Good day, ladies and gentlemen. Welcome to the Compañía de Minas Buenaventura Third Quarter 2024 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 Officer. Mr. Salas, you may begin.

Good morning, everyone, and thank you for joining us today to discuss our third quarter 2024 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 Geology and Explorations; 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 October 30, 2024. Let me now turn the call to Mr. Leandro Garcia.

Thank you, Gabriel. Good morning to all and thank you for joining us today to discuss the quarterly results of Compañía de Minas Buenaventura. On Slide 2, this is our cautionary statement, important information that I encourage you to read. Today, we will be discussing our performance for the third quarter of 2024, highlighting key achievements and strategies moving forward. After the presentation, we will be available for our question-and-answer session, where our team will be happy to answer your questions. The next slide, please. This is a slide I would like to highlight a few key areas that contributed to our strong third quarter 2024 results. Our EBITDA from direct operations for the third quarter has increased to $132 million compared to the previous year, primarily driven by strong results from Yumpag and El Brocal. This performance is also reflected in a higher EBITDA margin of 40%, compared to 25% in the previous year. Third quarter 2024 net income, including the sale of Chaupiloma Royalty Company, reached $237 million, compared to $28 million net loss for the same period in 2023. Copper production decreased 9% year-over-year in the third quarter of 2023; copper production at El Brocal has increased due to higher estimated copper content mined from the open-pit transactional ore. In the third quarter of 2024, silver production reached 4.4 million ounces, a significant increase compared to the 1.9 million ounces produced during the same period last year. Of this total, 3.2 million ounces came from Uchucchacua and Yumpag. Gold production increased 7% year-over-year, mainly explained due to increased output at Julcani and La Zanja. We are pleased to share that Buenaventura completed the sale of its Chaupiloma Royalty Company to Franco-Nevada for $210 million during the third quarter of 2024. Buenaventura's CapEx in the third quarter 2024 totaled $98 million, which includes $77 million allocated to the San Gabriel project, primarily allocated to the mine's water dam and to power line construction. Buenaventura's credit rating was upgraded by Moody's to B1 with a positive outlook. Moody's cited Buenaventura's operational improvement driven by increased production from its El Brocal, Yumpag, and Uchucchacua mines as well as efficiency in cost reduction, cash flow generation, and conservative liquidity management as a key factor. Our cash position reached $458 million with a total debt of $675 million. We continue deleveraging the company, reaching a net debt-to-EBITDA ratio of 0.5x, the lowest in years and within our targeted range. Moving on to our cost structure in Slide 4, the third quarter 2024 all-in sustaining costs have been reduced by 69% year-over-year. This reduction is primarily attributed to the increased silver contribution from Uchucchacua and Yumpag. Moving on to cost applicable to sales trend, as you can see, copper CAS decreased in the quarter, mainly due to an increase in volume processed during the quarter, resulting from stockpiled ore processing, keeping the CAS in line with the third quarter 2023 figure. Silver CAS has decreased year-over-year, primarily driven by the higher contribution of silver ounces from Uchucchacua and Yumpag. However, it has increased quarter-over-quarter due to higher exploration expenses and increased costs at Uchucchacua and Yumpag related to ground support works. Gold CAS has increased year-over-year, primarily driven by lower grades at Tambomayo and Orcopampa. On the next slide, we will present our free cash flow generation. The cash position for the third quarter of 2024 increased during the quarter, primarily due to the strong performance of El Brocal, Uchucchacua, and Yumpag. The sale of Chaupiloma for $220 million and dividends received contributed to this. Additionally, the EBITDA to cash reconciliation highlights Buenaventura's current growth phase, with significant capital expenditure investments related to San Gabriel. Moving on to Slide 6, this slide illustrates the cumulative progress of the San Gabriel project, which has reached 65% overall completion by the third quarter of 2024, mainly driven by advancements in water dam and power line construction. A key milestone we are closely monitoring for the next quarter is the completion of the pipeline works. Out of the total $650 million in capital expenditure, we have already executed $250 million and committed nearly $230 million, which helps mitigate risks to project completion and potential cost increases. 100% of the structural steel is now on site, and major contracts for plant and infrastructure have been awarded. On the next slide, we show the progress of the processing plant, which will operate at 3,000 tonnes per day. Currently, the SAG and ball mechanical works are at 60%, the primary crusher mechanical works at 90%, and the mechanical works for the CIL tank at 65%. Moving on to Slide 8, we present the progress at various facilities essential for underground mine development, including the North Ramp portal, fan installations, and the shotcrete plant. Transitioning to Slide 9, we show the progress of various project infrastructures, including the filtered tailing plant, the water dam, the power line, and the campsite, all of which are 100% completed. In my closing remarks, I would like to summarize a few key points. First, Uchucchacua exceeded expectations, achieving an average throughput of 1,500 tonnes per day earlier than anticipated, while Yumpag maintained steady production at 1,000 tonnes per day, delivering 3.2 million ounces of silver in the third quarter. Second, El Brocal successfully processed 100% of the stockpiled ore, allowing us to meet our production targets for the first nine months of 2024. The underground mine reached a record average throughput of approximately 12,000 tonnes per day during the quarter. Third, the San Gabriel project achieved a 65% overall progress, aligning with our planned targets. Buenaventura continues to de-risk the project through engineering and procurement efforts. Lastly, I am pleased to report a record low leverage ratio of 0.5x for the quarter, driven by strong EBITDA growth, the sale of non-core assets, and effective debt management. Thank you for your attention, and I will turn the call back to the operator to open the line for questions.

