Q1 2022 Compania de Minas Buenaventura SAA Earnings Call

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Good day, ladies and gentlemen, welcome to the company a D amino sporting event venture a first quarter 2022 earnings conference call.

At this time all participants are in a listen only mode and please note that this call is being recorded.

I'd now like to introduce your host for today's call Mr. Gabriel solid Investor Relations. Mr. <unk> you may begin.

Okay.

Good morning, everyone and thank you for joining us.

Discuss our first quarter.

Today's discussion will be led by Mr. Landa.

Oh sure.

Also joining our call today and available for your questions are Mr. Daniel Dominguez, Chief Financial Officer, Mr. Juan Carlos Ortiz, Vice President of operations, Mr. Ando Vice.

I appreciate the development and commercial Mr. Alejandro <unk>, Vice President of sustainability, Mr. Mohit <unk>.

Mr. Juan Carlos <unk> geology, and exploration has been a year.

Okay, Chairman and Mr relevant as they render.

This conference call will include forward looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements.

Any such statements should be considered in conjunction with cautionary statements within our earnings release and risk factor discussions I encourage you to read the full disclosure concerning forward looking statements within the press release, we filed on April 28.

With that let me now turn the call over to Mr. Landa, Chief Executive Officer, Andrew Pease go ahead.

Thank you.

And good morning to all and thank you for attending this conference call.

We started this presentation, we would like to wish you. Your funding we are Brian Hill will be difficult.

Okay.

We are pleased with <unk> first quarter 2022.

One of them.

We have prepared a powerpoint presentation, which is available in our website.

Before we go forward. It please take a moment to review the cautionary statement shown on slide two.

Moving on to slide three.

Whereas follows.

First quarter 'twenty to EBITDA from direct operations reached 431.

9 million U S dollar compared with $39 7 million reported in the.

We reported third quarter journey.

One.

300 million, resulting from the sale of one of them to this day.

Gotcha, and 45 million from Newmont's contribution.

Cause future course.

Of course.

Third quarter 'twenty to EBITDA, including Agile company reached $578 7 million compared to U S. Dollar 168 8 million in first quarter.

Sure.

Third quarter net income reached $636 2 million.

U S dollar compared to <unk>.

$64 million.

For the same period in 2021.

Third quarter 2000 and through exploration.

I've got the 18 units increased to $14 million.

For $9 $3 million in the same period last year aligned with the company's strategy.

Primary owner what age.

Third quarter capital expenditures were $19 9 million compared to 13 in the same period or 2021.

Third quarter turning to Capex.

$2 8 million in Capex related to the sound of your boy.

447 million in Capex related.

The company continued its strategy of programs would leave you with using fixed cost I think we'll keep Jaguar mine to improve the cost structure efficiency window for Asia.

First quarter 'twenty to Covid related expenses were five $3 million compared to the 11 7 million reported in the first quarter 'twenty one.

2022, COVID-19 related expenses.

So between bill and $14 million.

Buddha gosh for social reach.

30.

Mm 397, 4 million as much as of March 31st 2022.

Net debt was reduced to one <unk>.

<unk> hundred 71 million achieving a one.

<unk> volume 71 times.

Net debt to EBITDA.

Aligned with the company's commitment to believe their aging on March one.

Buddha fully paid.

Syndicate loan amounting to 275 million.

On March <unk>.

<unk> the company counsel also $50 million Opex, where it won't be impacted.

On March 30, and got real mine project received the government of Peru.

<unk> approval.

<unk> deployments that require permits and.

To enable the company immediately commenced mining project project construction development.

2022 production guidance will be updated.

The second quarter due to a new mine plan in progress for a broker.

In the unexpected one.

The $1 5 million decrease in Chile was important from a year.

Moving on to slide four ESG corporate service.

As presented before.

Here, you will find nowhere materiality metrics. This year, we will start working on the go signal that's on topics like it's behind us and get supply.

Like Jane climate change and energy.

And as he views.

All of the brokers make on these first quarter is shown in the next slide.

Moving on to slide five.

You can find some key indicators regarding our ESG aside.

For example on the environment.

<unk> is committed to responsible water.

Achieving a 99 assembled circulation at our open people for Asia, and 83% of our underground.

Also in the first quarter of 2020, we have used 74% of renewable energy right.

Primarily from our hydro electric a blend.

This year, we will focus on measuring our carbon footprint.

Regarding the social baila as we have always mentioned taking care of our workers Hill is our top priority and we will continue working on this.

