Q3 2024 Compañía de Minas Buenaventura SAA Earnings Call
Speaker Change: Good day, ladies and gentlemen. Welcome to the company at the Minus Buen of Ventura 3rd Quarter 2024 earnings results conference call. At this time, all participants are in a listen-only mode, and please note that this call is being recorded.
I would now like to introduce your host for today's call, Mr. Gabriel Salas, Investor Relations Officer. Mr. Salas, you may begin.
Good morning, everyone, and thank you for joining us today to discuss our third quarter, 2020-4 results.
To this discussion we will be led by Mr. Leandro Acia, Chief Executive Officer.
Also joining our call today, Anavelo, for your questions, our Mr. Leandro Mingus, Chief Financial Officer, Mr. Juan Carlos Ortiz, by spreading of operations.
Mr. Al-Domatha, Vice President of Business Development and Commercial.
Mr. Alejandro Armosa, by President of Sustainability, Mr. Renzo Macher, by President of Proyid.
Mr. Juan Carlos Alazar, Vice President of Geology and Explorations, Mr. Rogan A. is Chairman and Mr. Raul A. E. E. E. E. Director.
Before I hand our call or let me first touch on a few items.
On one end to our website, you will find our previous release that was posted yesterday after the market close. Please note that today's remarks include forward-looking statements that are based on management's current views and assumptions.
While management believes that its assumptions, expectations and projections are reasonable in view of the currently available information, your question not to please and you reliance on these forward-looking statements.
I encourage you to read the full disclosure concerning forward-looking statements within the earnings results, press release, issued on October 30, 2024. Let me now turn the call to Mr. Leandro Raggio.
Thank you, Gabriel. In the morning to all, thank you for joining us today to discuss the important little results of our company.
On a flight to is our cautionary statement, important information that I encourage you to read.
Leandro Raggio: Today we will discuss in our performance for the third quarter of 2024. Highlighting key achievements and strategies moving forward.
After the presentation, we will be able for our question on answer session, where our team will be happy to answer your questions.
Leandro Raggio: The next slide please.
Speaker Change: This is Leandro, we like to highlight a few key areas that continue to our storm, there's water 2022 in the fall result.
Speaker Change: Our AVIDA from the Great Operations for the third quarter, passing Greece to $132 million compared to the previous year, primarily driven by a strong resource from Diumpuck and El Dracal.
These performance is also reflected in a higher eddies of 40% compared to 25% in the previous year.
3.4 2024 net income, including the sale of choppy lo my euro is healthy company, which 237 million dollars, compared to 28 million net loss for the same period in 2023.
Copper production decreased 9% year over year, in 3.223 Copper production at the local has increased due to higher estimated copper content mines from the open pit transitional port.
Speaker Change: In the third quarter of 2024, silver production reached 4.4 million ounces, as significant increase compared to the 1.9 million ounces produced during the same period last year.
Speaker Change: On this total of these total 3.2 million ounces came from Uttar Krakwak and Yompa.
O'Production increase 7% year or year, mainly explain you to increase output at Hulkani and Lassar.
We are pleased to share that with our entourer, completely the sale of its choppy, Loma Royal, the company to Franco-Neva, for $220,000,000,000 during the 2014-2024.
Speaker Change: Well, now in tourist topics is in third quarter 2014 to an import, total $98 million, which includes $77 million, allocated to the Sangabriar project. Primary, allocated to the mines, water down, and to power-line construction.
When I went to the creative rating, was a gravy my movies to be one with a positive outlook.
Mooris cited when aventuras or traditional improvement driven by increased production from its local Dumpung Dumpung and Uchuchago mines, as well as efficiency in cost reduction, cash flow generation and conservative liquidity management as key factor.
Our car has put cash position rich, all 158 billion dollars with a total of 675 million dollars. We continue the leverage in the company reaching a net that evades the ratio of
0.5 times, low waste in years and willing our targets is the range.
Moving on to our cost structure in a slide for
The third quarter 2020-24, all the insistenting costs have been reduced by 69% year over year. This reduction is primarily attributed to the increased silver contribution from Puchuchakua and Yumur.
Moving on the coast applicable to say the strength.
As you can see, corporate gas decreased in the quarter mainly due to an increase in volume process during the quarter, resulting from a stoppile or process. The gas is in line with the third quarter to an inch, only three figures.
