Q4 2024 Southern Copper Corp Earnings Call

February 12, 2025

Operator: Please enter your dial-in PIN and press pound when finished.

And press pound when finished.

Raúl Jacob: ... Over our 2023 production level. It was mainly due to an increase in production at all our mines. For this year, 2025, we expect to produce 23 million ounces of silver, an increase of 10% compared to 2024. We already mentioned for zinc, we already mentioned the excellent performance of our new Buenavista zinc concentrator. As I mentioned, it's operating at full capacity after a successful ramp-up in 2024. Well, I already mentioned it, increase, it's, it was, 18% over its production plan, with a cash cost of $0.19 per pound of zinc produced.

And over our 2023 production level.

It was mainly due to an increase in production with all of our minds.

For this year 2025, we expect to produce 23 million ounces of silver an increase of 10% compared to 2024.

We already mentioned ports for sync, we already mentioned the excellent performance of our new win of Isa zinc concentrate are.

As I mentioned, it's operating at full capacity after a successful ramp up in 2024.

Well I already mentioned that the increase it was 18% over its production plan, we can cash cost of 19 cents per pound of seeing produce.

Raúl Jacob: Zinc, as a whole, represented 5% of our sales in Q4 2024, with an average price of $1.38 per pound in the quarter, a 22% increase when compared to the same period, Q4 2023. Zinc is currently our third by-product. Mine zinc production increased by 155% quarter-on-quarter, and totaled 43,148 tons. This was mainly driven by the full ramp-up of the Buenavista zinc concentrator that produced 26,496 tons over the period, and by an increase in production at Santa Bárbara, at the Santa Bárbara mine of IMMSA. Refined zinc production dropped by 7% in Q4, vis-à-vis, the same Q4 2023.

Zinc as a whole represented 5% of home sales in the fourth quarter of 2024 with an average price of one dollar and 38.

Per pound in the quarter.

At 22% increase when compared to the same period, the fourth quarter of 2023.

Zinc is currently our third byproduct.

Mine sink production increased by 155% quarter on quarter.

And total 43148 times.

This was mainly driven by the full ramp up of the whenever you start zinc concentrate are that produced 26496 tonnes over the period and by an increase in production at San <unk>.

And a lot of our mine inside.

Refined zinc production dropped by 7% in the fourth quarter vis vis the same fourth quarter of 2023.

Raúl Jacob: Zinc production almost doubled in 2024. It increased by 99%. This was fueled by a contribution of 64,297 tons from the Buenavista concentrator and higher production at the Santa Bárbara and Charcas mines. It was partially offset by lower production at the San Martín mine. For 2025, we expect to produce 171,700 tons of zinc, which represents an increase of 32% over the 2024 production level, and 162% above the 2023 mark. This growth will be mainly driven by the expected 105,000 tons of production of our new Buenavista zinc concentrator. Focusing on the financial results of the company.

Zinc production almost doubled in 2024, it increased by 19, 9%.

This was fueled by the by a contribution of 64297 tonnes from the winner of Easter concentrated on higher production at the time a lot of our entire cost mines.

Was partially offset by lower production at the San Martin mine.

For 2025, we expect to produce 171700 tons of zinc, which represent an increase of 32% over the 2024 production level and 162% above the 2023.

Mark.

This growth will be mainly driven by respected 105000 tons of production of the.

Our new win Avista zinc concentrate.

Focusing on the financial results of the company for net saves in the fourth quarter of 2024 sales were $2 $8 billion. This is $489 million higher than sales for the fourth quarter or a 21% increase copper sales value.

Raúl Jacob: For net sales in Q4 2024, sales were $2.8 billion. This is $489 million higher than sales for the fourth quarter, or a 21% increase. Copper sales value increased 17%, and volumes were up 5%, spurred by better prices. Regarding our main by-products, sales value of molybdenum rose due to better prices and were slightly offset by a decrease in volume. Zinc sales, in turn, grew 80% due to an increase in prices of 22% and volumes, thanks to the contribution of the Buenavista Zinc facility. Lastly, silver sales were up 68% due to better prices and volumes. Our total operating costs and expenses in the fourth quarter increased $50 million, or 4%, when compared to Q4 2023.

Increased 17% and volumes were up five.

Sent spurred by better prices regarding our main by product sales value of molybdenum rose due to better prices.

And.

We're slightly offset by a decrease in volume.

Zinc sales in turn grew 80% due to an increase in prices of 22% and volumes. Thanks to the contribution of the when a b testing facility.

Lastly, silver sales were up 68% due to better prices and volumes.

Our total operating cost and expenses in the fourth quarter increase.

$50 million or 4% when compared to the fourth quarter of 2023.

Raúl Jacob: Main cost increments was in the labor cost due to a one-time charge of $62 million, resulting from labor contracts signed with 5 of our 6 Peruvian unions. This was at the end of 2024. As of now, all the unions in Peru have signed these, these new labor contracts. The signing bonus was for about $65 million in total. $62 million of them were charged in last year's results, and this somehow explains this plus the maintenance, the biannual repair of the 2 Toquepala concentrators, somehow explain the much higher cost that we are reporting in this quarter. Well, this contract, the labor contract, will help ensure that our operations in Peru evolve in a peaceful labor, in a peaceful labor environment for the next 4 to 6 years.

Main cost increments was in the labor cost due to a one time charge of $62 million, resulting from labor contracts signed with five of our six Peruvian unions.

This was at the end of 2024.

As of now all the unions in Peru have signed these these new labor contracts.

The signing bonus.

First for about 60 $65 million.

In total 62 of them were charge in last year's results and this is somehow explained this plus the maintenance the biannual repair of the two Taco pilot Concentrators somehow explain the much higher costs that we are reporting in this third quarter.

While these contracts the labor contract will help ensure that our operations in Peru involving a peaceful labor in a peaceful labor environment for the next four to six years. In addition to this charge would register higher expenses for repair materials and a decrease in capitalized lease.

Raúl Jacob: In addition to this charge, we'll register higher expenses for repair materials and a decrease in capitalized leachable material. These cost increments were partially offset by decreases in inventory consumption, fuel cost, energy, water, and other factors. For EBITDA, Q4 2024, adjusted EBITDA was $1,507 million, which represented an increase of 43% with regard to the $1,056 million registered in Q4 2023. The adjusted EBITDA margin in the fourth quarter was 54% versus 46% in Q4 2023.... Adjusted EBITDA in 2024 for the whole year was $6,406 million. This is 27% above the figure in 2023.

<unk> materials.

These cost increments were partially offset by decreases in inventory consumption fuel cost energy water and other factors.

For EBITDA the fourth quarter of 2024, adjusted EBITDA was 1500 $7 million, which represented an increase of 43% with regard to the 1050 $6 million Register in the fourth quarter of 2023.

Adjusted EBITDA margin in the fourth quarter was 54% versus 46% in the fourth quarter of 2020.

Adjusted EBITDA in 2024 for the whole year was 6400 $6 million. This is 27% above the figure in 2023.

Raúl Jacob: The adjusted EBITDA margin for the year, last year, was 56% versus 51% in 2023. Cash costs. Southern Copper's 2024's operating cash cost per pound of copper, net of by-product revenue credits, was $0.89 per pound. This 14-cent reduction in the cash cost compared to the $1.03 reported in 2023, was mainly attributable to a 4-cent decrease in production costs and to a unit cost effect generated by both an increasing pounds of copper produced and a 9-cent increase in by-product revenue credits. For the Q4 of 2024, SX's operating cash cost, net of the benefit of by-product credits, was $0.90 per pound. This cash cost was 20 cents higher than the cash cost of 76 cents for the Q3 of last year.

