% compared to the previous year. It is worth mentioning that the figures do not include the $300 million obtained last year from the sale of our stake in Yanacocha. Our cash position remains strong in the fourth quarter of last year due to a strong performance at El Brocal, resulting in a leverage rate of 2.05 times, the lowest in two years and within our target range. Full year 2023 net income was $33 million, negatively impacted by an $113 million non-cash provision related to a former SUNAT dispute. Capital expenditures in 2023 totaled $239 million, including $94 million allocated to the San Gabriel Project. Additionally, Buenaventura made an extra investment of $33 million in advanced payments for the San Gabriel Project. When taking into account both aspects, the total disbursement for the San Gabriel Project amounted to $127 million. We are pleased to share that our dividends received from Cerro Verde during the quarter have contributed up to $49 million, strengthening our overall financial performance. The company received a total of $147 million in dividends for the full year 2023. Production from Yumpag's pilot stope began in November 2023, producing 2.3 million ounces of silver by year-end. Yumpag continued processing ore from the pilot stope through January 2024, after which mineral processing was suspended until definitive operating permits are obtained, expected by the end of the first quarter of this year. Yumpag is therefore expected to reinitiate mineral processing in the second quarter of this year. Record 2023 copper production resulted from a successful migration to a massive underground method, enabling El Brocal to ultimately achieve an average of 10,800 tons per day during the fourth quarter of 2023, surpassing its targeted 10,000 tons per day underground mine exploration rate. Our consolidated production of copper, silver and gold throughput in 2023 has yielded the following results: 58,000 tons of fine copper attributed to the exceptional production at El Brocal, meeting the upper range of the guidance; 9.2 million ounces of silver achieving the full year guidance; during the fourth quarter of 2023, Uchucchacua and Yumpag contributed with 2.6 million ounces; 155,000 ounces of gold with consistent production from Orcopampa. This production enabled us to surpass the upper range of the guidance. Moving to our cost structure in Slide 5. Aligned with our strategy to increase our corporate exposure, we are showing the all-in sustaining cost figures as copper and gold equivalent. Here, you can see that our 2023 all-in sustaining costs have reduced by 8% and 27%, respectively, year-over-year. This reduction is primarily attributed to the copper production at El Brocal and silver production at Yumpag. However, it is important to mention that both figures are on a consolidated basis and include 100% of Buenaventura's La Zanja and El Brocal. Moving on to the cost applicable to sales strength. As you can see, prioritization of copper ore at El Brocal and the ramp-up in the underground mine is translating into a 10% cost reduction year-over-year. Silver CAS has decreased 3% year-over-year, primarily driven by lower costs during the fourth quarter of 2023 with the contribution of Uchucchacua and Yumpag silver ores. Gold CAS has remained relatively flat year-over-year despite the reserves depletion at La Zanja and lower production in Tambomayo. On the next slide, we will be presenting the free cash flow generation. During 2023, we reduced our cash position by $34 million, primarily due to the intensive capital expenditure campaign, which includes San Gabriel. The EBITDA to free cash flow reconciliation is explained by the following breakdown of inflows and outflows. El Brocal, Orcopampa and Tambomayo have been the main contributors for 2023 while La Zanja, Julcani and Uchucchacua had a negative EBITDA due to the lower production for the first two assets and care and maintenance at Uchucchacua for the first nine months. However, we recorded a positive EBITDA for the fourth quarter of 2023, thanks to the resumption of Uchucchacua and the contribution of Yumpag. As we have mentioned before, Buenaventura is going through a growth phase with extensive CAPEX related to Yumpag and San Gabriel. This has