Compañía de Minas Buenaventura S.A.A. Q4 2024 Earnings Call Transcript

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February 21, 2025
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Operator

Good day, ladies and gentlemen. Welcome to the Compania Dominos Buenaventura Fourth Quarter twenty twenty four 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.

Operator

Sebastian Valencia, Head of Investor Relations. Mr. Valencia, you may begin.

Sebastián Valencia
Investor Relations at Compañía de Minas Buenaventura

Good morning, everyone, and thank you for joining us today to discuss our fourth quarter twenty twenty four 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.

Sebastián Valencia
Investor Relations at Compañía de Minas Buenaventura

Juan Carlos Ortiz, Vice President of Operations Mr. Aldo Masa, Vice President of Business Development and Commercial Mr. Alejandro Morozas, Vice President of Sustainability Mr. Renzo Majer, Vice President of Projects Mr. Juan Carlos Alazar, Vice President of Geology and Explorations Mr.

Sebastián Valencia
Investor Relations at Compañía de Minas Buenaventura

Rogel Enabides, Chairman and Mr. Raul de Enabides, 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 a market close. Please note that today's remarks include forward looking statements that are based on management's current views and assumptions.

Sebastián Valencia
Investor Relations at Compañía de Minas Buenaventura

While management believes that these assumptions, expectations and projections are reasonable in view of the currently available information, we 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 in 02/20/2025. Let me now turn the call to Mr. Alejandro Garcia.

Leandro García
General Manager at Compañía de Minas Buenaventura

Thank you, Sebastian. Good morning to all and thank you for joining us today to discuss the quarterly results of the company. On Slide two is our cautionary statement, important information that I encourage you to read. Today, we will be discussing our performance for the fourth quarter of twenty twenty four, highlighting key achievements and strategies moving forward. After the presentation, we will be available for Q and A session, where our team will be happy to answer your questions.

Leandro García
General Manager at Compañía de Minas Buenaventura

Next slide please. I would like to highlight a few key areas that contribute to our strong fourth quarter twenty twenty four results. Full year EBITDA 2024 from direct operations excluding the sale of Jopiloma's royalty company reached $431,000,000 compared to $199,000,000 reported in full year 2023, excluding the sale of contact. This performance is also reflected in a higher EBITDA margin of 37% compared to the 24% in the previous year. Full year 2024 net income including the August 2024 sale of Chapiloma Royalty Company was $402,700,000 compared to $19,900,000 in net income for the full year of 2023, including the sale of Contact.

Leandro García
General Manager at Compañía de Minas Buenaventura

The year ended with a cash position of $478,000,000 and a total debt of $627,000,000 resulting in a leverage ratio of 0.34x. On 02/04/2025, when Aventura issued senior unsecured notes for $650,000,000 maturing in 02/1932 with a 6.8 annual interest rate coupon. The proceeds will be used to refinance its our 5.5% senior notes due 2026 and for general corporate purposes. Simultaneously, Buenaventura completed a tender offer for the purchase of any and all of its bonds maturity in 2026, successfully repurchasing $4.00 $1,000,000 or 72.98% of the total outstanding bonds. On 12/12/2024, when Aventura received $78,300,000 in dividends related to its stake in Cerro Verde and received a total of $166,500,000 in dividends for the full year 2024.

Leandro García
General Manager at Compañía de Minas Buenaventura

The total CapEx for the year 2024 amounted $378,000,000 with $291,000,000 allocated to the San Gabriel project. In the full year 2024, silver production reached 15,500,000 ounces, 69% higher compared to the 9,200,000 ounces produced during the same period in last year. Of this total, 10,500,000 ounces came from Uchucchacua and Jumpac Complex. Finally, Buenaventura's Board Of Directors has proposed a dividend payment of US0.2922 dollars per share. We have resumed dividend payments policy reaffirming our commitment to delivering returns to our investors.

Leandro García
General Manager at Compañía de Minas Buenaventura

Moving forward to our 2025 guidance in the next slide. We anticipate a stable copper and silver production at both El Brocal and Nuchuchaquayumpa maintaining consistent output level. Regarding gold production, our primary focus will be on the San Gabriel project, which is expected to become our main gold producing asset in the coming years, playing a key role in our long term growth strategy. Moving on to our cost structure in Slide five, the all in sustaining cost for the fourth quarter of twenty twenty four increased by 26 compared to the same period in the previous year. This rise is primarily driven by increased exploration activities aimed at supporting the company's long term growth and resource development strategy.