The adjusted EBITDA margin for the year last year was 56% versus 51% in 2020.

Cash costs.

Copper's 2020 fours operating cash cost per pound of copper net of byproduct revenue credits was <unk> 89 cents per pound.

This 14% reduction in the cash cost compared to the $1 three since reporting in 2023 was mainly attributable to a four cent decrease in production costs and to a unit cost effect generated by both an increase in pounds of copper produced and a 9% increase.

Leasing byproduct revenue credits.

For the fourth quarter of 2024 X Ccs operating cash cost net of the benefit of byproduct credits was <unk> 90 per pound.

This cash cost was 20 <unk> higher than the cash cost of 76% for the third quarter of last year.

Raúl Jacob: I mentioned already that we had an unusual charge to labor cost in the fourth quarter due to the new contracts with the six unions in Peru and the maintenance cost and lost production for the Toquepala concentrators maintenance. The operating cash cost per pound of copper before by-product credits was $2.32 per pound in Q4 2024. This is $0.37 above the value for Q3 this year, that was $1.95. This 19% increase in operating cash cost was a result of higher costs per pound from production cost, increases in treatment and refining charges, and administrative expenses, and lower premiums.

I mentioned already that we had an unusual charge to labor cost in the fourth quarter.

Due to the new contracts with the six unions in Peru, and the maintenance cost and lost production for the toquepala.

Traders are maintenance.

The operating cash cost per pound of copper before byproduct credits was $2.32 per pound in the fourth quarter of 2024.

This is 37 cents above the value for the third quarter of this year. There was a dollar and identify these 19, 19% increase in operating cash cost was the result of higher cost per pound from production cost increases in treatment and refining charges and then.

<unk> expenses and lower premiums regarding by products, we had a total credit of $679 million or 136 cents per pound in the fourth quarter of last year.

Raúl Jacob: Regarding by-products, we had a total credit of $679 million or $1.36 per pound in Q4 of last year. These figures represent a 14% increase when compared with the credit of $639 million or $1.19 per pound in Q3 2024. Total credits have increased for zinc and silver, and remained flat for molybdenum, and decreased slightly for sulfuric acid. Regarding net income, the net income in Q4 was $794 million, which represented a 78% increase with regard to the $445 million registered in Q4 2023. Net income margin in Q4 was 29% versus 19% in the same period of 2023.

These figures represent a 14% increase when compared with the credit of $639 million or $1 19 per pound in the third quarter of 2024.

Total credits have increased for zinc and silver and remained flat for molybdenum and decrease slightly for sulfuric acid.

Regarding net income the net income in the fourth quarter was $794 million, which represented a 78% increase with regard to the $445 million registered in the fourth quarter of 2023.

Net income margin in the fourth quarter was 29% versus 19% in the same period of 2023.

Raúl Jacob: The full year net income, 2024, was $3,377 million. This is 39% higher than the 2023 mark. These improvements were driven by the aforementioned increase in net sales and by our strict cost control measures. The net income margin in 2024 was 30% versus 25% in 2023. Cash flow from operating activities in 2024 was $4,422 million, which represents an increase of 24% over the $3,573 million, 2023. This result, which was mainly driven by higher net income, was partially offset by an increase in net operating assets.

The.

Full year net income 2024 was 3370 $7 million. This is a 39% higher than the 2023 Mark.

These improvements were driven by the aforementioned increase in net sales and by our strict cost control measures and net income margin in 2024 was 30% versus 25% in 2023.

Cash flow from operating activities in 2024 was 4420 $2 million.

Which represents an increase of 24% over the 3570 3 million.

23.

This result, which was mainly driven by higher and income was partially offset by an increase in net operating assets.

Raúl Jacob: For capital investments, our current capital investment program exceeds $15 billion and includes investment in the Tía María, Los Chancas, and Michiquillay projects in Peru, and in 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 2024, we spent $1,027 million on capital investments, which reflected a 2% increase year-over-year and represented 30% of net income last year. Given that there is a description of our main capital projects in Southern Copper's press release, I'm going to focus on updating new developments for each. For our Mexican projects, Minera México is planning to invest more than $600 million in 2025 at both its open pit metallurgical facilities and underground mines.

For capital investments, our current capital investment program exceeds $15 billion and includes investment in the Tia Maria of Shanghai, and <unk> projects in Peru.

And in AP and electrical projects in Mexico. This.

This capital forecast includes several infrastructure investments, including key investments to bolster the competitiveness of the electrical project in.

In 2024, we spend 1020 $7 million on capital investments, which reflected a 2% increase year on year and represented 30% of net income last year.

Given that there is a description of our main capital project in Southern Copper's press release Im going to focus on updating new developments for each.

Our.

Second projects Minera, Mexico is planning to invest more than $600 million in 2025 at both its open pit metallurgical facilities and underground mines.

Raúl Jacob: 50% of this investment will be used to guarantee the viability of long-term operations by actively modernizing updating assets, or 31% of the investment will target improvements in water usage and tailings management to ensure safety and efficiency at our operations. Remaining funds will be invested in efforts to bolster optimization and growth. For our growth projects, we have El Pilar in Sonora, which is a low capital intensity copper greenfield, that is expecting to contribute to our copper production with 36,000 tons of copper cathodes. The budget for Pilar is $210 million. For now, the results of experimental pads in the leaching process have confirmed adequate levels of copper recovery, and we're evaluating different options for optimization. The company is engaging in project development and on-site environmental activities.

50% of this investment will be used to guarantee the viability of long term operations by actively modernizing up updating assets or 31% of the investment will target improvements in water usage and tailings management to ensure safety and efficiency at our.

<unk> remaining funds will be invested in efforts to bolster optimization and growth.

For our growth projects.

We have it be ladder in Sonora.

Which is a low capital intensity copper greenfield.

That is expecting to contribute to our copper production with 36000 tons of copper cathodes.

The budget for <unk> $210 million.

And for now the results of experimental patch and diligent process have confirm adequate levels of copper recovery and wherever relate in different options for optimization. The companies engaging in project development and on site environmental activities and mine life is estimated at 13 years format.

Raúl Jacob: The mine life is estimated as 13 years from now. In the case of El Arco, in the Baja California Peninsula, this is a world-class copper deposit located in the central part of the Baja California Peninsula, with sulfide ore reserves of over 1,230 million tons and an average ore grade of 0.40%. It has also 141 million tons of leach material with an average ore grade of 0.27, which is a very good ore grade for SX-EW technology, by the way. The project includes an open-pit mine with a combined 120,000 tons per day concentrator and a 20,000 tons per year SX-EW operation. The company has complete environmental baseline study for the mine.

In the case of illogical in the Baja California Peninsula.

If this is a world class corporate deposit located in the Central Park of the Baja California Peninsula with sulfide ore reserves of over 1200 30 million tons and an average ore grade of <unk>, 40%.

It has also 141 million tons of leach material with an average ore grade of <unk> 27.

Which is one very good or great for for Sx EW technology by the way.

The project includes an open pit mine with a combined 120000 tonnes per day concentrator <unk> and 'twenty.

Tons per year Sx EW operations.

The company has completed the environmental baseline study for the mine currently more detailed engineering is being conducted for a concentrate or sx EW plant as well as water.