Silvercast has decreased year or year primarily driven by the higher contribution of silver ounces from Uchuk Chakuan and Dumpa.
However, he has increased quarter of a quarter due to higher exploration expenses and increased cost at the Chaguan Dumpa related to ground support worlds.
Gok: Gok, Katka, has hatching crazy over here primarily driven by lower grades at the Mumbaio and Orko Pab.
Gok: On the next slide we will present our free Carlos Lleonineration.
The third quarter 2020, forecast, precision increased during the quarter, leaving mainly by the storm performance of a local or chuchakuan jumpa. They say the sale of choppy loamah for 220 and dividends received from several wells.
In addition to these drivers they did that to the free cash flow reconciliation, reflex, when adventurer's current, to the profit page, which significant of the company, the company, is the best.
Speaker Change: Moving on to the slide 6, this is like folks.
Sangabrius Projects, Comunative Progress, reaching 65% of a role completion by the Fair Quartet 2018. For a merrily driven by the advisement of the water, dam and the power line construction.
Here in my stone, we are closely monitoring for the next quarter if a completion of the pipeline works.
Out of the 650 million total graphics, we have already executed the 250MP.
Speaker Change: and committed close to 230 allowing us to the risk, the project completion at any cost and any cost increase.
100% of the structural steel is now on site, a major contract for planting and transfer to the field of water.
Speaker Change: On the next slide.
Speaker Change: We are showing the processing plants progress that will operate at 3000 tons per day.
Currently, the SAC and Bores Mechanica works at 60%. The primary Grasher Mechanica works at 90%. And finally, the Shield tanks Mechanica works at 65%.
Moving on to Westlight 8, we present the progress at various facilities essential for the underrun mind development, including the North Ram portal, finding installations and the show crew plan.
Moving on to the slide 9, we are showing the progress of various infrastructures of the project.
and we will get a filter daily planned, the water down, the power line and the contact 100% complete.
Speaker Change: Finally, to our close and remark, I would like to finish with the presentation with this comments first.
Speaker Change: Wich you've checked what? Exceeded?
Speaker Change: Expectations reaching an average throughput of 1500 tons per day earlier than expected, while you're documenting a steady production on 1000 tons per day, delivering 3.2 million answers of silver in several work.
Second, at the local, we successfully proceed, process it 100% of the stock by or enable us to meet our production target for the first 9 months of 2024.
Speaker Change: The Under of Mine, with record-other-h throughput of approximately 12,000 tons per day during the quarter.
Service, the Sangha Real Project achieve a 65% overall progress meeting our planned targets. When our entourer continues the risk in the project by completing engineering and procurement.
And lastly, I am pleased to report a record-low leverage radio of 0.5 times for the quarter, leaving driven by a strong David Degro, the sailor of an uncorassid and effective debt management.
Speaker Change: Thank you for your attention and I will hand the call back to the prayer to open the little time for questions. A prayer, please go ahead.
Speaker Change: We will now begin the Questioner and Answer session.
To ask a question, you may press star, then one on your telephone keypad.
Speaker Change: If you are using a speaker phone, please pick up your handset before pressing the keys.
Speaker Change: To withdraw your question, please press star then too.
At this time, we will pause momentarily to assemble our roster.
Speaker Change: part
Episode 2
The first question is from Sezar Perez-Navola from BTG Patchual. Please go ahead.
Thank you. Good morning, everyone, and congratulations for your third quarter. Really extending results in a lot of progress.
If I may have three questions, the first one relates to a local.
I believe the company is on track to achieve average mine rates of around 11,000 metric pounds in.
and Trotiton before.
How are doing the third proper production fell around 10%, even though your average rates for the quarter, still a 12,000 metric tons per day?
Can you please comment on why the volume are fell and where will I brocade?
are reaching the targeted rate of 12,500 per day if I recall correctly.
The second question relates to Sal Gabriel.
Speaker Change: and the completion is already at 68%. Could you please comment on Project Economics now that you have?
A fully revised capics.
An innovation in the European on the European will be also great, they are appreciated.
and finally, if I lay again, if you could indicate where your sources.
of Infosa, Nautilus of Cash.
will be in the next year, including your dividends from Satellite. I ask a lot of questions, but I'll thank you very much for taking them.