We will now start the question-and-answer session. The first question is from Cesar Perez-Novoa from BTG Pactual. Please proceed.

Thank you. Good morning, everyone, and congratulations on your third quarter, really outstanding results and a lot of progress. If I may have three questions. The first one relates to El Brocal. I believe the company is on track to achieve average mining rates of around 11,000 metric tonnes in 2024. However, during the third quarter, copper production fell around 10%, even though your average rates for the quarter stood at 12,000 metric tonnes per day. Can you please comment on why the volume fell and when will El Brocal reach the targeted rates of 12,500 per day if I recall correctly? My second question relates to San Gabriel. Alejandro mentioned completion is already at 68%. Could you please comment on project economics now that you have fully revised CapEx? And in addition, any new update on Trapiche would be also greatly appreciated. And finally, if I may again, if you could indicate where your sources of inflows and outflows of cash will be in the next year including your dividends from Cerro Verde. I asked a lot of questions, but thank you very much for taking them.

Thank you, Cesar, of course. Regarding El Brocal, we already reached the objective to reach 12,000 tonnes per day. This objective was planned to be reached in December this year, but we reached it before. Maybe Juan Carlos, can you give more explanation regarding the copper production, please?

Thank you, Leandro. And thank you, Cesar, for the question. Yes, we reached a 12,000 tonnes per day average rate production in the mine. We are planning to keep ramping up this rate up to 12,500 tonnes per day, probably by the first or second quarter of 2025. So we are on track to reach full capacity of the mine, as we planned. The difference between the third quarter of 2023 and the third quarter of 2024 in copper production is a 10% lower production compared between quarters because in the last year, we had exceptional production from the shipping ore from the open pit. We had like 12,000 tonnes spread from the open pit, crushed, and sold directly to the market with an average of 20% copper. So you have almost 1,400 tonnes of fine copper as a spot sale in 2023. That's the main difference between the third quarter of 2023 when we had this spot production and the third quarter of 2024 when 100% of the copper production came from the underground mine. That's the main difference in our copper production.

And continuing with the second question, you were asking about the economics of San Gabriel. For San Gabriel, we are planning to have an EBITDA around $100 million per year, our cash cost should be around $1,300 with sustaining CapEx yearly about between $5 million and $7 million. More importantly, the production will be around 130,000 ounces per year. And in terms of inflow and cash flow, Daniel, please, can you provide more detail to the question?

Yes, of course. Thank you, Cesar, for the question. For 2025, we expect to start the year with a cash position of around $370 million, and considering the prices for gold at $2,100, for silver at $27, and for copper at $9,000 per tonne, we estimate an EBITDA for the following year of around $350 million to $380 million. In addition to this, we expect to receive $150 million of dividends from Cerro Verde. This is regarding the inflows. And regarding the outflows, we expect to spend at San Gabriel close to $240 million to $250 million, plus our sustaining CapEx, which is in the order of $100 million to $120 million. Lastly, we are going to pay the taxes for the Chaupiloma sale, for which we received $210 million this year, but we are going to pay the corporate tax of 29.5%, which is $45 million and will be paid in the first quarter of next year.