We have achieved a 92% fulfillment of our social commitment.

Also we have made more than $120 million low bulk purchases.

Finally.

Regarding the government's pilot.

We will focus on optimizing our business and the construction of <unk>.

Our San Gabriel project.

Which are which are key value generate.

Moving onto slide six financial highlights.

Total revenues during the first quarter were.

$233 million, which is 27% higher in comparison to the first quarter of 2021.

As we mentioned before.

Separately regulations for the first quarter.

Increased to $432 million in comparison.

During the first quarter last year.

All forward.

We're doing as a company for the first quarter of 2012.

H boyfriend was $79 million less in comparison to $163 million I think that's accurate.

The capex increase to $20 million.

First quarter of 'twenty two.

Compared to $13 million in the same quarter.

Last year.

Moving onto slide seven and eight.

The old production total gold attributable production in the first quarter of 2022.

<unk> 49000 ounces with Gs.

31.

Hi, Yes, Vega aboard that from the same quarter previous year.

Silver production.

Quarter West to millennials, which shows a decrease of 42% compare with the figure reported on the first quarter.

Or was.

This is a direct result of the.

This expansion level based on that job.

In the third quarter of 2022 nine.

Akshay will produce a slight decrease compared to the first quarter of last year.

In the case of lead equity production was 4000 metric tons in the first quarter of 2008.

3% lower in comparison to the first quarter.

Finally, our Cobra attributable production for the fourth quarter of the year was 27.

And metrics.

An increase of 13% when compared with the same view in 2010.

Moving on.

Hi, Nate.

All in sustaining cost and cost applicable.

Applicable to sales guys.

The all in sustaining cost from our direct operations and get this quarter decreased by 34, 34%.

Two $1131 barrels favorable.

The cost applicable to sales for the first quarter of 2012 were as follows for gold.

26 <unk>.

<unk>, 13% lower than a year ago.

<unk>.

15.

21 U S dollar per ounce, which is 22022% lower than.

A year ago or led.

<unk> thousand 375, you as long as export method, which.

<unk> four <unk>.

Hi, yes, a year ago or six six.

631 U S <unk>.

Medical which is 19 high yet comparison a year ago.

Finally in the case of seeing that goes up a bit.

The savings was.

<unk> hundred $88 per metric ton, which is 38% higher than a year ago.

Moving on to slide 10, our pipeline project.

Here, we are presenting.

And this is like the current development level for each of our projects.

And slide 11, Sangamo did we obtained the approval.

With widespread these enable us to immediately commence construction.

The early works.

We are.

Starting to release purchase and service all of it back.

Or is the construction.

Moving on to slide 12.

But at Beach.

One side metallurgical column testing is deep on progress.

Our completed one of.

Two.

Environmental and.

That's it.

And environmental assessment.

Workshops in their field.

Only missing one would be held by the second quarter of 'twenty.

A cooperation agreement with four.

Our <unk> community.

They're finding other stages.

We finished the report.

Our land land access with powerful results.

Moving on to slide 13, and our <unk> Park project.

While malecha is board approved by the ability to states.

Binnie.

Plenty of Jimmy was infill drilling program for me Hi, Rachel.

Thank you for your attention and the pull back to the operator to open the line for questions. Operator. Please go ahead. Thank.

Thank you we will now begin the question and answer session.

Ask a question you May press Star then one on your Touchtone phone.

Youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble our roster.

Our first question comes from Carlos de Alba from Morgan Stanley . Please go ahead.

Yes, good morning, gentlemen.

We're doing fine.

First question when you say, if you could give us an even more color on that and look at it.

And what has led to the revised mine plan.

And what would be the impact.

Besides the production of a new game.

On cost for.

From that operation and in days any other meaningful probably not but I'll just ask.

Any other meaningful changes too.

On the other metals that operation.

And then you also could comment.

All in all.

Yes, the discrepancy between EBITDA and cash flow generation.

So operation Wise negative EBITDA was really strong.

That he has to do potentially with the discontinued operations the results from continuing operations.

How much of the.

How much taxes cash taxes did you guys paid on the profits that you booked 40 from discontinuing operations. Thank you.

Thank you Carlos.

With respect to your question of the production of a go.

This is a consequential.

The event was having in March that was in.

I'd like to do.

With the market.

We have to change that.

In the mining plan.

But more colo.

One Carlos will be for you and the other thing about <unk> that of a constellation with.

<unk> of course here is Danielle so we can begin with within the guidance.