Thank you, this is our course. We're learning, broccals, we already reached this end.
The objective to treat 12 tons and tons per day. The least objective was planned to be reached on December, December, but we just before.
Lily Juan Carlos, or this can give more to the...
and the explanation to the production of Popeye.
Speaker Change: Thank you, Leandro, and thank you for your question, yes. We are which 12th anniversary of the production in the mind.
We are planning to keep running up these rate at 12.5. A 1,000th birthday, probably by the 1st or 2nd quarter of 2025. So we were on track to reach full capacity of the level of mine as new planets.
The difference between 340 to 1223
Speaker Change: and third quarter to 1224 in total production that 10% lower production will compare it between quarters. If it goes in the last year we have production and exceptional production of new shipping over from the open bit.
Speaker Change: We have like 12,000 tones, is straight from the open deep, crash it and sell it directly to the market within average of 12% copper. So you have almost 1.4,000 tons of fine cobras.
Speaker Change: A sports sale on 323. That's the name difference between the third quarter to 323. When we have these is a sports production and there are 324, when 100% of the production came from the underground mine. That's the main difference.
I'll cover the notion leading to writers.
and continue with your second question.
You were asking about the economic sub-sunga, Gabriel. Senegalville? Yes, we are planning to have.
and Alibis, around $100 million per year.
A World Cacheco, Cacheco should be around 1300 and with our sustaining graphics yearly about 5, between 5 and 7 million dollars.
and the more important the production will be around the 130,000 tons per year.
and Ian.
Speaker Change: In terms of inflow and cash flow, Daniel please, and you give more color to the question.
Speaker Change: is of course, thank you so much for your question. For 2020-5, we expect to start a year with a cash position of around $370 million.
Speaker Change: and considering the prices for world of 2100.
for silver, $27, and for copper, $9,000 per ton.
We estimate an average therefore the following year of around 350 to 380 million dollars. In addition to this, we expect to receive 150 million dollars of dividends from survey.
This is regarding the hills close and regarding the hills close.
Speaker Change: We expect to spend a thunder of real close to 240 to 250 million dollars.
Plas our sustaining capics, which is in the order of $100 million to 120. And finally, we are going to pay the taxes for the chopper-domar sale, which we received $100 million a year, but we are going to pay the corporate tax of 29.5% which is $45 million, and we will be paying the first quarter of the next year.
Speaker Change: and
Alright, very good. Thank you very much for those information.
Thank you all. No, Zeta. I left the adi for the end. Your question about trapeche, any news about the deal. We continue with the feasibility site and friends of the city view can give more information to Zeta.
Speaker Change: Sure. So...
We are in the middle of the disability study and we have starting to receive the death resource from our second set of column testing on site confirming the business case.
Speaker Change: We keep working to consolidate the right of fast for the power line where probably 60% advanced in that one. And in the environmental impact assessment process, we finish the public assembly, so some great news.
We are in the process of solving the authority questions of probably within the next six months we shall have an environmental interceptor segment.
Okay, very clear, thank you very much.
Speaker Change: The next question is from Carlos Dealba with Morgan Stanley. Please go ahead.
Carlos, your line is open on our end perhaps you haven't muted on yours.
Carlos DeAlba: Yeah, thanks, good morning and sorry about that.
So if there's a question, the first one is on Sang Gabriel, just continuing the discussion there. Any expectations and guidance on how do you see it?
The mind ramping up to full normalize production on rate of 130,000 on this period. It seems that the first or second quarter of next year, so how do you see the ramp up?
Thank you Carlos, Renzo, Juan Carlos.
Leandro Raggio.
Speaker Change: i
Sorry, the start-up one.
We're expecting to reach 65% of our production capacity by the third corner of 2020. We're commissioning activities on the meal and pressure starting in the first quarter next year.
Speaker Change: and then we're going to start.
We're going to start the run-up process after 3,000. I don't know if you want to understand your incremental matter.
Sure, we have right now the contract to run in the tunnels underground. We have two crews, two feet working for the north and the south ramp at the same base. We are reaching an average developing rate of about 500 to 600 meters per month.
Speaker Change: We are getting into the old body right now. So when we have a wear scale to have access to the...
Pilot Pils.