been partly offset by the dividends received from Cerro Verde. In the following slides, I would like to illustrate our main four flagships: first, Yumpag producing at full potential once the definitive operating permits have been obtained, expected by the end of the first quarter of 2024; second, El Brocal underground mine expansion at 12 tons per day in the following two years; third, San Gabriel ramp-up and the first gold bar during 2025; and fourth, Cerro Verde dividend distribution for approximately between $120 million and $150 million in the following year. As you can see, our collection of mines offers over 10 years of uninterrupted reserve and resource extraction. We have updated our resource and reserve values shown. In copper, we have 1.9 million tons of reserves, along with an additional 3.1 million tons of resources. In silver, we have 128 million ounces of reserves with Yumpag making a significant contribution. Additionally, we have 199 million ounces of resources. Lastly, in gold, we have 2.8 million ounces of reserves with San Gabriel being our primary future gold production source. Additionally, we have 3.5 million ounces of resources. Moving forward to our 2024 guidance. As evident, the prioritization of copper ore at El Brocal and the ramp-up in the underground mine will enable us to maintain an annual copper production in 2024 between 55,000 tons and 60,000 tons per year. Silver production will see a 65% year-over-year increase primarily due to the contributions of Uchucchacua and Yumpag silver ounces. Gold production will decrease by 12% year-over-year, primarily due to the reduced contribution of Tambomayo gold ounces. Lastly, it is also relevant that in 2024, we estimate executing between $300 million and $320 million of CAPEX with approximately $220 million allocated to the development of San Gabriel. The total CAPEX estimates for the project are being reviewed due to some delays and escalation costs. We are continuously looking for optimization and efficiencies in the project to control the CAPEX as much as possible. Moving on to Slide 10. In the next year, Buenaventura will be focusing most of its efforts on the San Gabriel Project because it will be a relevant contributor to the company's value. It will add more than 14 years of life of mine to the company and another 14 years if we consider the reserves. On this slide, you can see the project's progress quarter-by-quarter. In the upcoming quarters, we will complete the installation of the concrete plant and the construction of the campsite. On the next slide, we are showing the earth movement activities for the processing plant facility. On Slide 11, you can see the progress of the construction until the end of the third quarter of 2023, while in Slide 12, we can see an update on the construction towards the end of the fourth quarter of 2023. By 2023 year-end, we have filled over 80,000 cubic meters of material and cut over 250,000 cubic meters. On the next slide, we show a couple of other components of this project, along with the update as of the end of the fourth quarter of 2023. At the top, you can see the San Gabriel definite campsite with a 98% of progress and over 1,000 beds already installed. The photograph at the bottom shows the progress of the main storage area, where we already have 40% of the equipment on site. 30% of the equipment have already arrived in Peru but are pending to be transported to the site. Finally, I would like to finish the presentation with a couple of closing remarks. First, San Gabriel will allow us to stabilize our gold production at 130,000 to 150,000 ounces yearly in the midterm. We are on track as we aim for our first gold bar by the second half of 2025. The ongoing success of Yumpag confirms its status as a world-class asset, marked by consistently high silver grades. As we have mentioned, the definitive operating permits are expected by March 2024. El Brocal is strategically focusing on the copper underground mine, maximizing margins and gearing up for a robust ramp-up to 12,000 tons per day in the midterm. We are ensuring full funding for our growth projects and sustaining capital expense. Thank you for your attention. I will hand the call back to the operator to open the line for questions.

