Q3 2023 Compañía de Minas Buenaventura SAA Earnings Call
[music].
Good day, ladies and gentlemen, and welcome to the company yet they mean US one Ventura third quarter 2023 earnings conference call.
At this time all participants are in a listen only mode.
Please note that this call is being recorded.
At this time I'd like to introduce your host for today's call Mr. Gabriel Dulles Investor.
Investor Relations Mr. Solace you may begin.
Good morning, everyone and thank you for joining us today to discuss our third quarter 2023 results today's discussion will be led by Mr. Leandro Garcia Chief Executive Officer.
So you need in our call today and available for your questions Army sturdy Daniela Domingos, Chief Financial Officer, Mr. Juan Carlos Ortiz, Vice President of operations, Mr. Although Masa Vice President of business development and commercial Mr. Alejandro <unk>, Vice president of sustainability Mr.
So Mike Harris, Vice President of project, Mr. Juan Carlos Salazar, Jody and explorations multiyear Mr. Roque Benavides.
Chairman and Mr. I would've been a yes they richter.
Before I hand over call over let me first touch on a few items on one then when our interest website you will find our press release that was posted yesterday after the market close.
Please note that today's remarks include forward looking statements that are based on management's current views and assumptions, while management believes that its assumptions expectations and projections are reasonable in view of the currently available information you are a carton 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 on October 30th 2023, let.
Let me now turn the call to Mr. Leandro Garcia.
Thank you Ariel.
And good morning to all and thank you.
You for joining us.
Today, we'll discuss the quarterly results for vehicle.
On slide two is our cautionary statement and important information rich you too right.
We assume that you have already read the results reported yesterday.
Moving on to the next slide our presentation will cover the.
Main topics shown here and we will be followed by an hour.
Q&A session.
Our team will be happy to answer your questions.
Let's begin with some overview.
For the first nine months 2023.
Our EBITDA from direct operations for the first nine months of 'twenty to 'twenty three.
This is our 27% increase as compared to the same period of the previous year.
It is worth mentioning that the figures do not include <unk>.
The $300 million obtained last year from the sale of our stake in <unk>.
Our cash position remains strong in third quarter 2023, due to strong performance at del Toro.
We are pleased to share that our dividend received from silver aware that during the quarter have contributed to $49 million.
Strengthening our overall financial performance.
It is important to note.
Where their costs are.
Our record in copper production during the third quarter 'twenty three.
430000 tonnes per day, representing 255 million pounds of copper.
After completing the processing plant operational readiness.
Successfully resume operations.
On October 29, and also received approval for the project environmental impact assessment on September seven.
Enabling <unk> to perform metallurgical test or up to 125000 tonnes of ore from duplex myeloma scope.
We are determined with our commitment to sustainability and responsible Miami Brexit while fostering production.
Although operations or they'll work on especially.
Specifically, the cookie cutter for northern mines.
Same for being suspended and.
Bruno the environmental impact.
We are able to continue focusing on increasing the underground production to 12000 tons per day as planned for the following two years.
Our consolidated production.
<unk> see.
Silver and gold.
The last three quarters.
The following results.
44000 tons of buying Goldberg, thanks to their record production or their broker.
We are on track to achieve the upper range of your guidance.
$4 9 million ounces of silver being a broker its main contributor during the fourth quarter.
2023 would you chalk and Joel will contribute almost.
Two 8 million ounces to reach their full year guidance.
100 <unk>.
11000 ounces of gold with a steady production from our Gabon.
Moving on to our cost structure in slide five.
You can see that our all in sustaining costs have increased by 34% compared to the nine month period.
Of last year.
This is primarily explained by the gold production degrees at La <unk>.
My uncle Malecha. However, it is important to mention that these figures does not include Ella's Oracle and SAP rollout.
With excellent cost performance during the third quarter of 2023.
Moving on the growth.
Applicable to sales strength.
And you can see the prioritization of corporate or guidance with better operating margins is translating into a 10% growth in the last quarter.
Cost applicable to sales has increased 29% year over year, primarily driven by lower head grades at Cagny and Tom Palmer.
However, we expect to reduce costs during the fourth quarter of 2023 with a contribution of Chartwell and <unk>.
Silver ounces.
Gold cost applicable to sales costs will remain relatively flat year over year, Despite the reserve depletion and less on high.
And lower production numbers.