Raúl Jacob: Currently, more detailed engineering is being conducted for concentrator, SX-EW plant, as well as water for water desalination, logistics, infrastructure, and power delivery. SCC, on top of these projects in Mexico, the ones that I just mentioned, Pilar and El Arco, has some other projects in its Mexican pipeline that may boost organic growth if they are found to be of value for both stakeholders and the communities in which we operate. These projects are Angangueo, Chachihuites, and the Empalme Smelter, which could bolster our position as a fully integrated copper producer. For the Peruvian projects, we have Tía María. This project, after a thoughtful and detailed review, have set a new project budget at a value of $1,802 million to complete the Tía María investment.

Order desalinization logistics infrastructure and power delivery.

On top of these projects in Mexico are the ones that I just mentioned.

And a lot of them.

Has some older projects in its Mexican pipelines and may boost organic growth. If they are found to be of value for both the stakeholders and the communities in which we operate these projects are ongoing gale <unk> weakness and the empowerment of smelter, which could bolster our position as a fully.

Integrated copper producers.

For the Peruvian projects, we have Tia Maria.

This project after a thoughtful and detailed review has set a new project budget at a value of 1800 $2 million to complete the <unk> investment.

Raúl Jacob: As of 31 December last year, the company has generated more than 614 jobs, almost 500 of which were filled with local applicants. To the fullest extent possible, we intend to fill the 3,500 jobs estimated for the Tía María's construction phase, prioritizing workers from the Islay province. When we start operations in 2027, the project will generate 764 direct jobs and 4,800 indirect jobs. This year, we expect construction to begin. Work will initiate with construction of roads and access points to the project, as well as railways, installing a temporary camp, earth moving efforts for mine clearing activities. To date, we have installed a 59km live fence and delimit the property.

As of December of last year to 30 December 31, the company has generated more than 614 jobs.

Most 500 of which were filled with local applicants to the fullest extent possible, we intend to fill the 3500 jobs estimated for the <unk> construction phase prioritizing workers from the slide problems.

When we start operations in 2027, the project will generate 764 direct jobs and 4800 indirect jobs.

This year, we expect to we expect to construction to begin work will initiate with construction of roads and access points to the project as well as freight with installing a temporary camp air moving efforts for mine clearing activities to date, we have installed a 59 kilometer license.

And the limit deferrals.

Raúl Jacob: For Los Chancas, project in the Apurímac region of Peru, in coordination with the Peruvian authorities, efforts continue to eradicate illegal mining activities. Once this process has concluded, we will resume our environmental impact study and begin hydrogeological and geotechnical studies. We will also begin a resource verification drilling campaign of about 40,000-meter infill to gather additional information on the geological characteristics of the Los Chancas deposit. For the Michiquillay project in Cajamarca, as of 31 December 2024, the total progress of the exploration project was 35%. We have drilled 140,000 and 130 meters on a total program of 148,000 meters and obtained about 45,800 drill core samples for chemical analysis.

Total of Shanghai project in there for the Mercury in a federal.

In coordination with the Peruvian authorities efforts continued to reenter advocate illegal mining activities. Once this process has concluded we will resume our environmental impact study and being and begin Hydrogeological and geotechnical studies. We will also begin a resource verification drilling campaign.

<unk> of about 40000 meter infill to gather additional information on the geological characteristics of the last chunk of deposits.

For the <unk> project can cause America.

As of December 31 of 2020 for the total progress of the exploration project with 35% who have drilled 140130 meters on a total program of 148000 meters and obtain about 45000.

800 deal core samples for chemical analysis Diamond drilling will continue and will provide information for the interpretation of geological sections related to mineralization geological modeling and mineral resource evaluation.

Raúl Jacob: Diamond drilling will continue and will provide information for the interpretation of geological sections related to mineralization, geological modeling, and mineral resource evaluation. Geometallurgical studies are currently underway, and hydrological and hydrogeological studies have also initiated. The geotechnical study for the project is scheduled to begin shortly. Regarding environmental, social, and corporate governance practices, ESG, as it's known, Southern Copper Corporation is among the top 10 mining companies with the highest rating for sustainability in 2024. Corporate Sustainability Assessment of S&P Global, which publishes an annual performance review of the sustainability practices of 13,000 companies from across the globe, considers Southern Copper Corporation among the best-rated companies of 248 companies in the mining and metals sector for 2024.

Metallurgical studies are currently underway and hydrological and hydro Geological studies have also initiated.

Technical study for the project is scheduled to begin shortly.

Regarding environmental social and corporate governance.

Practices EC as it's known.

Southern Copper Corporation.

Among the top 10 mining companies with the highest rating for sustainability in 2020 for corporate sustainability assessment of S&P Global which probably is an annual performance review of the sustainability practices of 13000 companies from across the globe consider southern copper.

Among the best rated companies of 248 companies in the mining and metals sector for 2024.

Raúl Jacob: With a score that is twice the average register for our peers in the mining industry, SCC's sustainability rating rose 9 points year-over-year, and this marks our sixth consecutive year on the Dow Jones Sustainability Index. We have also been included in the Sustainability Emerging Market Index. Occupational safety and health of our workforce. Operating discipline and the strength of our preventive safety culture led to a 28% reduction in the number of employee Pardon me, please. Well, the discipline of our workforce and the safety culture that the company has implemented led to a 28% reduction in the number of employee accidents involving lost time injuries in 2024.

With a score that is twice the average raised turf our peers in the mining industry.

Sustainability rating rose nine points year over year.

And this marks our sixth competitive consecutive year on the Dow Jones sustainability index.

We have also been included in the sustainability emerging market.

[noise] occupational safety and health of our workforce operating discipline and the strength of our preventative safety culture.

Led to a 28% reduction in the number of employee.

Yes.

Pardon me please.

Well the.

The discipline of our.

Workforce and the safety culture of the company has implemented led to a 28% reduction in the number of employee accidents involving lost time injuries in 2024.

Raúl Jacob: For Tía María, we already mentioned some of the advances on the project, but on the community area, the company has been implementing the technology for agricultural program with the participation of 28 out of the 38 organizations from the Tambo Valley. It has these programs has increased the productivity of the different crops in the area by 14%, and 95% of the families of the valley has benefit from this program. And finally, on GC, the best international practices for tailings management with a preventive focus and an eye on minimizing risks. We are making progress in our efforts to implement the global industry standard on tailings management of the International Council on Mining and Metals, or ICMM, at our main operations.

For Tia Maria we already mentioned some of the advances on the on the perich.

But on the community area.

The company has been implementing the technology for a recovery program with the participation of 28 out of the 38 organizations from the Tambo Valley.

It has.

This program has increased the productivity of the.

The different crops in the area by 14%.

95% of the families of the value has benefit from this program.

And finally on <unk>, the best International practices, 14 management with a preventive focus on Eni of minimize on minimizing risks, we are making progress in our efforts to implement the global industry standard on tailings management of International Council on mining.

Metals or ICM.

At our main operations, we have completed our GAAP analysis.

Raúl Jacob: We have completed a gap analysis of open pit mining operations and are on track to ensure that all SCC facilities [are] complying with this standard. Regarding financing, on 5 February this year, that is last week, our subsidiary, Minera México, issued a $1 billion seven-year note of fixed rate senior and secure notes. This debt is due in 2032 and has an annual interest rate of 5.62%. During our marketing effort, we held meetings with 85 global and local fixed income investors and received purchase orders from high quality institutional investors. We received orders for $3.5 billion, a demand that is 3.5 times the offering. Proceeds will provide the company with additional liquidity to finance our Mexican capital expenditures and Minera México's general corporate purposes.