The initial pilot is by December this year in order to start training what people who are in the mind in the middle of the world using Sangapel.
and continue with this training along the air.
First half of the 2025. We have been reaching the world closer to the decision which is all the mining equipment. That's for the mining operation. We have put delivery times so we've been for.
and a great deal of cleaning and new equipment according to the plan that we have for ramping up the whole production. So we are well-intracted for the mind-developed side, along as I mentioned, we take a construction commission in the process of plan.
Speaker Change: Thank you just to clarify the 65% of capacity by the third quarter of 2025. Is that throughput or is this a final production?
And I know that's been...
That's it.
65, 65% which equals 2000 tons per day. That's when the project will end with a constant production of 2000 tons per day for.
for three weeks without major stops and with a commercial product at the end, that's kind of it. That's kind of it. When we finish, we're all you can restart a project.
is the exact correct. Okay, then the next question is on server the any expectations for debilitating the fourth quarter.
Hey, well, you may see the dinosaurs over there and there is some cash that we expect to...
Speaker Change: and maybe we will discuss it in the next board meeting.
How much would it be if you know, dressifications?
Speaker Change: Yeah...
We expect an additional 50 or 60 million dollars for us, for one and a total.
50 to 60 million for Guanamentura in the fourth quarter potentially.
Speaker Change: Motel,
Great. And then on a couple of operations, what can we expect on a climate large profitability in the coming quarters given that you'll spend the good prices in the trouble in the third quarter?
Well, the current situation, we are expecting a permanent...
Speaker Change: Yes, by my way, we are expecting a permit.
Speaker Change: for continue our operations.
Speaker Change: And once we have the early production, we'll come as we were used to around 70,000 on this per year. We expect...
to move more Venerable or in the lead spot that has been constructed and we are expecting that permit. We will begin production in the third quarter.
It's in the cell quarter and the next year maybe more detail on Carlos can can give it.
Speaker Change: Thank you, Leandro, yes Dave.
We are from the square and the living coming quarters close to American institution in Cornwallachium. We are extracting goals from the inventories that we hold on the path.
Speaker Change: Leandro, we already have the environmental license to do the expansion of the path. We hold the land, we are clearly fired for the construction purpose. So we have the construction purpose ready by the end of the year, in late 2025.
and there are some other details of the permits but that's the sequence of ideas. We have the chance to start putting fresh ore on top of the map by the FN4 to the 75.
So the idea that we hold the situation kind of close to breaking it, as we're kidding, and the marriage, the permit for construction, for placing fresh or double the path by the third quarter of the 2025. And at that time, we were assumed profitability that we had been the path.
Speaker Change: Okay, but so basically, if you're going to resume leaking in the cell quarter, probably you only see production until the fourth quarter, 25 or first quarter, 26.
Speaker Change: Are you in a country? Yeah, what are you in a country? Yes, it will be a ramping up as you know they use their place in the or and you have a saluting period, totally cheap period of total loss 60% or 60 days. So you should do it.
Speaker Change: Waiting, Bad
Third quarter of the year would be a few moments, so, as you can see, the background is very similar to the beginning of the year.
Gold owns this camin from the top, the existing method that we have and we are taking it out right now plus the additional fresh ore in the circuit, so we'll be a combination of all of them. So, probably the fresh ore will add a lot of fuel for the profitability of the Ocarmolachibide circuit.
And then lastly sorry for all these questions but just get them out of the way on the cool Kenny. What is the rationale to sustain to keep this operation in what I'm doing as part of the volume?
Speaker Change: Given the elevator cost.
Speaker Change: Yeah, well, we are trying to make more efficient with Gany. We have to make some...
Speaker Change: To take some decisions there, but we are moving from the to the copper and gold areas that give us more production of gold in order to be more efficient with that might.
As I told you Carlos, we are evaluating the situation and the continuity of that mind in our portfolio.
Thank you very much everyone, good quarter
Speaker Change: Thank you.
Again, if you have a question, please press star then one.
The next question is from Tanya, Jakos Connect with Scotia Bank. Please go ahead.
Tanya: Great, good morning, good afternoon everybody. Thank you so much for taking my questions. Sorry I just got on a bit late.
was another call ahead of you. Just wanted to come back to sign Gabriel. Can I just, I think I heard an bit doll of 110 million? Was that a sign Gabriel, ebit doll?
