Q1 2024 Southern Copper Corp Earnings Call

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Yes.

Operator: Good morning and welcome to Southern Copper Corporation's first quarter 2024 results conference call. With us this morning we have Mr. Raul Jacob, Vice President of Finance, Treasurer, and CFO, who will discuss the results of the company for the first quarter 2024 as well as answer any questions that you might 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.

Good morning, and welcome to Southern Copper Corporation's first quarter 2024 results conference call with US. This morning, we have southern Copper Corporation, Mr. Raul Jacob Vice President of Finance Treasurer, and CFO, who will discuss the results of the company for the first quarter.

Our 2024 as well as answer any questions that you might 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 to not place undue where.

Operator: 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.

Alliance 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 onto Mr. Raul Jacob.

Raul Jacob: Thank you very much, Gigi. Good morning, everyone, and welcome to Southern Copper's first quarter 2024 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 ESG. After this, we will open the session to questions.

Thank you very much.

Raul Jacob: Good morning, everyone and welcome to Southern Copper's first quarter of 2024 results conference call.

Today's conference I'm joined by Mr. Oscar Gonzalez Rocha CEO of southern copper and board member as well as Mr. Gao Notable competitor who is also a board member.

Raul Jacob: Today's call will begin with an update on our view of the copper market and then review southern Copper's key results related to production sales.

Breaking cost financial results expansion projects and easy. After this we will open the session for questions now, let us focus on the copper remarks.

Raul Jacob: Now let us focus on the copper market. The London Metal Exchange copper price decreased 5.4% from an average of $4.05 per pound in the first quarter of 2023 to $3.83 in the past quarter. At the end of last year, we were expecting a slight market surplus for 2024. However, after several producers announced reductions in copper production, concerns about a potential deficit displaced market optimism. At this time, we estimate that the copper supply will drop by about 1%.

Raul Jacob: The London metal exchange copper price decreased five 4% from an average of $4.05 per pound in the first quarter.

Raul Jacob: Of 2023 to $3.83 in the past quarter.

Raul Jacob: At the end of last year, we were expecting a slight market surplus for 2024. However, after several producers announced reductions in copper production concerns about a potential deficit displays market optimism.

Raul Jacob: At this time, we estimate that the corporate supply will drop by about 1% previously.

Raul Jacob: Previously... We were expecting a growth of 3.2% in supply, which has been reversed by this new forecast of a drop of 1%, as I said. In addition to the significant downward revisions to global copper production projections for this year, we're currently seeing strong market demand on the back of a resilient U.S. economy and new demand for decarbonization technologies and artificial intelligence. Demand is suspected to grow by about 2.5% this year.

Raul Jacob: Previously.

Raul Jacob: We weren't expecting a growth of three 2% in supply, which has been reversed by visa Newport Gasify our.

Raul Jacob: A drop of 1% of sites.

Raul Jacob: In addition to a significant downward revisions to global.

Raul Jacob: Copper production per.

Raul Jacob: Predictions for this year, we're currently seeing a strong market demand on the back of a resilient U S economy.

New demand for Decarbonization technologies, and artificial intelligence demand is expected to grow by about two 5% this year.

Raul Jacob: We believe these new factors, as I say, the carbonization technology, and the resilience of the U.S. economy, will play a significant role in supporting long-term copper demand. sustaining an attractive copper price Now, let's look at Southern Copper's production for the past quarter. Copper represented 78.6% of our sales in the first quarter of 2021. Copper production registered an increase of 7.6% in the first quarter in terms of quarterly terms to stand at 240,270 tons. Our quarterly production result reflects a 19% increase in production in Peru due to higher ore grade mineral processing and recoveries and a 0.5% increase in production in Mexico.

Raul Jacob: We believe these new factors as they take the carbonization technologies, the resilience of the U S economy.

Raul Jacob: He will play a significant role in supporting long term corporate demand.

Raul Jacob: Staining attractive copper price.

Raul Jacob: Now, let's look at southern Copper's production for the past quarter copper represented 78, 6% of our sales in the first quarter of 2020 for copper.

Raul Jacob: Corporate production registered an increase of seven 6% in the first quarter in quarter on quarter terms to Stan.

Raul Jacob: There are 40270 times, our quarterly production result.

Raul Jacob: <unk>.

Raul Jacob: 19% increase in production in Peru, due to higher ore grade mineral processing and recovery and appointed five increasing production in Mexico margins.

Raul Jacob: This includes 2,158 tons of copper from the new zinc concentrator at Buena Vista Mars. These positive results were partially offset by a decrease in SXCW cattle production at Buena Vista and Toque. In the fourth quarter of 2023, we reported that our Buena Vista operation had experienced difficulties with its water supply.

Raul Jacob: This includes 2158 tons of copper from the new zinc concentrate are gonna be summer.

Raul Jacob: These positive results were partially offset by a decrease in Sx EW copper production that whenever you start I'm talking about.

Raul Jacob: In the fourth quarter of 2023, we reported that our we never used operations have experienced difficulties with its water supply.

Raul Jacob: After taking action this past quarter to cover water requirements for this facility, we believe we have ensured sufficient water supplies to operate our Buena Vista mine as forecasted in our annual plan. For 2024, we're increasing our forecast of copper production to 948,800 tons of copper, an increase of 4.1% over the 2023 final. Last year, we drove our Pilares project to full capacity and initiated ramp-up of the Buena Vista zinc concentrator

Raul Jacob: After taking action this past quarter to cover water requirements for this facility. We believe we thought we have to ensure sufficient water supplies to operate our Buenavista mine are forecasted in our annual plan.

Raul Jacob: For 2024, we're increasing our forecast of copper production to 948800 tons of copper an increase of four 1% over the 2023 final print last.

Raul Jacob: Last year, we drove our pillar is project to full capacity and initiated ramp up of the win at Vista.

Raul Jacob: For 2024, we expect these two projects to contribute 43,800 tons of copper. For Molybdenum, it represented 10.5% of the company's sales value in the first quarter of this year and is currently our first by-product. Molybdenum prices averaged $19.84 per pound in the quarter, compared to 32.04 in the first quarter of last year, which represents a decrease of 38%. However, molybdenum production increased by 9.5% in the first quarter of 2024 compared to the same period last year. This was mainly driven by higher production at the Peruvian operation and the Buena Vista mine due to higher ore grades. These results were partially offset by lower production at La Caridad.

Raul Jacob: Concentrate for 2024, we expect these two projects to contribute with 43800 tons of copper.

Raul Jacob: For molybdenum it represented 10, 5% of the company's sales value in the first quarter of this year and is currently our first by brother molybdenum prices averaged $19 84 per pound in the quarter compared to 32.04.

Raul Jacob: In the first quarter of last year.

Raul Jacob: Which represents a decrease of 38%.

Raul Jacob: Lithium production increased by nine 5% in the first quarter of 2022, four compared to the same period of last year.

Raul Jacob: This was mainly driven by higher production at the Peruvian operations.

And then when Arista mine due to higher ore grades. These results were partially offset by lower production at La Caridad mines.

Raul Jacob: In 2024, we expect to produce 26,100 tons of molybdenum, higher by 2.4% than our plan. For silver, it represented 4.3% of our sales value in the first quarter of 2024, with an average price of $23.35 per ounce in the quarter, which reflected an increase of 3.6%. Silver is currently our second byproduct.

Raul Jacob: In 2024, we expect to produce 26100 tons of molybdenum hire two 4% and our plan.

Raul Jacob: For silver it.

Raul Jacob: It represented four 3% of our sales value in the first quarter of 2024 with an average price of $23 and 35.

Raul Jacob: In the quarter, which.

Raul Jacob: <unk> an increase of three 6%.

Raul Jacob: Silver is currently our second byproduct mined silver production increased eight 4% in the first quarter of 2024 versus the first quarter of 2023.

Raul Jacob: Mine silver production increased 8.4% in the first quarter of 2024 versus the first quarter of 2023 after production rose at all our mines with the exception of Huenavilla. Refined silver production fell by 1.6% quarter over quarter, which was mainly driven by a drop at the INSA and La Caridad. In 2024, we expect to produce 20.5 million ounces of silver, an increase of 11.4% compared to 2020. SYNC represented 2.7% of our sales value in the first quarter of 2024, with an average price of $1.11 per pound.