Leandro García
General Manager at Compañía de Minas Buenaventura

It is also important to highlight that the year over year decrease in all in sustaining costs was primarily driven by lower commercial deductions and high by product credits mainly from JMP. Moving on the costs applicable to sales trend. As you can see, copper cash increased in the quarter mainly due to lower byproduct credit contributions at El Brocal. Silver costs applicable to sales has increased year over year, but was consistent with the expectations for this quarter. Gold cost applicable to sales has increased year over year, primarily driven by lower grades at Tambo Maio and Orcopah.

Leandro García
General Manager at Compañía de Minas Buenaventura

On the next slide, we will present free cash flow generation. The fourth quarter twenty twenty four cash position increased during the quarter, driven mainly by the strong performance of El Brocal, Uchuchacua and Yump and dividends of course received from Cerro Bal. Despite the investment made in San Gabriel and the fact that we fully paid the outstanding debt at El Brocal, around $50,000,000 In addition to these drivers, the EBITDA to free cash flow reconciliation reflects Buenaventura's growth pace with significant CapEx investment related to San Gabriel and El Orcal's debt payment. Moving on to the Slide seven. This slide shows San Gabriel's cumulative progress, reaching 71 overall completion by fourth quarter twenty twenty four, primarily driven by finishing the engineering and procurement.

Leandro García
General Manager at Compañía de Minas Buenaventura

The construction timeline remains on schedule. We anticipate commencing the ramp up phase in the third quarter of twenty twenty five, followed by the production of the first gold bar in the fourth quarter of twenty twenty five. However, this milestone remains subject to the timely approval of the necessary permits. On the next slide, we are showing the processing plant's progress that will operate at 3,000 tons per day. Currently, the primary crusher mechanical works are at 97%.

Leandro García
General Manager at Compañía de Minas Buenaventura

The Sac and Bulge Mechanical Works are at 75. And finally, the CIL Tanks Mechanical Works are at 87%. Moving on to Slide nine, we can see the progress of the main components of the plant. In Slide number 10, we are showing the progress at the filter tailings plant that currently is at 55. As we move to Slide 11, I would like to highlight our progress with implementation of the UDF mining method, which aims to optimize ore recovery and reduce dilution.

Leandro García
General Manager at Compañía de Minas Buenaventura

Our structured implementation program includes three key initiatives. First, dedicated experts with over fifteen years of experience in this mining method. Conducting a trial mine at Tambo Maio to evaluate and refine its application. Carrying out benchmarking business to four mines in Nevada, USA to gather best practices and insights. This will ensure a successful and efficient integration of the UDF method.

Leandro García
General Manager at Compañía de Minas Buenaventura

To conclude the presentation, I would like to share a few final thoughts. First, we have strengthened our balance sheet through successful bond issuance. This has improved our financial position, providing us with greater liquidity and flexibility to support future growth. Second, the year 2025 will be a significant transition for us as the commencement and ramp up of production at San Gabriel will mark an important milestone in our growth strategy and set the stage for long term success. Third, we are seeing a stable copper and silver production with consistent performance from our flagship assets, El Brocal, Uchucchacua and Yumpa.

Leandro García
General Manager at Compañía de Minas Buenaventura

We are maintaining a steady output and operational stability. Finally, we are committed to returning value to our shareholders. We have resumed dividend payments by affirming our commitment to delivering returns and creating value for our investors. These reflect our dedication to sustainable growth and shareholder value. Thank you for your attention.

Leandro García
General Manager at Compañía de Minas Buenaventura

I will hand the call to the operator to open the line for questions. Operator, please go ahead.

Operator

We will now begin the question and answer session. Our first question today is from Carlos de Alba with Morgan Stanley. Please go ahead.

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

Thank you. Good morning, everyone. So on San Gabriel, construction is 63% completed. Obviously, you have four more quarters to go. But what are the key elements of the construction of the project that are still pending?