Open pit mining operations are on track to ensure that all sec's facilities complying with decent Thunder.

Regarding financing on February 5th.

This year that has passed.

Last week, our subsidiary Minera, Mexico issue, a 1 billion seven year note of fixed rate senior unsecured notes.

This debt is due in 2032 and has an annual interest rate of 556, 2%.

During our marketing effort, we held meetings with 85 global and local fixed income investors and receive purchase orders from high quality institutional investors, we received order for $3 $5 billion of.

Demand that is three five times the offering proceeds we provide the company with additional liquidity to finance, our Mexican capital expenditures.

It costs general corporate purposes.

Raúl Jacob: Regarding dividends, as you know, it is the company 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. Accordingly, on 23 January 2025, Southern Copper Corporation announced a quarterly cash dividend of $0.70 per share of common stock, and a stock dividend of 0.0073 shares of common stock per share, payable on 27 February 2025, to shareholder of record at the close of business on 11 February. Ladies, with this, ladies and gentlemen, with these comments, we end our presentation today. Thank you very much for joining us, and now we would like to open the forum for questions.

Regarding dividends as you know it is the company policy to review, our cash position spect that cash flow generation from operations capital investment plan and other financial needs at each board meeting to determine the appropriate quarterly dividend Accordingly from January 23.

<unk> 2025, Southern Copper Corporation announced a quarterly cash dividend of <unk> 70 per share of common stock and a stock dividend.

<unk> zero zero 73 shares of common stock for sure.

Payable on February 27, two.

2025 shareholder of record at the close of business on February 11.

Ladies with this ladies and gentlemen, with these comments with our presentation today.

Thank you very much.

For joining us and now we will like to open the forum for questions.

Operator: Thank you so much. As a reminder, to ask a question, simply press star one one on your telephone and wait for your name to be announced. To remove yourself, press star one one again. Please stand by while we compile the Q&A roster. Our first question is from the line of Gabriel Simos with Goldman Sachs. Please proceed.

Thank you so much and as a reminder to ask a question simply press Star one one on your telephone and wait for your name to be announced.

To remove yourself Crestar one line.

Again.

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

And our first question is from the line of Gabriela Cmos with Goldman Sachs. Please proceed.

Gabriel Simos: Hi, thank you for the presentation. Thank you for taking my questions. I actually have two. So for the first one, so you provided a new guidance for the Tía María project, right? Of $1.8 billion. I just wanted to understand what's included in the CapEx. So you've been mentioning a few changes you were expecting to the project. So just wanted to understand if the new road, the desalination plant are all included in this new guidance. And how much has been already invested into the project, right? So this is the first question. And for the second question, I'd like to understand a little bit better your production guidance, right?

Gabriel Simões: Hi, thank you for the presentation. Thank you for taking my questions. I actually have two. So for the first one, so you provided a new guidance for the Tía María project, right? Of $1.8 billion. I just wanted to understand what's included in the CapEx. So you've been mentioning a few changes you were expecting to the project. So just wanted to understand if the new road, the desalination plant are all included in this new guidance. And how much has been already invested into the project, right? So this is the first question. And for the second question, I'd like to understand a little bit better your production guidance, right?

Gabriela Cmos: Hi, Thank you for the presentation.

All my questions.

Actually I have two so for the first one so.

Gabriela Cmos: So you provided a new guidance for the Tia Maria project right.

Gabriela Cmos: $1 $8 billion I just wanted to understand what's included in the Capex. So you have been mentioning.

Gabriela Cmos: Few changes you were expecting to the projects I just wanted to understand if the new road.

Gabriela Cmos: Gallinacean planned Aro include included in this in this new guidance.

Gabriela Cmos: And how much has been already invested entered the project. So this is the first question and the second question I would like to understand a little bit better. Your your production guidance right. So if you could comment on the main reasons for the slight change rates or the slight gain.

Gabriel Simos: So if you could comment on the main reasons for the slight change, right? So those slight around 10,000 tons drop that you expect for 2025 production. That'd be interesting. And also, you have lowered, right? You have decreased the horizon for which you give guidance, your forecast for production guidance and CapEx guidance in Q3. Are we going back to the longer guidance at this point? And then, if not right now, when can we expect a longer guidance for production guidance and CapEx going forward? Thank you.

Gabriel Simões: So if you could comment on the main reasons for the slight change, right? So those slight around 10,000 tons drop that you expect for 2025 production. That'd be interesting. And also, you have lowered, right? You have decreased the horizon for which you give guidance, your forecast for production guidance and CapEx guidance in Q3. Are we going back to the longer guidance at this point? And then, if not right now, when can we expect a longer guidance for production guidance and CapEx going forward? Thank you.

Gabriela Cmos: Around 10000.

Gabriela Cmos: <unk> dropped do you expect for 2025 production.

Gabriela Cmos: That would be interesting and also you have lowered right you have to treat the horizon for which you give guidance.

Gabriela Cmos: Your forecast for production guidance and Capex guidance in the third quarter.

Gabriela Cmos: Are we going back to the longer guidance at this point.

Gabriela Cmos: And if not right now when can we expect a longer guidance for production and guidance and Capex going forward. Thank you.

Raúl Jacob: Okay, well, Gabriel, thank you very much for your questions, and I'm going to address them, and I may ask you for one of them to remember us what was it? But, well, for the Tía María, you will mention that we have set this budget in $1.8 billion in round numbers. So far, we have invested a little bit north of $400 million in the project. We have made some changes in the initial design of the project. We were not considering as part of the project a new road that will go through the desert areas that we have purchased in the last few years.

Gabriela Cmos: Okay.

Gabriela Cmos: Thank you very much for your questions and.

Gabriela Cmos: I'm going to.

Gabriela Cmos: Address them.

Gabriela Cmos: May ask.

Gabriela Cmos: For one of them too.

Gabriela Cmos: Remember us what was it but.

Gabriela Cmos: Well for the Tia Maria you will mentioned.

Gabriela Cmos: That we have we have said this budgeting $1 8 billion in round numbers.

Gabriela Cmos: So far we have invested a little bit north of $400 million in.

Gabriela Cmos: In the project.

Gabriela Cmos: Yeah.

Gabriela Cmos: We are we have at some some.

Gabriela Cmos: We have made some changes.

Gabriela Cmos: In the in the initial design of the project, we were not considering as part of the project.

Gabriela Cmos: New road that will go through the desert areas that we have purchased in the last few years older.

Raúl Jacob: All the way from where Tía María is to the coast. This is like about a 20km, 22km road that will help to move in the materials and everything that we require for the project construction at the very beginning. And the reason for that is that by doing this, we will avoid passing through the valley and generating inconvenience to the Tambo Valley people. So I think that is one of the reasons. The other one is the inclusion of the diesel plant. And a third element that is affecting the budget is inflation. The last time that we had this budget was a few years back.

Gabriela Cmos: All the way from <unk> to a close this is like about a 20 kilometer 22 kilometer road that will be will help to move on moving the materials and everything that we are required for the project.

Gabriela Cmos: Construction.

Gabriela Cmos: At the very beginning and the reason for that is that by doing this we will.

Gabriela Cmos: Avoid passing through the valley and generating.

Gabriela Cmos: Convenience to the Tambo Valley.

Speaker Change: People. So I think that that is one of the reasons. The other one is the inclusion of the of the diesel plant and a third element that is C that is affecting the budget. These inflation.