After production rose at all our mines with the exception of win.

Raul Jacob: Refined silver production fell by one 6% quarter over quarter, which was mainly driven by a drop at the insight and like how do you outperform.

Raul Jacob: In 2024, we expect to produce 25 million ounces of silver an increase of 11, 4% compare to 2023.

Raul Jacob: Zinc represented two 7% of our sales value in the first quarter of 2024 with an average price of a dollar and 11 cents per pound in the quarter.

Raul Jacob: This is 22% lower than last year's first quarter's price for SYNC. Sink mine production increased 75% quarter after quarter and totaled 26,366 tons. This was mainly driven by the new Buena Vista Zinc Concentrator production of 9,695 tons over the period, and by an increase in production at the Santa Barbara, Charcas, and San Martin mines of our IMSA subsidiaries. However, refined zinc production decreased by 15% in the first quarter of 2024 compared to the first quarter of 2020. For this year, we expect to produce 120,300 tons of zinc, which represents an increase of 84% over the 2023 production level. This growth will be driven by the Buena Vista Sink Concentrate.

Is 22% lower than.

Raul Jacob: Last year's first quarter surprise foreseen.

Raul Jacob: Zinc mine production increased 75% quarter on quarter and totaled 26366 times.

Raul Jacob: This was mainly driven by the new win of Easter zinc concentrate or production of 9695 tonnes over the period and by an increase in production at the center of all that charter Catherine Tang Mark being mined.

Raul Jacob: Our <unk> subsidiary.

Raul Jacob: Refined zinc production decreased by 15% in the first quarter of 2024 compare to the first quarter of 2020.

Raul Jacob: For this year, we expect to produce 100 2300.

Raul Jacob: 300 tons of zinc, which represents an increase of 84% over the 2023 production levels.

Raul Jacob: This growth will be driven by the buenavista zinc concentrate are.

Raul Jacob: We expect this facility to produce 54,500 tons of zinc in 2024 and an average of 90,200 tons of zinc and 20,000 tons of copper per year over the next five years. (Inaudible) For the first quarter of 2024, sales were $2.6 billion. That is $194 million lower than sales for the first quarter of 2024, 7%. Copper sales volume increased by 2.8, but value decreased 4.8% driven by lower prices. Regarding our main byproducts, despite an increase in our molybdenum sales volume of 8.4%, sales for molybdenum decreased by 9.3% due to lower prices. As I mentioned, prices dropped by 38% quarter on quarter. In the case of silver, sales dropped by 3.1% due to a decrease in volume.

Raul Jacob: We expect this facility to produce 54500 homes.

Raul Jacob: Zinc in 2024, and an average of 90200 tons of zinc and 20000 tons of copper per year over the next five years.

Raul Jacob: Financial results.

Raul Jacob: For the first quarter of 2024 sales were $2 $6 billion that is $194 million lower than sales for the first quarter of 2023.

Raul Jacob: Or 7% less.

Raul Jacob: The corporate sales volume increased by $2 eight but value decreased four 8% driven by lower prices.

Raul Jacob: Regarding our main by products.

Raul Jacob: Spike in increasing our molybdenum sales volume of eight 4% sales for molybdenum decreased by nine 3% due to lower prices as I mentioned prices dropped by 38% quarter on quarter in the case of silver sales dropped by three 1% due to a decrease in volume.

Raul Jacob: It was partially offset by better pricing zinc sales dropped by 24% over the period due to lower prices.

Raul Jacob: The slightly lower volume.

Raul Jacob: Operating costs, our total operating costs and expenses decreased by $30 million or two 1% when compared to the first quarter of 2023.

Raul Jacob: The main cost reductions has been inventory.

Raul Jacob: Purchase copper workers' participation explosive and grinding media and other factors. These cost reductions were partially offset by higher repair materials diesel and fuel cost labor and other costs.

Raul Jacob: This drop was partially offset by better prices. Sink sales dropped by 24% over the period due to lower prices and slightly lower volume. Our total operating costs and expenses decreased by $30 million or 2.1% when compared to the first quarter of 2021. The main cost reductions have been inventory, purchase Copper, workers participation, Explosives and Grinding Media, and other factors. These cost reductions were partially offset by higher repair material, diesel, and fuel costs, labor, and other costs.

Raul Jacob: The first quarter of 2024, adjusted EBITDA was $1417 7 million, which is $9 six lower when compared to the 1000 568 million registered in the first quarter of 2023.

Raul Jacob: This was due to lower prices for copper and molybdenum that.

Raul Jacob: Adjusted EBITDA margin in the first quarter of this year was 54, 5% versus 56, 1% in the first quarter of 2023.

Raul Jacob: Operating cash cost per pound of copper.

Raul Jacob: Before by product credits was $2 11 per pound in the first quarter of 2024. This is 12 cents below the $2.23 Register for the fourth quarter of 2023.

Raul Jacob: The first quarter of 2024 adjusted EBITDA was $1,417.7 million, which is 9.6 lower when compared to the $1,568 million registered in the first quarter of 2024. This was due to lower prices for copper and molybdenum. The adjusted beta margin in the first quarter of this year was 54.5% versus 56.1% in the first quarter of 2019, operating cash costs per pound of copper. Before byproduct credits, it was $2.11 per pound in the first quarter of 2020.

Raul Jacob: <unk> five 3% decrease in operating cash cost was attributable to lower cost per pound.

Raul Jacob: Production.

Raul Jacob: A decrease in treatment and refining costs and are dropping administrative expenses.

Raul Jacob: All of these net of an uptick in the premiums.

Raul Jacob: Southern copper operating cash cost, including the benefit of byproduct credits was $1.07 per pound in the first quarter of this year.

Raul Jacob: This cash cost was 18% lower than the cash cost of $1 25.

Raul Jacob: For the fourth quarter of 2023.

Raul Jacob: Regarding by products, we had a total credit of $532 million or $1.04 per pound in the first quarter of 2020 for.

Raul Jacob: This is $0.12 below the $2.23 registered for the fourth quarter of 2020. This 5.3% decrease in operating cash costs was attributable to lower costs per pound, a decrease in treatment and refining costs, and a drop in administrative expenses, all of these net of an uptick in the premium. Southern Copper operating cash costs, including the benefit of by-product credits, were $1.07 per pound in the first quarter of this year. This cash cost was $0.18 lower than the cash cost of $1.25 for the fourth quarter of 2012.

Raul Jacob: These figures represent a five 9% increase when compared with the credit of $491 5 million.

Raul Jacob: Which was an equivalent of 98 four cents per.

Raul Jacob: Per pound in the fourth quarter, So we have better credit.

Raul Jacob: That increase hour increased by 6% in absolute dollars and on.

Raul Jacob: <unk>.

Raul Jacob: For pound basis.

Raul Jacob: It was a $1 four versus 98 four in the last in the fourth quarter of last year.

Raul Jacob: Total credits have increased for molybdenum and silver, but decrease for zinc and sulfuric acid.

Raul Jacob: Copper production volumes increased by two 6% between the first quarter of this year in the fourth quarter 2023 regarding byproducts production volumes increase foreseeing as I'd say, 56% and decreased for molybdenum.

Raul Jacob: Yes.

Raul Jacob: Net income was 736 million or nine 5% lower when compared to $813 2 million registered in the first quarter of 2023.

Raul Jacob: Regarding byproducts, we have a total credit of $532 million, or $1.04 per pound, in the first quarter of 2021. These figures represent a 5.9% increase when compared with the credit of $491.5 million, which was an equivalent of 98.4 cents per pound in the fourth quarter. So we had better credits that increased by 6% in absolute dollars, and on a per pound basis, it was $1.04 versus 98.4 cents in the fourth quarter of that year.

Raul Jacob: Net income margin was four in the first quarter of this year was 28, 3% versus 29, 1% in the first quarter of 2023.

Raul Jacob: Cash flow from operating activities in the first quarter of 2024 with $659 9 million, which.

Which represented an increase of 22% over the 540 million 49.

Raul Jacob: Million posted in the fourth quarter of 2023. This improvement was attributable to strong cash generation at our operations, which was driven by higher sales and cost control efficiencies.

