Q4 2023 Southern Copper Corp Earnings Call
[music].
Operator: Good day and welcome to Southern Copper Corporation's fourth quarter in the year 2023 results conference call. With us today we have Mr. Raul Yacob, Vice President of Finance, Treasurer, and CFO, who will discuss the results of the company for the past quarter in the year 2023, as well as answer any questions that you may have. The information discussed on today's call may include forward-looking statements regarding the company's results and prospects, which are subject to risks and uncertainties. Actual results may differ materially, and the company cautions not to place undue reliance on these forward-looking statements. Southern Copper Corporation undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. All results are expressed in full U.S. GAAP. Now, I will pass the call to Mr. Raul Jacob.
Good day, and welcome to southern Copper Corporation's fourth quarter and year 2023 results conference call with US today, we have southern Copper Corporation, Mr. Raul, Jacob Vice President Finance, Treasurer, and CFO, who will discuss the results of the company for the past.
Order in year 2023, as well as answer any questions that you may have.
The information discussed on today's call May include forward looking statements regarding the company's results and prospects, which are subject to risks and uncertainties actual results may differ materially and the company cautions not to place undue reliance on these forward looking statements.
Southern Copper Corporation undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information future events or otherwise all results are expressed in full U S. GAAP now I will pass the call to Mr. Raul Jacob.
Raul Jacob: Thank you very much, Carmen. Good morning, everyone, and welcome to Southern Copper's fourth quarter of 2023 and full year 2023 results conference call. At today's conference, I'm joined by Mr. Oscar González Rocha, CEO of Southern Copper and board member, as well as Mr. Leonardo Contreras, who is also a board member. On today's call, we will begin with an update on our view of the copper market and then review Southern Copper's key results related to production, sales, operating costs, financial results, expansion projects, and easements. After this, we will open the session to questions.
Thank you very much garmin, good morning, everyone and welcome to southern Copper's fourth quarter of 2023, and 50000, a year 2023 and results conference call.
Today's conference I'm joined by Mr. Oscar consolidate Roger CEO of Southern copper and board member as well as Peter Lonardo trader Who's also a board member.
In today's call we will begin.
And with an update on our view of the copper market and then review southern Copper's key results related to production sales operating cost financial.
Financial results expansion projects and <unk>.
S T a.
After this we will open the session for questions.
Raul Jacob: Before we get into the details of this past quarter, I'd like to make some comments regarding the company's results in 2021. Even though 2023 was a challenging year for Southern Copper, we believe the company achieved good results. 2023 net sales were $9,886 million; this is 152 million or 1.5% lower than 2022 net sales. This research was driven by higher stage volumes for copper of 2.2% and molybdenum of 2.3%, as well as better prices for molybdenum by 28% and silver. This situation was partially offset by a decrease in metal prices for copper and zinc and by a reduction in the safe volume of silver and platinum. However, net sales in 2023 were negatively impacted by a year-counting adjustment of $406 million for lower metal prices on sales. In addition to this, we estimate that 2023 tails were affected by a larger copper anode inventory in process at year-end. If we exclude these two effects, the state for 2023 would have been 3% higher than the 2022 market.
Before we get into the details of this past quarter I would like to make some comments regarding the company results in 2023.
Even though 2023 was a challenging year for southern copper.
We believe the company is cheap.
2023, net sales were 9890 $6 million. This is a 152 million or 145% lower than 2022.
This was driven by higher sales volumes for Cooper of eight 2% molybdenum of two 3%.
Better prices for molybdenum by 28%.
Yes.
This situation was partially offset by a decrease in metal prices for copper and zinc and by a reduction in the face volume silver and zinc.
Net sales in 2023 were negatively impacted by a year accounting adjustment of $406 million or lower metals prices on sales. In addition today. We estimate that 2023 sales were affected by a larger poker I know inventory in process at <unk>.
Year end.
We exclude these two effects.
For 2023, we would have been 3% higher than the 2022.
Raul Jacob: The 2023 copper production increased 1.8% year-on-year to $900 million and 11,000 tons of copper. The yearly result was mainly attributable to higher production toward the colludium operation. A report that was partially offset by a reduction in production of our Mexican operations, but mainly fueled by a drop in mineral processing and recovery at the Buenavista mine. In the second half of last year, we experienced a reduction in fresh water at our Buena Vista operation, which was caused by the fact that we lacked the permits we set to receive for building a pipeline of approximately 20 km to transport water from the well to the operation and nearby
The 2023 copper production increased one 8% year on year to 900.
11000 tonnes of copper in the.
The yearly result was mainly attributable to higher production at our Peruvian operations.
A result that was partially offset by.
Reduction in production at our Mexican operations with was mainly fueled by a drop in minerals processing and recovery at the Buenavista mine.
In the second half of the pattern of last year, we experienced a reduction of fresh water and a winner based operation, which was generated by the fact that we lacked the permits we expect to receive.
We're building a pipeline of approximately 20 kilometers to transport the water.
The well.
Duration and nearby Chancellor.
Raul Jacob: For 2024, the company has decided to transport water through other means to secure the supplies required to ensure that Buena Vista can operate at full capacity for copper production and the ramp-up of new zinc concentrator operations. As for our by-products, molybdenum production totaled 26,836 tons in 2023, which was 2.3% higher than the figure for 2018. This increase was due to higher production at three of our four mines. The section was covered by me.
For 2024, the company has decided to transport the water.
Through other means to secure the supply required to ensure that we're not currently.
Can operate at full capacity or corporate production and the ramp back up new think concentrate or operations.
For our byproducts molybdenum production totaled 26836 tonnes in 2023.
Which was two 3% higher than the figure of 2020.
This increase was due to higher production of three of our four mines there.
As such on West Bakr.
Raul Jacob: Minesink production rose 9.2% year-on-year due to higher production at the Carcass and Santa Bárbara mines. However, mine filter production dropped less than 1% in 2023, primarily driven by lower production at the Buena Vista mine. This exit was partially offset by higher production at our Peruvian operation in 2023. Operating cash costs per pound of copper, including by-product revenue credits, were $1.03. The 25 cents increase in tax costs recorded versus the 78 cents per pound in 2022 was mainly attributable to 17 cents per pound increase in production costs and 8 cents reduction in by-product revenue credit. At this point, we believe we are seeing the end of the inflation-related cost tool.
Mine zinc production.
Production Rose nine two.
Nine 2% year on year due to higher production at the charter.
About about a month.
Mined silver production.
Less than 1% in 2023, primarily driven by lower production at the Buenavista mine.
This decrease was partially offset by higher production at our Peruvian operations.
In 2023.
Operating cash cost per pound of copper.
Losing byproduct revenue credits with a dollar tree.
A 25% increase in cash flow.
Ported versus the 78 cents per pound in 2022 was mainly attributable to 17 cents per pound increase in the production call an 8% reduction in byproduct revenue trends at.
At this point, we believe we're seeing the end of the inflation related cost.
Raul Jacob: Our cash flow before Vaxello trades evolved from $2.09 per pound in the first quarter of 2023 to $2.22 per pound in the fourth quarter. It is important to know that levels were relatively stable in the second half of last year. For 2024, we expect our cash costs to be 4 by 12 trades to be $2.20 per trade. We expect zinc and silver to contribute positively to growth in 2024 on the back of an uptick in volume. For zinc, we expect a growth in production of 80%. 80%, for Filter 13% Nonetheless, we'll expect molybdenum prices to remain at the level that they are right now, which is about $19.30. In this scenario, all in-company cash flow credits for 2024 will total $1.03 per capita.