We've got a little ahead.

Thank you Pavel for the question yes.

A landslide.

For <unk> in the west flank of the <unk> beat.

So in that area, we have remediation plan that is in place right now and probably will take between three to four months to remediate that area with meaningful the loose material into shallow slope in order to have safe conditions for that particular area of the mine.

We will continue with the mining of the Stroud section of helping deep and also remaining area in the north.

In addition to that we will supply or to the to feed ore to the processing plant from the poly metallic supplier that we have right next to the main crusher.

So the consequences will be a delay on the production a lot of rescheduling of the production of certain areas.

We opened.

These these axiom.

The impact of these a year will be in the range of 1.15 million ounces of silver.

These production will be delayed for 2022, probably going into 2023, we still looking for opportunities to review these as cable, but we really would it be then bridge.

Sure.

By reviewing this.

A plan broadly where we are.

Okay.

At San opportunity capture send opportunities in order to reduce the gap in timber and increase a little bit of zinc and lead but we are not on a conservative side. So far until we have more information from the study more progress on the work that has been done.

Regarding the cost.

We introduced axiom.

Being a test, but we believe it will be in the range of $3 million to $4 million of additional expenses on the open due to the additional <unk>.

Move outs of material a two.

Shallow that loves it looks on the website.

Thank you Juan Carlos.

Maybe Daniel please.

Thank you Randall.

Good morning Carlos.

Discrepancy between the EBITDA from direct operations.

Operating free cash flow that we report.

Hmm.

There are three reasons one is the department of you mentioned.

Uh huh.

February we.

On China, we solved the VEB off with you on our culture.

The.

Thanks Nathan.

Oftentimes we're paid in.

In March and this was in order of $50 million.

And this is.

Work on desktop which consolidates.

In our.

Sure.

This is the explanation of important pardon me.

The increase in taxes on the increasingly working capital which is all around.

$30 million is explained by three main factors first mutually partners Samsung Chartwell.

<unk>.

Remember that in December we.

<unk> shrunk between 17 and $20 million.

Sure.

Contracts are.

Contract.

On all saw the headcount that we are.

The adjustment of the end of the year.

So this bill.

Okay.

January February the provision was made in December so you.

Sotheby's.

Growing our costs, but disbursements big crash went out between January and February .

The same.

And we have some claims.

Our provision at the end of last year and paid in the first marker is worth around $6 million and also in December we have our the renewal of the property insurance.

<unk> and $11 million.

Remember, we made the provision on the payments were.

Executed between January and February .

$10 million to $11 million effect, that's why there is a discrepancy between the <unk>.

Free cash flow of around $70 million.

Thank you Danielle.

Again, if you have any.

<unk>. Please press Star then one.

Our next question comes from Tanya and check Jack Hu <unk> from Scotiabank. Please go ahead.

Yes. Good morning, everyone. Thank you so much for taking my call I have three questions.

First question comes back to outgrow count So I just wanted to check with you.

Why there was no adjustment to EBIT, the copper to the base metal aspects of the mine.

Lowered the guidance itself.

On the base metal products can you explain to me why that's the case.

Sure Sanjay.

Remember that we have.

Two.

Operations and broke up one of the open pit and the other examples like that.

More detail to give you on Douglas. Please go ahead.

Yes, Andrew and thank you for your question and yet.

<unk> mentioned.

The guidance for copper was not change because we will have any impact on the underground mine that 95% of the production of copper for this year.

In regard of the late <unk>.

As I mentioned.

The south wall of the open pit at another world of open pits, we're not impacted by the option. So we have to put extra fleet to remove additional material about the we will supply that.

Production.

We expect it. So finally as I mentioned, we will review that in order to see if we can reduce the gap.

With an increase effect a little bit of the lead and zinc, but at this time, we believe the main impact will be on silver.

Are they equivalent money income later on with a little bit of reduction on zinc and lead that will be.

Share with the market in our next conference call. When we have more information for stability and progress on their recommendation works.

What what I'm understanding from you is that you got it.

The way.

That's a portion of the tax that's working on zinc and lead and move it to.

We had the Wow.

We have the map slide and starting to clean up its going to be additional cleanup and then hopefully you're able to push on.

Zinc and lead when you bring the trucks back is that what I'm understanding.

Not exactly is that.

They sell their world.

Like a 100 meters away from the landslide modulate that suffer so this other world, where we continue with the.

Work, we have asphalt pretty much two weeks and now we are putting additional tracks to catch up with the scale.