Raul Jacob: In the first quarter of this year cash flow from operating activities was 44% lower than the 1180 $5 million reported in the first quarter of 2022 <unk>.

Raul Jacob: Total credits have increased for molybdenum and silver, but decreased for zinc and sulfuric acid. Copper production volumes increased by 2.6% between the first quarter of this year and the fourth quarter of 2021. Regarding by-products, production volumes increased for zinc, as I said, 56% and decreased for molybdenum. Net income was $736 million, or 9.5% lower when compared to the $813.2 million registered in the first quarter of 2012. The net income margin in the first quarter of this year was 28.3% versus 29.1% in the first quarter of 2012.

This decrease was attributable to $311 million, increasing working capital, which was driven primarily with our Mexican operation.

Raul Jacob: Capital investments our current capital investment program for this decade exceeds $15 billion and includes investments in the Tia Maria the tankers in the GTA project in Peru, and they will be testing <unk>.

And electrical projects in.

Raul Jacob: This capital forecast includes several infrastructure investments, including key investments to bolster the competitiveness of the a lot of copel.

In the first quarter of this year, we spent 214 million on capital investments down 10% compared to the first quarter of last year and 16% versus the figure in the fourth quarter of 2023.

Raul Jacob: Capital expenditure represented 29% of net income this quarter.

Speaker Change: It seems there is a description of our main capital project in FCC's press release, I'm going to focus on updating new developments for each of them.

Speaker Change: Yes.

Speaker Change: For the Buenavista zinc concentrate or the capital budget for the project is $439 million.

Raul Jacob: Cash flow from operating activities in the first quarter of 2024 was $659.9 million, which represented an increase of 22% over the $540.9 million posted in the fourth quarter of 2020. This improvement was attributable to strong cash generation at our operations, which was driven by higher sales and cost control. In the first quarter of this year, cash flow from operating activities was 44% lower than the $1,185 million reported in the first quarter of 2021. This decrease was attributable to a $311 million increase in working capital, which was driven primarily by our Mexican-Occupied countries and Capital Inventor.

Speaker Change: Of which $283 million have been invested as of March 31 of this year.

Concentrator operation began in the first quarter of 2024, we expect as we mentioned already to produce 54500 tonnes of zinc and 11900 tonnes of copper this year.

Speaker Change: And for the next five years, we expect to have an average production of 90200 tons of zinc and 20000 tons of copper per year.

Speaker Change: Coming from these new <unk> zinc concentrate.

Speaker Change: For the Peruvian projects.

Speaker Change: In the case of China cutting our pulling back the company continues to engage in coordinated efforts with the Peruvian authorities to eradicate illegal mining activity. Once this process is completed we will resume the environmental impact assessment and initiate hydrogeological as well as your technical studies.

Raul Jacob: Our current capital investment program for this decade exceeds $15 billion and includes investments in the Ta Mara, Los Chancas, and Michiquillay projects in Peru and the Buenavista, CINC, Pilares, El Pilar, and El Arco projects in Mexico. This capital forecast includes several infrastructure investments, including key investments to bolster the competitiveness of the El Arco project. In the first quarter of this year, we spent $214 million on capital investments, down 10% compared to the first quarter of last year and 16% compared to the figure in the fourth quarter of 2013. Capital expenditure represented 29% of net income in this quarter.

Speaker Change: We also conduct.

Speaker Change: A diamond drilling campaign for 440000 meters to gather additional information on the characteristics of the last chunk of deposits.

Speaker Change: Dammit GTI project located in the America region in Peru.

Speaker Change: As of March 31 of this year, we have to drill 80000 meters of.

On a total program of 110000 meters.

And obtained 27902 core samples for chemical analysis.

Diamond drilling is underway, which will provide data for a cross section interpretation geological modeling and resource evaluation, we expect to begin Hydrogeological and geotechnical studies soon and will also add to the results of metallurgical testing at the defaults to.

Speaker Change: The company continues to work with <unk> and link Canary communities based on the guidelines of corresponding social agreement.

Raul Jacob: Since there is a description of our main capital projects in SEC's press release, I'm going to focus on updating new developments for each of them. For the Buena Vista Sinks Concentrator, the capital budget for the project is $439 million, of which $383 million had been invested as of March 31st of this year. The concentrator operation began in the first quarter of 2024. We expect, as we mentioned already, to produce 54,500 tons of zinc and 11,900 tons of copper this year.

Speaker Change: For <unk>.

Speaker Change: Environmental social and corporate governance or ESG.

Speaker Change:

Speaker Change: Well.

Speaker Change: We're always.

Speaker Change: We're very consistently reporting on ESG assessment conducted by rating agencies on our operations.

Speaker Change: For the third consecutive year, we were included in the S&P Global's sustainability yearbook. These.

Speaker Change: This means that thanks to our performance in these agencies corporate sustainability assessment and evaluation were ranked among the top 15% of the best rated company and sustainability in mining and metals.

Speaker Change: Regarding ESG risk ratings report evaluation by sustained lytic ACC.

Speaker Change: ACC reduce its risk level by improving this score within the medium risk category from 27, five in 2023 to 23 four in 2024.

Raul Jacob: And for the next five years, we expect to have an average production of 90,200 tons of zinc and 20,000 tons of copper per year coming from these new Buena Vista zinc concentrators. For the Peruvian projects, in the case of Los Chancas in Apurima, the company continues to engage in coordinated efforts with the Peruvian authorities to eradicate illegal mining activities. Once this process is completed, we will resume the environmental impact assessment and initiate hydrogeological as well as geotechnical studies.

Speaker Change: For climate action in the first quarter of 2024, we received clean energy certificate from one of our electricity suppliers in Peru.

With this all the electrical electrical energy, we consume in Peru in 2023 came from renewable sources.

Speaker Change: Measurements indicate that consumption of renewal electricity energy electrical energy at ACC increased from 23% to 36% in 2023, which means that we have already hit our 2027 target to ensure that 25% of our.

Raul Jacob: We will also conduct a diamond drilling campaign for 40,000 meters to gather additional information on the characteristics of the Los Chancas deposit, for the Michiquillay project located in the Cajamarca region in Peru. As of March 31st of this year, we have drilled 80,000 meters on a total program of 110,000 meters and obtained 27,902 core samples for chemical analysis. Diamond drilling is underway, which will provide data for cross-section interpretation, geological modeling, and resource evaluation.

Speaker Change: Electrical supply is derived from renewable sources.

Speaker Change: Over the same period greenhouse gas emission dropped by seven 5% in 2023 compared to 2022.

Speaker Change: For climate governance recently, a briefing from chapter SKU home of the climate governance initiative was held for the directors and managing of Southern Copper Corporation to inform them about the risks and opportunities associated with climate change these initiatives.

Speaker Change: In collaboration with the War Economic Forum aims to support non executive director insurers in.

Raul Jacob: We expect to begin hydrogeological and geotechnical studies soon, and we'll also assess the results of meteorological testing at the depot. The company continues to work with the Michiquillay and Lencaa communities based on the guidelines of the corresponding social agreements. For Environmental, Social, and Corporate Governance, or ESG, [inaudible] We're always, we're very consistently reporting on ESG assessments conducted by rating agencies on our operations. For the third consecutive year, we were included in the F&P Global Sustainability Yearbook.

Speaker Change: <unk> climate action into dirt business to study.

Speaker Change: Yes.

Speaker Change: For the second consecutive year, we received the exceptional Company award in Mexico presented by the business ordinated currency, the communication currencies and the institute for the promotion of quality.

Speaker Change: On dislocation the success of our location on center model was recognized after outstanding results were reported for <unk> in Spanish and English language.

Speaker Change: Which are above the national and regional average for the cohort of 2000 students from the four basic levels of schools sponsored by the company in mix.

Under our voluntary initiatives to benefit our employees.

Raul Jacob: This means that thanks to our performance in this agency's Corporate Sustainability Assessment and Evaluation, we are ranked among the top 15% of the best-rated companies in sustainability in mining and networks. Regarding DSG Risk Ratings Report Evaluation by SustainLit, SEC reduced its risk level by improving its score within the medium risk category from 27.5 in 2023 to 23.4 in 2021.

Speaker Change: In Peru, we integrated high performance school or core integral Macquarie.

Speaker Change: Newsome Spanish.

Speaker Change: The Peruvian.