All right. Very good. Thank you very much for the detailed explanation. Thank you, all.

No, Cesar, I left your question about Trapiche for the end. Any news about Trapiche? We continue with the feasibility study. Renzo, please, can you provide more information on that?

Sure. Exactly, we're in the middle of the feasibility study, we are starting to receive test results from our second set of column testing onsite, confirming the business case. We keep working to consolidate the write-off paths for the power line. We are probably 60% complete on that. And in the environmental impact assessment process, we finished the public assemblies. Those are great news. We are in the process of solving the authority question. So hopefully, within the next six months, we will have an environmental impact assessment approval.

Okay, very clear. Thank you very much.

Next question is from Carlos De Alba with Morgan Stanley. Please go ahead. Carlos, your line is open on our end, perhaps you have it muted on your end.

Yes. Thanks. Good morning. Sorry about that. So I have several questions. The first one is on San Gabriel, just continuing the discussion there. Any expectations, any guidance on how do you see the mine ramping up to full normalized production run rate of 130,000 ounces per year? It seems that the first ore is in the second quarter of next year. How do you see the ramp-up?

Thank you, Carlos. Well, Renzo, Juan Carlos, please provide more details.

Yes. So the start-up plan, we're expecting to reach 65% of our production capacity by the third quarter of 2025 with commissioning activities on the mill and crusher starting in the first quarter next year. Then we're going to start the ramp-up process up to 3,000. I don't know if Juan Carlos can comment on that part.

Sure. We have the contract ready in the tunnels underground. We have two crews working for the North and the South ramp at the same pace. We are reaching an average development rate of about 500 to 600 meters per month. We are getting into the ore body right now. We are scheduled to have access to the pilot pit by December this year in order to start training our people on the mining method that we will be using in San Gabriel and continue with this training along the first half of 2025. We are close to the decision to purchase all the mining equipment for the operation. We have good delivery times for rented equipment and new equipment according to the plan that we have for ramping up the whole production. We are well on track for the mine development, along with the construction and commissioning of the processing plant.

Thank you. Just to clarify, the 65% of capacity by the third quarter of 2025. Is that throughput? Or is this your final production?

No, no, no. That's 65%, which was 2,000 tonnes per day. That's when the project will end with a constant production of 2,000 tonnes per day for three weeks without major response, and with a commercial product at the end. That's kind of where we finish a project and we start operation.

All right. Got it. Okay. Then the next question on Cerro Verde. Any expectations for dividends in the fourth quarter?

Well, you may see the financials of Cerro Verde. There is some cash that we expect to receive; maybe we will discuss it in the next Board meeting.

How much will it be your expectations?

We expect an additional $50 million or $60 million for Buenaventura.

$50 million to $60 million for Buenaventura in the fourth quarter, potentially?

Potentially, yes.

Yes. All right, great. And then on a couple of operations, what can we expect on Coimolache profitability in the coming quarters given that, despite the good prices, it struggled in the third quarter?

We are expecting a permit.

Coimolache?

Yes, Coimolache, we are expecting a permit to continue our operations. Once we have the permit, the production will come as we were used to around 70,000 ounces per year. We expect to put more mineral ore in the leach pad that has been constructed, and we are expecting that permit. We will begin production in the third quarter of next year, and maybe Juan Carlos can provide us with more details.

Thank you, Leandro. Yes, the trailing profitability for this quarter and maybe the coming quarters will be close to breakeven in Coimolache. We are extracting gold from the inventories that we hold from the past. As Leandro mentioned, we already have the environmental license to do the expansion of the pads; we will hold the land. We are currently filing for the construction permit. We expect to have the construction permit ready by the end of the year, with related to 2025. There are some other details on the permits, but on that sequence of ideas, we will have the chance to start putting fresh ore on top of the pad by the third quarter of 2025. The idea is that we will hold the situation close to breakeven, and we expect to receive the permit for construction, allowing us to place fresh ore on top of the pad by the third quarter of 2025. At that time, we will resume profitability as we had in the past.