Our cash cost before by product rates evolve from $2.09 per pound in the first quarter of 2023 to $2.20 per pound in the fourth quarter. It is important to note that levels were relatively stable through the second crop.
Last year.
For 2024, we expect our cash cost before byproduct trades to be $2.20 per pound.
We expect zinc and silver to contribute positively to growth in 2024 on the back of an uptick in volumes.
Zinc, we expect a growing production of 80%.
80%.
For silver.
13%.
Nonetheless will suspect molybdenum prices to remain at the level that they're right now which is about 19.
Tom.
In this scenario all in company cash course credits for 2024 will total $1 three per pound.
Therefore, our cash cost after byproduct credits is estimated in a golar 17 cents per pound for this year 2024.
Raul Jacob: Therefore, our cash flow after by-product trading is estimated at $1.17 per pound for this year. This increasing value was driven primarily by a 13% reduction in by-products. Adjusted for inflation, the Visa in 2023 was $5,029,000,000. This is 6% lower, or 320 million below, the figure of two thousand and twenty. The dropping adjusted to beta year-on-year was primarily attributable to a reduction in sales equivalent to $152 million.
This increase in value was driven primarily by a 13% reduction in byproduct trades.
Adjusted EBITDA in 2023.
<unk> thousand and $29 million.
This is 6% lower or $320 million below.
The figure of 2022.
Dropping adjusted the beat them year on year.
Primarily attributable to a reduction in sales equivalent to $152 million.
Raul Jacob: A $113 million non-return variance in other income due to 2022 insurance and tax refund and the 54 million uptake in operating costs. They adjusted the data margin in 2023 was 50.8% versus 53.2% in 2020. For net income, last year we had $2,425 million, that's 8% lower than the mark for 2021. The Net Income Margin was 24.5% last year versus 26.3% in 2009.
113 million nonrecurring variance in other income due to 2022, ensuring and tax reform.
And the 54 million uptick in operating costs.
Adjusted EBITDA margin in 2023.
50, 58% versus 53, 2% in 2020.
For net income last year, we had 2420 $5 million.
8% lower than the Mark for 2022.
And net income margin was 24, 5% last year versus 26, 3% in 2020.
Now, let's focus on the short term.
Raul Jacob: Now let us focus on the copper mine. The London Metal Exchange copper price increased 2.2% from an average of $3.63 per pound in the fourth quarter of 2022 to $3.71 per pound in the fourth quarter of 2022. At the beginning of last quarter, we were expecting a market surplus for this year. However, after a significant reduction in copper production was announced by some producers, market expectations for a surplus ceased and were replaced by concerns about potential deficits due to the extremely low available inventory. Even though there are still significant uncertainties this year for the world economy, such as the slow recovery of China, a recession in Europe, and a soft landing or minor recession in the U.S., we believe copper prices should have good support through 2024.
The London metal exchange corporate price increased two 2% from an average of three.
$3 63 per pound in the fourth quarter of 2022.
Up to $3 71 per ton in the third in the fourth quarter of 2020.
At the beginning of last quarter, we are expecting a market surplus for this year.
However, after a significant reduction in corporate production west announced by some producers market expectations for a surplus six and we're pleased by concerns about potential deficits due to the extremely low available inventory.
Even though.
Our significant uncertainty this year for the worst economy, such as the slow recovery of China.
Session in Europe, and in a soft landing or minor recession in the U S. We believe corporate prices should have four through 2002 thousand people.
Raul Jacob: Now, let's look at Southern Copper's production for the task force. Copper represented 77.8% of our sales in the fourth quarter of last year. Copper production registered a decrease of 3% in the fourth quarter and a quarter-and-a-half terms to stand at $234,089, where quarterly results reflect a 9.6% decrease in production in Mexico driven by our Vena Vista mine, which was partially offset by higher production at La Caridad Mine due to better ore growth. Production at our Peruvian operations increased 6.6% in a quarter and a quarter turn, which was mainly due to higher production at our Toquepala operation.
Now, let's look at southern Copper's production for this past quarter.
For Cooper each represented 77, 8% of our sales in the fourth quarter of last year.
Corporate production greatest decrease of 3% in the fourth quarter and a quarter on quarter terms to stand at 234089 times.
For quarterly result reflects a nine 6% decrease in production in Mexico, driven by our winner when Arista mine.
Which was partially offset by higher production at La Caridad mine due to better already.
Production at our Peruvian operations increased six 6% in a quarter on quarter turns which was mainly due to higher production at our landfills.
That operation.
Raul Jacob: Compared to the third quarter of last year, copper production increased 3.5%, which was mainly attributable to higher production at the Coajones, Cocefala, and Caridad mines. For this year, we expect to produce 936,000 tons of copper, an increase of 3% over the 2023 final year. Last year, we drove our PIARES project to full capacity, and initially a ramp-up at the Buena Vista We expect these two projects to contribute 44,000 tons of copper to our production. Molybdenum represented 10% of the company's safe value in the fourth quarter of 2023 and is currently our first life product. Molybdenum prices averaged $18.41 per pound in the quarter, compared to $21.17 in the fourth quarter of 2020.
Compared to third quarter of last year copper production increased three 5%.
But mainly attributable to higher production at the core haul network at Pilar and <unk> nine.
For this year, we expect to produce 936000 tons of copper an increase of 3% over the 2023 final terms.
Last year, we drove our Polaris project to full capacity and initiated a ramp up of the Buenavista zinc concentrator for.
For 2024, we expect these two projects to contribute with 44000 tons of culture to our production.
Molybdenum represented 10% of the company sales value in the fourth quarter of 2023.
And it's currently our first by product.
Molybdenum prices averaged $18 41 per pound in the quarter.
Compared to $21 17 in the fourth quarter of 2022.
Raul Jacob: This represents a decrease of 13%. Molybdenum production increased 6.6% in the fourth quarter compared to the same quarter of 2022. This was mainly driven by an increase in production at the Toquepala and La Calidad mines due to higher ore grades in both operations. These results were partially offset by lower production at the Cojones and Buenavista.
This represents an increase of 13%.
Molybdenum production increased six 6% in the fourth quarter compared to the same quarter of 2022.
This was mainly driven by an increasing production at toquepala in a cardiac mines due to higher ore grades in both operations gives us hopes were partially offset by lower production at <unk> I'm Gonna based online.
Yes.
Raul Jacob: Molybdenum production increased 2.3% year-on-year in 2023 after production grew at La Calidad, Cojone, and Buenavista. However, it was partially affected by lower production... For this year, 2024, we expect to produce 25,500 tons of molybdenum. For silver, it represented 4.3% of our sales value in the fourth quarter of 2023, with an average price of $23.25 per ounce in the quarter, which reflected an increase of 9%. Silver is currently our second biggest.
Molybdenum production increased two 3% year on year in 2023 after production.
<unk> it was.
Partially offset by lower production at full capacity.
For this year 2024, we expect to produce 25500 tons of molybdenum.
Our filter it represented four 3% of our sales value in the fourth quarter of 2023 with an average price of $23 $25 per ounce in the.
Quarter, which reflected an increase of 9% silver.
Silver is currently our second byproduct.