Speaker Change: Last time that we had this budget was a few years back even though we have found some savings in certain.

Raúl Jacob: Even though we have found some savings in certain facilities, well, inflation has taken a toll on the total budget. So that's basically the reasons behind the increase in the originally historic budget of $1.4 billion, up to $1.8 billion. The reason for the drop in production for 2025, mainly it's a matter of ore grades and recoveries. There's nothing specific affecting the production or the use of our facilities. Actually, I mentioned on the Toquepala concentrators maintenance that we did in Q4. This is going to be very, very helpful, very helpful for production this year.

Speaker Change: In certain facilities.

Speaker Change: Inflation has taken a toll on the total budget and so that's basically the reasons behind the increase in the <unk>.

Speaker Change: Originally the historic budget of $1 $4 billion up to one $8 billion.

Speaker Change: The reason for the drop in production for 2025, mainly its a matter of.

Speaker Change: Of.

Speaker Change: Ore grades and recoveries is nothing.

Speaker Change: Pacific.

Speaker Change: In the <unk>.

Speaker Change: The production.

Speaker Change: Or the use of our facilities actually mentioned on the toquepala.

Speaker Change: Concentrators.

Speaker Change: <unk>.

Speaker Change: Maintenance as we did in the fourth quarter. This is going to be very very helpful.

Speaker Change: Very helpful for.

Speaker Change: For production this year my personal expectation is that we can be.

Raúl Jacob: My personal expectation is that we be at the 2024 level or a little bit better, and that's hopefully a little bit better. Well, the five-year guidance, we usually have been mentioning that in our meetings as well as distributing to those who are interested in this matter. I can share this with you for the next few years. I mentioned already production for 2027.

Speaker Change: 2024 level or a little bit better and thats, hopefully a little bit better.

Speaker Change: Well the five year guidance, we usually are.

Speaker Change: We have been.

Speaker Change: Mentioning that in our meetings as well as distributing to those who are interested in this matter.

Speaker Change: Canada shared this with you.

Speaker Change: For the next few years I mentioned already the production for 2027 for 2026, we have.

Raúl Jacob: For 2026, we have a reduction in Toquepala production due to ore grades mainly, and in Cuajone as well, and that affects our ore production, should be at about 900,000 tons for 2026, 950,000 tons for 2027, 1,021,000 tons for 2028, 1,070,000 tons for 2029. And about that in 2030 as well. So that's for copper. We already mentioned on zinc what we are expecting to produce this year, which is 172,000 tons, will be a little bit better for the next few years. We will be close to 180,000 tons.

Speaker Change: A reduction in toquepala production due to ore grades mainly in <unk> as well and that affects our production should be at about 900000 tons for 2026.

Speaker Change: 950000 tons 2027.

Speaker Change: One 1000 1.021 million tons 2028, 1.070 million tons 2029.

Speaker Change: And.

Speaker Change: About that.

Speaker Change: In 2030 as well.

Speaker Change: So that's for culture.

Speaker Change: Well really mentioned on zinc.

Speaker Change: Expecting to produce this year, which is 172000 tons will be <unk> will be a little bit better for the next few years will be close to 180 180000 tons and formally at about 26%.

Raúl Jacob: For molybdenum, at about 26,000 tons, between 24, 25,000 and 26,000, will be the production mark for this year and next year. In the case of byproducts, particularly the open-pit operations, the driver of the mining plan is optimizing the copper production. Obviously, it comes with molybdenum, silver, and some other metals, but that's the plans are made to optimize the cost of the main product, which is copper, as you know, about 75% of the company's sales.

Speaker Change: <unk> 6000 tons between 'twenty four 'twenty.

Speaker Change: <unk> 5000, 26000 will be.

Speaker Change: <unk> Mark for the <unk> for the for this year and next year.

The case, hopefully by products, particularly the <unk> pizza operations.

Speaker Change: The driver of the mining plan is optimizing the copper production, obviously it comes with molybdenum silver and some other metals, but thats.

Speaker Change: The plants are made to optimize the cost of the main product, which is a copper as you know.

Speaker Change: About 75% of the company.

Gabriel Simos: That's great, Raul. Thank you very much.

Gabriel Simões: That's great, Raul. Thank you very much.

Speaker Change: That's great. Thank you very much.

Raúl Jacob: You're welcome.

Operator: Thank you. One moment for our next question, please. And it's from the line of Alejandro Demichelis with Jefferies. Please proceed.

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

Speaker Change: And he is from the line of Alejandro Demichelis with Jefferies. Please proceed.

Alejandro Demichelis: Yeah. Good morning, gentlemen. Thank you very much for taking my questions. Just to follow up on Tía María, please. Could you please give us an indication of how you're thinking about kind of cash cost for Tía María with the new changes that you have made? That's the first question. And then the second question is for 2025, 2026, how are you thinking about cash cost for the entire business for Southern Copper?

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

Speaker Change: Just to follow up on Tia Maria please.

Speaker Change: Can you please give us some indication of how you're thinking about kind of cash cost for Tia Maria with the new changes that <unk> made that's the first question.

Speaker Change: And then the second question is for 2025, how are you thinking about cash costs for the entire business for southern copper.

Raúl Jacob: Okay. On the Tía María Cash Cost, obviously it has been affected by inflation. Let me mention that in the first time that we did a financial evaluation on Tía María, we used a copper price of $2 per pound. Today, as you know, the market is, if you are at COMEX, well, a little bit north of $4.50, and in the case of LME, a little bit north of $4.10 today. The cost has also increased. Now, we are considering a cost of $1.12 per pound, Cash Cost. That's our current long-term view for the Cash Cost of Tía María.

Speaker Change: Okay.

Speaker Change: On the Tia Maria cash cost, obviously, it hasn't been affected by inflation.

Speaker Change: Let me mention that the debt in the first time that we did.

Speaker Change: A financial evaluation on Tia Maria we use a copper price of $2 per pound.

Speaker Change: Today as you know the market is if you are a comment so will a little bit north of $4 50.

In the case of Ele me, a little bit north of 410 today.

Speaker Change: So.

Speaker Change: Cost has also increased now we are considering cost of a dollar and 12 cents per pound.

Speaker Change: Cash cost that's how.

Speaker Change: Our current.

Speaker Change: Long term view for the cash cost of Tia Maria.

Alejandro Demichelis: That's great. Thank you.

Speaker Change: Okay. Thank you.

Operator: Thank you. One moment more-

Raúl Jacob: Cash cost, I forgot to comment on cash cost for the company. For 2025, we're expecting a cash cost in the range of $0.90 per pound. This is using the current prices; it should hold at that level or increase a little bit up to $1 in the following years. If you consider this year's prices, we're usually much more conservative in our long-term view. We want to be sure that we will be generating the funds that are required for all of our growth plans. So, for that reason, we tend to be a little bit more conservative in prices.

Speaker Change: Thank you.

Speaker Change: I forgot to comment on cash cost for four.

Speaker Change: Four.

Speaker Change: For the company for this for 2025 were expecting our cash cost in the range of <unk> 90 per pound.

Speaker Change:

Speaker Change: This is using the current prices should hold at that level or increase a little bit up to one dollar.

Speaker Change: In the following year to feed consider <unk>.

Speaker Change: This year's prices, where usefully much more conservative.

Speaker Change: In our long term view, we want to ensure that we have we will be generating the funds that are required for all of our growing plans.

Speaker Change: So.

Speaker Change: For that reason, we tend to be more conservative in prices, but if we consider.