But so basically, you're going to resume leaching in the third quarter; probably you won’t see production until the fourth quarter of 2025 or first quarter 2026, or what sort of increase?

Yes, it will be ramping up. As you know, we used to have places in the ore, and there's a leaching period; generally, you need to wait around 60 days. So usually, you will start to see the results by the third quarter of next year. It will be a pivotal moment for Coimolache to return to profitability because there will be some gold ounces coming from the past, plus the addition of fresh ore in the third quarter. It will be a combination of both. The fresh ore will significantly fuel the profitability of Coimolache by the third quarter.

All right. Excellent. And then lastly, sorry for all these questions, but I want to get them out of the way. On Julcani, what is the rationale to sustain to keep this operation in Buenaventura's portfolio given the elevated costs?

Yes. Well, we are trying to make Julcani more efficient. We have to make some decisions there, but we are moving toward the copper and gold areas that give us more production of gold in order to be more efficient with that mine. As I told you, Carlos, we are evaluating the situation and the continuity of that mine in our portfolio.

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

Great. Good morning or good afternoon, everybody. Thank you so much for taking my questions. Sorry, I just got a bit late. It was another call ahead of you. Just wanted to come back to San Gabriel. Can I just ask, I think I heard an EBITDA of $110 million. Was that assigned San Gabriel EBITDA?

Yes, between $90 million and $110 million. Yes.

Okay. And sorry, what gold price was that based on?

$2,000.

Thank you for that information. I want to clarify something. I heard you say that the total cash costs increased to $1,300, whereas the initial feasibility study or your plan estimated them at $800. That represents a 60% rise. Can someone explain what caused this increase in total cash costs? It seems to be more than just inflation. Has there been a change in the mine plan?

Yes, yes. The mining method has changed. Juan Carlos, I don't know if you can provide more information to Tanya.

Yes, sure, Leandro. Well, if we split the operation of San Gabriel into the mine, the processing plant, and the overhead expenses, pretty much the processing plant and the overhead pretty much aligned with the pre-feasibility study and feasibility studies operating costs. The main difference is with the underground mine. Right now that we are getting our hands on the mine, as I mentioned before, we are running tunnels and assessing the quality of the rock and how to safely proceed to mine the deposit. The quality of the rock is very good. However, we require a lot of reinforcement, and we need to change the volume of ore that we extract with the underhand mining methods compared to the original study. So in a combination of more expensive tunnels, more expensive openings due to the quality of the rock, and a larger percentage of ore extracted by underhand mining method is that instead of overhand. The underhand is more expensive, requiring us to use more cemented backfill with 7% cement. This combination of factors accounts for the significant change in the operating cost of San Gabriel.

So can I ask what is the operating cost per tonne of this operation? Like if you take the mining, milling, and G&A processing. So what would it be? Is it like $200 a tonne? I don't know anymore, $250?

In the initial years, it will be in the order of $150 per tonne and then gradually, while we start doing less of the more expensive openings, we will start coming down to $140, $135 per tonne. That's a combination of processing overhead and the underground mine.

Okay. And that's in U.S. dollars?

U.S. dollars.

Yes. Okay. And can I ask, when did you understand that the mining cost had to change? Was this a recent thing that you noticed once you started to put the decline in and you started to see the rock conditions? When did you note that you had to change?

Yes, it has been recently. Once we started driving the tunnels along the ore body in the last two quarters. We began in May with a contractor driving tunnels on the ore body. So we had the chance to reassess the quality of the rock. We revised all the mechanics, the selection of the mining methods, and we need to ramp the mining planning or the mine plan. There was an opportunity to reduce a lot of tunneling in the new design, almost $100 million in less expenses on tunneling compared to the new arrangement, offset by the larger expenses on cemented backfill. So it was in the last five to six months that we conducted a thorough assessment of the ore body, not just by drill holes but through openings and galleries, which significantly improved our understanding of the quality of the rock. We are now being conservative about it. We are putting more shotcrete reinforcement. Probably during the operation, we will test if that is necessary or if there are sale opportunities that we foresee right now to reduce expenses and optimize efficiency in the coming months.

And just on the sustaining capital, which you mentioned would be $5 million to $7 million. Most of the companies that we follow with underground mines in that sort of range would have maybe $200 an ounce of sustaining capital, which brings it to $25 million a year. Can you explain to me why your sustaining capital is so low?