Speaker Change: It is worth in aggregate the Peruvian region, where our Toquepala mine operates this campus houses 300.

Speaker Change: Outstanding students for the state the location of the system.

Speaker Change: Many of these students come from the most vulnerable areas of the region.

Speaker Change: All our facilities.

Speaker Change: Load them to continue their studies in state of the art classrooms laboratories libraries residences and support areas. Thanks to an investment of $26 million through the work for taxes modality.

Raul Jacob: For climate action, in the first quarter of 2024, we received clean energy certificates from one of our electricity suppliers in Peru. With this, all the electrical energy we consumed in Peru in 2023 came from renewable sources. Measurements indicate that consumption of renewable electricity energy, electrical energy at SEC, increased from 23% to 36% in 2020, which means that we have already hit our 2027 target to ensure that 25% of our electrical supply is derived from renewable sources. Over the same period, greenhouse gas emissions dropped by 7.5% in 2023 compared to 2021.

Speaker Change: Dividend announcements regarding dividends as you know it is the company policy to review our cash position.

Speaker Change: <unk> cash flow generation from operations capital investment plan and other financial needs at each board meeting to determine the appropriate quarterly dividend.

Speaker Change: Accordingly.

Speaker Change: Corporate Corporation announced last Friday that its board of director has approved a quarterly stock.

Speaker Change: Dividend.

Speaker Change: <unk> <unk> hundred one <unk> four shares of common stock per share payable on May 23, 2024 to shareholders of record at the close of business on May eight of this year.

Speaker Change: In lieu of fractional shares cash will be distributed to each shareholder will otherwise have been entitled to receive a fraction on share based on a share price of $115 13 $115 13.

Speaker Change: Which is the average of the high and low share price on April 18 2024.

Raul Jacob: For climate governance, recently, a briefing from Chapter 0, home of the Climate Governance Initiative, was held for the directors and management of Southern Copper Corporation to inform them about the risks and opportunities associated with climate change. This initiative, developed in collaboration with the World Economic Forum, aims to support non-executive directors and chairs in integrating climate action into their business strategies. For the second consecutive year, we received the Exceptional Company Award in Mexico, presented by the Business Coordinated Council, the Communication Council, and the Institute for the Promotion of Quality.

Speaker Change: Shareholders will not be required to take any action to receive the stock dividends.

Speaker Change: After the payment date shareholders book entry accounts will be traded with additional shares that represented the stock dividend.

Speaker Change: When shares are held in a brokerage account in the name of our broker.

Speaker Change: The additional shares will be distributed to broker on the shareholders' behalf.

Speaker Change: Hi.

Speaker Change: The stock dividend is administered by Computershare the company's transfer changes.

Speaker Change: Ladies and gentlemen, with these comments we end our presentation today. Thank you very much for joining us and we will like now to open the forum for questions.

Speaker Change: As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced toward the draw. Your question. Please press star one one again please.

Raul Jacob: On this occasion, the success of our educational center model was recognized after outstanding results were reported for mathematics, Spanish, and English, which are above the national and regional average for the cohort of 2,000 students from the four basic level schools sponsored by the company in Mexico under a voluntary initiative to benefit our employees. In Peru, we inaugurated the High Performance School, or COAR, in Tacna. COAR is the acronym in Spanish. This was in Tacna, the Peruvian region where our Toquepala mine operated.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: Our first question comes from the line of Carlos de Alba from MFS.

Speaker Change: Yes. Good morning, Thank you very much.

Speaker Change: So if I ask three.

Speaker Change: Three questions.

Speaker Change: One is what drove the decision the board decision to change the dividend from cash to all shares.

Speaker Change: In all.

Speaker Change: All the time I've been covering the stock the company I think only one time that I can remember the company pay dividends and shares and at the time. He was partial cash and partially on shares and so yes any color will be very interesting to understand these deviations from the norm.

Raul Jacob: This campus houses three hundred... Outstanding Students for the State Education. Many of these students come from the most vulnerable areas of the region; the core facilities will allow them to continue their studies in state-of-the-art classrooms, laboratories, libraries, residences, and sports areas, thanks to an investment of 26 million dollars through the work for taxes modality. Dividend Analysis. 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 the appropriate quarterly dividend.

Speaker Change: My second question.

Speaker Change: Has to do with.

Speaker Change: The appetite for southern copper.

Potentially pursue M&A.

Speaker Change: M&A.

Speaker Change: Bye.

Speaker Change: A company in this sector as opposed to develop the projects, which well certainly the portfolio subtract here.

Speaker Change: For all of the many years away potentially with the exception of Tia Maria.

Raul Jacob: Accordingly, Southern Copper Corporation announced last Friday that its Board of Directors had approved a quarterly stock dividend of 0.0104 shares of common stock per share, payable on May 23, 2024 to shareholders of record at the close of business on May 8 of this year. In lieu of fractional shares, cash will be distributed to each shareholder who would otherwise have been entitled to receive a fractional share based on a share price of $115.13, which is the average of the high and low share price on April 18, 2002.

Speaker Change: Developed.

And lastly.

Speaker Change: The cost performance was really good in the quarter congratulations on that.

Speaker Change: I wanted to understand.

How do you see the trend in cost before by products before the benefit of byproducts.

Speaker Change: In the coming quarters.

Speaker Change: Sure the new guidance or how you see the average cost for the year.

Speaker Change: Before byproducts again, thank you very much.

Speaker Change: Thank you. Thank you very much for your questions Carlos I am going to address them now.

Speaker Change: Well they are changing the dividend.

Speaker Change: It's because we do have a resource which are this.

Speaker Change: The shares that the company has been buying as part of the buyback program and <unk>.

Raul Jacob: Shareholders will not be required to take any action to receive the stock deal. After the payment date, shareholders' book entry accounts will be credited with additional shares that represent the stock dividend. When shares are held in a brokerage account in the name of a broker, the additional shares will be distributed to the broker on the shareholders' behind. The stock dividend is administered by ComputerShare, the company's transfer agent.

Speaker Change: Given the cash position of the company and the view on the price and how to.

Speaker Change: How to respond to a sensible say GBM deals given the cash.

Speaker Change: The price of the of the shares.

Speaker Change: Consider to pay.

Speaker Change: Dividend that if you do the arithmetic are using the as I referenced the price that we indicated of $115.

Speaker Change: Yeah.

Raul Jacob: Ladies and gentlemen, with these comments, we end our presentation today. Thank you very much for joining us. And we would like now to open the forum.

Speaker Change: 34, I believe four for the for the price that we use as a reference is about the dollar and <unk> 20 per share.

The cash generation of the company at that point at the point of the board meeting was not.

Speaker Change: April without putting in compromise some expenditures for the future.

Operator: As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Carlos de Alba from Mexico.

Speaker Change: And Thats why the board decided to to use these.

Speaker Change: The resource and let the shareholders decide if they want to keep the shares or monetize them by selling them in the market.

Speaker Change: <unk>.

Speaker Change: Regarding your second concern on the appetite for potential M&A.

Speaker Change: Basically.

Carlos de Alba: Good morning, Raul. Thank you very much.

Speaker Change: Well, we do see.

Speaker Change: We do follow what is happening worldwide within M&A opportunities.

Carlos de Alba: So if I may ask, I have three questions. And one is, what drove the decision, the board's decision, to change the dividend from cash to all shares? All the time I've been covering the stock, the company, I think only one time that I can remember has the company paid dividends in shares. And at that time, it was partial cash and partial shares. And so, yeah, any corner would be very interesting to understand this deviation from the norm.

Speaker Change: As you know we are.

Speaker Change: Significantly focus in our.

Speaker Change: Organic growth we're following our projects we're happy to report on the.

Speaker Change: Polaris.

Speaker Change: Well being in the last year. This year, it's part of our operation and we're doing also.

Speaker Change: So good work for or the zinc concentrate are ramping up so those are the projects that has been finished lately.

Carlos de Alba: My second question has to do with the appetite for Southern Copper to potentially pursue M&A and buy a company in the sector as opposed to developing the projects which, well, certainly the portfolio is attractive, you know, they're probably many years away, potentially with the exception of Tia Maria, to be developed. And lastly... And the cost performance was really good in the quarter. Congratulations on that. And I wanted to understand how you see the trend in cost before byproducts, before the benefit of byproducts, in the coming quarters? And if you can share the new guidance or how you see the average cost for the year before byproducts again, thank you very much, Raul.