Raul Jacob: Mining silver production decreased 3.2% in the fourth quarter, versus the same mark of 2022 after production reduced in Buena Vista and Guadalajara. This was partially observed by higher production artists of Hefala, Carriaz, and INSA Corporation. The fine production fell by 40%, quarter on quarter, which was mainly driven by a drop in all of our refineries.
Mined silver production decreased three 2% in the fourth quarter.
<unk> was the thing Mark of 2022 after production reduced when Avista.
Provision for after production reduced England notwithstanding.
This was partially offset by higher production at Pilar cardiac and in some operations.
Mine production fell by 40% quarter over quarter, which was mainly driven by a drop in all of our refineries.
These I'd like to comment that we're expecting.
We're having a different change in commercial conditions and thats.
Raul Jacob: On this, I'd like to comment that we are checking, we are having a change in commercial conditions, and that has somehow altered the purchases of material for silver production at the refineries in Mexico. In 2024, they expect to produce 20.7 million ounces of silver, an increase of 13% compared to 2016. Copper represented 3.3% of our sales value in the fourth quarter of 2020, while sink prices averaged $1.13 per ton in the quarter.
Somehow.
Alterra.
Purchases self material for silver production.
Refinery.
In Phoenix.
In 2024, we expect to produce 27 million ounces of silver an increase of 13% compared to 2023.
Zinc represented three 3% of our sales value in the fourth quarter of 2023.
<unk> prices averaged about 13 cents per pound in the quarter.
Is that 17% decrease regarding the for the fourth quarter of 2022 figure.
Raul Jacob: This is a 17% decrease regarding the fourth quarter of 2022. However, I think my production increased 11% quarter on quarter and totaled 16,932. This was driven primarily by increasing production at the Santa Bárbara and Charcot mines. Refined tin production decreased by 0.1% in the fourth quarter. In 2023, we'll produce 65,509 tons of zinc, an increase of 9.2% compared to 2017. This was mainly driven by an uptick in production at the Santa Bárbara and Charka Corporation, although this was partially spread by decreased production at the San Martino.
Zinc mine production increased 11% quarter on quarter and totaled 16930 tons.
Was driven primarily by an increase in production at the Santa Barbara and chart nine.
<unk> zinc production decreased by nine 1% in the fourth quarter.
In 2023, we produced 65000.
65509 tons of zinc an increase of nine 2% compared to 2022.
This was mainly driven by an uptick in production at the Santa Barbara and chartered vessel operations.
This was partially offset by a decreased production at the San Martin mine.
Refined zinc production increased by 1% in 2023 compared to 2010.
For the year, we expect to produce 113800 tons of zinc, which represented an increase of 80% over our 2023 production level.
This growth will be driven by the startup of the Buenavista zinc concentrator.
Raul Jacob: The financing production increased by 1% in 2023 compared to 2012. For this year, we expect to produce 113,800 tons of zinc, which represents an increase of 80% over our 2023 production, globally driven by the startup of the Buena Vista Pink Concentrator, that will contribute 54,400 tons. For the year 2025 and on, we expect to produce over 170,000 tons per year. For the 4th quarter of 2023, sales were $2.3 billion, which is $525 million lower than sales for the 4th quarter of the previous year, or a 19% reduction. Even though copper prices were 2% higher than in the fourth quarter of 2022, sales of these metals decreased almost 10%, mistakes in the past quarter were negatively impacted by a quarterly accounting adjustment of $62.3 million for copper sales, and this was basically for lower metal price systems.
And that will contribute with 54000.
<unk> hundred pump zinc.
For the year 2025, we expect to produce over 170000 tons per year zinc.
Financial results for the fourth quarter of 2023 sales were $2 3 billion.
This is $525 million lower than sales for the fourth quarter or 19%.
19% with us.
Even though copper prices were 2% higher than in the fourth quarter.
2022.
Eight of these metal decreased almost 10%.
Let's say in the past quarter were negatively impact.
By a quarterly adjustment.
Accounting assessment.
$62 2 million for copper sales.
And this was basically for a lower metal price for something.
In addition to be at the end of the past quarter.
We had a larger corporate annual inventory process.
That also affected.
Regarding our by products, despite a 6% increasing the volume of them a little bit in soles.
Days of our main by product decreased 54% due to a lower due to lower prices and an important accounting adjustment.
<unk> hundred $6 2 million.
Molybdenum.
<unk> decreased 18% due to lower prices and volumes for silver sales fell 10% due to lower volume, which was partially offset by better pricing.
Raul Jacob: In addition to this, at the end of the past quarter... We have a larger copper anode inventory in process, and that's all suspected. Regarding our byproducts, despite a 6% increase in the volume of molybdenum salt, sales of our main byproducts decreased 54% due to lower prices and an important accounting assessment of $106.2 million on molybdenum. Things said decreased 18% due to lower prices and volume. For silver, sales fell 10% due to lower volume, which was partially offset by better quality.
So the fourth quarter of last year safety reduction was mainly affected by an increase in copper inventory and adjustments or not been sales of copper and molybdenum and zinc.
$68 4 million.
Operating costs, our total operating cost and expenses decreased by $23 5 million or 2% when compared to the fourth quarter of 2020.
The main cost reduction has been the inventory consumption capitalized mutual material worker participation in energy.
These cost reductions were partially offset by higher contractor costs.
Label exchange rate variances repair material order fuel and all that.
Raul Jacob: So, the fourth quarter of last year's sales reduction was mainly affected by an increase in copper inventories and adjustments on open sales of copper and molybdenum for $168.4 million. Operating costs, Our total operating costs and expenses decreased by $23.5 million, or 2%, when compared to the fourth quarter of 2017. The main cost reduction has been in inventory consumption, capitalized leachable material, worker participation, and... These cost reductions were partially offset by higher contractual costs, labor, exchange rate variances, repair materials, water, fuel, and oil. The adjusted adjusted revenue was $1,055 million, which came 35.3% under the $1,631 million registered in the fourth quarter of 2013. The adjusted data margin for the 4th quarter was 46% versus 58% in the 4th quarter of 2012.
The fourth quarter of 2000.
Just delete them.
1050, $5 million, which came 35, 3% under the 1630 $1 million registered in the fourth quarter of 2022.
The adjusted EBITDA margin for the fourth quarter was 46% versus 58% in the fourth quarter 2018.
Okay.
<unk> copper operating cash cost, including the benefit of micro credits was $1 25.
Per pound in the fourth quarter of 2020.
This cash cost was 27 higher than the cash cost of 98 in the third quarter of this year of this past year.
Operating cash cost per pound of copper before by product credits was $2.23 per pound in the fourth quarter of 2023.
That is one <unk> lower than the value for the third quarter.
This one.
1% decreasing operating cash cost is a result of lower cost per pound from production and lower administrative expenses were partially offset by lower premiums.
Capital sales.
And higher treatment and refining charges on concentrate sales.
Regarding by products, we reported a 28% reduction in credit.
This 44th quarter 2023.
Had we had that crazy.
For the fourth quarter of last year, we had a credit of $491 million.
Or $98.04 per pound.
These figures represent a 22% decrease when compared to a credit of.
