Good morning and welcome to Southern Copper Corporation's second quarter and six months 2026 results conference call. With us this morning, we have Southern Copper Corporation's Mr. Raul Jacob, Vice President Finance, Treasurer, and CFO, who will discuss the results of the company for the second quarter and six months 2026, as well as answer any questions that you may have. The information discussed on today's call may include forward-looking statements regarding the company's results and prospects, which are subject to risk and uncertainties. Actual results may differ materially, and the company cautions not to place under-reliance on these forward-looking statements. Southern Copper Corporation undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. All results are expressed in full U.S. GAAP. Now I'll pass the call on to Mr. Raul Jacob.

Thank you very much, Carmen. Good morning, everyone, and welcome to Southern Copper's third, second quarter of 2026 results conference call. At today's conference, I'm accompanied by Mr. Leonardo Contreras, CEO of Southern Copper and also a board member. Let me first begin by mentioning that Southern Copper delivered another exceptional quarter, registering record-breaking results in sales, adjusted EBITDA, and net income. These outstanding achievements are driven by operating excellence and reflect our commitment to creating long-term value for our stakeholders in a context marked by sustained demand for copper and the other minerals we produce. Today we will begin with an update on our review of the copper market and then review Southern Copper's key results related to production, sale, operating costs, financial results, expansion projects, and EAP. After this, we will open the session for questions. The London Metal Exchange copper price increased 40% from an average of $4.32 per pound in the second quarter of 2025 to $6.04 this past quarter. In the complex market, we saw a 31% increase with an average of $6.16 per pound this quarter. Based on current supply and demand dynamics, we estimate a slight copper market deficit for 2022. Copper inventories worldwide, the total combining stock up in London with Exchange, Comet, Shanghai, and London warehouses, that's the sum of these inventories, is at 1,123,000 tons as of yesterday, July 21st, We estimate that this inventory can currently cover approximately 15 days of global demand. Now let's look at Southern Copper's production for the past quarter. Copper represented 73% of our sales in the second quarter of 2026. Copper production registered a decrease of 3.5% compared to the trend in the second quarter of last year, standing at 230,662 tons this past quarter. Our quarterly results reflect a 12% drop in production in Peru, mainly attributable to lower oil rates and recoveries at both Poquetala and Cochum. However, these results were partially offset by an increase in production at our Mexican operation of 3.2%, which was driven by higher production at our Buena Vista, La Caridad, and Inca Mines. For 2026, we expect to produce 917,000 tons of copper, an increase of about 1% over our initial plant. For molybdenum, it represented 11% of our saves in the second quarter, and it's currently our first petro. Molybdenum prices averaged $29.44 per pound this quarter, compared to $20.57 in the second quarter of 2025. This represents an increase of 43%. Molybdenum production dropped 11% in the second quarter of this year, compared to the same period as last year. This was mainly driven by a decrease in production at all our mines due to lower oil rates. In 2026, we expect to produce 27,900 tons of monogamous. This is 7% above our initial plan. For silver, it represented 9% of the company's sales value in the second quarter of this year. Silver prices averaged $73.49 per ounce this quarter, compared to $33.62 in the second quarter of last year. This represents an increase of 118% in price. Silver is currently our second by-pro. Despite high production at our La Caridad and INSA mines, silver production fell 4% in the second quarter of 2026, driven by the lowest production at the Toquetala, Coajones and Buena Vista mines. The fine silver production decreased 0.3% quarter over quarter, driven mainly by a drop in production at the ILO refinery in Perú. In 2026, we expect to comply with our plan to produce 24 million ounces of silver. Sink was 4% of our sales value in the second quarter of 2026, with an average price of $1.57 per pound in the quarter, which represents a 31% increase compared to last year's second quarter. Mine sink production decreased 14% quarter-on-quarter to total 39,250 tons. This decrease was mainly driven by lower production of the Buena Vista, San Martin, and Charkas mines. The fine sink production decreased 6% in the second quarter of this year vis-à-vis the same second quarter of 2025. This was principally due to lower oil grade. For this year, 2026, we expect to produce 162,900 tons of zinc. Financial results. For the second quarter of 2026, sales were $4.3 billion. This is $1.2 billion higher than the print in the second quarter of 2025, a 41% increase. Copper sales increased 38%, while the volume fell 1.5% in a scenario of the mentioned better prices. Regarding our main buy products, we'll register higher sales for molyphorin by 34%. Sink sales in turn rose 24 percent, silver were up 86 percent in the three cases of seaside products due to higher prices and these sales were partially offset by a decreasing volume. Our total