Copper inventories worldwide, including those at the London Metal Exchange, COMEX, and Shanghai warehouses, have fallen by 28%, from 627,000 tons at the end of March to 450,000 tons at the end of June 2025. This level of inventory is estimated to cover about 6 days of global demand. The copper market has experienced a notable price discrepancy between COMEX and London Metal Exchange prices, peaking on July 11 when COMEX was $1.19 per pound, 27% above the London price. This significant differential suggests the likelihood of the U.S. imposing a 50% tariff on copper imports. While we maintain a favorable long-term outlook for copper, we anticipate that an intense trade conflict between the U.S. and China may hinder global economic growth and, in turn, affect copper demand. During the last quarter, copper accounted for 74% of our sales. Production decreased slightly by 1.4% compared to the second quarter of 2022, totaling 238,980 tons. This drop was mostly due to decreased output from our Buenavista and La Caridad mines in Mexico, while Peruvian operations saw a minor quarterly decline primarily due to lower production at the Cuajone mine. In contrast, production increased at both our Toquepala and IMMSA mines. For the full year 2025, we project copper production to be 965,300 tons, reflecting a decrease of 0.9% from 2024. Molybdenum constituted 12% of our sales in the second quarter, with average prices dropping by 5% to $20.57 per pound. Molybdenum production grew by 3.5%, aided by increases from our mines, except La Caridad. We anticipate producing 28,700 tons of molybdenum this year, a slight decline of 1% from 2024. Silver accounted for 7% of our second-quarter sales, with an average price of $33.62 per ounce, marking a 17% rise. Silver production increased 15% from the same quarter in 2024, driven by gains across most mines, barring Toquepala. Refined silver production rose 1% compared to the previous quarter, primarily supported by our Caridad refinery, although it was somewhat offset by a decline at Ilo. This year, we expect to produce 22.8 million ounces of silver, up 9% from last year. Zinc made up 4% of our sales this quarter, averaging $1.20 per pound, representing a 7% decrease from the previous year's $1.29. Zinc production surged 56% from the last quarter, totaling 45,899 tons, primarily due to a 126% increase at the new Buenavista zinc concentrator. For the year, we project 173,400 tons of zinc production, which is a 33% rise compared to 2024. Sales for the second quarter totaled $3.1 billion, a decrease of $67 million or 2% year-over-year, with lower LME prices contributing. Copper sales value fell by 5%, while volume decreased by 3%. Despite this, zinc sales grew by 7% due to a 14% increase in volume, and silver sales increased by 28% driven by better pricing and volume. Molybdenum sales, however, decreased by 7% due to lower prices, despite a slight volume increase of 3%. Our total operating costs fell by $47 million or 3% compared to last year, driven mainly by reductions in inventory costs and other operational factors. However, this was partially offset by higher repair materials costs. The adjusted EBITDA for the second quarter was $1,791 million, slightly down by 0.3% from last year’s $1,797 million, with an EBITDA margin rising to 59% from 58%. For the first half of the year, adjusted EBITDA totaled $3,537 million, reflecting a 10% increase compared to 2024. Our cash operating cost per pound of copper, before by-product credits, was $2.11, a $0.06 increase from the first quarter. Despite a 3% rise in operating cash costs driven by various factors, this was somewhat counterbalanced by significantly lower treatment and refining costs, which improved dramatically. Including by-product credits, our operating cash cost was $0.63 per pound, down 18% from the prior quarter. Total by-product credits amounted to $756 million, or $1.48 per pound, representing a 15% increase over the previous quarter. Net income for the second quarter reached $973 million, reflecting a 2% year-over-year increase. The net income margin rose to 32% from 31% last year, primarily due to lower operating costs and increased interest income, even as net sales fell. Year-to-date, net income is up 14% due to higher sales. Cash flow from operations in the first half was $1,698 million, increasing 5% from 2024, driven by robust cash generation and effective cost control. Looking ahead, our investments in Peruvian projects are projected to exceed $10.3 billion over the next decade, supported by the Peruvian government's pro-investment stance. Our focus is on securing necessary permits efficiently. Regarding significant projects, the Tia Maria project has already generated 1,376 jobs, with 802 filled by local applicants, contributing to community employment. Our Los Chancas project recently signed a framework agreement with the local community to govern relations during construction and operations, marking a significant step forward. In Cajamarca, the Michiquillay project has reached a 45% exploration progress, with substantial drilling and sampling completed. We are also negotiating with the current government in Mexico to advance $10.2 billion worth of investments stalled previously. Southern Copper is committed to sustainability and transparency, as seen in our independently verified sustainable development report. We achieved a 24% reduction in injury rates and sourced 39% of our electricity from renewable energy last year. Southern Copper is also making strides in cultural and educational contributions through music programs and scholarships. Regarding dividends, Southern Copper has declared a quarterly cash dividend of $0.80 per share and a stock dividend of 0.0101 shares per common share, payable on September 4 to qualifying shareholders by August 15. With that, we conclude today's presentation and invite any questions.