Raul Jacob: OK. Southern Copper operating cash flow, including the benefits of the by process, was $1.25 per pound in the fourth quarter of 2021. This cash cost was 27 cents higher than the cash cost of 98 cents in the third quarter of this year because of this fact. Operating cash cost per pound of copper before by total credit was $2.23 per pound in the fourth quarter of 2023, which is one cent lower than the value of the third quarter. This 1% decrease in operating cash costs is a result of lower costs per pound from production and lower administrative expenses, which were partially offset by lower premiums on cattle sales and higher treatment and refining charges on concentrates. Regarding byproducts, we reported a $0.28 reduction in credit. For the fourth quarter of 2023, we have a credit of 491 million dollars, for 98.4 cents per gallon. This figure represents a 22% decrease when compared to a credit of $604,000,000, or $1.26 per pound, in the third quarter of last year.
$604 million or a dollar in <unk>.
In the third quarter of last year.
Total credits increased 14, 16%, but decreased for molybdenum, 33% and some forecasts at 11%.
Net income in the fourth quarter was $445 million.
Which represented a 51% decrease versus the fourth quarter of 2022 features and net income margin in the fourth quarter of 2023 with 19% versus 32% in the fourth quarter of 2017 net income was affected by lower sales of <unk>.
<unk> early.
Earlier and by year, and nonrecurring adjustment in nonoperating costs as well.
Cash from operations cash flow from operating activities in 2023, <unk> 3570, 3 million, which represented an increase of 27% over 2000 and 102 million post in 2022.
This was so was mainly driven by a reduction in working capital.
For capital investments, our current capital investment program for this decade exceed $15 billion and it is currently.
It currently includes investments in the <unk> and Polaris period in Mexico, and the Tia Maria returning cash and <unk> in Peru.
In 2023, we spend.
$1 billion in capital investments, which reflected a 6% increase year on year and represented a 41% of net income in 2022.
If there is a description of our main capital project in Southern Corporates press release Im going to focus on updating new developments for each.
Raul Jacob: Total credits increased 14.16% but decreased for more revenue 33% and historic assets 11%. Net income in the fourth quarter was $445 million, which represented a 51% decrease versus the fourth quarter of 2022. The net income margin in the 4th quarter of 2023 was 19% versus 32% in the 4th quarter of 2023. Net income was expected by lower states, as explained earlier, and by year-end non-recurring adjustments in non-operating costs as well.
Or they wouldn't have Easter zinc concentrate earnings on order.
The capital budget for the project is 439 million most of which has already been invested.
We initiated the commission in progress.
Progress 19, 9% ramping up of the plant began in the first quarter of the here this quarter.
After technical adjustments to a concentrated.
We expect it to use 54500 tonnes of zinc and 11900 tonnes of copper in 2024.
And an average of 90200 tons of zinc and 20700 tons of copper per year in the next five years.
Raul Jacob: Cash from a Theory. Cash flow from operating activities in 2023 was $3,573 million, which represented an increase of 27% over the $2,802 million post-2003. This result was mainly driven by a reduction in working time.
For the Polaris project in Sonora.
Mexico.
Budget for this project is 176 million of which $145 million has been invested.
<unk> is currently operating at full capacity and delivering quarter or two in a cardiac operation.
Since bill that is fully integrated into our operations. This will be the last time, we are reporting on it as a project in one of the awards related graduated from the states and is now part of cardiac operations.
Raul Jacob: For capital investments, our current capital investment program for this decade exceeds $15 billion, and it currently includes investments in the Buenavista, SINC, and Pilares projects in Mexico and in the Sia Maria, Los Chancas, and Michiglia projects in Peru. In 2023, we spent $1 billion on capital investments, which reflected a 6% increase year-on-year and represented 41% of net income in 2009. Since this is a description of our main capital project in SS and SCCO, I am going to focus on updating new developments for you on the Buenavista Sink Concentrator in Sonora. The capital budget for the project is $439 million, most of which has already been invested.
For the Peruvian project in the case of the Tia Maria project King at a key path.
Return rates out there.
<unk> construction activities at Tia Maria will generate significant economic opportunities for the slide probing and added key partnering gear.
Given the current Peruvian economic situation. There is crucial to move ahead from project that will stimulate a sustainable growth cycle.
We expect to begin the construction phase of the project in the near future.
We will make it a priority to hire local labor to fill the 9000 jobs as we expect to generate during Tia Maria is construction.
Additionally from day, one of our operations, we will generate significant contribution to revenue in there to keep our region.
My opinion royalties and later on.
Some tax.
They look turnkey project in a cleaner it is.
Raul Jacob: We have initiated the commissioning process, and progress is 99% complete. Ramping up of the plant began in the first quarter of this year, this quarter, after technical adjustments to a constant rate. We estimated 54,500 tons of zinc and 11,900 tons of copper in 2024 and an average of 90,200 tons of zinc and 20,700 tons of copper per year in the next five years. COPPERPILLARIS PROJECTION Next, The budget for this project is $176 million, of which $145 million has been invested. Pilar is currently operating at full capacity and delivering copper ore to the La Caridad operation.
Greenfield project in which we are in a coordinated effort with the Peruvian authorities of the company, making significant progress in eradicating illegal mining activities at our concession.
Once this process is complete we will restart environmental impact assessment conducts a diamond drilling campaign for 40000 meters and initiate hydro geological and technical study.
Additional information on the characteristic of the China Classic Boston.
Meti projecting cash America as of December 31 of last year, we have drilled 63000 meters from.
From a total program for 110000 meters and obtained 20137 core samples for <unk> color on that.
Logical modeling cross section and certification and bridging loading are currently underway.
Raul Jacob: Since PILARES is fully integrated into our operations, this will be the last time we report on it as a project. In other words, PILARES graduated from the project stage and is now part of the La Caridad. For the Peruvian project, in the case of the Ta Mara project in Arequipa, we reiterate our view that the initiation of construction activities at Ta Mara will generate significant economic opportunities for this poor province and the Arequipa region. Given the current Peruvian economic situation, it is crucial to move ahead on projects that will stimulate a sustainable growth cycle. We expect to begin the construction phase of the project in the near future. We will make it a priority to hire local labor to fill the 9,000 jobs that we expect to generate during Tia Maria's construction.
For 2024, the company expects to complete the Diamond drilling program geological modeling and resource evaluation.
We will also begin hydro geological and technical studies.
The results of metallurgical testing at the Pos.
The company continues working with the <unk> community following the guidelines of the social agreements signed with them.
For environmental social and corporate governance or ESG practices.
Major improvement we have a major improvement in water recovery that we want to report.
Over the last four years, we have improved reuse of water at our operations going.
64 cubic meters.
Nathan one cubic meter 64 of water for our mill tons of mineral in 2022 points 53 cubic meters in 2023.
This represents an increasingly efficiency of 17%.
Improvement has primarily been driven by the company's initiative to record a water from our caveat around that tailings dams in Peru.
By an uptick in the water volume recover a big winner of East coast covered in mind.
Raul Jacob: Additionally, from day one of our operations, we will generate significant contributions to revenue in the Arequipa region by paying royalties and later on income tax. The Loslanka Project in Afrima is a greenfield project where we are in a coordinated effort with the Peruvian authorities of the company making significant progress in eradicating illegal mining activities at our concession. Once this process is complete, we will restart environmental impact assessments, conduct a diamond drilling campaign for 40,000 meters, and initiate hydrogeological and geotechnical studies to gather additional information on the characteristics of the Los Chancas. For the Michigui Project in Cajamarca, as of December 31st of last year, we drilled 53,000 meters from a total program of 110,000 meters, and obtained 20,137 core samples for chemical analysis. Geological Modeling, Cross-Sectional Interpretation, and Drilling Loading are currently underway. For 2024, the company expects to complete the diamond drilling program, geological modeling, and resource evaluation. We will also begin hydrogeological and geotechnical studies and assess the results of metallurgical testing at the site.