Thank you, sir. The first question today comes from Cesar Perez-Novoa with BTG Pactual. Please go ahead.

Good morning everyone, and congratulations on your results. I have three questions. First, regarding the significant operational improvement in the last quarter, which included several enhancements and Yumpag, how should we view costs for 2024? Is the EBITDA reported in the last quarter expected to be the new standard moving forward, assuming prices remain stable? Can you discuss the sustainability of costs? My second question concerns whether any of your direct operations will experience maintenance downtime in 2024. If so, which quarter and for which operation? Lastly, there was a recent article stating that Cerro Verde plans to implement modifications in its production unit with an investment of approximately $646 million. Could you clarify what this will entail? Will this lead to any expansion at the concentrator? Your insights on this and potential production guidance for Cerro Verde and CAPEX would be greatly appreciated.

Thank you, Cesar for your questions. Well, we foresee the cost to maintain in terms of copper and gold in line with 2023 last quarter's cost. In terms of any situation that could affect any of our units, we have to mention that in Coimolache, we are expecting a permit that will allow us to continue the works and piling in the pad. More details, maybe Daniel and Juan Carlos can give you more color to your question.

Thank you, Leandro. This is Juan Carlos. Thank you, Cesar, for your question. Yes, as Leandro was mentioning, regarding the costs, operating costs on copper and gold, we foresee a stable cost from what we have reported in 2023 coming in line in 2024. In the case of silver, because now we have a full year with production in the Uchucchacua mine and also in Yumpag, we foresee a reduction from what was in 2023. Maybe the average of $19 per ounce of silver in 2023 probably coming down closer to $16 per ounce of silver in relative units. That is going to be along the year because we are ramping up production in Uchucchacua and we are stabilizing production specifically projects in operation in Yumpag. So it's going to be a gradual decrease in the cost of these two units for silver production. Regarding the potential downtime in any of the units, as a potential risk, we foresee a delay in the permits in Yumpag that we expect for the end of the first quarter but probably could make a week or two later, that's an operational risk, hopefully not. And in the case of Coimolache, we are also expecting some permits in order to build the expansion of pads to continue with our leaching operations, so also depending on that. Our guidance also includes the case that we are delaying this construction in Coimolache of the pads. So any advance or any speed-up of the project will be a net gain on the expected production against our guidance that was published a couple of weeks ago.

Okay. Thank you.

Okay. Second to add to what Juan Carlos said, in the fourth quarter, Cesar, we had a very strong EBITDA. In the first quarter of this year, we will have Yumpag paralyzed for a couple of months. So this will impact the EBITDA of the quarter. However, for the full year, we expect a total EBITDA of around $220 million to $240 million.

All right. Thank you, Daniel.

Thank you. And our next question today comes from Carlos De Alba with Morgan Stanley. Please go ahead.

Yeah. Thank you very much. Good morning, everyone. Just maybe just a very quick follow-up to Cesar's question and to your response on the EBITDA for the year, under what commodity prices, Daniel, are you forecasting this $200 million to $240 million?

Hi, Carlos. Thanks for your question. The prices that we are using for these estimates are for gold, $1,900; for copper, $8,500; and for silver, $23 per ounce.

Sure. Daniel, I have a question about the earnings release related to the SUNAT situation and the tax dispute. I understand you recorded a provision of $112 million to $113 million, which is noncash because the payment has already been made. Does this suggest that the likelihood of winning the case has decreased? What is your perspective on your chances of eventually succeeding with this case? What is the current status of the legal process, and what are the next steps?

Thank you, Carlos, for your question. We have established this provision because, according to our lawyers, the likelihood of winning the case is less than 50%. Therefore, according to accounting standards, we need to account for this write-off. The case is still active, and we are entering a second phase that will be in the constitutional court. During this stage, we anticipate regaining our position, and the trial should return to the Supreme Court. This situation pertains to a portion of the ongoing trial related to the years '09 and '10. There is still considerable time to await developments, and we will keep you updated as this progresses.

Okay. And so the next step is for you to file, I guess, an appeal in the constitutional court, right? But would you have not done that? And if you haven't, when do you plan to do this? And typically, is there any rule of thumb, any expectation as to how long the process at the constitutional court could last?

Carlos, we have already done this in December. And we are expecting in the following months to have an answer from the SUNAT.

Okay. My next question is about Yumpag and the permits. You mentioned in the press release that you expect to receive them in the first quarter. How certain are you about this? Is there a possibility that this could be delayed into the second or third quarter? How confident are you that Yumpag will really ramp up again in the second quarter?

The administration is working to streamline the permit process to ensure that all administrators can issue permits more quickly. We hold daily meetings with various organizations and authorities to address their inquiries and expedite the permit acquisition. We are making every effort to secure this permit before the end of the quarter. While I can't provide specific probabilities, I want to assure you that obtaining this permit is a top priority for us.

Fair enough, Leandro. Just my last question for you, Leandro, or maybe Roque or Raul, how do you envision this new phase of the company with a significant second large shareholder that may potentially receive two seats on the Board of Directors? How does this change the company? How do you see the company moving forward? And what do you expect from this relationship with Antofagasta?

Well, Carlos, as management and all the corporate team, we are very comfortable with the business plan and the strategy we have. Maybe we have not talked with Antofagasta yet. We just received the approval of the shareholders to increase the number of directors. So we will see. We will expect our first meeting. Maybe, Roque, if you want to add additional comments?