First, I wanted to explore realized copper prices, particularly considering the COMEX premium observed this quarter. How much of the COMEX premium are you actually realizing? What percentage of your sales comes from COMEX? If the copper tariffs go through soon, what implications does that have for your contracts? I understand you have several contracts that reference the COMEX premium, but it seems your clients may hesitate to accept that price if they're not sourcing it from the U.S. Can you clarify how that will work for you? Also, regarding expectations for cash costs, we've noted a significant improvement this quarter, though much of it stemmed from byproduct credits. There may have been some effects from TC/RC as well. Could you outline what you expect before byproduct credits for the remainder of this year and into next year? What advantages, if any, might you see from potentially lower TC/RCs? Lastly, how are you considering investing in the Empalme smelter given the low TC/RCs in Asia? Economically, it might not make sense based on the current TC/RC spot prices, but there could be strategic reasons to proceed. If you could elaborate on that, it would be appreciated.

Thank you for your questions, Jon. First, I want to clarify that we are not going to discuss our sales composition or how the significant price arbitrage is affecting us; that's managed by our commercial team, and we prefer to keep that confidential for now. However, I can mention that we need to monitor the outcome of potential tariffs on copper imported to the U.S. The situation is still uncertain, as tariff levels fluctuate daily. Recent news indicates that negotiations are ongoing in various countries, and the outcomes are hard to predict at this time. Regarding cash costs, it's important to acknowledge that the higher credits we're receiving, especially for silver, are influencing prices, while molybdenum and zinc aren't performing as well. Nonetheless, our performance in zinc and silver production and sales has improved compared to last year and is reflected in increased revenues from byproduct credits. This has certainly contributed to keeping our cash costs low, as we've reported in recent quarters, showing improvement from the first quarter of 2025. As you noted, TC/RCs are at very low levels, with some reports indicating they may even be negative. This makes new investment in a smelter less appealing economically. However, our presence in the Americas is significant for future considerations. Statistically, the circumstances could change, making new smelter investments viable. We will evaluate this as we move forward. We possess the capability to build and operate a new smelter competitively in both Mexico and Peru but need clearer long-term perspectives on such investments before proceeding.

Okay. That's clear. As a follow-up, I understand the reasons for not wanting to disclose the contracts and COMEX prices. However, can you confirm if you were receiving the COMEX premium this quarter based on your current contracts? Is it fair to say that you were operating under the original agreements you have with your clients? Nothing has changed thus far, and you were receiving the COMEX price reference in the second quarter?

Some of our contracts are under COMEX, and we are honoring them while also expecting our customers to do the same. It's important to note that there is currently no tariff applicable for any sales to the U.S.

Raul, two questions, if I may. We've heard this week that Chile may be getting some kind of exemption on copper tariffs if they were to come in and so on. How do you see the dialogue between the Peruvian government and the Peruvian kind of operating companies with the U.S. regarding this situation? That's the first question. And then the second question is, you mentioned the progress on Tia Maria and the access road and so on. How are you seeing the date or potential date for starting up Tia Maria then, please?

Let me address the second quarter briefly. We plan to start tests and have some production in the first half of 2027, and we will keep the market updated on our progress with the project. This is our current objective. Regarding discussions, they are conducted very confidentially, and we don't have much to share on that.

Could you just talk a little bit about CapEx because the spend in the first half was materially lower than what you've been guiding for for the full year. Should we assume there's a dramatic step-up in CapEx in the second half? Or is the downside risk to the 2025 CapEx guidance? And could you remind us what projects are coming through over the next 6, 12 months in addition to Tia Maria in terms of meaningful spend. Is like, Cuajone, and so?