operating costs and expenses increased 202 million or 14 percent compared to the second quarter of 2025. The main cost increments were in operating materials, purchased copper, diesel and fuel, workers participation, and translation difference, as well as other factors. These cost increments were partially assessed by a decrease in repair material and inventory consumption. The second quarter 2026 adjusted EBITDA hit a record high of $2,856 million, which represented an increase of 60% with regard to the $1,191 million registered in the second quarter of 2025. Adjusted EBITDA margin in the second quarter of this year stood at 67% versus 59% in the second quarter of last year. Adjusted the visa year-to-date was $5,569 million, which is 58% higher than 20 in the six months of 2025. Adjusted the visa margin in the six months of this year stood at 65% versus 57% for the six months of 2025. Operating cash costs per pound of copper before the total credits was $2.29 per pound in the second quarter of 2025. That is, two cents lower than the value for the third quarter of this year. One percent decrease in operating cash costs is a result of lower cost per pound from production and administrative expenses, a higher premiums. This result was partially upset by a decrease in treatment and refining charges. $1,000 co-operating cash costs, including the benefit of white product service, was $0.05 per pound in the second quarter of 2026. Even though this cash cost was $0.15 higher than the cash cost of minus $0.11 for the first quarter, we think that this is an excellent mark for the company. Regarding diet products, we had a total credit of $1,106 million or $2.24 per pound in the second quarter of 2023. These figures represent a 7% decrease compared to a credit of $1,189 million or $241 per pound reported in the first quarter of 2023. Total credit has increased for molybdenum and zinc and decreased for silver and sulfuric acid. The second quarter of 2026 net income hit a record high of $1,670 million, up 72% versus the $973 million registered in the second quarter of last year. This was the result of higher net sales, mainly the result of higher net sales and the cost control measures that we imposed in our operations. The net income margin in the second quarter of 2026 stood at 39% versus 32% in the second quarter of 2025. On a year-to-date basis, net income was 69% higher than in 2025 due to higher net sales. Cash growth from operating activities in the six months of this year was $3,692 million, which represents an increase of 117%, compared to the $1,698 million post in the six months of last year. This improvement was attributable to strong cash generation at our operations, which was driven by higher sales, and a decrease of $719 million in operating assets and liability requirements. This year, on June 24th, the company issued $1.25 billion in a 10-year fixed-rate senior and secure notes. This test is due in 2036 with an annual interest rate of 5.35%. Demand for the most was $4 million, which was 3.2 times greater than the total issuance amount. Proceeds will be used exclusively by Southern Peru Copper Corporation, our Peruvian branch, to develop the Tia Maria project, finance its capital expenditure program, as well as general corporate purposes for Southern Peru Copper Corporation. Regarding capital investment, Southern Copper's current capital investment program for this decade exceeds $25 billion and includes investments in projects in Peru and Mexico. In the second quarter of this year, we spent $423 million on capital investment, which reflected a 79% increase over the year reported in the second quarter of 2025 and represents 25% of this quarter's net income. In the first half of the year, we spent $865 million on capital investment, which represents a 27% of net income and reflects the impact of a 56% increase in capital expenses year on year. Looking at our Peruvian employees, as Peru is poised to begin a new executive cycle were encouraged by the initial statements made by President-elect Mrs. Keiko Fujimori. Accordingly, SEC reiterates its commitment to work with incoming administration to promote economic growth and social development in Peru through the advancement of our Peruvian projects Tia Maria, Los Chancas, and Michiquillaz, which represents a combined investment of approximately $10.3 billion. Given that there is a description of our main capital project in 1,000 coppers per series, I'm going to focus on updating new developments for each of them. In the case of the Tia Maria project located in the Peruvian region of Arequipa, as of June of this year, June 30th, the company has committed $1,101 million to various project activities, of which $693 million have already been invested. Mass Airworks has moved 13.8 million metric tons of material from La Tapada. This is a 71% product. And also most purchase orders of the project's major equipment have been issued. Regarding the leaching process, purchase orders have been placed for key state-of-the-art equipment and procurement activities for the remaining major equipment continue. Regarding the power supply, electromechanical works are underway at the main electrical substations and efforts continue to build the 220-kilowatt transmission line. Concurrently, the mass airworks required to develop both the dry and wet areas are in their final stage. Seedery works and steel structure assembly have commenced in key facilities, including the primary, secondary, and tertiary