They are important shareholders, and we respect all shareholders. They suggested a couple of names. Mr. Iván Arriagada and Mr. Andrónico Luksic. And we are proposing those names to the Shareholders' Meeting for approval. I look forward to an excellent relationship. I happen to know Mr. Andrónico Luksic, the Founder, many years ago. And I think the industry has a lot of respect for Antofagasta. So we hope to work together in a very constructive way. There is nothing more than that.

Thank you, Roque. Thank you, Leandro.

Thank you. Today's next audio question comes from Tanya Jakusconek with Scotiabank. Please go ahead.

Great. Good morning, everyone and thank you so much for taking my questions. And Roque, if I can just follow up on the Antofagasta, it seems from your comments that you haven't really sat down with them to see exactly what they want. I mean, we listened to their conference call in terms of what they mentioned. But I'm more interested in if you've been able to have conversations with them.

Their interest, as a copper company, is focused on the Peruvian market and the copper assets of Buenaventura. We have Trapiche and Coimolache, in addition to Brocal and an equity stake in Cerro Verde. This is what they have expressed interest in. They will participate like any other company; if they wish to help develop the projects we are currently working on, they will need to engage just as we are with others, such as Sumitomo or BHP in relation to Coimolache. As shareholders, they will sit on our Board and will share their expertise, which I believe is beneficial for the company.

They were interested in all your copper assets. As you know, they primarily operate open-pit mines, but they're also looking at the underground operations. Are they considering Trapiche possibly assisting in the development similar to BHP, as you mentioned? Would they like to be a partner in Trapiche?

Well, if they are interested, as any other company, we will open and they will have to sign an NDA. And yes, why not? Antofagasta is a first-line company and they specialize in copper and, as you say, in open-pit mines. So nothing extraordinary, Tanya, nothing extraordinary.

Okay. No, I really, really appreciate that. Thank you so much, Roque, for that. Can I just ask maybe a couple of things on just some modeling questions from Daniel and then I want to come back to San Gabriel and Trapiche? Just on the modeling side, Daniel, should I be looking at your 2023 level for exploration, G&A, and selling expenses, and is that a similar level for 2024?

Yes, Tanya. For exploration, you should estimate around $45 million from brownfield explorations and an additional $10 million for greenfield. The D&A should be similar to the first to third quarter of this year. Remember that in the quarters three and four, we had an amortization of the deferred stripping asset at El Brocal. So if you want to model, you should take the D&A similar to the first two quarters of the year.

Okay. No, that's very helpful. Thank you so much for that. That’s helpful. And then can I come back and ask about some asset sales? When we were at the Investor Day, and congratulations on selling one little asset in the quarter, we talked about selling some of the assets to help fund the balance sheet, on top of the Cerro Verde dividends that we're receiving. Where are we on the Yanacocha royalty sale? I know we had talked about it at the Investor Day; there were 13 potential buyers. Can you just talk about where you see asset sales in Q1?

Yes, Aldo, please go ahead.

Okay. Thank you, Leandro. Yes, Tanya. We're still in the process of selling the royalty. We have received five nonbinding offers, February 15. The idea is to elect the one who passes the ROFR of Newmont and maybe make a potential visit to Yanacocha at the end of March. Finally, the idea is to receive the binding offers on April 15 and then choose one and go ahead.

Okay. So it seems as though Newmont is not involved. It's just other players besides Newmont and you would like to finalize by April 15.

Yeah. This is the idea.

Okay. And then I'd like to come just to San Gabriel, if I could. I just wanted to understand, I see the picture of the camp, 1,000 beds. So is the camp done? And what are the critical items for 2024? And then at the Investor Day, we were also told that we would be getting updated capital and operating costs. Can you remind me whether that's coming?

Yes, Daniel. I turn the microphone to Renzo, our Vice President of Projects.

Hi, Tanya. We have 1,000 beds ready at the campsite, and there’s another 1,000 beds nearby, so we won’t have any issues there. The image shows the completion of sidewalks and the emergency power plant at the site, along with a few minor details that are still outstanding. The main contractor for steel piping and mechanical work will arrive next month, ensuring everything will be completed by that time. Regarding your second question about expectations for 2024, the first concrete pour is scheduled for the second quarter, along with the start of power line construction. In the third quarter, we anticipate beginning work with the electrical and signal contractor, and we plan to make significant progress on the water dam before the rainy season. Lastly, in response to your question about the updated CapEx, as Leandro mentioned, we are currently working on that, and we will provide the final estimates in the next quarter.