Speaker Change: Well the zinc concentrator has seen its way up to being a new operation as well.

Speaker Change: But generally speaking what we're doing is we're following what's happening in the market. If we see a good opportunity for asset management, we will be appropriate to do some recommendation to our board and where we're seeing.

Speaker Change: The.

Speaker Change: Circumstances, but so far nothing has been.

Speaker Change: Has been taking our interest specifically.

Speaker Change: And regarding the cost before by products.

Speaker Change: Keeping mind that producing the byproduct cash cost.

Speaker Change: So the new.

Speaker Change: Zinc concentrate are divided costs divided by the pounds of corporate debt.

Speaker Change: All the pounds of copper that we produce is charging us a little bit our cash cost before credits obviously it creates a much much higher than the cost of this facility on a per pound basis as well.

Raul Jacob: Thank you very much for your questions, Carlos. I'm going to address them now.

Speaker Change: I believe that we are we're seeing.

Raul Jacob: Well, the change in the dividend is because we do have a resource, which is the shares that the company has been buying as part of the buyback program, and given the cash position of the company and the view on the price and how to, how to respond to a sensible, say, dividend yield given the cash and the price of the shares. It was considered to pay this dividend, and if you do the arithmetic using, as a reference, the price that we indicated of $115 and 34, I believe, for the price that we use as a reference, it's about $1.20 per share.

Speaker Change: Prices.

Speaker Change: The cash cost.

Speaker Change: The range of what it is now.

Speaker Change: I think that that we're not seeing.

Speaker Change: Inflation for instance, affecting ours, our our cash cost now.

Speaker Change: A little bit may come from from higher fuel prices.

Speaker Change: If they keep where they are now, but that's basically it.

Speaker Change: So my view would be that we should maintain our cash cost before credits at this level.

Speaker Change: After credits.

Speaker Change: At the new production from the from the Buena Vista concentrated obviously, we will have a much higher credits and we reported something of that even though we had no thats good prices as we have in the other quarters.

Raul Jacob: The cash generation of the company at the point of the board meeting was not possible without putting in compromise some expenditures for the future, and that's why the board decided to use this resource and let the shareholders decide if they want to keep the shares or monetize them by selling them in the market, regarding your second concern about the appetite for potential M&A. Basically, what we do see, we do follow what is happening worldwide with M&A opportunities. As you know, we are significantly focused on our organic growth. We're following our projects closely. We're happy to report on Pilares' well-being over the last year.

Speaker Change: So that's basically.

Speaker Change: Thank you Raul if I may just on the on the <unk>.

Speaker Change: First question on the dividend.

Speaker Change: Yes.

Speaker Change: Maybe I just wanted to understand that would be more because the company has very strong balance sheet. It finished the year doing jointly with <unk>.

Speaker Change: $8 billion in cash and marketable securities and generated cash in the first quarter another $100 million.

Speaker Change: So what what changed.

Speaker Change: Are you planning on maybe did you see <unk> being approved soon or any other project.

Raul Jacob: This year is part of our operation. And we're also doing some good work for the zinc concentrator ramping up. So those are the projects that have been finished lately.

Speaker Change: <unk>.

Speaker Change: Starting relatively.

Speaker Change: In the near future or maybe.

Speaker Change: An opportunity to acquire an asset and that will require cash.

Raul Jacob: And well, the zinc concentrator is on its way to being in a new operation as well. But, generally speaking, what we're doing is we're following what's happening in the market. If we see a good opportunity for us as management, it will be appropriate to make some recommendations to our board.

Speaker Change: Before you decided to use the shares because you could have also potentially cancel the shares and increase the EBITDA per share and therefore megastar blue cheaper.

Speaker Change: Well, if you see our cash from operating activities in the first quarter was $660 million in round numbers.

Speaker Change: That is a reference that we than we.

Raul Jacob: And we're seeing different circumstances, but so far, nothing has been taking our interest specifically. And regarding the cost before byproducts... Keep in mind that producing the by-products has a cost. So the new thin concentrator divided the cost, divided by the pounds of copper, so that all the pounds of copper that we produce, it's charging us a little bit of our cash costs before credits. Obviously, the credits are much, much higher than the cost of this facility on a per pound basis.

Speaker Change: They look at.

Speaker Change: In order to see how how much.

Speaker Change: Capacity of paying a cash dividend coming from from our operations.

Speaker Change: As I mentioned, we had we had a change in operating assets and the ability for about $311 million.

Speaker Change:

Speaker Change: This we believe is going to be at one time.

Speaker Change: Issue.

Speaker Change: But.

Speaker Change: Generally speaking it was.

Speaker Change: Our mix of of maintaining maintaining a conservative position regarding cash.

If we see some.

Positive developments in Tia Maria is we're seeing that we're moving forward now.

Raul Jacob: I believe that we are seeing prices... the cash cost in the range of what it is now. I think that we are not seeing inflation, for instance, affecting our cash costs now. A little bit may come from higher fuel prices if they stay where they are now, but that's basically it. So my view will be that we should maintain our cash costs before credits at this level. After credits, If you add the new production from the Buena Vista concentrator, obviously, we'll have much higher credits, and we reported some of that even though we had not as good prices as we had in the other quarter. So that's, that's basically it.

We will certainly require more and more cash. So this is one of the reasons.

Speaker Change: The other ones are all related to having a conservative position regarding our cash position.

Speaker Change: It's more like it's more like.

Speaker Change: <unk> bin.

Speaker Change: Being prudent at this point instead of <unk>.

Speaker Change: Of paying a dividend debt.

Speaker Change: We will create.

Speaker Change: <unk> creates some some problems for the future.

Speaker Change: Alright, Thank you wrote.

Carlos de Alba: Thank you, Raul. If I may, just on the first question about dividends. Maybe I just wanted to understand a bit more because the company has a very strong balance sheet. It finished the year 2023 with $1.8 billion in cash and marketable securities. It generated cash in the first quarter, another hundred and so million dollars. So what changed?

Speaker Change: Youre welcome.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question comes from the line of Alejandro Demichelis from Jefferies.

Alejandro DeMichelis: Yes, good morning, gentlemen, thank you very much for taking my question.

Alejandro DeMichelis: Anthony just to follow up on the dividend question. So if I understood correctly, you said that.

Carlos de Alba: Are you planning on maybe, do you see Tia Maria being approved soon or any other project starting relatively in the near future? Or maybe an opportunity to acquire an asset that will require cash before you decide to use the shares? Because you could potentially cancel the shares and increase the EBITDA per share and, therefore, make the stock look cheaper.

Alejandro DeMichelis: You are you seeing the share you have in treasury. So should we think that the dividend in stock with only limited to go check that you have in treasury or can we assume that you could actually expand.

The share count that you, perhaps just a first question and then the second question is you mentioned some progress in Tia Maria can you give us a little bit more.

Raul Jacob: Well, if you see our cash from operating activities in the first quarter was $660 million in round numbers. That is a reference that we look at in order to see how much capacity we have for paying a cash dividend is coming from our operations. As I mentioned, we had a change in operating assets and liability of about $311 million. This, we believe, is going to be a one-time issue.

Alejandro DeMichelis: Of a flavor of how you see that process going.

Speaker Change: Yes, So let me start by the last question.

Speaker Change: We are seeing first thing is that.

The recent change in the.

Speaker Change: Executive branch authorities related to two mining and energy as well.

Raul Jacob: But generally speaking, it was a mix of maintaining a conservative position regarding cash. If we see some positive developments in Ta Mara, as we're seeing that we're moving forward now, we'll certainly require more and more cash, so this was one of the reasons. The other ones are more related to having a conservative position regarding our cash position. It's more like being prudent at this point instead of paying a dividend that may create some problems for the company.

Speaker Change: Our findings as well as environmental Affairs has been very positive for the project.

Speaker Change: The new ministers or are working with the company to improve that.

Speaker Change: The conditions for the <unk> to start and that is very positive.

Speaker Change: Result in our view.

Speaker Change: We also.

Speaker Change: <unk> that the.

Speaker Change: Well, we have been doing.