We continue to make progress in our sustainability right.
And Pete Global results in its corporate sustainability assessment or CSA.
Indicate that thousand corporate Corporation has achieved a place among the top 10 performers.
Mining sector with a rating that exceed the industry average by 100%.
These results reflect our ongoing commitment to improving our sustainability practices and maintaining the company's inclusion in the Dow Jones sustainability index.
For the Latin American region.
This year marks our fifth consecutive year in the Dow Jones sustainability index.
In 2023.
<unk> achieved some of the highest score in detection for key.
<unk> eight indicators, including transparency and disclosure.
Okay patient on safety and health operations closure in human capital development.
We obtained a score of 90 out of 100 on CSA climate globally.
This effect with progress the company has made in these areas.
Additionally, we achieved a score of 100 in the task force on climate related disclosures.
Which focus on monitoring and disclosure of financial risk and no.
If opportunities related to climate change Additionally, investor lip climate action 100, plus.
Initiatives recognized our efforts to develop an emission reduction roadmap and award class a full compliance rating.
Raul Jacob: The company continues working with the Michigaya and Alencaada communities following the guidelines of the social agreements signed with. For environmental, social, and corporate governance or ESG practices, major improvement, we have a major improvement in water recovery that we want to report. Over the last four years, we have improved the use of water at our operations going from 0.64 cubic meters, Less than 1 cubic meter, 0.64, of water to a mill ton of mineral in 2020 to 0.53 cubic meters in 2021. This represents an increase in efficiency of 17%.
Sure.
Indeed.
FD Kathryn.
Furthermore, the rating agency sustain <unk> reduced the company's risk by two levels between 2020 and 2023.
In 2023, where you see our 97% increase in year to date year to year investment and associated infrastructure.
In Mexico, $35 9 million was allocated to these efforts.
That was particularly noteworthy this year focused on improving water infrastructure for the communities.
EMEA and mix effect.
In Peru, $45 7 million western benefit in social infrastructure, including the progress in building the waste water treatment plant for FIC tower.
Yes.
The company also prioritize duplication of infrastructure development in Peru.
And we will build upon successful previous initiatives and market impact.
Raul Jacob: Improvement has primarily been driven by the company's initiative to recover water from our Quebrada Onda training stand in Peru and by an uptick in the water volume recovered at the Buenavista El Cobre mine in Ecuador. We continue to make progress in our sustainability research. The F&P Global Report, in its Corporate Sustainability Assessment or CSA, indicates that Southern Copper Corporation has achieved a place among the top ten performers in the mining sector with a rating that exceeds the industry average by 100%. These results reflect our ongoing commitment to improving our sustainability practices and maintaining the company's inclusion in the Dow Jones Sustainability Index for the Latin American series. This year marks our fifth consecutive year on the Dow Jones Sustainability Index. In 2023, FEC achieved some of the highest scores in the sector for key ESA indicators, including transparency and disclosure. Occupational Safety and Health
Continuing our commitment the company is actively expanding indication of infrastructure to benefit the community.
Work for taxes.
<unk> includes setting up for a high performance score or core.
Excellent instrument spanning four one.
The decision to strengthen the capacity of withstanding students in the phase III patients.
Two schools are currently under construction.
In <unk> <unk>.
These investments have made.
Corporate primary private investor in Peru National educational infrastructure.
Regarding dividends as you know it is the company policy to review, our cash position expected cash flow generation from operations.
Capital investment plan and other financial needs.
At each board meeting.
To determine.
The appropriate quarterly dividend.
Accordingly.
How stupid market on January 25th.
Board of directors authorized a cash dividend of 80 pence per share of common stock payable on February 29.
To shareholders of record at the close of business on February 13th of 2024.
Ladies and gentlemen, with these comments we end our presentation today.
Raul Jacob: Operations Closure and Human Factories, who obtained a score of 90 out of 100 on the CFA Climate Governing Team. This is thanks to the progress the company has made in this area. Additionally, we achieved a score of 100 in the top four on climate-related disclosures, with a focus on management and disclosure of financial risks and opportunities related to climate change. Additionally, investor-led Climate Action 100-strike initiatives recognize our efforts to develop an emission reduction roadmap and award a full compliance rating in the TCFG practice. Furthermore, the rating agency Sustainalytics reduced the company's risk by two levels between 2020 and 2035.
Thank you very much for joining us and we will like to now open up the forum for questions.
Thank you.
As a reminder to our audience to ask a question simply press Star one one on your telephone and wait for your name to be announced to withdraw the question Press Star one again.
One moment for our first question please.
It comes from the line of Timna Tanners with Wolfe Research. Please proceed.
Yeah, Hey, good day, now and happy Friday can you hear me okay.
Yes, yes.
Great I hope everyone's doing well.
So a bunch of questions.
First I wanted to hear about how you are guiding to lower costs.
And just if you could provide some more color on.
And how that cost come down just given the broader inflation that we've been seeing prevalent in the last couple of years.
Raul Jacob: In 2023, we'll register a 97% increase in year-to-year investment in social infrastructure. In Mexico, $35.9 million was allocated to this effort, a project that was particularly noteworthy this year focused on improving water infrastructure for the communities of Cananea and Mariana. In Peru, $45.7 million was invested in social infrastructure, including progress on building the wastewater treatment plant, or PECAR, in India. The company also prioritizes rotational infrastructure development in Peru and will build upon successful previous initiatives in Mokewa and Tamaulipas. Continuing our commitment, the company is actively expanding educational infrastructure to benefit the community and the reward for practice modality. This effort includes setting up five high-performance schools or co-ops, as is the acronym in Spanish, for 1,500 students to strengthen the capacities of outstanding students in the state's educational system. School for Currency and Reconstruction, in Mofewa. These investments have made Southern Copper the primary private investor in Peru's national educational infrastructure.
Okay.
Basically what we're seeing is that enough.
Uptick in prices.
The same after the Russian innovation to Ukraine.
We saw.
A combination of the impact that had on energy and some some key materials for us such as ammonia that east use our material for explosive production as well.
Instance, and all that.
And we had some some.
Some cost push.
Changing the mix of explosives chain.
Changing.
Making more and more research to improve our our cost on steel.
Phew.
And that somehow has helped us.
Natus stabilized our cash cost before credits at about.
$2 and 23, $2 24 last year, and we have the expectation of.
Decreasing either a little bit more in 2024.
Okay. That's helpful. Thank you.
Tia Maria you sounded more constructive in the release this time.
Raul Jacob: Regarding dividends, as you know, it is the company's policy to review our cash position, expected cash flow generation from operations, Capital Investment Plans, and other financial needs at each board meeting to determine Accordingly, as announced to the market on January 25th, the Board of Directors authorized a cash dividend of $0.80 per share of common stock payable on February 29th to shareholders of record at the Cloak of Business on February 13th, 2020. Ladies and gentlemen, with these comments, we end our presentation today. Thank you very much for joining us, and we would like to now open up the forum to questions. Thank you. And as a reminder to our audience, to ask a question, simply press star 11 on your telephone and wait for your name to be announced. To withdraw the question, press star 11 again.
Tia Maria: In the remarks and I'm just wondering if it's actually.
Actually time to put it.