Raúl Jacob: But if we consider the prices that we are looking at now, $0.90 about that, or between $0.90 and $1, I will say.

Speaker Change: The prices that we are.

Speaker Change: Looking at now Nike about that or in between $19 I will see.

Laurent Vial: Okay, that's great. Yeah. Thank you very much.

Alejandro Demichelis: Okay, that's great. Yeah. Thank you very much.

Speaker Change: Okay, that's very clear thank.

Speaker Change: Thank you very much.

Raúl Jacob: You're welcome.

Speaker Change: You're welcome.

Operator: Thank you. One moment for our next question. That comes from the line of Camilla Barber with Bradesco BBI. Please proceed.

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

Speaker Change: That comes from the line of Camelot BARDA point Bradesco BBA. Please proceed.

Camila Barber: Hi, good morning. Thank you for taking my questions. I have two questions. The first one on the copper market. If you can comment on your views on the supply side, given the current low TC, RC environment, do you see any risk for smelters of cutting supply? And the second question, just a quick one: Can you provide an updated estimate for CapEx and free cash flow expectation for 2024? Thank you.

Camilla Barder: Hi, good morning. Thank you for taking my questions. I have two questions. The first one on the copper market. If you can comment on your views on the supply side, given the current low TC, RC environment, do you see any risk for smelters of cutting supply? And the second question, just a quick one: Can you provide an updated estimate for CapEx and free cash flow expectation for 2024? Thank you.

Speaker Change: Hi, Good morning, Thank you for taking my question.

Speaker Change: I have two questions. The first one on the copper market and if you can comment on your yields on the supply side.

Speaker Change: Given the current low TCE ERC environment, we've seen new lease for smelters all cutting supply.

Speaker Change: And the second question just a quick one can you provide an updated estimate for Capex and cricket stores expectation for 2024. Thank you.

Raúl Jacob: So sorry, Camilla, I couldn't get your last question.

Speaker Change: I <unk> clear and get your last question.

Camila Barber: The last question is on expectations for CapEx and free cash flow in 2025.

Camilla Barder: The last question is on expectations for CapEx and free cash flow in 2025.

Speaker Change: The last question.

Speaker Change: Our expectations for Capex and free cash flow in 'twenty five.

Speaker Change: Okay.

Raúl Jacob: Okay, on the view on the supply side, what we're seeing, what you mentioned, the extremely low, if not zero or even negative, TC/RC, the discounts that we have on the copper market, that is reflecting a significant scarcity of copper concentrates worldwide. Today, we have news from China, that the Chinese government has put some restrictions to new smelters' constructions in China. And so that's, that reflects, well, how we are seeing the market for copper concentrates at this point. On prices, we already mentioned that we believe that they will hold at the current level. There is a huge arbitrage between COMEX, in favor of COMEX, between COMEX and LME.

Speaker Change: Okay.

Speaker Change:

Speaker Change: Yes.

Speaker Change: Okay.

Okay.

Speaker Change: And the view on the on the on the supply side, we're seeing well you mentioned the extremely low if not zero or even negative Tcs Rcs discounts that we have on the copper market that is reflecting.

Speaker Change: Significant paucity of copper concentrates worldwide.

Speaker Change: Today, we have new some from China that the Chinese government has put some restrictions to two new smelters constructions in China and so that's what that reflects how.

Speaker Change: How we are seeing the market for copper concentrates at this point.

Speaker Change: On prices, we already mentioned that we believe that they will they will hold at the current level. There is a huge arbitrage between comex in favor of comex between <unk> and <unk>.

Raúl Jacob: We believe that that should close after we find a new area of activity, different, a different one, obviously, because of the high spread between the two prices. On well CapEx, I'll mention on the CapEx, on the free cash flow, depending on your assumptions for prices and production, we already report on the production. I'm going to mention on the CapEx. For this year, our board has approved a budget of $1.6 billion for capital expenditures. For 2026, when we believe we will begin a strong consumption on Tía María, we were expecting to spend $2.4 billion.

Speaker Change: We believe that that should.

Speaker Change: Close after we find the new new well aerial full of activity different our different <unk>, obviously because of the high spread between the two prices.

Speaker Change: On.

Speaker Change: Well capex.

Speaker Change: I'll I'll mention on the Capex on the free cash flow depending on your on your assumptions for prices and production will really to report on the production ongoing dimension on the Capex for this year our board has approved.

Speaker Change: Our budget of $1 $6 billion for capital expenditures.

Speaker Change: For 2026, when we believe we will begin.

Speaker Change: Strong consumption on Tia Maria.

Speaker Change: We're expecting to spend two.

Speaker Change: $4 billion that number should be at about $2 $1 billion in 2027.

Raúl Jacob: That number should be at about $2.1 billion in 2027, and 2028, $2.5 billion, and 2029, $2.8 billion. That's our current forecast for the next few years on CapEx.

Speaker Change: $2022 5 billion in 2000 $2092 $8 billion that's that's.

Speaker Change: Our current.

Speaker Change: Forecast for the next few years on Capex.

Camila Barber: Okay. Thank you very much.

Camilla Barder: Okay. Thank you very much.

Speaker Change: Okay. Thank you very much.

Raúl Jacob: You're welcome.

Operator: Thank you. One moment for our next question, please. And it's from the line of Alex Hakin with Citi. Please proceed.

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

Speaker Change: Yeah.

Speaker Change: And he is from the line of Alex hacking with Citi. Please proceed.

Alexander Hacking: Yeah, thanks, Raul. Just to follow up on those CapEx numbers that you gave, the $1.6 billion this year, $2.4 billion next year, how much of that is Tía María? Thank you.

Alex Hacking: Yeah, thanks, Raul. Just to follow up on those CapEx numbers that you gave, the $1.6 billion this year, $2.4 billion next year, how much of that is Tía María? Thank you.

Carol: Oh, yes, thanks Carol.

Speaker Change: Just to follow up on those Capex numbers that you gave the $1 6 billion. This year $2 4 billion next year.

Carol: How much of that is the Tia Maria Thank you.

Raúl Jacob: Sure. For this year, Tía María, it's about a little bit north of $200 million, $210, to put it simply. In 2026, it's $980 million. Let me mention, in 2027, when we should be finishing the construction phase of the project, $460 million.

Sure.

For this year came out it's about.

Carol: A little bit north of $200 million.

Carol: 210 to put it simply.

Carol: In 2026 is $980 million.

Carol: And let me mentioned in 2027, when we should be finishing the construction phase of the project $460 million.

Alexander Hacking: Okay, thanks. And then I guess also-

Alex Hacking: Okay, thanks. And then I guess also-

Speaker Change: Okay. Thanks, and then I guess also on TMR.

Raúl Jacob: Sure.

Alexander Hacking: - On Tía María, you know, Peru has elections next year, 2026. Do you see any risk that Tía María becomes politicized due to the elections? I'm not familiar with the candidates, what their platforms are, but I've just had some questions from investors on this topic. Thank you.

Raúl Jacob: Sure.

Alex Hacking: - On Tía María, you know, Peru has elections next year, 2026. Do you see any risk that Tía María becomes politicized due to the elections? I'm not familiar with the candidates, what their platforms are, but I've just had some questions from investors on this topic. Thank you.

Speaker Change: Peru has election next year 2026.

Speaker Change:

Speaker Change: Do you see any risk that Tia Maria becomes politicised due to the elections I am not familiar with the candidates what their platforms are but I just had some questions from investors on this topic. Thank you.