On the next slide we are showing the free cash flow generation.
During the third quarter of 2023, we have increased our cash position in $20 million.
To the excellent performance from our local and dividends received from several modeling.
David that to free cash flow reconciliation is explained by the following breakdown of the inflows and outflows.
<unk> <unk> and Arco pump have.
The main contributors for the nine for the period of nine months of 2023.
<unk> y la <unk>, which will chunghwa.
EBITDA due to lower production for the first two asset <unk> and gentlemen.
Dennis on the in the <unk> mine.
However, we expect to have a positive EBITDA for the fourth quarter.
Thank you thanks to the resumption of who took Jaguar and the contribution of yield.
As we have mentioned before.
<unk> is rolling through grow.
Now growth phase with that.
Capex related to your impact on revenue.
This has been partially offset by the income taxes and dividends received from several of them.
Moving on to slide seven we are focusing the pipeline on the projects.
That has more than 10 years of life of mine.
Also we have a diversified portfolio of projects in each stage of their viability cycles enable we're not imprudent to continuously deliver new projects in the following years.
The following slides I will like to illustrate our main two projects.
In San Gabriel.
We are relaunching, a new charter with the UN mined almost six kilometers away from the core and mine. These.
These recent restart will extend the life of mine by around 15 years Youll have successfully obtained its environmental permit on the Cubs to immediate financial position for the reported provision. However in November we are going to start processing ore from the <unk> with a permit.
That allow us to treat up to 125000 tonnes of ore from the pilot scope.
Moving on to slide 10.
In the next years, when <unk> will be focusing most of it.
Its efforts in the Sangaree approach.
Because it will be a relevant contributor to the company's value.
We will add more than 14 years of life of mine to the company in this slide you can see the progress of the <unk>.
Project quarter by quarter.
The following quarter, we expect to start the field work.
Underground construct.
Correct.
Yeah.
On the next slide we are showing the air movement activities for the processing plant facility.
On Slide 11, you can see the layout of the future plan of the San Gabriel project.
With its crushing equipment on the lift of the picture going through the modeling and the grinding area.
Yet to finally reach the kind of running Leach area.
We expect to complete 100% of this facility by the first half year 2025.
On the next slide we show a couple of pictures.
<unk> component.
Of the project that are processing and plan.
Such as the mine and.
And the water treatment plant on the top left.
Also there is a real definite com site and the waste down facility.
On the bottom of the slide is that their online portal with this ventilation system.
Finally.
I would like to finish the presentation with a couple of closing remarks.
Sanger vehicle structure will progress faster as the main contractors are already on the project.
Total capex for the project remains unchanged and the start of commercial production for the second half.
<unk> 25 is maintained.
We took Jaguar <unk>.
Successfully restarted after two years of care and maintain.
You impacts environmental permit was approved and production will start in November.
<unk>.
Our record production of copper this year.
The open pit temporaries as patients for the average for the nine months of 2023.
Half reviews, consistent corporate gas by 10% configured membranellar tourist effort to obtain <unk> cost.
Thank you for your attention I will handle the call back to the operator to open the line for questions.
Operator, Please go ahead.
Ladies and gentlemen at this time well begin the question and answer session.
Ask a question you May press Star and then one on a touchtone telephone.
You are using a speaker phone we do ask you. Please pickup your handset before pressing the keys to ensure the best sound quality.
To withdraw your question you May press Star two.
Please also note you may.
You may present your questions through the webcast by typing in hitting submit.
At this time, we will pause momentarily to assemble our roster.
Our first question today comes from Carlos de Alba from Morgan Stanley. Please go ahead with your question.
Yes, good morning, gentlemen.
So first question is.
Regarding a sample Bayou.
In the explanation of the production performance. It is noted that.
Yes.
In order to reach the mines Upper zone.
We're required to do more rehabilitation.
And then you will be able to access these high grade ore.
When would you be in a position to reach these high grade zone and how much in expenses.
Expenses are capitalized expenses when you have to incur in order to do so.
Thank you. Thank you Carlos for your question.
Actually yesterday in that or is in the upper part of the of the mine.
I will net on governance of these to give more explanation.
The timeline to reach that car lease Hong Carlos.
Orlando. Thank you Carlos for equation in the upper part of <unk>. We are already there. We are mining that area. We expect this year to mine at a certain pace, but due to the Iraq condition. The ground conditions, we need to slow down the rate of construction from that these area, we need to do more.