Speaker Change: Social work in the Tambo Valley, and his life Province, and I think that we're seeing.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Alejandro Demichelis from Jeffrey.

Speaker Change: Bidder social environment generally speaking for for the project.

Speaker Change: And this is basically the result of <unk>.

Alejandro DeMichelis: Thank you very much for taking my question. Actually, just to follow up on the dividend question, Raul, so if I understand correctly, you said that you're using the shares you have in Treasury. So should we think that the dividend in stock will only be limited to those shares that you have in Treasury? Or can we assume that... you could actually expand the share count that you have.

Speaker Change: Many years of consistent work.

Speaker Change: When we have the last stop it.

Speaker Change: The Tia Maria project, a few years ago, we didn't stop making making.

Speaker Change: Making progress on the Soc upfront and that is something that we're seeing it.

Speaker Change: Making the project advance had positive positive news for now.

Regarding the dividends will we have these shares in treasury.

Alejandro DeMichelis: That's the first question. And then the second question is, you mentioned some progress in Tia Maria. Can you give us a little bit more of a flavor of how you've seen that process going? Yes, let me start with the last question.

Speaker Change: This dividend will consume about 8 million shares although the treasury that they want said, we have seen fishery and that's basically it for now.

Speaker Change: Considering.

Speaker Change: Northern Norway, what you are saying.

Speaker Change: Neither neither what youre, saying on using all the shares in treasury or something like that we're not considering that and we're not also considering any.

Raul Jacob: The first thing to say is that the recent change in executive branch authorities related to mining and energy as well as finance, as well as environmental affairs has been very positive for the project. The new ministers are working with the company to improve the conditions for the project to start, and that is a very positive result, in our view. We also acknowledge that we have been doing social work in the Tambo Valley and in the Islay province, and I think that we're seeing a better social environment, generally speaking, for the project. And this is basically the result of many years of consistent work.

Speaker Change: Any shares issuance for.

Speaker Change: For the future so for now it's.

Speaker Change: While it is what it is as was mentioned before.

Speaker Change: The first questions.

That we had from Carlos de Alba.

Speaker Change: We pay a few years ago in the fourth quarter of 2011.

Speaker Change: Dividend west pay using the shares that we had at that time.

And we by doing this we we transferred to the shareholders the decision of monetizing those shares or keeping them considering the.

Raul Jacob: When we had the last stop at the Tia Maria project a few years ago, we didn't stop making progress on the social front, and that is something that we're seeing. It's making the project advance positive news for now. Regarding the dividends, well, we have these shares in Treasury. This dividend will consume about 8 million shares of the Treasury, the ones that we have in Treasury.

Speaker Change: Very good outlook that the company has for the future.

Speaker Change: Yes, and just to follow up on Tia Maria can you give us some timeline do you have any timeline.

Speaker Change: So there's no time.

Speaker Change: No timeline no time, we're doing progress will will report to the market to investors community as we move on in a quarterly basis, but we don't want to set a timeline at this point.

Raul Jacob: And that's basically it for now. We are not considering what you are saying, neither what you are saying about using all the shares in Treasury or something like that. We are not considering that, and we are not also considering any share issues for the future. So for now, it is what it is. As mentioned before in the first questions that we had from Carlos de Alba, a few years ago, in the fourth quarter of 2011, a dividend was paid using the shares that, and by doing this, we transferred to the shareholders the decision of whether to monetize those shares or keep them, considering the very good outlook that the company has for the future. That's clear.

Speaker Change: That's great. Thank you Robert.

Speaker Change: Youre welcome.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from the line of Jon Brandt from HSBC.

Jon Brandt: Hey, good morning, Thanks for taking my questions.

Jon Brandt: I'm just wondering would you I mean, we've seen codelco talk about maybe taking on some partners to increase.

John Please could you could you would get a little bit closer I can help you with.

Jon Brandt: Is that does that matter.

Speaker Change: Each better okay.

Speaker Change: We've seen codelco to talk about maybe partnering with.

Speaker Change: Some other miners to to help increase their production.

Speaker Change: Do you have.

Speaker Change: A really great pipeline of Greenfield projects.

Alejandro DeMichelis: And just to follow up on Tia Maria, can you give us some timeline? Do you have any timeline on how the process is going to work? No timeline, no timeline. We're making progress. We'll report to the market, to the investors community as we move on on a quarterly basis. But we don't want to set a timeline at this. That's great. Thank you, Raul. You're welcome.

Speaker Change: Is that something that you would consider would you partner with another minor I mean was that helped you pulled forward some of the production or is there something else you could do to it.

Speaker Change: <unk>, the CW or Greenfield projects.

Speaker Change: I guess, that's the first question and then just on Tia Maria.

Speaker Change: I think I noticed in your slide you were talking about a 2027 startup.

Operator: One moment for our next question. The next question comes from the line of John Brandt from HSBC.

John Brandt: Raul, thanks for taking my questions. You know, would you, I mean, we've seen Koudelka talk. Could you, John, please, could you get a little bit closer? I can't talk to you well. Oh, yeah, is that better? Much better. I guess that's the first question, and then just on Tia Maria. I think I noticed on your slide that you were talking about a 2027 start-up. When does that assume that you start construction activities? I mean, is it a two-year construction activity before you would see your first production? If you could sort of talk about that, that would be great. Thank you.

Speaker Change: And when does that assume that you start construction activities.

Speaker Change: Yeah.

Speaker Change: Two year construction activity before you would see first production.

Speaker Change: If you could sort of talk about that that'd be great. Thank you.

Speaker Change: Yes.

Speaker Change: Well, yes, it will be it will be.

Speaker Change: Two year two year construction.

Speaker Change: Process at this point this is our.

Speaker Change: Were estimated timeline for construction, we don't know when this is going to to be the case to report, but whenever it happens we'll certainly let you all know.

Speaker Change: And to your first.

Raul Jacob: Yes, well, yes, it will be a two-year construction process at this point. This is our estimated timeline for construction. We don't know when this is going to be the case to report, but whenever it happens, we'll certainly let you all know. And to your first question, considering a partnership or partnership with another miner, no, for now, we are not considering that. The company is developing these projects as full-owned operations, as is the case with our current operations in general.

Speaker Change: Question, considering partnering or a partnership with another miner.

Speaker Change: For now we're not.

Speaker Change: Considering that the company is developing this period.

Speaker Change: <unk> one.

Speaker Change: Operations as it is the case with our with our current operations in general.

Speaker Change: Okay.

Speaker Change: Sorry, one follow up just so just to clarify your answers.

Speaker Change: Stock dividend.

Speaker Change: Should we expect next quarter you go back to our cash dividends is that how we should interpret your answers.

John Brandt: One follow-up question: just to clarify your answers on the stock dividend. Should we expect next quarter you to go back to a cash dividend? Is that how we should interpret your answers?

Speaker Change:

Speaker Change: As I say when I report on the dividend announcement, each board meeting the board discuss.

Speaker Change: The company cash position the outlook on the market.

Raul Jacob: As I say when I report on the dividend announcement, each board meeting, the board discusses the company's cash position, the outlook on the market, any payments that we have to do for projects or debt, etc., and on that basis, a dividend is determined. How the board is going to evaluate this in the next board meeting, I can't advance anything on that. Okay, great. Thank you.

Speaker Change: Any.

Speaker Change: Payments that we have to do for projects or DAP et cetera, and on that basis, a dividend is declare how the board is going to evaluate this in the next board meeting.

Speaker Change: I can't.

Speaker Change: Uh huh.

Advanced anything on that.

Speaker Change: Okay, great. Thank you.

Speaker Change: Sure.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Yeah.

Speaker Change: Our next question comes from the line of Timna Tanners from Wolfe Research.

Operator: One moment for our next question. Our next question comes from the line of Timna Tanners from Wolf Research.

Timna Tanners: Happy Friday.

Timna Tanners: So wanted to probe a little bit more of the Buenavista situation last quarter, you told US you had not yet not yet grant.

Timna Tanners: Happy Friday, thanks.

Raul Jacob: So I wanted to probe a little bit more on the Buena Vista situation. Last quarter you told us you had not yet been granted the permit, and we're still moving water via truck. I know you said you've covered your needs, but can you give us an update on the supply situation there and any progress toward the permit?