We estimate this coming forward and if so if you could elaborate on timing also that one 4 billion amount in light of all that cost inflation around miners globally can you just remind us if that's an updated number and what that entails. Thanks a lot.
Sure so regarding the Capex.
We already have spent a little bit north of $350 million on equipment that is a store.
With the appropriate care.
A nearby camera the policy.
And.
We're more positive for sure on Tia Maria.
And we are moving forward with some actions that we will report on progress as we as we get better their news domain.
But yes, we're much more positive.
Regarding the project.
Timna Beth Tanners: One moment for our first question, please. It comes from the line of Timna Tanners, Red Wolf Research. Please proceed. Yeah, hey, good day now, and happy Friday. Can you hear me okay? Yes, they're watching us.
Sure.
But we will like to give you good news when we have something relevant to report.
Okay. That's helpful I'll leave it there thanks again.
Thank you very much thank.
Thank you one moment for our next question. Please.
Raul Jacob: Okay, great. I hope everyone's doing well. I have a bunch of questions. First off, I wanted to hear about how you are guiding to lower costs, and just if you could provide some more color on how the costs have come down, just given the broader inflation that we've been seeing prevalent in the last couple of years. Basically, what we are seeing is that after an uptick in prices, after the Russian invasion of Ukraine, we saw a combination of the impact it had on energy and some key materials for us, such as ammonia that is used as a material for explosives production, as well as steel, for instance, and obviously oil. And we had some cost push.
He comes from the line of Gabrielle Cmos with Goldman Sachs. Please go ahead.
Hi, Thank you for taking my question.
So the first one if you could provide some more details on the GAAP W. Baird.
In production versus copper sales in the quarter. So you mentioned.
D&O or inventory.
Yes, I can.
Copy you.
And copy you well could you give.
They're closer to your point, yes.
Yes, much better now.
Alright, sorry, Im sorry about that so.
So the first question is about the gap that we observed this quarter in production versus sales for copper right. So you mentioned that this is due to the end of the inventory situation, but any additional detail that you could providers.
On the market here would be interesting.
And in addition would you expect this gap to be reversed in the coming quarters. So that the excess inventory that you accumulated due to the higher production.
Raul Jacob: Well, we react to that, reassigning, changing the mix of explosives, doing more research to improve our cost on steel, as well as looking into some other ways to save energy, both as power and as fuel. And that somehow has helped us and made us stabilize our cash flow before credit at about $2.23, $2.24 last year, and we have the expectation of decreasing it a little bit more in 2017. Okay, that's helpful. Thank you. Regarding Chia Maria, you sounded more constructive in the release this time and in the remarks. And I'm just wondering if it's actually time to put it in our estimates as coming forward, and if so, if you could elaborate on timing. Also, that $1.4 billion amount, in light of all the cost inflation around miners globally, can you just remind us if that's an updated number and what that entails? Thanks a lot.
That would be interesting to know as well.
Second question is regarding the comment that you guys made the point.
<unk> got water situations. So I just wanted to add some more color on how this is going and if it has already impacted some of your cost in some way.
That should affect your cost in a meaningful way in the short term and if there is a longer term solution toward its already underway or credit structurally increasing copper mine in the future.
Thank you.
Okay. Thank you very much for your question Cody.
Okay.
We have.
Inventory built up.
Related to <unk>.
And in Mexico, the refinery at.
At the end of the past quarter.
Have about 7800 tonnes of copper in process that should be sold.
Leap this quarter in the first quarter of this year.
Raul Jacob: Sure. Regarding the capex, we already have spent a little bit more than $250 million on equipment that is stored with the proper care nearby the Tia Maria deposit. And we are more positive, for sure, on San Maria, and we are moving forward with some actions that we will report on progress as we get better news on it. But yes, we are much more positive regarding the project. But we would like to give you good news when we have something relevant to report. Okay, that's helpful. I'll leave it there. Thanks again.
So it's not like it's more like <unk>.
Mike.
One thing obviously inventories are.
<unk> are bearing all the time, but in this case we had.
We had some <unk>.
Some repairs that were scheduled for the end of the year that generated <unk>.
The uptick in inventory in process.
Regarding the win at least our water situation well, we have I would say.
I mentioned that we the company has taken actions.
One on solving this problem for this year.
Raul Jacob: Thank you very much, Timna. Thank you. One moment for our next question, please. It comes from the line of Gabriel Simos with a golden fax. Please go ahead. I thank you for taking my questions. I have two.
We're basically moving water.
Water tankers.
<unk> tankers plus.
And.
Obviously, it has an impact in costs.
Gabriel Simos: So the first one is, if you could provide some more details on the gap that we observed in production versus copper sales in this quarter. As you mentioned, this is just the annual inventory. Sorry, David. I can't copy you. David, I can't copy you all.
We'll see we'll see that it's about $29 million.
We're expecting.
<unk>.
And.
In terms of production.
The problem in production, we have Easter if you look at the metrics.
We're reporting for whenever you were mentioning that there was a reduction in mineral process as well as recovery that's directly related to the lack of orders. So that's why the company has made.
Gabriel Simos: Could you get a closer view? Yes, it's much better now. I'm sorry. I'm sorry about that. So the first question is about the gap that we observed this quarter in production versus sales for copper. You mentioned that this is due to the anode inventory situation, but any additional details that you could provide us on the market here would be interesting. And in addition, would you expect this gap to be reversed in the coming quarter so that there would be excess inventory that you accumulated due to the higher production? That would be interesting to know as well.
Tia Maria: The related deepening ways to solve this.
We finally took a decision and are implementing it.
This month.
Sorry, Keith.
Generally.
Thank you and as a reminder to ask a question simply press star one one to get into queue. Our next question comes from Alfonso Salazar with Scotiabank. Please proceed.
Raul Jacob: And my second question is regarding the comment that you guys made on the Brennan East water situation. So I just wanted to have some more color on how this is going. And if it has already impacted some of your costs in some way, it should affect your costs meaningfully in the short term.
Thank you.
Down.
I have two questions. The first one is regarding <unk> concessions.
<unk>.
I want to understand how deep water problem that cananea relate with.
The new law in Mexico that requires some mining.
Raul Jacob: And if there is a longer-term solution for this already underway, or could it structurally increase the cost of the mine in the future, if this is a relevant metaphor for the cost. Thank you. Okay, thank you very much for your questions. Okay, well, we have an inventory built up related to the Mexico refinery. At the end of the past quarter, we had about 7,800 tons of copper in costs that should be sold, I believe, this quarter or the first quarter of this year. So this is not like, it's more like one thing. Obviously, inventories are varying all the time, but in this case, we had some repairs that were scheduled for the end of the year that generated this uptick in inventories overall.
Concession for reuse of water specifically for mining activities. So.
So I just want to understand if there is a link between these two things.
I am not mistaken I remember correctly back in November 2022, there was a misunderstanding between the government and the company because of some.
Concession splatter concessions granted to.
The company.
Lisa.
I think the company clarify that that way.
As such.
<unk> was granted and.
And the second question was regarding illogical.
You can see.
Youll see the details in the press release about this despite just wanted to understand why is that and the third question that I have is regarding the blended grades that we should expect.
Raul Jacob: Regarding the Buena Vista water situation, well, we have, as I mentioned, we, the company, have taken action on solving this problem for this year. We're basically moving water using water tankers of the world conqueror class, and uh... obviously, it has an impact on cost. We'll see that it's about $29 million that we're testing. And in terms of production, it created a problem in the production of Buenavista. If you look at the metrics that we're reporting for Buenavista, we mention that there was a reduction in mineral processing as well as recovery. That's directly related to the lack of water.