Reworks.
Our onshore board do.
Celerity actresses soda area.
From a flexibility to mine the App area. So we are already there we don't meet extra capex to add this area into production. We are already there. The only difference is the production rate is lower than we expected. So we are Carey owned these promotional call 2000 from 2020 into 2024.
And the production in that area on the grade in that area is basically <unk>.
Five to seven ounces of silver two three grams of gold. So it's a substantial production of silver coming from this area and now we are offsetting these production with other areas of <unk> that are more on the gold.
The value that the silver that the different that you see in our guidance for the rest of the year of 2023.
Alright, Thank you Juan Carlos appreciate that another question.
One call Kenny.
Clearly the mine is loosing money.
Cash attributable to sales of 26.
In the third quarter, but you didn't mention that there is a new zone of gold and copper.
And that will begin production during the fourth quarter.
With this I mean can you talk a little bit more about about this zone and what the implications would be for cost and production is digital and.
Allow the mine to turn to the black and make money.
Yeah.
And this of course Carlos.
Actually the difference.
And in France against our budget that production is.
A reconciliation of the greats.
They actually great.
This is this quarter and during the 2023.
However, we have we are working on these new area called Rosario.
Well on Carlos will give you.
Another.
Big picture of what is what.
What are we finding their lease Guangdong.
Sure vendor yet.
Kenny.
You see how it looks like we have.
Core area at the center of a deposit where we have been making.
I will say, Jeff for Angelica point of view in the wholesale area.
Surrounded by a region, where we have all the land sea Robin allocation, we are producing right now and historically, we have been producing most of our recent.
Silver production from the surrounding region.
The <unk> mine in <unk>, where we are achieving now lower than expected grades in the stock that we have planned for 2023.
Rosario area is at the center of the deposit so it's not size, maybe 504 100 meters from the existing installed.
Area, So we share a lot of infrastructure.
At CIT.
This area West.
Originally many many many years ago in the upper levels and now we are accessing these areas.
At the system level.
We hit the.
The same vein that we have some evidence in surface where web seeker.
And with the higher copper and gold grade that we had in the past the upper area. So we have that.
One set of babies.
Similar thing in the ratio five grams of gold.
<unk>, 4% copper so now it is something new for us.
The start up was in the last two years.
Developing these new area, we have begun developing of this area around small campaign of 2000 tonnes of ore that we're passing the last quarter in the last month of the year, maybe December we will processes after finishing all the pilot test.
In the lab, we will do it.
Industrial things we do.
Or with a value in the order of 350 to $400 per tonne of value and we believe we're coffee buy Dvds that we're having so far in exploration and development.
This area will become significant.
A player for good county in the coming two years, we need to still to continued exploration and develop these new area between 2024 and 2025 in order to have a substantial production value from this area. So we will we have continuous operational conditions, where areas were trying to catch the high grade.
Silver grade areas.
And developed in parallel.
Area from the SRU altogether goes to the same cost basis at the recently closed <unk> call in a little bit higher because we are putting everything that we do as expense development.
Oh, sorry area in the same basket.
Thank you Mike.
Okay.
So of course cost will increase but ultimately these new area will make them profitable.
Yes, that's the idea this year or the next year, we invest in developing this area will take like.
At least 12.
18 months to develop on both these area into full production to be as substantial bar, maybe 25% to 3%.
Contribution in promotion, we kind of we came for this area.
Now what we need to compete on the days and be sure that every single site.
Right.
Along with the <unk>.
Or assuming high grade program might be started solid path for the next well.
<unk> <unk> module.
Kind of higher than expected cost and they will deliver.
Deliver the additional production.
Mike.
Okay alright, thank you.
Ill get back to the queue.
Or a couple of more questions. Thank you very much.
Youre welcome.
Our next question comes from Cesar Perez Novoa from BTG Pactual. Please go ahead with your question.
Yes, Thank you and good morning to all.
Two questions. The first would be on your bugs and to recap the fourth quarter of 2003 target date.
For startup production unchanged.
Is there a commercial volume that we should consider from this asset in the final quarter of the year.
And if so.
What cost should we.
Just for modeling.
And my second question.
Relates to.
To remark upon ton underground mine youre, increasing production from 10000 tons per day.