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

And what would be in your from your perspective the most critical aspect of them or the one top one, top two critical aspects of the construction that is pending? And then if you could remind us as you obviously further move the project along and with the new realities of commodity prices and cost inflation. Can you remind us a little bit on the economics that you see for the project? What is the cost the cash cost and the also same cost that you expect for the project maybe in terms of profitability or IRR for the investment, how have you seen that now? I have a couple of other questions.

Leandro García
General Manager at Compañía de Minas Buenaventura

Of course. Thank you, Carlo, for your questions, for both questions. Here with us is Renzo that can give you an update of the next milestones that we have in the project. Please, Renzo, go ahead.

Renzo Macher
VP - Projects and Innovation at Compañía de Minas Buenaventura

Yes. Hi. Thanks for the question. So as you mentioned, we have all the contractors on-site running. Now it's about completing things.

Renzo Macher
VP - Projects and Innovation at Compañía de Minas Buenaventura

So we are starting with the first windpack commissioning for the electric ones in the crusher circuit. And next is going to be the C1 and C2 commissioning of the crusher area. And after that, the carbon leaching, in leaching area. So that's kind of the three main goals for the next three months, something like that.

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

Thank you, Renzo. And any comments on the profitability?

Leandro García
General Manager at Compañía de Minas Buenaventura

Sure.

Leandro García
General Manager at Compañía de Minas Buenaventura

Please, Carlos, let Juan Carlos Ortiz to give the Sure.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

Thank you, Leandro and thank you, Carlo, for the question. Yes, the cost, it's going to be in the rate of $1,400 per ounce of gold. That's going to be the cash cost for the project and we expect to produce in a full year basis in the area of 120,000 ounces of gold per year. So depending on the price, you can play with the scenarios of EBITDA that we can generate from San Gabriel.

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

Right. Fair enough. Thank you very much, Marcos. The other question I had is on dividends. So we saw the proposed dividends that we'll be discussing in the next shareholders meeting.

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

From management perspective, is this the only dividend payment that if approved will take place in 2024? And then perhaps only in 2025 once San Gabriel is starting to ramp up, potentially you have an increased dividend payment. Is that the way we should think about it?

Leandro García
General Manager at Compañía de Minas Buenaventura

Well, Carlos, you know our dividend policy is 20% of our at least 20% of our net profit. We are in permanently evaluation of the possibility to give dividends. If there is any window in the following quarters to give an additional dividend, we will do it and evaluate it. Evaluate it and do it.

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

But haven't you been paying less than that, Leandro?

Leandro García
General Manager at Compañía de Minas Buenaventura

Excuse me?

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

I thought you have been paying less than the 20%?

Leandro García
General Manager at Compañía de Minas Buenaventura

Yes. We in the last three years, we have been paying $20,000,000 and the reason of this limited payment was because we were engaged in the construction of San Gabriel. We have some operational problems that we have resolved in the last three years. So but now we are in a different position and we have to reward the patience of our investors.

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

Okay. So what so in other way, you may pay more than $20,000,000 in dividends in 2024 or that would only take place in 2025? That's basically what I'm asking.

Leandro García
General Manager at Compañía de Minas Buenaventura

In 2024, we paid $20,000,000

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

Sorry, yes, my mistake. $2,025,000,000 dollars sorry or only $2,026,000,000 dollars So in 2025, would you pay $20,000,000 only and then in 2026, you potentially pay a little bit more?

Leandro García
General Manager at Compañía de Minas Buenaventura

No, no, no. In the division the management the Board is proposing this date to the annual general meeting is around $80,000,000 It's 20% of our net profit.

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

Okay. That's clear. Okay. Excellent. And then last question.

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

How is the relationship going with Antofagasta? What are what do you think that you as a management team and want to recruit as a company can lever up this partnership or this investment that Antofagasta did a few a couple of years ago and the two Board seats that they have. Can you maybe provide some examples of initiatives or

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

things

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

that you could do together, please?

Leandro García
General Manager at Compañía de Minas Buenaventura

Well, let me tell you that, we as management team, we feel comfortable with the strategy we have proposed to the board. And Antofarasta as part of the board, both of them are very supportive to the team strategy and we are continuing with the same strategy that we proposed a couple of years ago, a year ago. So we continue with our plan with our flagships, our effort to increase visibility of our company. No, we feel comfortable with them also. We feel them very supportive.