And basically because it's going to be you will see that as a satellite mine. So I would imagine that that we should increase the caridad mine as more and more.
<unk> comes from Polaris. So just wanted to understand what to expect in terms of a blended grade there.
These are the three questions that I have.
Thank you very much <unk> so.
Good to hear from you okay into water concessions.
Well basically we do have the concession for the wells.
What we don't have.
<unk>.
The final permit to build a pipeline. So that's that is something that.
We expect to have.
Raul Jacob: So that's why the company has evaluated different ways to solve this, and we finally took a decision and are implementing it in January. Thank you. And as a reminder, to ask a question, simply press star 11 to get in the queue.
When we finish.
Working on the construction for the wells, but we haven't received yet so this is.
This is what these trucks created these these plus some lower range than than expected. This year. This past year I should say.
That is.
Basically what we have in the wells.
Alfonso Salazar: Our next question comes from Alfonso Salazar with Scotiabank. Please proceed. Thank you. Good morning. I have three questions. The first one is regarding the water concessions, and I want to understand how this water problem at Cananea relates to a new law in Mexico that requires a concession for the use of water specifically for mining activities. So I just want to understand if there is a link between these two things.
We will solve that problem in terms of water availability.
<unk>.
No matter how the weather.
Thanks.
<unk> brings.
In the area.
Now in the case of Kalydeco.
We are making.
Make any reference to a project because we have not made much progress to report we will do that when we have something relevant to share we do we do.
Alfonso Salazar: If I'm not mistaken, back in November 2022, there was a misunderstanding between the government and the company because of some concessions, water concessions granted to the company at Buena Vista, which I think the company clarified that there were no such concessions granted. And the second question was regarding El Arco. I didn't see the details in the first release about this project. I just want to understand why that is.
The financial community at this point, we're advancing the dupree, but.
Nothing relevant to report.
And then on the blended rate expected toward La Caridad, let me explain what's happening there.
Are we now.
When we initiated the production of mineral.
At <unk> <unk>.
We found that there wasn't an oxide.
Layer that had to be removed before getting into the field of course, we charge a fee for for the concentrator. So the first months.
Alfonso Salazar: And the third question that I have is regarding the blended grays that we should expect at La Calidad, basically because it's going to be using LARIC as a satellite mine. So I would imagine that we should increase the Calidad mine as more production comes from LARIC. So I just want to understand what to expect in terms of a blended grade there.
This was at the end of 2022 in the first quarter of 2023.
We basically removed is oxides.
From from the Pilates.
Deposit and funding to our Sx EW.
That material, it's being process. So we will expect to have some more.
Raul Jacob: And these are the three questions that I have. Thank you very much, Fawzi. I have a good hearing from you. Okay, in the water concessions, basically, we do have a concession for the well. What we don't have is the final permit to build a pipeline.
Refined sx EW copper coming from Polaris.
In near future.
And.
Dan we are.
Look at the.
Prices relative prices of molybdenum vis vis copper this was by mid 2023 molybdenum at very good prices.
Raul Jacob: So that is something that we expect to have when we finish working on the construction of the world. But we haven't received it yet. So this is what this has created. It has had some lower rain than expected this year, this past year, I should say. But that is basically what we have in the world.
And corporate and not as good as we have.
At the same the year before.
After making some some numbers some financial.
Raul Jacob: We'll solve the problem in terms of water availability, no matter how the weather affects the rain in the area. Now, in the case of El Arco, we haven't made any reference to the project because we haven't made much progress to record. We will do that when we have something relevant to share with the public and the financial community. At this point, we're moving forward with the project, but there's nothing relevant to it. And then on the blended weights expected for RACALILA.
Reviews.
Sure.
We completed that work.
We're asking to increase the molybdenum production of like cardio, we see from our four open pit mines the ones that have the best ore grades for molybdenum So the company.
Favored the production of molybdenum cardiac.
And that was sold taking.
Raul Jacob: Let me explain what happened at RACALILA. When we initiated the production of minerals at the Pilares project, we found that there was an oxide layer that had to be removed before getting into the core cores, which are the feed for the concentrators. So the first month, this was at the end of 2022 and the first quarter of 2023, we basically removed this oxide from the pilaric deposits and sent it to our effective W leaching area. That material is being processed, so we will expect to have some more refined SXEW copper coming from Pilates in the near future. And then we look at the prices, the relative prices of molybdenum vis-à-vis copper. This was by Meek in 2023.
The opportunity of a much higher prices for for molybdenum.
That has passed the last quarter we had.
A price that was safe reported lower than what we had before and consequently, we're coming back to attending or.
From Polaris to two la caridad.
Our expectation is that that we should be producing about 35000 tons of copper from <unk>.
Tia Maria: In the mix.
Got you got Conor.
Concentrator, we got material.
Okay I understand in case monoprice at so again, you may reduce their input from from pillar.
Raul Jacob: Molybdenum had very good prices, and Copper not as good as we had seen the year before, and after making some numbers, some financial reviews, we... We conclude that it was interesting to increase. The Molotov Instruction of La Calidad de los Chichos from our four open pit mines, the ones that have the best, all great for Molotov. So the company favored the production of molybdenum at La Caridad, and that was all taking advantage of the opportunity of much higher prices for Molotov.
To produce more and multi bad right.
If prices make.
Prices make sense.
We do that we'll consider it.
Okay. Thank you and just to confirm the pelon, we bought that you have at least that does not relate.
The changes to the mining law and the water concessions.
Raul Jacob: That, in fact, the last quarter we had a price that was reported lower than what we had before, and consequently, we are coming back to sending ore from Pilares to La Calida. Our expectation is that we should be producing about 35,000 tons of copper from Pilares in the mix at the La Calida concentrator with Calida material. Okay, and if I understand correctly, in case molybdenum prices soar again, you may reduce the input from pilares to produce more molybdenum, right? If it makes sense to do that, we'll consider it.
I don't think so I think that this is this is a different matter. This just.
Pipeline permit.
It's taking longer that was we.
Belief when we initiate.
This.
We're working towards.
Thank you very much.
Thank you one moment for our next question. Please.
Comes from the line of John Tumazos, with John Tumazos very independent research. Please proceed.
Thank you very much I apologize if I have any construction noise in the background.
Raul Jacob: Okay, thank you. And just to confirm, the water problem that you have at Buenavista does not relate to the changes to the mining law and the water concession. I don't think so.
Southern copper.
25000 tons.
Output from purchased ores.
2023.
Raul Jacob: I think that this is a different matter. It's just a pipeline permit that is taking longer than we believed when we initiated the work in these two ways. Thank you very much. You're welcome. Thank you. One moment for our next question, please, comes from the line of John Tumazos with his very independent research.
<unk>.
$5 million less.
Other income.
Could you describe whether the.
The purchase stores were in Sonora.
Southern copper.
<unk>.
A regular sustainable or sort of an episodic thing.
And what.
Other income.
John Tumazos: Please proceed. Thank you very much. I apologize if I have any construction noise in the background.
Which declined.
Okay.
Let me.
Address the last question.
Raul Jacob: All right. Thank you. Thank you. Southern Copper had twenty-four and a half thousand tons Less Output From Purchased Ores Harvard end top. Would you describe whether the purchase orders were..... Southern Copper Corp., regular, sustainable, or sort of episodic? What has been the other income?