Raúl Jacob: Thank you very much for your questions, Alex. We don't see a risk at this point. What we're seeing is that the people, the population in the Tambo Valley and the Islay Province and Arequipa region, are all engaged in receiving the benefits of this phase of the project, which is the construction. Later on, we will be contributing from day one to local taxation, which will be very important for the progress of the Arequipa region, as well as the Islay Province in particular. Let me mention that the operations that we have in Toquepala and Cuajone operations, as well as the Ilo smelter and refinery complex, has over time contributed to the regions where we operate.

Speaker Change: Thank you very much for your questions Alex.

Speaker Change: We don't see a risk at this point, what we're seeing is steady.

Speaker Change: People the population the Tambo valley in the Slide Province, and Arequipa region.

Speaker Change: Our Ola.

Speaker Change: Engage in receiving the benefits of this phase of the project, which is a construction later on we will be contributing from day one to <unk>.

Speaker Change: Local taxation, which will be very important for the progress of of the Arequipa region as well as the slide province in particular.

Speaker Change: Let me mention that the operations that we have in the toquepala and <unk> operations.

Speaker Change: As well as the law.

Speaker Change: Smelter refinery complex.

Speaker Change: Has.

Over time contribute to the regions, where we operate where we have put our focus, particularly in education and health and you see the indexes for for quality of leaving in these two regions. The ones that were our current operations or are among the.

Raúl Jacob: We have put a focus particularly on, in education and health. And if you see the indexes for, for quality of living in these two regions, the ones where our current operations are, are among the top three, top five in Peru. We believe that this, this new project will be in the Tía María project, as well as the other ones, Chancas and Michiquillay, will bring many opportunities for growth and development to the local population, and over time, they will left poverty behind and be prosperous regions as the ones that we see in, in for Toquepala, which is the Tacna region, and for Cuajone, which is the Moquegua. Cuajone and Ilo, which are both in the Moquegua, the Moquegua region.

Speaker Change: Top to top three top five.

Speaker Change: In Peru.

Speaker Change: We believe that these are these new.

Speaker Change: The project will be in the Tia Maria project as well as the other ones that <unk> will bring many opportunities for growth and development to the local population and over time they will.

Speaker Change: Lift poverty behind and be prosperous regions as the ones that that we see in four took a pilot which is attacking a region and portal <unk>, which is the market <unk>, which are both in the <unk> <unk> region. So we believe that that is a consequence and I believe my personal.

Raúl Jacob: So we believe that that is a consequence, and I believe my personal take is that the local population has already understood this after having very hard years because of COVID and then political instability at the beginning in 2021 to 2023, up to 2023. So being, as you had then mentioned, Alex, being that next year, a year of election, we will certainly keep working, and but we expect to pass through this part of the political cycle with no specific issues for Tía María.

Speaker Change: Take is that the local population.

Speaker Change: <unk> has already understood. This after having a very hard years because of Covid and then political instability.

Speaker Change: At the beginning in 2021 2023 up to 2023, so being as Julie mentioned Alex.

Speaker Change: Next year a year of election, we will we will certainly keep working.

Speaker Change: But we expect.

Speaker Change: To pass through this.

Speaker Change: Part of the political cycle with no specific issues for Tia Maria.

Alexander Hacking: Thank you, Raul.

Alex Hacking: Thank you, Raul.

Speaker Change: Thank you Rob.

Raúl Jacob: You're welcome.

Speaker Change: Youre welcome.

Operator: Thank you. One moment for our next question, please. It's from David Feng with CICC. Please proceed.

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

Speaker Change: Hey.

Speaker Change: David Fang with TICC. Please proceed.

David Feng: Oh, thank you. Good morning, Raul and team. My first question is just a follow-up on your unit cost. Since we have seen a quarter-over-quarter increase in your unit operating cost before by-product credits in Q4. So we know if the increase is mainly because of the maintenance works at Toquepala, or what are the other reasons behind? And also, you just mentioned your estimate for cash costs in 2025 is $0.90 per pound. So what shall we expect for the unit cost before the by-product credits? That's my first question.

Speaker Change: Oh, Thank you good morning <unk>.

Speaker Change: My first question is just a follow up on your unit cost.

Speaker Change: So we have seen quarter on quarter increase in your operating cost before byproduct credits in the fourth quarter.

Speaker Change: So let me know if the increase is mainly because of the maintenance works at <unk> or <unk>.

Speaker Change: What are the other reasons behind and also you just mentioned your estimate for cash costs.

Speaker Change: Internet five ish 90 cents per pound.

Speaker Change: So what shall we except for the unit cost.

Speaker Change: Before.

Speaker Change: The byproduct credits.

Speaker Change: My first question.

Raúl Jacob: Okay. In the Q4, we had two major cost issues. The one that you just mentioned, the maintenance of the two plants that we have in Peru. And on top of that, and very expensive as well, for a quarter, for a given quarter, not for a 4-year or 6-year contract, the charge in labor costs that we had due to the signing of the new labor contracts. Those are the two effects that were significantly affecting the cash cost in the Q4. Cash costs before by-product credits was, is expected to be at $2.17 per pound for the year. Last year was $2.13, so it's a negligible increase. This is our plan.

Speaker Change: Okay.

Speaker Change: On the.

Speaker Change: In the fourth quarter, we had two major.

Speaker Change: Cost issues.

Speaker Change: Issues. The one that you just mentioned.

Speaker Change:

Speaker Change: The maintenance of the two plants that we have in Peru.

Speaker Change: And on top of that and very expensive as well.

Speaker Change: For a quarter for a given quarter not for a four year a six year contract.

Speaker Change: Chart in labor cost that we have due to the new the signing of the new <unk>.

Speaker Change: Labor contracts those are the two effects that were significantly.

Speaker Change: Affecting the cost cash cost in the fourth quarter.

Speaker Change: Cash cost before byproduct credits was <unk>.

Speaker Change: It is expected to be at $2 17 per pound for the year.

Speaker Change: Last year was $2 13.

Speaker Change: <unk> will increase this is our plan, we usually focus on improving on top of what we have planned. So my expectation is that we have a lower cash cost cash cost before byproduct credits on a bidder.

Raúl Jacob: We usually focus on improving on top of what we have planned. So my expectation is that we have a lower Cash Cost, all Cash Costs before by-product credits, and a better cash by-products contribution at the end of 2025.

Speaker Change: Cash.

Speaker Change: <unk> contribution at the end of 2025.

David Feng: Oh, that's great to hear. Thank you so much, Raul. My second question is, we've seen that your cash balance has been increasing quickly in the past few quarters, and I believe it might be higher in Q1 2025, given the $1 billion proceeds from the senior notes issuance. So I just wonder, shall we expect your CapEx will accept resume in next few quarters, or would there be any other use for the excess cash position we are seeing right now?

Oh, that's great to hear thank you so much Raul.

Speaker Change: And my second question is we've seen that.

Speaker Change: Your cash balance has been increasing quickly in the past few quarters.

Speaker Change: I believe it likely.

Speaker Change: Higher in the first quarter of 2005, given the $1 billion.

Speaker Change: Proceeds from that.

Speaker Change: The senior notes issuance. So I just wanted ask shall we expect your <unk> in next few quarters or will there be any other use for the excess cash position, we are seeing right now.

Raúl Jacob: Well, as we indicated for the bond issue, for the Minera México bond issue, this is basically the same for our cash position. We're going to use it for our organic growth, for our CapEx, as well as for some other uses that the corporation may have. As you know, we declare all the quarters a dividend, and that is something that is one of the possible uses of cash. Not saying that we're expecting anything different than what we have been doing on this. This is up to the board. So I believe that we have to wait for the board to discuss it and see the appropriation of any cash that we have in hand.