Carlos de Alba
Carlos de Alba
Analyst at Morgan Stanley

Okay. Thank you very much, Leandro, Juan Carlos and Renzo.

Leandro García
General Manager at Compañía de Minas Buenaventura

You're welcome, Carlos. Thank you.

Operator

The next question is from Cesar Perez Novo with BTG Pactual. Please go ahead.

Cesar Perez Novoa
Analyst at BTG Pactual

Yes. Good morning, gentlemen. Just continuing here on San Gabriel, I'm just going to piggyback on Carlos' discussion. My question specifically is, if there is any risk related to completion of the asset? I know that you are well advanced and the assembly risk is minimal.

Cesar Perez Novoa
Analyst at BTG Pactual

But is there anything that investors should consider in relation to weather or perhaps rain as we go into the winter months? That would be my first question. And my second question relates to El Brocal. Your costs increased by around 36% year on year in the quarter. And as Leandro mentioned, this relates to lower byproduct contributions.

Cesar Perez Novoa
Analyst at BTG Pactual

So should we assume that cost for the copper circuit will remain at this level throughout 2025, that is circa around $6,800 per metric tonne, at least that's what on the report. Considering of course that your silver guidance for this unit is expected to fall in 2025 Or is there anything that will reverse this?

Cesar Perez Novoa
Analyst at BTG Pactual

Those would be my questions.

Leandro García
General Manager at Compañía de Minas Buenaventura

Thank you, Cesar. For San Gabriel, Renzo can give you an idea. He's, of course, our Vice President of Project. He's in charge of San Gabriel.

Leandro García
General Manager at Compañía de Minas Buenaventura

And also he's part of our management committee risk. So we continuously are evaluating the risk for all our operations and especially for San Gabriel. Please Lorenzo, go ahead.

Renzo Macher
VP - Projects and Innovation at Compañía de Minas Buenaventura

Yes. Thanks for the question. Yes. There's no risk about procurement because everything has been ordered already. The new year is complete.

Renzo Macher
VP - Projects and Innovation at Compañía de Minas Buenaventura

In regards to rain, the rainy season in Peru is from December to March with the highest rain on February. So we're about to finish the rain. Of course, there are some small delays due to the rain and the storm alarms, but nothing that we can recover in the following months. Commissioning and everything is going to be this is on the South Part of Peru, so it's very dry. So I don't foresee any problems with the weather.

Renzo Macher
VP - Projects and Innovation at Compañía de Minas Buenaventura

We passed the worst part already. There's all of course, the social issue is always pending. We're managing that so far. We haven't had a single stop date. So I don't foresee any bigger problems there.

Renzo Macher
VP - Projects and Innovation at Compañía de Minas Buenaventura

And at the end, the last one is the permits. So as soon as we finish construction, we are going to start working with the permits and there's an authority process that we need to go through as we are aiming at completing construction towards May, June. So we have some time to work with the authority to get the permit to

Renzo Macher
VP - Projects and Innovation at Compañía de Minas Buenaventura

operate.

Leandro García
General Manager at Compañía de Minas Buenaventura

Thank you, Renzo. And for the question related to Roccal, Juan Carlos here, Cesar.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

Thank you, Cesar, for the question. Yes, we expect to be in the range of $6,500 per tonne of copper, the cost for air brokal. We are getting stable at that range. And this is a combination of two things. We are lowering our unit cost in the mine by reducing the unit cost per tonne, move from the mine and processing the processing plant.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

And at the same time, we're getting closer to the average grade of copper of our reserve, which have been mining slightly over our average grade in the reserves or getting closer and closer kind of catching up with the average grade. So it's a balance between increasing the tonnage, reducing the cost and reducing the grade, getting closer with copper grade, getting closer to the average of our reserve to build an asset of more than fifteen years life of mine. So under all these combination of factors, we expect to have either $6,500 per tonne of copper, the average cost for a Brocal.

Cesar Perez Novoa
Analyst at BTG Pactual

All right. Thank you very much. And sorry, Juan Carlos. Just one more. At Coimolache, per the stated mine plan, gold production in 2025 is going to grow as you expand your leach pad.

