Compañía de Minas Buenaventura SAA Q3 FY2024 earnings call

• EBITDA from direct operations for Q3 2024 was $132 million, with a 40% margin vs 25% in the prior year.
• Net income in Q3 2024 was $237 million vs a $28 million net loss in Q3 2023.
• Silver production in Q3 2024 was 4.4 million ounces, up from 1.9 million ounces YOY; gold production up 7% YOY.
• Buenaventura sold its Chaupiloma Royalty Company to Franco-Nevada for $210 million in Q3 2024.
• CapEx in Q3 2024 was $98 million, with $77 million for the San Gabriel project.
• Credit rating upgraded to B1 by Moody's with a positive outlook.
• Cash position was $458 million, debt $675 million, net debt-to-EBITDA 0.5x.
• All-in sustaining costs decreased 69% YOY.
• San Gabriel project was 65% complete by Q3 2024.
• Uchucchacua exceeded throughput expectations, Yumpag had steady production, and El Brocal processed stockpile ore.

In the third quarter of 2024, Compañía de Minas Buenaventura's EBITDA from direct operations increased to $132 million, with an EBITDA margin of 40% (compared to 25% in the previous year). Net income for the third quarter was $237 million, contrasting with a $28 million net loss in the same period of 2023. Copper production decreased 9% year-over-year, while silver production reached 4.4 million ounces (a significant increase from 1.9 million ounces in the prior year, with 3.2 million ounces from Uchucchacua and Yumpag). Gold production increased 7% year-over-year. CapEx in the third quarter totaled $98 million, with $77 million allocated to the San Gabriel project. The company's cash position was $458 million, with total debt of $675 million, and a net debt-to-EBITDA ratio of 0.5x. All-in sustaining costs decreased by 69% year-over-year.

• For 2025, expected EBITDA is $350 million to $380 million.
• Expect $150 million in dividends from Cerro Verde.
• San Gabriel is projected to have an EBITDA of ~$100 million per year, cash cost of ~$1,300, sustaining CapEx of $5 million to $7 million per year, and production of ~130,000 ounces per year.
• 2025 cash position is expected to start at around $370 million.

• Permit issues for Coimolache operations could impact profitability.
• Rock quality at San Gabriel may lead to higher costs due to increased reinforcement and backfill needs.
• Dependence on key mines' production and timely permit approvals for operations like Coimolache.

Q: El Brocal copper production fell 10% YOY despite average rates of 12,000 tonnes per day. Why?

A: In Q3 2023, there was exceptional spot production from the open pit (1,400 tonnes of fine copper), whereas in Q3 2024, copper production came solely from the underground mine.

Q: Economics of the San Gabriel project?

A: San Gabriel is projected to have an EBITDA of ~$100 million per year, cash cost of ~$1,300, sustaining CapEx of $5 million to $7 million per year, and production of ~130,000 ounces per year.

Q: Cerro Verde dividends expectations?

A: Expect ~$50 million to $60 million in dividends from Cerro Verde in 2025.

Q: Coimolache profitability in coming quarters?

A: Waiting for permits; expect production to resume in the third quarter of 2025, with profitability resuming as fresh ore is placed on the leach pad.

Q: Increase in San Gabriel cash costs?

A: Due to rock quality, requiring more reinforcement and a different mining method (underhand vs overhand), leading to higher expenses for cemented backfill.

Q: Low sustaining capital for San Gabriel?

A: Sustaining capital is low due to the compact footprint of the project and experience from previous mines, keeping maintenance costs manageable.

Q: Labor inflation forecast?

A: Expect 2% to 4% inflation in labor costs, with labor and contractors making up 30% of total costs.

Q: Capital allocation of cash?

A: Proceeds from Cerro Verde dividends and asset sales will be used to fund the San Gabriel project, with revolver facilities remaining undrawn.