Timna Tanners: The permit and we are still moving water via truck.

Timna Tanners: I know you said you've covered your needs, but can you give us an update on this.

Timna Tanners: The supply situation, there and any progress toward the permit.

Timna Tanners: Certainly timna.

Speaker Change: To hear from you.

Timna Tanners: Yes, we are.

Timna Tanners: You mentioned where were occurring.

Timna Tanners: A portion of the.

Timna Tanners: Certainly, Timna, glad to hear from you. Well, yes, we are covering a portion of the water that is required by Buena Vista with the track fleet. We've been operating that so far this year. And as we are indicating in the press release, we're covering our water needs for now and with some excess capacity. So we are comfortable with what we have as water. That's basically it.

Timna Tanners: Water that is required by when we start with the truck fleet, we're operating that.

So far this year and where.

Timna Tanners: We are indicating in the press release, we're covering our our water needs for.

Timna Tanners: For now.

Timna Tanners: And with some excess capacity. So we are comfortable with what we have as water supply.

Raul Jacob: On the permit status, we do have the permit to operate the wells. We are using the wells to get the water, but we don't have a permit for building a pipeline that will bring the water from the wells to the facilities. That's why we're using water trucks at the moment. And we have no news on when we are going to get the permit.

Speaker Change: That's that's basically it.

The status.

Speaker Change: We do have the permit to operate the wells were.

Speaker Change: Using the wells to get the water, but we don't have.

Speaker Change: The permit for Bill.

Speaker Change: Building a pipeline that will bring the water from the wells to the facilities. That's that's why we're using the water trucks at this point.

Speaker Change: I don't know.

Speaker Change: No new no news on when are we going to get the permanent got it that you anticipated. My next question. Okay, and then as we go through with your new guidance for copper silver and.

Timna Tanners: Got it. You anticipated my next question. Okay.

Raul Jacob: And then as we go through with your new guidance for copper, silver, moly, and zinc, just looking at the copper side, your guidance implies kind of a little drop-off from first quarter run levels in copper. It implies a big step-up in run rate for silver. Just try to understand a little bit more of the nuances of what drives the little slowdown in moly, a slowdown in copper, and an uptick in silver. I think we understand zinc pretty well, but just try and understand the other items.

Speaker Change: Thank you I was just looking at the copper side your guidance implies kind of a little drop off from the first quarter running level run rate in Q and copper it implies a big step up in run rate for silver.

Speaker Change: Just trying to understand a little bit more on the nuances of what drives.

Speaker Change: Let alone slowdown in Mali slowdown in copper in it.

Speaker Change: Silver I think we understand zinc pretty well, but just trying to understand that other items.

Speaker Change: Well actually on the corporate side.

Speaker Change: Where we are much more optimistic than that.

Raul Jacob: Well, actually, on the copper side, we are much more optimistic than, let me put it differently. We're relatively conservative in our production goal for the year. Hopefully, we'll be better than what we're, at this point, estimating. But that's where we are now. That's our current plan.

Speaker Change: Put it differently, we're relatively conservative in our production goal for the year.

Speaker Change: Hopefully, we will be better than what we're at.

Speaker Change: At this point.

Speaker Change: Tomatoes, but that's that's where we are now that's our current plan and so so.

Speaker Change: Hopefully, we will we will improve a little bit.

Speaker Change: Our our final March for Cooper.

Raul Jacob: And so hopefully, we will improve a little bit our final mark for copper. In the case of molybdenum, we have been producing more molybdenum than this past quarter and more than the first quarter of last year. The problem here is the prices for molybdenum, which are much lower than what we had last year. We had a 38% drop in price for this quarter vis-a-vis the first quarter of last year.

Speaker Change: In the case of molybdenum, we have been producing.

Speaker Change: More molybdenum than than this past quarter and more than that in the first quarter of last year a parallel here.

Speaker Change: The price is are the prices for molybdenum that which are much lower than than what we had last year. As I mentioned, we have to have 40 from 38% drop in price for four Bcf this quarter vis vis the FERC one of last year.

Timna Tanners: Okay, and then on silver, did you have a comment on why that was trending much better than the first quarter run rate?

Speaker Change: Okay, and then on silver did you have.

Speaker Change: Comment on why that was.

Speaker Change: Trending much better than the first quarter run rate.

Raul Jacob: Oh, sure. We are getting more silver from our current operating facilities. The new concentrator also has some silver content in the production that we are getting. So that plus better production at our operations is the driver for higher silver production. Okay. Thank you very much.

Speaker Change: Sure.

Speaker Change: We're getting more and more silver from our current operating facilities the new.

Speaker Change: Concentrator, the new concentrator of households, with some silver content in the.

Speaker Change: Production that we're getting so so that's a plus.

Speaker Change: Better production at our operations is the driver for higher silver production.

Timna Tanners: You're welcome, Timna.

Speaker Change: Thank you very much.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Alfonso Salazar from Scotiabank.

Speaker Change: Welcome Tina.

Tina: Thank you one moment for our next question.

Tina: Okay.

Tina: Our next question comes from the line of Alfonso Salazar from Scotiabank.

Alfonso Salazar: Hi Raul, I would like to please rephrase a couple of questions from my colleagues. The first one is because this stock dividend is a one-off, and for the next quarter, the board of directors will not be considering the possibility of paying a stock dividend again. So is this correct?

Tina: Alright.

Alfonso Salazar: Let me rephrase a couple of questions for my colleagues the first one.

Alfonso Salazar: Because this stock dividend you saw one offs.

Alfonso Salazar: For the next quarter or the political.

Alfonso Salazar: Directors will not be considering the possibility of paying.

Alfonso Salazar: I stopped medium to gain and so is this correct.

Raul Jacob: It's up to them. It's up to them. I can't comment on what they are going to decide at the next board meeting.

Speaker Change: It's up to them.

Speaker Change: It's up to them and I can't I can't comment on what they are going to decide on the next board meeting.

Alfonso Salazar: Okay, but in principle, it will be an I-1L. In principle, it will be what? I want to know the payment for our stock.

Speaker Change: Okay, but in principle it would be our mills.

Speaker Change: In principle, we are wet.

Speaker Change: I don't know.

Speaker Change: Payment of a stock dividend.

Alfonso Salazar: They approved a stock dividend this quarter, but we don't have at this point any idea of what they are going to propose for the next one.

Speaker Change: They approved for a stock dividend this quarter with them, we don't have.

Speaker Change: At this point any.

Speaker Change: Any idea of what they are going to.

Raul Jacob: Fair enough, fair enough, thank you. Can you remind us how many stocks you have at the treasury after this payment?

On the next one.

Speaker Change: Thank you.

Speaker Change: Can you remind us how many.

Alfonso Salazar: Well, before the payments, we had $111 million in our share. I'm sorry, I can't hear you. One, one, one million. One hundred and eleven million. Okay.

Speaker Change: So we do have the.

Speaker Change: After these repayments.

Speaker Change: Yes.

Speaker Change: Before the payments we had.

Speaker Change: 111 million shares.

Yes.

Speaker Change: 111 million $111 million.

Raul Jacob: Um, and uh, the share payout is about $8 million, so after this, we will have $103 million. The exact number would be 103,442,000 shares, treasurer shares after these dividend payments. Yeah, that's good. Excellent. The other question that I have is, can you remind us?

Speaker Change: And the share.

Speaker Change: Payout.

Speaker Change: Okay sure payout is about 8 million. So after this we will have 103.

Speaker Change: The exact number will be $103 million 442000 shares.

Speaker Change: Uh huh.

Speaker Change: Treasury shares after this.

Speaker Change: These dividend payments.

Speaker Change: That makes.

Speaker Change: Makes sense.

Speaker Change: The other question that I have is can you.

Alfonso Salazar: The other question that I have is, can you remind us of your copper production profile for the coming years and let us know what your projections are for Tia Maria or other projects?

Speaker Change: Remind us your copper production profile.

Speaker Change: For the coming years on Netflix.

Speaker Change: Is your projection for Tia Maria or other projects.

Raul Jacob: Okay. We're sticking with this. For this year, as I say, it's going to be 948,800 tons. Next year, 2025, 920,000. 2026, 940,000. 2027, 1,000,005,000, and 1,028,1,020,000.