The main project we have is Tia Maria, and we will see significantly higher expenditures on it in the second half of the year. In addition to Tia Maria, which is a new operation, we have several other projects progressing as part of either project replacements or due to other initiatives impacting our operations. Generally, we are managing a group of maintenance projects, such as replacing mining equipment. In the first half of the year, we invested just over $230 million in these other projects, and we expect our total spending for the year to be around $1.6 billion, in line with our budget. We are focused on moving these initiatives forward.

So we should assume quite a material step-up in CapEx in the second half based on first half's actual spend. And maybe just to clarify on Tia Maria, if we're getting testing and first or during the first half, should we assume something like 50,000 tons of production in 2027? Or will it be less than that? How should we think about that production profile, '27, '28 to get to full capacity?

We are currently evaluating the information on potential production in 2027. We will provide more details soon, but for now, we are not adjusting our estimates. We may update them during the next quarterly report or when we finalize the budget for 2026. It's important for us to see how we progress with various aspects of the project. Currently, we are concluding the bidding process and beginning work to open the La Tapada mine, which will be the initial phase of our investment cycle. We plan to invest significantly more in the project in the second half of the year compared to the first half. This will be reflected in our capital expenditures for the remainder of 2025.

Can we discuss the maintenance that is occurring or has occurred in some of your Peruvian operations? I would appreciate some details on these works as well as their potential impact on shipments, copper production, and costs.

For the Peruvian operations, specifically, as I understand what you...

If you have also maintenance in Mexico.

In the case of the Peruvian operations, we have scheduled two major maintenance activities at the Cuajone mine this year, and some maintenance has already been included in our current production forecast. For the Ilo smelter in Peru, we are required to conduct multi-annual maintenance approximately every three years, which involves a major 20-day stoppage of the facility to perform various works. This will take place in the third quarter. We are adjusting to sell more copper concentrates to maintain our sales levels, and our low treatment and refining charges are beneficial in this context. As for our Mexican operations, we are concentrating on improving production at the Buenavista concentrator, which is a key focus for us. The SX-EW operations at Buenavista are performing well, and we are very pleased with the performance of the Buenavista zinc concentrator. That sums it up.

And just in terms of the potential impact on cost of this maintenance and maybe Cuajone maintenance in the third quarter. Any color there?

Well, not much. I think we will be having a very competitive cash cost in the second half of the year. Obviously, well, keep in mind that we will not be operating 20 days smelter. So the total cost very likely will decrease rather than increase because of this major maintenance. So in my view, we are going to maintain basically the same cost structure that you have seen in our report or improve it a little bit with more zinc getting into our sales stream.

Okay. And you are talking in terms of cash cost per pound?

Yes.

Okay. And from a management perspective, to the extent that you know what the Board is discussing, what could be the potential impact on dividends as the Tia Maria capital expenditures increase?

That's up to the Board, as you know, Carlos. We need to evaluate different options. Currently, we will be spending a bit more money. However, prices are significantly better now compared to a year ago, especially with some sales in the COMEX market. So, it's difficult to predict. I believe the company will continue its past practice of not hoarding cash and returning it to shareholders as much as possible. This approach has been a standard for the company, and I think the market appreciates it.

I have two questions for you. First, in Grupo Mexico's release, they mentioned that copper production in Mexico has decreased, which is related to prioritizing zinc and silver production at Buenavista. Can you clarify how this will work? Will you need to prioritize one metal over the other? Is this already reflected in your guidance? We have to reduce copper production at Buenavista zinc this year, so I want to understand the situation better. How do you determine whether to focus on zinc or copper? My second question is, could you remind us of your production guidance for the upcoming years?