Yes, between 9 million and 110, yes.
Speaker Change: 19th, 19th and 110th.
and sorry what gold price was that based on?
Speaker Change: 2000
$2,000. Okay, all right, thank you so much for that. Can I just ask, I heard you mentioned the total cash cost went to $1,300.
And I think originally, the feasibility study or your plan was $800, so that's like a 60% increase. Can someone explain to me what has happened to these total cash costs? It's not just inflation. It's something changed in the mind plan.
Yes, yes, the minding method have changed on Carlos.
I don't know if you can give more information to Daniel.
Yes, sure, Leandro. Well, it was played the operations of Sengarrian into the mind, the processing plant, and the overhead expenses.
Petty match, the positive plant and overhead pretty much are aligned with the previous unit of the star, if it's even the star is already in cost.
The main difference is the undergrowth line.
Speaker Change: Right now that we get our hands on the mind as I mentioned before, we are running tunnels as is in the quality of the rock, and what is the safe going to proceed to mind the deposited quality of the rock is very good.
Speaker Change: We work out a lot of reinforcement and we need to change the volume of all that we've constructed with upper hand 90 methods compared to the original study.
So, in the combination of...
Speaker Change: More expensive standards to be living in this poor quality rock
Speaker Change: More Expensive Often is to be made into the quality of the rock and larger percentage of all extracted by the other hand, my design is made to the state of the overhead. So the other hand, more expensive, we're required to use more cemented backfee with 7% cement.
So the combination of all these factors is the one that make the music and change on the breading does Sangabia.
So can I ask what is the operating cost per ton, like all this operation?
If you take the money, class of the mailing plus the GNA, processing, so what would it be? Is it like $200 a ton? I don't know any more, $250.
In the initial years, would be in the railroad hundred and fifty dollars per ton.
and then gradually when we start doing less of the expensive openings, the first cut that we need to make for the under hat, we will start coming down to 140, 135 or as per toe. That's a combination of processing overhead and the under row mine.
Okay, and that's US dollars.
You're so. Yeah, okay, and can I ask, you know, like when did you, when did you understand that the mining cost had to change?
Was this a recent thing that you once you started to put the decline in and you started to see the rock conditions or when did you kind of notice that you have to change?
Yeah, I have been recently once we started driving the tunnels along the road in the last two quarters. We started making a contractor driving tunnels in the road. So we have the chance to reassess the quality of the rock.
Speaker Change: We do this.
All the young mechanics, the selection of the mining methods and we need to run the mining plan of the mine plan.
There was an opportunity, we were using a lot of tunneling in the new design, almost in the $100 million of a Lens Expenses on tunneling to be made in the new arrangement, but is offset by the larger expenses on.
The Mid-Edit Boxio, so it was in the last five months.
Six months that we have more thorough access to the authority or the assessment of by the host by with opinions, galleries, which we know later in the quality of the rock, and we are on that conservative side of the equation. So we are now putting more.
Shocked and reinforcement, I'm probably doing the operation with this if that is necessarily or a sample for doing this for a C right now to reduce expenses and do some similar decisions in the coming months.
and Jessica's a fainting capital which you mentioned would be five to seven million dollars.
Speaker Change: Most of the companies that we follow with underground lines in that sort of range would have like maybe $200 an ounce of the same capital which brings it to 25 million a year. Can you explain to me why your sustaining capital is so low?
Speaker Change: i
Well, the our officials, whose ten capitalists just keep all the assets in good shape.
Speaker Change: Keep maintaining all the equipment that we have.
So we have experienced in the moment of the pandemic, but some of the matura variations we know of the match well we need. So everything that we need for a construction and the spur part, any outside service is being taken down or taking the interior inside the cabinet.
So that the reason that in the coming years after completion of the boy we understand to be the range of less than a million dollars Suspending habits as we see for maintenance of all the facilities is a very compact good brain
Speaker Change: and we saw brand new operations. So we expect to be that range based in the long-awaited experience and they are not necessarily the project itself.
Speaker Change: Okay
Speaker Change: and go to just talking about just your costs as you go into 2025.
Can someone just share with me as you think about your budgeting of your cost? What sort of labor inflation are you forecasting or overall inflation for 2025 estimates over 24?