This year two to 12000 tons per day over the next.
Two years.
Could you fine tuned the date for this capacity increase.
<unk> guide on the potential copper volume that we should anticipate from from the asset in the future.
Sure.
Thank you for your question please Hong Kong.
The first one on <unk>.
Sorry.
Campaign of about 120000 postal or SaaS part of the final stage of the exploration permit we have license to process around 130000 tonnes of ore in Delaware, which a chunk of our processing plant. So we will start right now should we started yesterday to India.
Yes.
It's a very high grade ore is her over 2025 ounces of silver so.
To produce.
Could the network guidance in there at all.
Almost 2 million ounces.
In the last quarter, we put in our guidance coming from this area.
For these production in <unk> scenarios and land at $12 per ounce of silver.
So this is.
We are adding back and once we have the operational license.
We continue mining the same ore body prone to <unk>.
In 2014 advance at a rate of 1000 Boes per day with an average rate of <unk> 22 ounces of silver per tonne.
So it's a substantial assets for us at a very low cost so Paul from a combination of June by backfill could chuckle Michael.
Regarding <unk>, we are now at a promotional rate in the underground mine in Dorado too.
<unk>, sorry, 10, five almost close to 11000 tonnes per day. Some peaks. So next year in 2024.
Our targeted stabilized the production at a rate of 11000 Boes per day.
34, and keep developing the mine.
The throughput in 2025 to around 12000 Boes per day. So the target is to reach 30000 tonnes per day by mid 2025.
Thank you.
Regarding copper production because under the mining says yearly corporate player we will be.
Our bottom part of course is going to be starting up I'm, assuming they are about 50000 tons of refined copper, but we are looking for opportunity to go over that.
<unk> not only at <unk>, but also the recovery.
Our opportunity that we have basically on the cost side as you see we have reduced unit costs.
Leasing cost.
And that's our main targeted immune targets in mortgage rates increased production will.
The decrease.
The cash cost of that will go Mike.
Thank you Julien.
If I may add.
There is a.
Need to any capex to the plan, we have planned capacity enough between the 12.
<unk> tons per day, all the airports are in the mine site.
To extract the 12000 tons per day from the mine.
Okay, and just to be very clear my.
Connection is not very stable, but if I heard you correctly, you'll be hitting stable.
Stable production of around <unk>.
Throughput rates of 11024 in the middle of 'twenty, five you'll be hitting 12000.
<unk> tons per day, and your minimum copper production would be in the range or or at minimum 50000 tons right.
That's correct.
Alright.
Okay. Thank you very much gentlemen.
Our next question comes from Omar <unk> from Prima AFP. Please go ahead with your question.
Hello. Thank you very much part of the call I have a couple of questions if I could.
What it means.
The dividend.
During this last quarter of the year.
Do you have any information regarding the tax dispute between Freeport and the Peruvian government.
Dave.
Alright. Thanks.
Thank you Omar for you for your question.
I will.
Im sorry.
<unk>.
We know that it's.
<unk> known by everybody.
Federal revenue has an excellent performance there is some room on dividends, but.
The decision has not been.
<unk> taken until yet.
And we expect of course, some dividends, but there is no doubt.
And 100% confirmation.
With respect of the <unk>.
You're trialing in CA.
We expect news.
Sure.
<unk> next.
Next year some.
<unk> mentioned some.
Communication from the JV of different zones.
This.
Trial.
Okay. Thanks.
He may original question.
Do you have any news regarding these consulta previa process and giving back.
Yes, well, we are working very close with a minister.
Our minds, but.
Maybe here with US is selling 100 masa that gain that can give us more color.
Sure.
Four vessel.
Yes.
This process is core.
Antley under evaluation from the.
Social office of the Ministry of mines.
Evaluating all the processes that we have put.
In the past.
In that operation.
We should have some results from them or some instruction.
Instruction from them in the following weeks.
Okay. Thank you very much.
Mhm.
Our next question comes from Joshua Jensen from Nomura. Please go ahead with your question.
Hello, and thank you very much for taking my question.
Can you hear me.
Yes.
Okay.
I want to ask about Capex, if you could provide us.
More color regarding.
The Capex expected for 2024 point that growth projects and also for total and.
Capex, we expect for <unk> and when do you expect to start.
BLT now these days.
Bryant.
How do you expect.
To fund that Capex.