trashing circuits, as well as the solvent trashing and electrowhealing facilities, among others. At the close of June, the Tia Maria project had reached 42 percent completion and 5,817 new jobs have been created. Of these positions, 1,254 has been filled with local applicants. For the Luchanca project in the region of Apurimek in Peru, as of June 30, the presence of illegal miners within the project area continues despite the state's and site enforcement efforts through the Environmental Prosecutor's Office. This has hindered the project's progress. Meanwhile, community development and environmental management programs continue in the communities of Tiaparo and Tapayrihu, both located within our direct area of influence. In the case of the Michiquillai project in the Perilian region of Cajamarca, studies to estimate neural research and develop the mine plan coupled with hydrological and hydrogeological assessments are currently underway. In addition, the technical research is progressing and entering its final phase. Focusing in our Mexican projects, Southern Copper has several projects in its Mexican pipeline that may boost organic growth if they are found to be of value for both stakeholders and the communities in which we operate. These projects are Anganguero and Chalchihuites, which are part of the Mexican Copper Circuit, and the Empalme Network, which are expected to bolster our position as a fully integrated copper producer. We are engaged in talks with the current administration to continue rolling out SEC's Mexican investments for $10.2 billion. El Pilar in the Sonora states, it's a greenfield project that has to sustain the necessary environmental permits and will begin early-type preparation work in September of the year, next September in other words, to develop energy lines, water pipelines, roads, workers' accommodation, and some other facilities. products for project construction will commence in the first quarter of 2027 and production is expected to begin in the second half of 2029. This project is located in Sonora in Mexico, approximately 45 kilometers away from the Camanea and Benavista mine. Its copper oxide mineralization contains estimated proven and probable reserves of 317 million tons of ore with an average copper weight of 0.249% and a live mine of 18 years. It will operate as an open pit mine with annual production capacity of 36,000 tons of copper cattle utilizing cost efficient and environmentally friendly SXEW technology. SXEW stands for Southern Straction and Electro-Wearing. With an investment of $551 million, this project will employ a direct workforce of 450 people during the construction phase and 300 during the operational phase. For environmental, social, and corporate governance, or ESG practices, Over the last five years, we have reported several times on the Curahawira Dam, located in the Candarare area in southern Peru. This is in the Tacna region in Peru. These dams have transformed the lives of 18% farmers of the area and their facilities by providing year-round access to water. According to the Ministry of Agricultural Development, crop yields in the area have risen around 20%. This infrastructure, with a capacity of 2.5 million cubic meters, was built by our company through an alliance with the Peruvian State and local farmers. We continue to work with authorities to build the Callaza and Caliente dams, also in the Candarabra area. And with this additional dams, more than 90% of farmers' water needs will be covered. Moving to Mexico, students from Nacozari and Esqueda schools, both in Sonora, Mexico, performed admirably in national and international competitions, including the Mexican Mathematics Olympics and Informatics 2026. This achievement reflects the company's commitment to education and development of its team skills. The company currently benefits 3,000 students through 11 education centers. It operates in Mexico and Peru. To promote integration and well-being through sports, our company joined the global social initiative of the Mexican government. Our efforts, which focus on communities neighboring our operations, have brought together 2,629 participants who are organized into 216 teams of employees and community members with categories for children and youth. Alongside this initiative, 580 volunteers work to create 14 community murals and recognition Sports Venue, which strengthens harmonious relations, inclusion, and the social fabric. These sports and cultural programs cover approximately 41% of the young population close to our Mexican operates. Dividend Announcement. Regarding dividends, as you know, it is the company's policy to review our cash position, expected cash flow generation from operations, capital investment plans, and other financial needs at each board meeting to determine the appropriate quarterly division. Accordingly, on July 16 of this year, Southern Copper Corporation announced a quarterly cash dividend of $1.10 per share of common stock and a stock dividend of 0.012 shares of common stocks per share. This will be payable August 27th of this year, 2026, to shareholders of record at the close of business on August 11th, 2026. Let me mention that factoring in both the cash dividend and the equivalent value of the stock dividend, the total estimated dividend payment is $3.23 per share. Ladies and gentlemen, with these comments, we end our presentation today. Thank you very much for joining us. And now we would like to open the forum for questions.