Cesar Perez Novoa
Analyst at BTG Pactual

How much of this expansion will translate to cost? I believe that your average cost last year was around $1,600 per ounce. Is this going to move this year?

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

Yes. The cost is going to keep the same for the initial three quarters of the year up to August, September, in which we will get the permitting for the charging fresh ore into the leaching pads. So for this nine months, eight months up to August, September, we will keep the demand the same cost as we had in 2024. From the time we start placing fresh ore into the pads, August, September, November, December this year, the cost of the product cash cost will come down. So this is going to be an inflection point also for Cubo Lache.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

Once we get the permit, when we get the full production, our production cost, our cash flow will came down in the last quarter.

Cesar Perez Novoa
Analyst at BTG Pactual

All right. Thank you very much, Juan Carlos, Rezo and Leandro. Thank you very much.

Leandro García
General Manager at Compañía de Minas Buenaventura

Thank you, Cesar.

Operator

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

Tanya Jakusconek
Analyst at Scotiabank

Great. Good morning. Thank you so much for taking my questions. Just wanted to come back on San Gabriel, and thank you for the slides showing the progress. It's great to see.

Tanya Jakusconek
Analyst at Scotiabank

I can see everything pretty much on surface and that's great. But I wanted to move to the underground if I could and maybe someone can help me. Can I just get an update on where we are on the underground in terms of getting the stopes ready because the mill will be ready, but I need to understand where are the stopes in terms of preparation for ore to be delivered to surface? Most important, I would like to understand how your ground conditions are and the testing of these four mines in Nevada. Can you kind of give me what mines you benchmarked against and sort of the costing there and maybe what you are experiencing here?

Tanya Jakusconek
Analyst at Scotiabank

I know you're doing a trial test at Tambo Mayo. Maybe you haven't done one yet at San Gabriel, but I'm just trying to understand how the underground is being positioned to be ready to deliver ore?

Leandro García
General Manager at Compañía de Minas Buenaventura

Thank you, Tanya. Thank you for your question. Please Juan Carlos.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

Sure. Well, regarding the progress on the other mine, we are on track, our plans. We have two set of crews developing the mine with a local contractor, the mining contractor. So we are on track of what we plan to do. We already have right now like 20,000 tons of ore already in surface along with the development through the ore body.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

We are stockpiling that material in the surface rain mix to the processing plant. We expect to grow that stockpile up to almost 300,000 tons by October, November this year. And of course, there will be plenty of ore in surface to catch up with the start up of the processing plant, with the commissioning and the final operational settings of the processing plant. So we are we feel comfortable with the progress on the underground mine. Along with that, we placed an order with Epiroc to a complete fleet for our mine development and mining activities.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

That fleet is going to be delivered by Epiroc since July. June, July and August, all the fleet will be delivered, our conventional equipment, not seeming fancy. So we don't expect any risk. We are training our people already, the new people that we are hiring around the San Gabriel footprint. So everything, all the plants are working together.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

Regarding the ground condition, we knew that it's going to be a poor ground. So it's something that we can control right now with shortcrete. There is no water underground. So it's a plus on the sense that we don't need to deal with that problem from the ground condition standpoint. Regarding the benchmark that we make, we are using all the parameters like this one mine that belongs to I-eighty, it's Granny Creek, the other is Cortes Mine that is operated by Nevada Gold Mines.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

But we are taking not the cost, but the production rates, like the KPI of how many tons you need to break with jumbo, how many tons you need to haul with a max with a loader, etcetera, etcetera, etcetera. And we use those KPIs and translate that into our local metrics of operating costs. We have to take into consideration that an average operator in the state is in the range of $100,000 or $120,000 per year. In Peru, the same operator is a fraction of that. So we are taking that into consideration in order to make the local reconstruction of the operating cost for San Gabriel.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

So that's the reason we expect to be in the range of $140 to $160 per tonne, whole unit, this is the mine, the processing plant and placing the tailings in the dry stacking system. I hope I can answer your question on the dryer.