Yes, we have made a decision regarding the Buenavista operation. The zinc plant and concentrator we constructed is currently focused exclusively on zinc production because we are operating in areas that yield more value from zinc. This choice allows us to maximize output without the disruptions that come from switching between zinc and copper. Each time we switch to copper production, we have to halt operations, which negatively impacts our annual output of both metals if done frequently. After assessing the potential copper production from this facility and considering the value of the zinc from the concentrator based on our operations, the company decided to concentrate fully on zinc. The copper concentrators and the SX-EW plant at Buenavista continue to produce copper as usual, and last year we produced 9,500 tons of copper at the zinc concentrator. However, that production has not been available this year, so we expect to produce 965,000 tons of copper in 2025. If we were to replicate last year's output, we could add another 10,000 tons, but we choose to prioritize zinc production instead, which has proven to be more profitable for the company. This decision is reflected in our substantial increase in zinc sales. We have some zinc inventory that will be released in the second half of the year. Regarding production guidance, we expect 965,300 tons for this year and are currently reevaluating next year’s forecasts, which suggest a bit over 900,000 tons. For 2027, we estimate 950,000 tons; over 1 million in 2028; 1,021,000 in 2029; and 1,070,000 in 2030. Then we plan to scale up to 1.6 million tons by 2031 and 2032 by leveraging the benefits from our ongoing projects in Peru and Mexico.

Okay. Perfect. So if I understand correctly, it's a value maximization that you will have to be doing depending on the ore grades for the Buenavista zinc for the mineral extracted for the Buenavista zinc, and you will have to assess what is more profitable, right?

That's correct. We have certain areas of the Buenavista mine where the zinc content is extremely high and interesting. Therefore, we should prioritize producing significantly more zinc in these areas and switch between copper and zinc, as the copper production would not be as valuable. Continuing with copper would mean sacrificing a large amount of zinc, which is more valuable than the copper we would obtain from that part of the mine. The facility can transition from copper to zinc, but in this instance, we are focusing solely on zinc due to the areas we are working in and the technical adjustments needed in the plant for copper production, which would not be worthwhile at this time. The profitability is much higher, as our results and zinc sales indicate and will continue to demonstrate in the latter half of the year. For this year, we expect Buenavista to produce 110,700 tons of zinc. Next year, this number will drop to 94,000 tons and remain at that level through 2026. We are making this decision because it is more profitable for the company and it is the best way to process the mineral we obtain from the mine for the zinc facility. This evaluation must be done over time as prices fluctuate and the quality of ore grades in different areas of the mine may change. Therefore, it is an ongoing assessment, and we will inform the market when necessary. Additionally, our copper production at this facility has been and will continue to be around 10,000 tons per year. The decision involves potentially forgoing that 10,000 tons to obtain more zinc, which depends on various circumstances that I have outlined.

Our next question comes from the line of Juraj Domic with LarrainVial.

Can you hear me?

We can hear you. There's a little bit of background noise in the back.

Okay. Perfect. I have two questions. I would like to understand the drop in copper sales compared with the first quarter. I don't know if there were any shipment delays or...

We lost our questionnaire sir. I'm going to move on to the next question. And it comes from Emerson Vieira with Goldman Sachs.

So I have a few questions. The first one is on Cuajone expansion. I know you guys are expecting this project to come to Board approval by next year. So any update on that front would be very helpful. So this is the first one. The second one would be on the copper sales as well. So we saw a decline year-over-year, so sales lagging production by 7%. So I just wanted to understand if there was, I don't know, a front-loading effect in first Q that caused this to happen in the second quarter. And I think it would be those two questions.

On the copper sales, at the end of 2024, we had some copper inventories that were sold in the first quarter of this year. This is the main difference in our copper sales for the first quarter. It's not that sales have decreased overall. There were indeed lower copper sales in the second quarter, but this is not directly related to production; it is more about the higher inventories processed in the first quarter. As for the Cuajone expansion, there isn't much to update. We are working on gathering better information about the project. One concern we have is the water sourcing necessary for the expansion, and we are exploring various initiatives. One of these initiatives has been tested successfully, which involves using dry tailings at our Cuajone tailings deposit, but we are also considering other options. We will provide updates when we have significant information to share. It’s an attractive project, but we need to address some concerns before presenting it to the Board for an announcement.

And as I see no further questions in the queue, I will turn the call back to Raul Jacob for final remarks.

Well, with this, we conclude our conference call for Southern Copper's second quarter of this year. We certainly appreciate your participation and hope to have you back with us when we report the third quarter 2025 results. Thank you very much for being with us today, and have a nice day.

And ladies and gentlemen, this concludes our program for today. Thank you all for participating, and you may now disconnect.