Well, our decision regarding sustaining capital is just to maintain all the assets in good shape, keep ensuring all the equipment we have is operational. In our experience with Tambomayo and Orcopampa, we know what we need. Everything required for construction and spare parts or any ancillary services is considered inside the CapEx. In the coming years, after the completion of the project, we expect to be in the range of less than $10 million sustaining CapEx, as we see positive results based on our experience and the dynamics of the project itself.

Okay. Maybe if I can leave San Gabriel and go to just your costs going into 2025. Can someone share with me, as you think about your budgeting of costs? What sort of labor inflation are you forecasting or overall inflation for 2025 estimates over 2024?

Yes, Tanya. During the COVID time, there was an increase in labor cost due to inflation, with the inflation rate reaching around 9%. However, this year, we expect to have this level around 2.4% to 2.5%. In that range, should be the increase in labor costs.

And what about other items within your cost structure? Should I assume that your 2025 cost will only be 2.5% higher than 2024? Or are there other factors within your cost structure that will increase those costs more than 2.5%?

In our business, 60% of our costs come from contractors and manpower, right?

Yes.

It is a big component of our operations. Remember, we are trying to replace contractors in our most important mines with our own people and equipment. So we should expect, in the long run, not necessarily in 2025, but it's a strategy that we are implementing this year.

Okay. And of the 60% of your costs which are labor, what percentage of that is just contractors? Is it about half, a third?

Yes. Exactly. Can we have, right, Daniel, I don't know.

If I can give you a little bit more detail on this, Tanya. The labor is between 16% and 20% of our total costs. Total contractors are 56%. From the 56%, 25% is labor from contractors. So the 16% plus the 14% are labor. This will be affected by the 2% to 4% inflation that Leandro mentioned.

So if 16% is your own people and then 14% is contractors?

Correct.

So 16% plus 14% gets me to 30%.

Yes, that would be correct.

Yes, 30%.

Yes. Okay. Perfect. Thank you so much. And then, Daniel, while I have you on, I saw obviously, you've got your Cerro Verde dividend, which you got about, I think, it was at $60 million, and then you got the $210 million from the sale of the royalties to Franco. Now you have more cash than debt on your balance sheet. Can you just review your capital allocation for that additional cash? Obviously, you've got $280 million or whatever the number was to pay for San Gabriel sale, right? We have to finish San Gabriel, but what may be your capital allocation on all this cash on the balance sheet?

Yes, Tanya. At this point in time, we will use all the proceeds from the Cerro Verde dividend and the asset sale to fund San Gabriel. Remember that we have $200 million in revolver facilities, RCF that we haven't used, so those facilities will remain undrawn because we count with these proceeds. So at this point in time, the funds will be revolted to fund San Gabriel.

Okay. And we just continue to pay the dividend as per formula. So cash to fund San Gabriel? And is there any money going to Trapiche that I should know about the feasibility study? How much is this costing?

We are spending around $20 million per year at Trapiche until we reach the pre-feasibility study. So that is the average. And regarding the dividends, we continue paying dividends every year. Next year, we should evaluate what would be the amount of dividend paid considering the good performance of the company this year.

Okay. So if I understand correctly, all the cash and Cerro Verde dividend go to San Gabriel, and then your debt outstanding will just be paid over time with your cash flow? Would that be a safe assumption?

Exactly. We will pay $50 million of El Brocal loan. We are doing this quarter. So maybe you will see at the end of the year, $50 million less in cash.

Okay. Got it. Thank you so much. And look forward to hopefully seeing San Gabriel when it's up and running.

Thank you.

Ladies and gentlemen, that concludes the question-and-answer session of today's conference call. I would like to turn it back to management for closing remarks.

Thank you, Operator. Before we finish today's conference call, we are excited to announce that Buenaventura's Annual Investor Day will be held in December. This event is an excellent opportunity for us to connect with you. This Buenaventura Day will be held December 10 in New York. There, we will share our latest updates and discuss our strategic vision and key projects for the coming year. We hope you all join to gain deeper insight into Buenaventura’s growth plans and operational progress. Please save the date and keep an eye out for more details coming soon. We look forward to seeing you in New York. And again, thank you very much, and have a wonderful day. Thank you.

Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.