Thank you so much. And as a reminder to ask a question, press star 11 on your telephone and wait for your name to be announced. To remove yourself, press star 11 again. One moment for our first question. It's from Richard Garcicorena with Barclays. Please proceed.

Thank you for taking my question. Just want to talk about copper production in the quarter was down 3.5% year over year. Can you just talk about how the grades have progressed at Toquepala and Cojone, and what do you see that doing in the second half of this year? And, you know, is that impacting your four-year production expectations at all?

Thank you very much for your question, Richard. Well, we have been reporting, and we mentioned this at the beginning of the year, that our expectation was at the first part of the year we were expecting to produce in 2026 about 910,000 tons of copper. Now, we're expecting for this year 917,000 tons of copper, so we're improving a little bit on our plan. But the main reason for the change or for the lower production vis-a-vis last year, it's an oil grade, particularly at the Guajoni mine, where we had a reduction that translates into about 35,000 tons of lower copper production, and the difference comes from Toquepala. As I mentioned, we have been, at the same time, doing some important efforts to increase production for the Mexican operations, and that has been allowed to maintain our production levels in Mexico, but having a lower volume in the range of 40,000 tons in total at the Peruvian site.

Great, and if I can just ask a bigger picture question, you talked about $10.3 billion in CAPS required for your Peruvian projects and with the new administration is it expectations that they'll be some additional funding incentives that could be potentially in place for you know local production growth and then you know relative to that you did issue 1.25 billion of debt for Team Maria is funding going to be the main expectation for you know financing these new projects or how do you think about, you know, financing the remainder of the projects?

The latest bond issue, the one that we mentioned in our first release for $1.25 billion, was for mainly for financing the Tia Maria project. As you know, we expect to spend in total $1.8 billion in Tia Maria. So with this bond, we should cover a significant portion of it. If by any reason we have – we finish Tia Maria before spending this money, we'll have some other projects that could absorb a portion of the funds. But if that would be the case, that would be a very small amount. For the Peruvian projects, we are indicating the expected capital expenditures for each of them, for Los Chancas and Michikiyai, those numbers will be reviewed and updated when we have a goal for the project, as we have done in this past quarter with LP Lab, where we have already a budget that is what we expect to spend in the construction of LP Lab. Generally speaking, the company considers use of some debt a certain point in the developing of the projects of the company well that's a good practice to have a balance or a better balance capital debt capital structure in our financial statement that's that's basically it so even though i cannot assure you that we will issue bonds or some other forms of financing at each time that we go on with the project this is what we have been doing in the last few years so i believe that we could move on in the same direction for the future projects as well thank you our next question is from Emerson Vieira with Goldman Sachs.

Please proceed.

Hello, good morning, everyone. I want to just talk a little bit more about your closet. I understand that... I'm sorry.

Emerson, I can copy you well. Do you sound better now? Yes.

Okay. Go on, please. I have two questions. Because of them, I think you got into my project. I understand that the fiscal process is advancing right. But there is a critical equipment component, which is the foundation plan. So, I just wanted to double-check.

Emerson, please.

I think sorry for for but you separate a little bit your from from the microphone because it doesn't pop you okay how about now better excellent okay thank you thank you yeah but I need to hear away with the mic so yeah have two questions first of them on the project okay Maria specifically It's good to see that physical progress is advancing, but I understand there's a critical component which is the reformation point, so I want to double check if the order to purchase that equipment has already happened, and if not, if there's a risk for delaying the project. If I recall, well, last quarter automation started up in the third quarter of 2077, and in this press release, the cop animation started up in the second half. So just right in the center, if you guys see a risk of some delays in the project. That's for Tia Maria. Also on the Mexican project, Pilar, just try to understand here if the company was able to obtain the water license that was expired, you mentioned that all environmental license have been obtained, but just double checking if everything is indeed well placed to start the early works. So, this is on the project, and then I have to give you another question, but I will do it later on.