We have seen that in this quarter you have been <unk>.
We expect to take up more of that.
Or.
That may level credit line that you already have.
Thank you. Thank you very much for your for your questions.
A relevant issue.
<unk>.
Capex for 2024.
We mainly.
The efforts will be focused on Gabrielle.
And for the sustaining capex normally when a quota.
Hi.
Our budget.
$80 million.
P J.
We'll be around Germany between join the authority, but maybe Danielle.
And help us with it.
More exciting peers.
We are managing us today.
<unk> thanks for the question.
For year 'twenty 'twenty four we are expecting total capex of around $300 million.
From these stronger real will require between $180 million to $200 million.
For you Buck.
We will.
These were around $25 million quadriplegic during 2024, we expect to disburse around $15 million.
Going to the second part of your question how are we going to fund these cash requirements loose.
Short term cash requirements.
We currently with the cash that we're generating it's around $200 million of EBITDA.
So count with where it's at.
Cash position level also $200 million.
We count with the dividends from Cerro Verde.
If there is a gap that we have.
Estimate that it could be around 100 or $150 million for a short period of time.
We are very close to obtain.
Committed <unk>.
Walgreens facilities with local banks in the order of $150 million, we already account with $50 million for our committed lines so that.
That will be that we will have liquidity that we need core.
The funding of basically signing of a deal.
But our maintenance capex.
Okay. Thank you and if I understand correctly, you said that you already have 50 million in committed credit lines and U S bank to increase it.
250.
Yes, that's correct.
Okay. Thank you very much.
Our next question comes from Tanya <unk> from Scotiabank. Please go ahead with your question.
Great. Good morning, everybody, sorry, I fell off a line and had to dial back in so I really apologize if you've already answered these questions, but I guess I wanted to know.
Thank everybody out.
Are we on that.
Our lines permit I thought the way to get it in Q4 of 2023, I guess wonder where we obviously get it yet or are we expecting it.
Thank you Danielle. Thank you for your question and answers with us.
He can give you more detail.
The process.
Sure.
We finish all the workshops with the communities and in November we should have.
The public Assembly.
Finally in December we should have been better if not better news bad news.
Yes.
Two more clients so far.
Okay, and then maybe Daniel I again, I apologize if you talked about the Seattle that as a dividend.
You know I think you had given guidance for about $120 million for this year and next.
Is this something that we should be thinking about or are we getting anything else from Cerro Verde this year.
We are very optimistic of the cogeneration of Cerro Verde, but they are generating $2 billion of EBITDA.
Already distributed to one $2 million to $100 million and of course, we expect an additional leeway.
Sure.
Sure.
The results come in the fourth quarter as we expect.
Okay.
And then can I just ask one final question just on the <unk>.
Investor Day that you are hosting in New York on December 4th.
I'm just trying to understand because it's at the end of the year.
And I'm just trying to understand at that Investor day on December four.
Besides the updates on the asset like Youre, giving us.
Obviously, the development pipeline will we be getting updated reserves and resources on December 4th.
Yes Tanya.
We will have news.
And that day.
One.
That is one of the reasons that.
We postponed the.
When I do that way for the.
The last month of this year so.
We will have news for you.
Okay. So we will have updated year end 2023 reserves and resources.
For the company.
That's correct yes.
Okay, and then one other thing.
Will you be providing 2024 and longer term guidance as well at the Investor day.
Yes, yes, we will be prepared for or giving you those.
<unk>.
Okay is it just I'm just trying to understand is it 2024 or is it more more years in 2024.
To 'twenty four 'twenty five.
25, okay.
And then yeah.
And then just I guess my final question for you is just any updates on just geopolitically, what's happening in Peru for us that are far away and just read what some CNN, but maybe you know.
We could have someone who actually let them.
Give us that answer.
And what's happening.
Yeah.
Proteins that we keep reading about et cetera, So maybe it would be really nice if someone.
Someone can provide some insight into what's happening in parallel and the geopolitical standpoint, our embarrassment and also for anti mining in protest.
Yes.
Yes.
Well.
Things are quiet.
Yeah.
There's still.
Okay.
Only thing is admission is sustaining.
The revolver Amendment and if the current administration is trained.
Trying to make all the efforts to.
Although.
More investment more.
Private investment.
Brent.
Hum.
A lot of it is.
Kevin.
And some travel some trips.