Okay. So when you report your Q1, so sometime in April, the end of April maybe, we will be getting an updated CapEx? And what about the operating cost?

The OpEx, we are going to be finishing in the third quarter of this year, towards the end of...

At the end of Q3?

Yes.

The update in CapEx should be for the conference call of the second quarter.

Conference call of Q2, so it's going to be sometime in July.

Yes.

CapEx in July and then OpEx in Q3, so October?

Yes.

Okay. Thank you so much for taking all my questions. I could go on all day, but let me pass it on to somebody else. I really appreciate it.

Thank you. And our next question today comes from Omar Avellaneda with Prima AFP. Please go ahead.

Good morning to all. Thanks for the call. I have a couple of questions. I guess, I missed a little part of the call, so maybe you have answered this. But I would like to know what is needed to have a fully operational Yumpag since the second quarter of 2024? And my second question and last one is regarding Cerro Verde. What are your expectations on CAPEX for this unit on a yearly basis for the next three years? Thank you.

Thank you, Omar. Thank you for your participation. In terms of Yumpag, fully operational, we expect to begin in the second quarter of this year. We are just waiting for the operational permit that allows us to resume the operations in Yumpag. In the case of Cerro Verde, we have reviewed the figures budgeted for this year. The CAPEX today that is approved and planned is around $300 million, in line with the CAPEX that we have been used to in the last couple of years. That is the CAPEX we know today. The other projects are under evaluation.

Okay, so just to add an additional question, this news that we saw in Gestión related to the $600 million of CAPEX in Cerro Verde does not change any at all of your views regarding dividends coming from these units, right?

Well, as I told you, Omar, that news that is appearing in Gestión is currently under evaluation, right? The plan today from the figures that we have is that the CAPEX for this year is $300 million. We should have more information in the following meetings with them.

Okay, perfect. And if I may, one additional question. This $600 million CAPEX is not only for just one year. I guess it could be for a couple of years, three years. It's not going to be disbursed in one year only, right?

Yes, it is a permit and an IPS. This IPS is not just for one year.

Okay. Perfect. Thank you very much. Congratulations on the results.

Thank you, Omar.

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 Gabriel Salas, Investor Relations Officer, for any webcast questions.

Thank you, operator. The first two questions come from Isabella Pacheco from Bank of America. How do you see net leverage in 2024? What was the main factor contributing to a positive EBITDA in the fourth quarter of 2023?

So maybe Daniel can help us with that question?

Yes, Leandro. We finished 2023 with a net leverage of 2 times net debt over EBITDA. As previously mentioned, we have a $200 million revolving facility with different banks that we plan to use for short-term funding for San Gabriel, likely utilizing around $150 million from these facilities. As a result, we expect the leverage ratio to rise to about 3x by the end of this year. Regarding the EBITDA for the fourth quarter, there were three main contributors. First, the sale of Contacto, which added approximately $38 million to our EBITDA. Second, increased production and sales volume from El Brocal. Finally, the restart of operations at Uchucchacua and Yumpag, which contributed around 2.8 million ounces of silver to our profit and loss statement.

Thanks, Daniel. The next question comes from Orlando Barriga from CrediCorp Capital. How much of Yumpag's costs were classified as CAPEX during the fourth quarter 2023?

Daniel?

Yes. There were $10 million of development costs that were not inputted to the cost of sales because we count with an exploration permit. So the number for the following years to be amortized is $10 million.

Thanks, Daniel. At this time, there are no further questions. I would like to turn the call over to the operator.

Thank you. 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, operator. Before we conclude today's conference call, I want to express my gratitude for your time and wish you a wonderful day. Thank you very much.

Thank you. Ladies and gentlemen, that concludes Buenaventura's fourth quarter 2023 earnings results conference call. We would like to thank you again for your participation. You may now disconnect, and have a wonderful day.