Okay. Let me start by Pilar, because that's the easiest way, the easiest to answer. We already have the license, the water license renewed, so we're ready to go, and that's why we are reporting it, beginning initial works of construction in September, and then a full construction process in the first quarter of next year. For Tia Maria, we are putting purchase orders and doing the proper contacts to different suppliers of the major parts of equipment, among them the diesel plant.

For now, we don't expect a delay in the project. that's what we're reporting but if there is a there is a perception that the project will delay a little bit will certainly report that to the market but for now we don't have nothing to report on this all right thank you a second one right now on sales right there was a gap this quarter and sales was a little bit the low production so just trying to understand if you guys expected the reversal in the second half uh i don't know maybe inventories being constant so that we see sales coming uh a

low production for the second half of this year thank you no i think we we should do a little bit better in terms of volume in the second half. The reason for that is that we have been increasing a little bit our material in process at our operations in the first half of the year. So I expect that metal to show up and being available for sales at certain point in the second half of this year so that's my personal view for now we are we are advising the market on 917 000 tons of total production for the year so that's that's basically what we're thinking now okay thank you thank you our next question comes from rafael barcelos with Bradesco PPI.

Please proceed.

Good morning and thanks for taking my questions. So the first question I just wanted to get your views on the overall political environment in Peru. I mean we are about to start a new movement so if you can give your broad view on what can change going forward on the regulatory backdrop and on top of that if you can comment specifically about your projects right of course. The first one, Tia Maria, what can you change for the for the project? And I understood from your last, from the last question that you see Tia Maria on track, I just wanted to get more insights on where are the main risks for us to keep an eye on here on execution of the project, you know, particularly because 2027 is a key year in terms of CAPEX disbursement, right, so just wanted to understand how do you see the risks and in the case of Los Chancas, also in this context on the political environment, I mean, you've been facing these illegal mining activities, right, so just wanted also to understand how candles since changed given the new the new government. And as a second question, can you comment a bit more on the outlook that you see for copper and byproducts production for the second half and for the second half of the year and 2027? I mean, I'm understanding that you can, you know, you have a chance to beat the the previous guidance for the year which was 911, but I just wanted to understand how does it change your view for 27 as well. Thank you.

Okay, thank you for your questions Rafael. On the political environment well we see We have to review the plan that was presented by the elected president for the elections, for Keiko Fujimori. It was very – they are considering several initiatives that we believe will be posted for the mining industry in Peru, in general for the economy, but particularly in the mining industry. I think that at the same time, the priorities that the incoming administration has mentioned are important because one of them is the fight to illegal mining, which is something that is affecting us on the tanker. So, we believe that some initiatives that are twofold, a new law for artisan mining, which is something that is widespread in Peru and has centuries of activities leading to a strong mining country. So, for that, I think that we'll see some positive developments. Some of them will be favorable for Los Chancas, we believe so. For the Tia Maria project redeployment, I think that the risks are the usual ones that you may expect for a project under construction. Even though we have to view very detailed, very strong detail all the matters that may impact the project, well, sometimes things are not as expected, but for now, we don't see anything like that showing up. the social environment is positive for the project. We are working with the local population in several initiatives. There are, as we reported, a significant amount of people from the area. Many cases were former protesters of the project or family of those persons and they are okay. we are fine in that regard. I already comment on what we're seeing, how we're seeing right now. On the outlook for copper byproducts for the second half, I mentioned already for this year our goals for the four materials that we copper, copper, moly, silver, and sulfuric acid, I think, and sulfuric acid. So, you already have this information. Next year, for copper, We are expecting to produce more or less the same that we have for this year. For now, that's what we have to report. In 2028, we will have for next year some help for – we expect to have some help from Tia Maria's tonnage, hopefully in the later part of 2027. For 2028 and on, we expect Tia Maria to fill in and increase our production level to about 970,000 tons. In 2029, our copper production should be over a million tons, 1,060,000 tons. That's our current expectation. A portion of that will come from Tia Maria and from recoveries in all grades at Coquepala and Guajon. And basically, in 2029, we will have the positive benefit of OPLAF and some other better oil rates at the Mexican operation. So we are very positive. As you know, our goal is to be over 1.6 million tons of copper by 2033, 2034. and that's what we are heading towards with organic growth in projects pretty much fully owned by the company.