Yes.
This yesterday in a Congress authorized.
Two O to United States to Commvault.
And to all of our investment in Peru given.
And this is to ensure that all of the opportunities we have.
As a country.
There is therefore Franco minister of economy to maintain.
Two.
Difficult.
Economic division because the lack of investment that we have had in the last two or three years.
Due to the NSW political instability.
But we are optimistic.
The country's growing the right way.
We think that.
All of that.
Auto loan at Prime Minister is.
Turning to politically.
Mitch.
<unk>.
Yeah.
This inflation.
The all the.
Different.
Needs.
The country has.
That much.
Much we feel that we are much better.
We were.
One year ago.
So it will be a very optimistic I don't know.
Here with US is of course, our term loan a royalty.
I don't know if rupee.
I wanted to add some ideas.
Well.
That may say the effect of.
Having the prime Minister the minister of mines.
Body language, if I may say, which gave a lot of support to the industry.
I think there is attitude.
Ill.
Helping the industry to do develop the project and then obviously the recession that we are living through.
Buyers buy more investment in and mining it.
It is.
The main source, if I may say.
Thank you Eric Okay.
Rocky you think that that and we are the Nazi unmatched Mark trial investment cast support for.
Investment in Peru, going forward because of the recession and things that the current cash.
Administration is doing.
There is no doubt about that there is no doubt.
I think the.
<unk> vaseline traveling to Germany traveling to the states in the next few days also show the interest to attract more investment.
Mhm.
Okay, great. Thank you so much and nice to hear from you.
Once again, if you would like to ask a question. Please press star and then one to withdraw your question you May Press Star two.
Our next question is a follow up from Carlos de Alba from Morgan Stanley. Please go ahead with your follow up.
Yes, great. Thanks.
On.
Got it.
Uh huh.
Apparently cost would be increasing in the fourth quarter.
As the company recognized the deferred stripping cost associated with the land inventory.
Can you provide a little more color on cost.
We're.
Somewhat elevated in the third quarter. So it will be very interesting to know what.
I guess it would be for this comment get maintenance and congratulate.
Okay.
Okay.
Please.
Yes, we have.
Bruce <unk>.
Accounts.
Different pre steeping in our books that accounts for about $51 billion. Because we finished the mining of the current phase of the open pit we are speeding up the amortization of these.
The amount of money into up to the end of the year, So it's going to be.
Sooner right amortization because of the open pit feed analyze not only the mining but also the processing of the ore that we broke up to September this year.
<unk> always talked buyers are going to have the processes up to December.
Latency.
And.
Based on that processing rates will be doing the amortization was $51 million that we have seen a deferred stripping accounting and broke out Mike.
This is pretty much what the main impact on cost because.
It's a substantial amount.
And kind of multi start the third quarter that is going to follow the same rate of amortization.
In this quarter every year.
Alright, Okay. Thank you very much.
Our next question comes from.
Rodrigo Mora edits from AFP Integra. Please go ahead with your question.
So how are you. Thank you for taking my call. One question. What are the actions you are actually taken to start stronger in the.
The second half of 2005.
Alright, sorry O'neil.
I didn't.
Right.
On your question.
Well as I want.
Oh, okay.
Could you repeat it.
Yes of course.
So well.
Can you explain or maybe on the actions you are taking to start production of <unk> in the second half of 2025 of the cost.
That construction persons.
The construction percentage.
The Capex you are ready.
Deploying I think 14%.
And you changed your guidance and so maybe if you can develop more.
Whereas the action.
July is doing right now.
If you don't expect any issues with communities for example.
Why are the credit actions, we communities, so capex could be deployed efficiently or not.
Okay. Thank you. Thank you for your question Rodrigo.
Rental.
Maybe you can help us with you.
Sure sure.
Sure.
Thanks for the questions.
Right.
This year has been a year, where we focus on.
So we can receive.
The main construction teams on site by the end of this year as usual.
The content gain much terminated.
The contractors on the theme for the mine work.
We are.
Signing the.
The SMB contract.
The concrete installation.
On November so we're going to be.
Focusing on full construction activities during the whole 2024.
In parallel we started our operation readiness.
So we're going to ask.
Charlie.
A year from now we're going to have all the main routes and we will work on when we're going to start training our people. So we can.
Any shade commissioning.
The first quarter second quarter of 2025.