Speaker Change: Yes.

Speaker Change: How long.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: <unk>.

Yes.

Speaker Change: We are expecting.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: For this year as they say.

Speaker Change: Going to be 948800 tons to 800800 tonnes next year 2025 920000.

Speaker Change: 2026 940000.

Speaker Change: 2027.

Speaker Change: 1.005 million.

Speaker Change: 1028 1 million in 'twenty.

Raul Jacob: Right, and from that, I assume that there will be some production coming from Tia Maria by 2027. Yes, Tia Maria is included in the...

Speaker Change: No.

Speaker Change: So on that I assume that there.

Speaker Change: So some production incremental Mei Tia Maria by 2027.

Speaker Change: Yes, Yeah Maria it's included in the forecast for 2007.

Raul Jacob: Yes, Tia Maria is included in the forecast for 2017. Excellent. Thank you.

Speaker Change: Thank you very much.

Speaker Change: Hello.

Operator: Thank you. One moment for our next question. Our next question comes from the line of John Tumazos from Very Independent Research, LLC.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from the line of John Tumazos from John Tumazos, very independent research LLC.

John Tumazos: Thank you, Raul. Is it possible that maybe we're a little spoiled? with these long delays in the very big projects moving forward, which permitted large dividends, bigger than 50% payout. Now that Tia Maria may advance, and the other projects in Peru are advancing, the dividend payout needs to be less than 50% rather than over 50% in cash. You know, it's better not to gain weight, and it's better not to accumulate debt because both of them are hard to reduce once you have accumulated them.

Speaker Change: Okay.

John Tumazos: Thank you Raul.

John Tumazos: Is it possible that maybe were a little spoiled.

John Tumazos: With these longer delays and a very big projects moving forward.

John Tumazos: Which permitted large dividends.

John Tumazos: Bigger than a 50% payout.

John Tumazos: And now that Tia Maria May advance.

John Tumazos: And the other projects in Peru are advancing.

John Tumazos: The dividend payout.

John Tumazos: It could be less than 50% rather than over 50% in cash.

John Tumazos: It's better not to gain weight and it's better not to accumulate.

John Tumazos: Because both of them are hard to reduce one sure Jim noise.

Raul Jacob: Well, I agree on the way to comment on that, John. But I think that the company, what we have seen and we have shown is that we're conservative and prudent in the use of our cash. We don't want to, for instance, take debt to pay a dividend. I think that that is not in our DNA.

Speaker Change: Well I agree on the way to comment on that a young but.

Speaker Change: I think that the company.

Speaker Change: We have seen and we have shown is that where we are conservative and prudent in the use of our cash we don't want to for instance, take debt to pay a dividend I think that that is not in our <unk>.

Raul Jacob: But in certain circumstances, for instance, when we anticipate that our future EBITDA will be higher because we're moving forward with a new project or getting some operations in better shape, then it is reasonable to have some additional debt. As we have been paying all the maturities in our bonds in the last five years, I think as we're doing this, we may consider going to the bond market or to the capital market at a certain point in time. Right now, we're not having any concrete plans for that.

Speaker Change: G&A.

Speaker Change: But in certain circumstances for instance, when we anticipate that our future of beat that will be higher.

Speaker Change: Because we're moving forward.

Speaker Change: New project or we're getting some some operations on the bidder.

Speaker Change: Tim.

Speaker Change: It is reasonable to to have some additional debt as we as we have been paying all the all the maturities in our bonds in the last five years.

Speaker Change: I think it does.

Speaker Change: We're doing this we may consider going to the to the bond market or to the capital market at certain point in time.

Speaker Change: Right now, we're not having any concrete plans for that there is some this is something that we evaluate on a on the <unk>.

Raul Jacob: This is something that we evaluate on a consistent basis. As you may imagine, interest rates are not what they used to be, and the company took advantage of that. If you look at our debt profile, the average interest rate that we're paying is significantly lower than what a company such as ours may get in the next few years or if we go out to the market now. Being prudent is one of the reasons why the company has been considering this, our dividend in this quarter, and we believe that this prudent view will hold for the next few years. And that's what we as management are thinking about the use of debt and dividend payments.

Speaker Change: Consistent basis as you may imagine.

Speaker Change: Interest rates are not what they used to be.

Speaker Change: And the company took advantage of that if you look at our debt profile.

Speaker Change: The average.

Speaker Change: Interest rate that we're paying is significantly lower than what a company such as ours may get.

Speaker Change: And the next few years or if we go out to the market now so so being prudent is one of the reasons why we're there.

Speaker Change: The company has been considering this.

Speaker Change: Is the dividend.

Speaker Change: Dividend in this quarter and we believe that these prudent view will hold for the next few years and Thats what the weather.

Speaker Change: We are managing or are thinking about the use of debt and dividend payments.

Speaker Change: Thank you.

Operator: One moment for our next question. Our next question comes from the line of Regina Carrillo from GBM.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from the line of Regina Cartwheel from GBM.

Regina Carrillo: [inaudible] Regina, please get a little bit closer to the microphone, and Steve Ritter. Much better, thank you. I saw in the presentation that you mentioned investments in the ILO and the Empalme, its members, and I just wanted to get an update on what you're seeing there. Yes, we do have some plans for growing in the refining business as well as the mining business. And because of that, we have plans for building a new smelter in Mexico, which at this point is considered to be in Palme, in Mexico, in Sonora State.

Regina Cartwheel: Hi, good morning, Thanks for taking my questions I saw in the presentation.

Regina Cartwheel: You mentioned investments.

Speaker Change: Hey, Matt.

Matt: Regina, please get a little bit closer to your microphone.

Regina Cartwheel: Is this better.

Regina Cartwheel: Much better thank you.

Regina Cartwheel: Correct.

Regina Cartwheel: I saw it in the presentation that.

Regina Cartwheel: You mentioned investments in the yellow on the impoundment is numbers and I just wanted to get an update on what you're seeing there.

Regina Cartwheel: Yes.

Regina Cartwheel: We do have some plans for growing.

Regina Cartwheel: In the refined in the refining business as well as the mining business.

Regina Cartwheel: And for that we have plans for for building a new smelter in Mexico.

Regina Cartwheel: Which at this point is consider to be in the Empire means and then in Mexico.

Regina Carrillo: And for the Peruvian facilities, we also have plans for a new smelter and refinery in the Ilo area, nearby our current facilities for smelting and refining. We see that direct sales to the industrial complexes in both Mexico and Peru will absorb this new material whenever we move on with this project. At this point, as you know, we are considering them for later in this decade, and we will be updating on any progress on these investments as we move on over time and the projects mature later on in time.

Regina Cartwheel: State.

Regina Cartwheel: And for the Peruvian facilities, we do have also plans for a new smelter and refinery in the elara nearby our current.

Regina Cartwheel: Facilities for smelting and refining.

Regina Cartwheel: We're seeing that.

Regina Cartwheel: Sales direct sales to the industrial complexes in both Mexico and Peru.

Regina Cartwheel: We'll absorb this new news new material whenever we move on we do with these projects at this point as you know we are considering them for later on this decade.

Regina Cartwheel: And we will be updating on any progress on these invest.

Regina Cartwheel: Investments as we move them over time and the projects mature.

Later on in time as well.

Raul Jacob: Thank you. At this time, I would now like to turn the conference back over to Mr. Raul Jacob for closing remarks.

Speaker Change: Perfect. Thank you.

Youre welcome.

Speaker Change: Thank you.

Speaker Change: At this time I would now like to turn the conference back over to Mr. Raul Jacob for closing remarks.

Raul Jacob: Thank you very much, Gigi, and with this, we conclude our conference call for Southern Copper's first quarter of 2024 results. We certainly appreciate your participation and hope to have you back with us when we report the second quarter results. Thank you very much for being with us today, and have a nice day.

Speaker Change: Yes.

Raul Jacob: Thank you very much GE and will reduce we concludes our conference call for Southern Copper's first quarter of 2024 results. We certainly appreciate your participation and hope to have to back with us when we report the second quarter results.

Speaker Change: Thank you very much for being with us today from <unk>.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: Have a nice day.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

Speaker Change: Yeah.

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Speaker Change: Tim.

Speaker Change: Yes.

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Speaker Change: Yes.