Tanya Jakusconek
Analyst at Scotiabank

Yes. The only thing I mean is, so you've got the four grams, you're doing the shock treat, you said you have no water, so that's good, right? You said no water?

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

Yes.

Tanya Jakusconek
Analyst at Scotiabank

That's correct. And you've got that $140 to $150 per tonne. What do you think so in terms of the ore that you've extracted that 20,000 tonnes, which I'd like to have the grade of what that stockpile is and what that 300,000 tons stockpile will also be. Is the grade exactly what you expected it versus the block model?

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

Well, we are pretty much in line. We are slightly above that, slightly above. We expect it to be running along blocks with four to five grams per ton. We are more on the over the five grams range of the material that we already have in surface for the 20,000 tonnes that we have in surface. For the whole year, we expect to place in surface in order 4.5 grams to almost five grams.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

That's the overall grade of the material that we're going to extract from the mine alone this year.

Tanya Jakusconek
Analyst at Scotiabank

And when you proposed your stopes, what sort of mining dilution is in your stope model? Is it meeting what in your stope model? Is it meeting what dilution you expected? I'm just looking at the little on page five of the little photos of the underground. I don't even know if it has San Gabriel.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

Yes. We will at this moment, we are not having any dilution because we are opening the tunnel, what we call the first route. Once we have placed the backfill and we need to make the secondary breaks in which we will have waste on wall on the left and the right side of the walls of the new tunnel in between these two backfill areas is where we start expecting to have some dilution. Dilution for those blocks is expected to be around 12%, but we need to monitor that because it's a consequence of several factors like drilling, blasting control, the quality of the filling. So probably we need to fight you on that at the early stage of the mine.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

And probably after a few months, we will have a good assessment of is that more close to 10% or more close to 15%. Right now, our asset is in the range of 12% dilution.

Tanya Jakusconek
Analyst at Scotiabank

Okay. And can I ask also just finishing off San Gabriel? I saw on the reserves that you didn't report reserves for San Gabriel and you're under you're redoing your reserves. I was a bit confused about that because I would have assumed all of your reserves would have been reported under a specific standard. What was it about San Gabriel that didn't meet standard?

Tanya Jakusconek
Analyst at Scotiabank

And should I be concerned that these reserves are going to go down? I'm just trying to understand why the why did you have to redo the reserves only at that mine and nowhere else?

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

Yes. Remember that the I think it was in the third quarter of twenty twenty four, we report an update on the operating costs of the mine. That was a material difference between the operating costs that we have in the feasibility study. So based on that, we need to review the whole analysis in order to report kind of a fresh report for '20 F. So we are working on that.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

As you mentioned, as I mentioned, we are taking into consideration the increased operating costs, the new block model, we additionally feel drilling that we made up to October and all the parameters of operational control like dilution as you mentioned, I have been taking into consideration on a more detailed sequence. So yes, we are working on that. We will report that on the twenty eighth. We will see so far because it's not finished yet that probably we need to make an adjustment to reduce a little bit of the reserve that we report in the past. We report in order 1,900,000 ounces of gold reserve and probably we will report a little below that in this updated '20 report.

Tanya Jakusconek
Analyst at Scotiabank

Okay. And when is the report coming out?

Renzo Macher
VP - Projects and Innovation at Compañía de Minas Buenaventura

April 30,

Renzo Macher
VP - Projects and Innovation at Compañía de Minas Buenaventura

I think.

Juan Carlos Ortiz
Vice President - Operations at Compañía de Minas Buenaventura

April 30, yes.

Tanya Jakusconek
Analyst at Scotiabank

Okay. Okay. Well, thank you so much. I'm going to leave it to someone else to ask questions, but very helpful on understanding that Gabriel and thank you for the photographs.

Leandro García
General Manager at Compañía de Minas Buenaventura

Thank you,

Leandro García
General Manager at Compañía de Minas Buenaventura

Tianjin.

Operator

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 Sebastian Valencia, Head of Investor Relations for any webcast questions.

Sebastián Valencia
Investor Relations at Compañía de Minas Buenaventura

Thank you, operator. The first question comes from Enrique Verara of Morgan Stanley. Do you expect any dividends from Cerro Verla?

Leandro García
General Manager at Compañía de Minas Buenaventura

Danny, Verde.