Okay.
And in the structure and the social aspects I think wearing.
Good morning.
Good performance with the combination.
No major problems Sundar.
We keep working with them we have like.
30% of our people are from within the region.
So we have good relationships contractual relationships working relationship with them.
Okay. Thank you and one additional question and.
Do you have concerns about the El Nino phenomenon for next year.
The communities have told you something.
What are your current conversations about that topic.
Thank you Ronny, yes. It is.
An important issue that we have been discussing.
Yes.
April this year.
We are working very closely to with our operations. We are defining all the critical aspects of the how.
Nino effect.
And I think us and we have.
Our plan to.
Alleviate.
All that.
How much that can be.
Don Bye Bye bye this phenomenon.
We are working with our.
Monday.
Safety and.
Internally, we are coordinating with all the areas to be prepared for this plan.
Okay and now do you have any estimate channel.
How much was just band two to alleviate.
Any circumstances due to this phenomenon.
Sure.
Uh huh.
Or do you have any estimations.
Nowadays.
Well we are looking.
Yes, primarily we are.
Jim.
Yes.
Reviewing our.
Capacity.
To have the scope the inventories of our.
Our concentrates we are.
Viewing also we are reviewing the alternative.
Routes.
Wait.
And the ways that we.
We have two axis our minds so.
<unk>.
We are focusing in two the two main issues are too old.
The.
Inflow.
Man material, we need and.
The routes that we can use.
To.
Established.
Good.
How prepared are they.
Alternative routes.
Growths that we that we have.
Today.
And also the capacity of how much stock we will have one.
One hour for our concentrates on scope, we need increase if any.
Of all our <unk> agreement.
Sure.
The material, we need to to continue production.
Okay. Thank you very much again.
Our next question comes from Juan crews from Morgan Stanley. Please go ahead with your question.
Hi, Good morning, everybody can you hear me okay.
Yes.
Excellent.
In light of that.
The capex and the projects that you have planned for the next few years.
Can you tell us what pace that minimum cash level that you feel comfortable holding.
Given where we are in the cycle and also how are you guys thinking about the bond maturity in 2026.
Standing that Theres still enough time.
I'll figure out our plan, but.
Given where we are.
And the rates environment, and how much that cost you now and what would they.
The potential refinancing costs could be how are you thinking about that if you are.
Thank you for your question Danielle can come up with answers.
Thanks for the question.
For the minimum cash that we consider.
Normally.
Estimate two months of Opex, which is around $50 million, so that would be our minimum cash.
That's the first question. The second question is the second answer for that.
For your second question is.
Of course, we are we have a plan for the quarter bond maturity, which is in 2026 and in July we are considering starting the renewal process at the beginning of year 2025.
So we should.
Count with with a facility or a bond renewal.
The plan executed by July 2025.
We are evaluating.
Of course, the interest rates as of now they are in a.
A very high level, but.
We expect that in year 2025 by mid year.
Should have decreased.
Actually.
Okay. Thank you and just as a follow up given where your cash balances.
Which is a healthy one right now at 220 something million at least as of September should we expect that you come close to your minimum at any point or that's not in the cards.
Oh, no if we are going.
We are getting close to our minimum we will.
Exercise our.
The liquidity that we have with the with the local banks and those facilities are committed.
We have one which is committed and the other ones we are looking.
To be completed as well.
Okay. So thats S. A.
Ideally up to $150 million.
Okay.
Thank you.
And our next question comes from Jocelyn Jensen as a follow up. Please go ahead with your question.
Okay. That's it thank you.
Yes.
Regarding our product.
<unk>, China and.
And I think he.
Secondly, you'll have going forward.
Yes.
And your expectations for this year.
Duncan will produce around.
Well two point up to $2.8 million Joshing.
You're assuming that that will be just in the fourth quarter.
Thank you.
Answer is no.
Yes, yes, sorry.
Our theater.
Mhm.
Yes, yes, yes. This is our guidance as I mentioned.
New package is growing.
Processing this year around 100000 tons 90 to 100000 total floor with that rate over 25.
Onset of silver per ton this year.
And we can travel will be processing also around the <unk> around 90000 200000 tons of four ounces.
<unk> ounces of silver per ton equivalent because it is a combination of.
But you said.