Other income.
What.
The expected one in 2023 other income tax expense.
The appropriate one to use will trend of the company in 2023.
The anomaly was in 2022 and May was a positive thing for the company.
Raul Jacob: Okay, let me address the last question. Other income was the expected one in 2023; other income slash spend was the proper one, the usual trend of the company in 2023. The anomaly was in 2022, and it was a positive thing for the company. We had some insurance refunds as well as tax refunds that we had in 2022.
Had some insurance refunds.
Tax.
A tax.
Refund.
As we that we had in 2022, so more than having lower.
Other income.
In 2023, we had an exceptional very good 2022 in that regard.
Raul Jacob: So more than having lower other incomes in 2023, we have an exceptional, very good 2022 in that regard; we are getting into oil purchases. Basically, we have to purchase an unusual amount of copper concentrate in 2022 to fill up our smelter in Peru. Due to the Quahogne mine stoppage of 54 days, we had a committee that blocked the water supply for Quahogne. It was, as I say, 54 days. That was in 2022, so in 2023, Quahogne operated at full capacity, which is excellent for us, and that's why we significantly reduced our purchases of third-party materials. Generally speaking, we are buying third-party copper for technical reasons, because, as you know, John, we are long in copper concentrates, so we could, using just our own materials, fill up our smelters and refineries.
Getting into the ore purchases basically we had we exited searches.
Useful amount of.
Copper concentrates in 2022 to fill up our smell.
Smelter in Peru.
Due to the.
The <unk> mine.
Stoppage of 54 days, we had.
Our community.
Located the water supply for California.
Sorry, say 54 base that was in 2022, so in 2023 quattrone operated at full capacity.
Which is excellent for us and that's why we.
Reduced significantly our ore purchases.
Third parties material generally speaking we are buying third party sculpsure for technical reasons, because as you know Joan we are alone in copper concentrates. So we could using just our own material fill up our smelters and refineries, but sometimes we went.
Raul Jacob: But sometimes we want to acquire third-party material that has certain technical characteristics that improve our process, and that's why we are buying some of that as our share. Thanks. Thank you. And one moment for our next question. And thank you.
To acquire.
Third party material that fast.
Anthony characteristics that would improve our process and that's why we're buying.
Some some some of that.
We will report shows.
Thank you.
Thank you.
One moment for our next question.
Sophia Martin: Our next question comes from Sophia Martin with GBM. Please proceed. Hi, thank you for taking my question. I was just wondering if you could share your production guidance going forward for the next couple of years, certainly for fear, for MEA.
And thank you. Our next question comes from Sofia Martine with GBM. Please proceed.
Hi, Thank you for taking our question.
Just wondering if you could share your production guidance going forward for the next couple of years.
Certainly Cynthia.
EMEA.
Okay.
Raul Jacob: I already mentioned that for 2024, it's 935,000, 936,000, for 2025, 966,000, 2026, 985,000, 2027, 1,000,000, and 1,000. 1,000,018.
We mentioned that for 2024.
935900 936000.
For 2025 956000.
2680 5000.
2027 1.001 million.
2028, 1 million and $18.
Raul Jacob: Perfect. Perfect. Thank you very much. Everyone.
Alright, perfect. Thank you very much.
Youre welcome.
Thanks, Dan already.
<unk> mentioned that from this year, we're increasing our zinc production from 65500 last year up to 118000. This year and then over 170000 or the next.
Raul Jacob: I also mentioned that this year we are increasing our zinc production from 65,500 last year up to 118,000 this year and then over 170,000 for the foreseeable future. Thank you so much, and we have one more question. One moment, please. This is a follow-up from Timna Tanners with Wolf Research.
Next a foreseeable future.
Thank you so much and we have one more question one moment please.
It's a follow up from Timna Tanners with Wolfe Research. Please proceed.
Timna Beth Tanners: Please proceed. Thanks for taking my follow-up. I just had two more questions. One was, you know, related to the reported interest of Brukleman.
Alright, Thanks for taking my follow ups I guess I had two more questions.
One was.
Related to the reported interest in Cleveland.
Raul Jacob: We don't hear, we couldn't hear you at the beginning. Oh, sorry. So, just two quick questions. One is related to the reported interest in Las Cruces from Grupo Mexico. Is that something you can comment on?
We don't we could.
Could encourage you at the beginning.
Alright.
Just two quick questions one is related to the reported interest in Las Cruces.
Grupo Mexico is that anything you can comment on and the second one.
Timna Beth Tanners: And the second one, is there anything that you can provide in terms of color on the board's decision to cut the dividend? Thank you. For the first one, I couldn't get your question, so sorry. My connection might be kind of rough.
Just is there anything that you can provide in terms of color on the board's decision to cut the dividend. Thank you.
The first one I Couldnt get your question I'm, So sorry, sorry.
Sorry about that and the connection might be kind of a rough.
Raul Jacob: So, it's been reported that Grupo Mexico is looking at Las Cruces, the Spanish mine owned by First Juan. So, I was just wondering if you have any comment on that or if it's relevant for Southern Copper. It's a relevant question for a group in Mexico actually, but just what we do, if there is a good opportunity to generate value for our shareholders through an acquisition, we dive into these alternatives. In this case, the company is not directly involved; it's through AMC that the Las Cruces evaluation is being done. In the case of the dividend, well, it's as we explained; at each board meeting, the company and the board look at how the market is, what are the next payments that the company has to do, what are the investment requirements, and in this case, if you see our cash generation from operations was somehow lower, the board decided to cut the dividend a little bit in order to maintain a solid cash position for the company.
So that it's been reported that Grupo Mexico is looking at Las Cruces.
The Spanish mine owned by <unk>.
First question. So I was just wondering if you have any comment on that or if it's relative relevant for southern copper.
It's a relevant question, Florida for Grupo Mexico actually but.
Just what we do if there is a good opportunity.
To generate value for our shareholders through an acquisition we dive into into this alternative in this case the comes.
Knee is not directly involved with this through through AMC that the exclusive evolution, it's beaten down.
Indications with dividend will.
As we explained in each board meeting the company the board looks at.
How the market is what are the next payments that the company has to do with the investment requirements and.
And in this case.
You see our.
Cash generation from operations.
Somehow lower so the board decided to cut a little bit.
The Cooper sorry.
Sorry, the dividend in order to maintain a solid cash position for the company.
Okay. Thank you again.
Raul Jacob: Okay, thank you again. Thank you. And, sir, I'm not showing any further questions in the queue. Thank you very much, Carmen. Well, with this, we conclude our conference call for Southern Copper's fourth quarter and full year results for 2023. We certainly appreciate your participation and hope to have you back with us when we report the first quarter of 2024 results. Thank you very much for being with us, and have a very nice day. And thank you all for joining our call today; you may now disconnect. Copyright 2020 Mooji Media Ltd. All Rights Reserved. No part of this recording may be reproduced
Thank you.
Sir I'm not showing any further questions in the queue.
Okay. Thank you very much Carmen well this will conclude our conference call for southern Copper's fourth quarter and full year results for 2023, we certainly appreciate your participation and hope to have back with us when we report.
The first quarter of 2024 results. Thank you very much for being with us.
Very nicely.
And thank you all for joining our call today and you may now disconnect.
Okay.
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Tia Maria: Yes.
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