<unk> in the <unk>.

So there will be positive 150 meters away from the launch of light. So we continue with the work in that area and another world.

We opened another phase is about one kilometer to the north.

So we don't have any interference that.

And we start works there for a couple of weeks well were received in the world right. Now So we believe we will.

Continue with the plan, we can catch up with these two weeks delayed that we have put into action.

Bob.

We are looking for ways.

Reducing the gap silver production nonetheless in the landslide.

And that might have a tradeoff between seamless production, but not for any substantially in terms of dollars we trade the income growth.

<unk> led with a little bit.

More income from cheaper, we will do that along the year.

Okay and for three to 4 million is related to cost then we should just put additional cost for that operation This year.

Yes.

And in terms of an updated mine plan, which had chocolate will we be getting that this year or is it next year.

Okay.

I. Thank you for your question.

As you.

Market of course, we worry about.

We are going to resume.

<unk> initiated the working to juggle we are working very hard.

We are trying to.

Shortly in the.

Our scale, but we think.

Finally that next year will be.

I expect that date to.

Expect type.

Doug I mean, and I remember it was the second half of the year or towards the end of the year with the Chaplin next year.

The second call second half okay.

And then my next question has to do with San Gabriel Congratulations on getting the permits and starting construction.

Construction that can you just maybe.

Someone give me some of the milestones that we need to get from here to 2025, when we see production.

Sure.

And I think of the opportunity.

Congratulate all the <unk> that is out there.

Made this possible.

<unk> mentioned the.

In a very tough onward domain.

And we did.

With US is our project manager and he can give you details.

<unk>.

The correct answer.

Perfect. Thank you.

Thank you very much.

We.

What we have authorization is to start with the urban works in.

Releasing the orders for equipment.

And the people.

Construction work as well as maintaining the Glen main infrastructure that hasn't been inactive for a couple of years, that's what we're going to start today.

Instead, we are going to be finishing construction towards b.

The end of 2004.

Aiming at the first bar.

So what is this.

At the end of the first half of 2025.

We'll be commercial production.

Our commercial production in 2025.

Second half.

From.

Are there anything within the construction that are critical milestones for us to watch for.

Well do it in 2020.

During 2020.

One we have been working on engineering staff, we have 32% of banking in Europe .

We're going to be.

Good evening and less uncertainty on frankly is to reach the foundation.

Of the plan and the foundation of the water damage.

Halfway information on that towards the end of 2022.

I guess that's.

That will be the first milestone of the project.

The foundation.

And then the camp site, which should be already somewhere in the second quarter of 2024, and that's when another milestone that will signal finding.

Beginning of the heavy construction.

Okay.

Okay.

As I understood. It so youre going to be putting down the plant foundation by at the end of 2022.

And then the camp site by Q2 of 2024 and place and then you have.

A bit of construction heavy construction from Q2 2024 till the time you parse outgrowth in the second half of 2025.

Correct understanding.

Yes, yes, I would just.

To make sure of that.

First the statement was.

Reaching Samsung foundation level, not improving efficiencies, reaching the foundation.

Confirming all of our.

All our models about where the foundation.

Yes, okay.

Okay got it.

The quarter before that so it's a technical side. Okay. Thank you for that and then my last question maybe for Daniel just an update on the CRA was after that.

Evidence.

We know works.

Thanks, Tom in 2022, so maybe an update on.

What are you seeing or are you expecting a dividend.

Q2.

Yes.

Good morning.

We are receiving today.

Close to $30 million.

Have you with us related to currency 21 results.

We also expect this.

Something like that.

Some of them earlier use of minority.

Additional dividends.

Half of the year, but we don't have yet.

Any any figure to report, but they are evaluating.

When we turn on additional dividends by the second half.

Okay, Okay, well congratulations on the additional $30 million Thats. Good news. Thank you.

Have a great weekend everyone.

Thank you.

Again, if you have a question. Please press Star then one.

There are no more questions in the queue that concludes our question and answer portion of today's conference call I would like to turn that turn it back to Andrew Garcia for closing remarks.

Thank you.

Before we finish today.

Today's conference call. Thank.

Thank you again.

Thank you very much for making the time to join us today.

We would like to invite you to our 22, when we do Investor day, which will be held in New York.

June six.

Eastern time Tonight.

Thank you again and have a wonderful day.

Ladies and gentlemen that concludes one adventures first quarter 2022 earnings results Conference call, we would like to thank you again for your participation you may now disconnect.

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