Just as a follow-up, can you be more specific when you say about the expectations for a new or revision on the mining law in Peru, which sort of aspects you believe could improve in the medium term?

No, it's more than reviewing the mining law. It's improving the safety, the security, excuse me, the security environment in the country. That, I tell you, would be very useful for mining projects in Peru. Besides that, we expect the government to maintain the fiscal accounts in order. And on top of that, there has been some changes in the institutional arrangement of the country. We will have a Senate in Peru that we haven't capped for over 30 years. And some other changes that will make the political environment much more stable. That's our expectations. We have to see what the elected president, Tuzumori, proposes in her speech in July 28th when she will take over the position of president. That's when we'll see specifically what their goals are and have more clarity on this. But the general view is a positive one, as I mentioned.

Okay.

Very clear. Thank you. Thank you very much.

Thank you. Our next question is from David Seng with CICC. Please proceed.

So, hi. Good morning. Thanks for taking my question. My first question is a follow-up question on the new administration. We saw that the incoming administration has proposed distributing up to 40% of the mining cannon directly to their residents in producing areas. So based on your experience in local communities in Peru, do you believe this would maturely improve community acceptance or could it make the existing community agreements more complicated?

In this case, David, we will not comment on this until we see it specifically what's the proposal. If it holds, that's the first very first thing. If it will hold or they have to review it, then we will know that as the policies of the new administration are deployed. So, for now, we don't have anything to comment on this.

Okay, I understand, and I have another question on the, dear Maria, so we saw that you have provided a cash cost estimate of 1.16 per pound, dollar per pound, just to like to double confirm if it's after byproduct credits and if so, what's byproduct price assumptions on the team this estimate, and should we expect it to be a lot of my average cost, or cost can be reached the initial years of the project, let's say, 2008 or 2009?

Okay. Well, Tia Maria has no like products. So, it's just copper, what we will reproduce, and as you mentioned, The cash cost estimate that we have is $1.16, so it's $1.16. That's the cash cost that we have as an estimate right now. Hopefully, well, we have seen some changes in fuel prices and some other materials, but so far this is the estimate that we're looking at right now.

Thank you so much. I'll pass it on.

Thank you. And our next question is from John Tumasos with John Tumasos, very independent research. Please proceed.

Thank you very much. I want to try to understand a little better some of the project delays. And maybe LPVAR is a simple one, just 36,000 tons copper production, smaller open pit. But the predecessor, Mercator, bought it in 2009 for $40 million from Stingray. You bought it out for $100 million in 2015 from the Mercator bankruptcy. It's now 11 years that you've had it. Please explain the delays in engineering and permitting and why it takes so long. This seems to be much easier than Tia Maria or Michi Kile or Alarca or some of the other projects.

Thank you for your question, John. Well, each project has its own challenges. And in the case of El Pilar, we had an indeed technical review in order to be absolutely sure that we were getting the recovery from copper that we were expecting for the project. That was something that took us a little bit longer than what we believed when we acquired the project, and you mentioned already the year. Besides this, in the meantime, we had to renew some of the permits that we have for the project, and we have finished in this process decently, and that's why our last board meeting, the project was presented for approval, and we got it, so that's why we're moving forward with it. So usually projects have different challenges. In this case, it was at the very beginning, as I say, some technical issues that have to be quite clear before we go into the investment. And the second point is some permitting that given the time we spent in solving all the technical issues, it took a little bit longer as well.

How much was the impact when Obrador wanted to halt the open pits in Mexico? Is that the way it?

For us, it has not the impact since we already have our concessions, including the open pit one. And so there's no point on this. For instance, the Pilaris open pit, and we are quite fine moving forward with it, with all the permitting for the party.

Thank you. I just, I wait many years, and I hope God gives me enough years to see everything get built.

We have sold. Thank you.

And thank you. And this concludes our Q&A session. I will pass it back to Raul Jacob for closing comments.

Thank you, Carmen. So, this will conclude our conference call for Salvin Copper's second quarter 2026 results. We certainly appreciate your participation and hope to have you back with us when we report the third quarter of this year results. Thank you very much for being with us today and have a nice day.

And this concludes today's conference. Thank you for participating and you may now disconnect.