Basically mechanical with cederberg latency that equivalent grade of that material is in there and obtain ounces of silver equivalent. So the combination of box that will be positive in campaigns in batches in Cabo.
<unk> Bank.
Bringing us into the order of $2 $5 8 million ounces of silver.
Ladies last quarter of the year.
And it will be correct like to multiply it.
By four to get to that 2024 number our last earn out.
Indicators, which are chunghwa, yes in the case of <unk> early we are getting closer to the average grade of the deposit is more authority from the ratio.
18% to 22 ounces is the average.
Instead of 25, obviously that we are.
Putting ahead of time speaking app promotion.
Three.
So it will not be a little delayed production next year.
Okay and going forward I saw in your presentation.
Q2.
Do I expect them to reduce the operating.
<unk>.
Can you give us more color about it when we separate.
Operating given thank you were thinking.
To close.
Okay.
This is happening now our presentation of the second quarter.
Yes.
Yes.
Well, we don't foresee.
<unk> current operations to close.
It is known by the client that we are struggling with reserved seating.
Bob.
Yeah.
And Tom O'malley yield due to different reasons.
But its and maybe.
Maybe it's that you referenced.
But.
Uh huh.
Yes.
Uh huh.
Okay.
Alright.
Well there isn't a person here and it will happen that you absolutely have seven upper age now operations and Daniel will be used to five operation in 2026.
And to between three and five by 2000.
On Saturday.
Well, we are concentrating in units.
And.
Support.
At least we are concentrating.
Our agency mines that have more than 10 years of life of mine.
All the airports are to increase the low multiple of our mines.
The strategy is to concentrate in those type of mines.
So in the time.
<unk>.
Any of the <unk>.
That characteristic.
In that moment, we will decide to close.
Close to sale too.
Hum.
We'll continue working on that.
But our strategy is to focus on.
Bias that have more than 10 years of life of mine.
That is the message.
Okay and that revenue mix will still be 50, 50 between base metals and precious metal.
We foresee a legal change we were.
Going to be more concentrated in sales coming from copper.
We'll be around 55%, 60% of our revenue coming from from copper in the following years.
To.
The increase in <unk>.
And broke <expletive>.
While all of the.
The support of several anatomy.
And also the decrease production that we expect for pump under mobile sound.
Somehow offset of course by our new project Tango it in.
In terms of.
Brian This is Matt.
Supported by <unk>, and John Button and Tesla.
And ladies and gentlemen, with that we'll be concluding today's audio question and answer session I would like to turn the floor back over to management for any offline questions.
Thank you operator.
The first question comes from leaning when your us from <unk> capital.
What is the level of engineering of sang Odeon.
Detailed engineering at what percentage and the Capex for San Gabriel includes the working capital of the ramp up.
Thank you Lynn and Rancho and give us more color.
Our last question.
Sure. So we're currently at 90% completion of the engineering this point.
This indicates that we have enough engineering to place all the purchased products and service orders and the remaining 10% is usually feeling in the army so supportive of changes during the construction.
And to.
The second question, Yes. It does include the working capital everything it needs until we move to commercial construction.
Thanks Rachel.
The second question comes from Tim Lambert from Loomis Sayles.
What is the timeline for the resumption of mining at <unk>.
Hey.
We're planning to resume operation the open pit depending on the permits on the timeline for getting all depend to them, but our target is to be receding as tribune by 2026 production problem from the open pit.
Processing plant by the end of 2036 ethylene 2047.
Thanks, Juan Carlos.
The third question comes from Javier lateral ammonia from Niklas partners.
What guarantees the company has given against the credit line.
Lenny.
He is currently lines are unsecured.
<unk>.
I don't foresee in core R&D is related to these credit lines or in revolving facility that we can.
Obtained for the following years.
Thanks Danielle.
At this time there are no further questions I would like to turn the call over to the operator.
Thank you at this time, we will close today's question and answer session for both audio and offline questions.
And I'd like to turn the floor back over to Mr. Garcia for any closing remarks.
Thank you.
Later.
Before we finish today.
Yes.
Our conference call.
Well like I like to like to thank you all.
Very much for making the time to be with us.
I would also like to remind everyone that we are organizing our investor day on December four.
New York and you are ordinarily invited.
Again, thank you very much.
Ladies and gentlemen that concludes what venter is third quarter 2023 earnings results conference call, we'd like to thank you again for your participation.
May now disconnect your lines.