Daniel Dominguez
VP - Finance and Administration at Compañía de Minas Buenaventura

Yes. Well, Cerro Verde, as you know, has paid close to $170,000,000 of dividends associated to the year 2024. For the year 2024, we don't expect more dividends. However, Cerro Verde in a full year is generating in excess of $2,000,000,000 They have no debt. The CapEx that they spend every year is around $300,000,000 to $350,000,000 and working capital plus taxes is in the order of $700,000,000 With this, they are generating close to $1,000,000,000 of cash per year.

Daniel Dominguez
VP - Finance and Administration at Compañía de Minas Buenaventura

Considering that they ended 2024 with close to $700,000,000 which is in excess of their minimum cash, We do expect at this level of prices of $9,000 per ton and additional or dividends for 2025 in a similar amount that what we received in 2024.

Sebastián Valencia
Investor Relations at Compañía de Minas Buenaventura

The next question comes from Moray Yenera of Compass Group. I was wondering if you can comment on your plans for Trapeche this year and the coming milestones for the project. Also, can you comment on the Aladro project you were granted by Reimburseon?

Leandro García
General Manager at Compañía de Minas Buenaventura

For this question, maybe Renzo and Aldo can help us.

Renzo Macher
VP - Projects and Innovation at Compañía de Minas Buenaventura

Sure. So in Tropicce, as you remember, we have inside on-site column leaching plants. We are unloading the last set of column testing for variability. We have our QP team, all the QP team for the feasibility study visiting the site last month. And so that's one of the big milestones for this year to get up 60% advance in the final world class feasibility study.

Renzo Macher
VP - Projects and Innovation at Compañía de Minas Buenaventura

And we also in the permit section, we finished answering all the questions from the environmental impact assessment. And we're waiting for any second question, but if not, we're expecting to have that towards the end of the year. And finally, we keep working with the communities to secure the remaining 20% of the potential power line. That's going to be the plan for this year.

Aldo Masa
VP - Business Development and Marketing at Compañía de Minas Buenaventura

And regarding the Algarrovo project, one of this project will be executed to a transfer and option agreement between Buenaventura and Pro Inversion. It consists in three stages. The first stage consists of a period of three years to reach a social agreement with our community in Pura. Once this agreement is reached, it's going to start a period of five years to obtain permits and authorization. Of course, we have to execute a product of water supply that will cost $5,000,000 approximately, then start a mineral exploration and of course make a feasibility study.

Aldo Masa
VP - Business Development and Marketing at Compañía de Minas Buenaventura

And then when Aventura will decide to exercise the option or not. The third stage will proceed, consisting in the construction of a mining operation, if we decide to exercise that option. And the CapEx will be between $400,000,000 and $800,000,000

Sebastián Valencia
Investor Relations at Compañía de Minas Buenaventura

That's it. At this time, there are no further questions. I would like to turn the call over to operator.

Operator

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.

Leandro García
General Manager at Compañía de Minas Buenaventura

Thank you, Borrero. And before we conclude today's conference call, I would like to thank you for the time and effort you dedicated in joining us today. Your participation and input are greatly appreciated. Thank you very much. Have a wonderful day.

Operator

Ladies and gentlemen, that concludes Buenaventura's fourth quarter twenty twenty four earnings results conference call. We would like to thank you again for your participation. You may now disconnect.

Analysts
    • Sebastián Valencia
      Investor Relations at Compañía de Minas Buenaventura
    • Leandro García
      General Manager at Compañía de Minas Buenaventura
    • Carlos de Alba
      Analyst at Morgan Stanley
    • Renzo Macher
      VP - Projects and Innovation at Compañía de Minas Buenaventura
    • Juan Carlos Ortiz
      Vice President - Operations at Compañía de Minas Buenaventura
    • Cesar Perez Novoa
      Analyst at BTG Pactual
    • Tanya Jakusconek
      Analyst at Scotiabank
    • Daniel Dominguez
      VP - Finance and Administration at Compañía de Minas Buenaventura
    • Aldo Masa
      VP - Business Development and Marketing at Compañía de Minas Buenaventura
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Earnings Conference Call
Compañía de Minas Buenaventura S.A.A. Q4 2024
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