Incues in the Labour Coast.
Due to the cost of inflation, the inflation rate.
and we return on 9% but...
The last year we expect to have, this year we expect to have 2.4 to 0.5 percent of inflation. So in that range should be the increase in labor costs.
We normally are at those levels within, within, within place, you know?
Speaker Change: and what's about other items within your cost structure? So when I think about your 2025 cost,
Should I just think that there are only two and a half percent higher than 2024 or are there other things within your cost structure that will, you know, move those costs more than two and a half percent.
from in our region 60% of our coast comes from the...
and the contractors and the manpower, right? So is the component of our operations?
And we remember we had tried to replace the contractor for painting the important, most important minds. We are trying to replace the contractors with our own people and our own equipment.
So, we should expect a...
in the long run, known as Israeli in 2025, but we are beginning this 2025 year. So we expect to reduce the cost of tonal in all the labor we need in our minds.
Speaker Change: So we shouldn't expect any important increase in our cost.
Okay, and of the 60% of your cost, which is labor, what percentage of that is just contractors?
Is it hard? Yes, exactly, it can be hard, right? Daniel Leandro Raggio.
And if you want a little more detail of this dungeon, the labor is between 16 and 20% of all total costs. Total contractors are 56%
From this 66% 25% is labor from contractors.
So, the 16% plus the 14% are labor. This will be affected by the 2 to 4% inflation, the Leandro Miochio.
So if I 16% is your own people
and then 1414 is contractors.
Speaker Change: Correct.
Speaker Change: So 16 plus 14 gets me to 30%.
is very presently.
Speaker Change: Okay.
Speaker Change: Perfect, thank you so much. And then, Daniel, while I have you on, I saw, obviously, you've got your Seattle Web, they dividend.
which you got about, I think was at 60 million and then we got the 210 million from the sale of the royalty-to-franco.
So now you have more cash than debt on your balance sheet. Can you just review with me your capital allocation?
Speaker Change: for that additional cash. Obviously you've got 280 million or whatever the number was to pay for signed Gabriel still, right?
Speaker Change: to finish the Grand Gabriel, but what maybe your capital allocation on the oldest cash on the balance sheet?
Speaker Change: [inaudible]
and the asset sales to fund some Gabriel. Remember that we have $200 million in the Revolta Facilities RCS that we have in use.
So that will those facilities will remain and grown because we have recount with this process So at this point in time the funds will be devoted to fund sangha reals
Okay, and we just continue to pay the dividend as per formula.
So you can pass your students on the Sangabri out and is there any money going to trip each day that I should know about the feasibility study, how much is this cost thing?
Speaker Change: We are spending at a beach here around 20 million dollars per year until we reach the the previous event of this study.
So that is the average.
and regarding the evidence, we continue paying the evidence as every year. Next year, we should evaluate what would be the amount of the evidence paid, considering the performance of the company this year.
Speaker Change: Okay, so if I understand all of the cash and the service they did it and go to San Gabriel and then your debt outstanding will just be paid over time with your cash flow with that be a safe assumption.
We have, we will pay 50 million dollars of the local loan. We have, we're doing this this quarter. So maybe you will see at the end of the year 50 million dollars less in cash.
Speaker Change: Okay.
Okay, God, thank you so much and I'm looking forward to hopefully seeing Sangabriel when it's up and running.
Speaker Change: Thank you.
Ladies and gentlemen, that concludes the question and answer session of today's conference call. I would like to turn it back over to management for closing remarks.
Speaker Change: Thank you very much. Before we finish today conference call, the video is aired.
Speaker Change: We are excited to announce that when aventura is on the on this survey, we will be held at the National Area of the Balejans.
Speaker Change: Daniel.
Speaker Change: You're on the good news.
Disabled Disabled Excellent Opportunity for us to connect with you.
Speaker Change: This, when I went to the daily, we'll be held December 10th in New York. I, there will be share our latest updates and discuss our strategic vision and key projects for the coming year.
We hope you all join to gain a deeper insight to what happened to us growth plans and operational progress.
Please save the day and keep an eye for our more details coming soon. We look forward to seeing you in New York and again, thank you very much and have a wonderful day. Thank you.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: i
Speaker Change: The End