Speaker Change: Well.

Speaker Change: We indicated for the bond issue for the <unk> Global Nishu.

Speaker Change: This is basically the same for for our cash position, we're going to use it for our organic growth for our Capex is with us for some other uses.

Speaker Change: The Corporation May have as you know we declare.

Speaker Change: All the all the quarters of dividend and that is something that is one.

Speaker Change: Of the possible uses of cash not I'm, not saying that we're expecting anything.

Speaker Change: Different that what we have been doing on this is up to the board. So so I believe that we have to wait for for the board to discuss it and see the appropriation of any cash that we have in hand.

David Feng: Understood. Thank you so much. That's really helpful.

Speaker Change: Understood. Thank you so much that's really helpful. Thank.

Raúl Jacob: Thank you. Thank you very much.

Thank you very much.

Operator: Thank you. Our next question is from the line of Alfonso Salazar with Scotiabank. Please proceed.

Speaker Change: Thank you.

Speaker Change: Our next question is from the line of Alfonso Salazar with Scotiabank. Please proceed.

Alfonso Salazar: ... Thank you. Hello, Raul. I have a follow-up question on CapEx. You mentioned what are you including for Tía María for the next few years. The question that I have is, based on your asset base today, what would be the level of sustaining CapEx to expect for you in the coming years on the sustaining CapEx, so maintenance CapEx? And the second question is also on capital allocation and the fact that you are, you know, having these extended, these dividend payments using both cash and stock. You are accumulating piling of cash, your cash balance has been increasing.

Speaker Change: Thank you.

Speaker Change: Hello.

Speaker Change: I have a follow up question on the Capex.

Speaker Change: You mentioned, what are you, including for the ammonia for the next few years.

Speaker Change: The question that I have is based on your asset base today, why do you see the level of sustaining capex two two to expect.

So are you in the coming year.

Speaker Change: On the sustaining capex or maintenance Capex on the second question fees also in capital allocation and the stack.

Speaker Change: That you added.

Speaker Change: Having these extended these.

Speaker Change: Dividend payments, you've seen bolt cash.

Speaker Change: On stock.

Speaker Change: You are accumulating tying up cash and your cash balance has been increasing any other comment on <unk>.

Alfonso Salazar: Any other comment on, you know, potential investments in, or use of this cash that you can mention, apart from all the points that they are in the pipeline? We have talked about M&A in the past, opportunities, opportunistic, anything opportunistic that you may be, you know, able to comment, in terms of going to look for other commodities or for other metals, or considering only copper at this stage, going forward? Any comment that you can make could be very useful. Thank you.

Speaker Change: No.

Speaker Change: Potential investments in.

Speaker Change: All use of these cash that you can mention in our platform. All the places they are in the pipeline, we have talked about M&A in the past.

Speaker Change: Opportunities opportunistic if anything opportunistic that you maybe.

Speaker Change: Able to comment.

Speaker Change: And in terms of going to look for other commodities of all the metals or considering only culprit.

Speaker Change: At this stage.

Speaker Change: Going forward any comment that you can make could be very useful. Thank you.

Raúl Jacob: Okay, let me focus first on the CapEx. The level of sustaining CapEx for the next 3 years, we're forecasting about $500 million for maintenance CapEx. In some cases, we're considering what otherwise would be a maintenance CapEx as part of a project. For instance, we are considering replacing truck haulage by conveyor belt haulage at certain operations, once the distances make it reasonable to consider that. At the end of the day, as you may know, the kilowatt-hour of power that propels a 400-ton truck is much more expensive than what you will pay for moving 1 ton through a conveyor belt in terms of energy, probably one fourth of that.

Speaker Change: Okay. Let me focus on first on the Capex the level of sustaining Capex for next few years, we're forecasting about $500 million for maintenance Capex.

Speaker Change: In some cases we.

Speaker Change: We're considering.

Speaker Change: What otherwise would be a maintenance capex as part of a project for instance, we are considering replacing trucks truck haulage by conveyor belt haulage of certain operations. Once the distances are are the or make it reasonable to consider that at the end of the day as you may know.

Speaker Change: The kilowatt hour of power that propel Sir.

Speaker Change: 400 tonne track is much more expensive than what what will you will pay for moving one ton through our conveyor belt in terms of energy from the one fourth of that so that's one of the recent why we we are.

Raúl Jacob: So that's one of the reasons why we are not considering certain expenditures as part of our maintenance, but that's what we have. It's about $500 million. On the other potential investments, it depends on where we see good opportunities for the company to grow an asset that fits our current characteristics of being a low-cost copper producer, very efficient copper producer, with a significant pipeline of byproducts as well, that make our cash costs even more competitive. We will certainly review it and make a recommendation to our board. That for now, that's basically what we're focusing in, Alfonso.

Speaker Change: We're not.

Speaker Change: Not considering certain expenditures as part of our maintenance, but that's that's where we have about $500 million.

Speaker Change: On the on the other potential investments it depends on where we see.

Speaker Change: Good opportunities for the company to grow an asset that fits our current characteristics of being a low cost copper producer their efficient copper producer with the.

Speaker Change: Significant pipeline of by products as well that make our cash cost even more competitive.

Speaker Change: We will we will certainly review it in and make a recommendation to our board.

Speaker Change: For now Thats Thats basically what were focusing in on our phones.

Alfonso Salazar: Okay. Excellent. Thank you so much, Raul.

Speaker Change: Okay excellent. Thank you so much.

John Tumazos: Raul, the maturity that we have in April?

Oscar González Rocha: Raul, the maturity that we have in April?

Speaker Change: Enrolled the maturity that we have in April.

Raúl Jacob: Oh, yes, thank you very much, Oscar. Oscar González Rocha. We have a maturity of $500 million that will be due in April. So we will be using a portion of our cash position for that. Thank you very much. I forgot about that, Oscar.

Speaker Change: Oh, yes, thank you very much.

Speaker Change: I was kind of inside of her own.

Speaker Change: We have.

Speaker Change: We have a maturity of $500 million.

We will be.

Speaker Change: We will be due in April so we will be using.

Speaker Change: A portion of our cash position for that.

Speaker Change: Thank you very much I forgot about that Oscar.

Operator: Thank you. One moment for our next question that comes from the line of John Tumazos, with John Tumazos Very Independent Research. Please proceed.

Speaker Change: Thank you one moment for our next question comes from the line of John Tumazos with John Tumazos very independent research. Please proceed.

John Tumazos: Could you give us a little more precision on the timetable, please, for the El Pilar heap leach project in Sonora and Tía María in Peru? Which quarter should we expect them to begin making copper?

Speaker Change: Yeah.

Speaker Change: Could you give us a little more.

Speaker Change: Precision on the timetable for the <unk>.

Speaker Change: The <unk> project in Sonora.

Speaker Change: And Tia Maria.

Speaker Change: In Peru, which quarter should we expect.

Speaker Change: <unk>.

Speaker Change: To begin making copper.

Raúl Jacob: In the case of Tía María, we will be, we'll be doing the initial testing of the equipment, but that's our current plan by, by the second quarter of 2027. We do operate, more than 5 SX-EW plants. One that is quite similar to the one that we will be, building in Tía María, it's currently operating at our Buenavista mine in Mexico. So we believe that the ramp up of these facilities should be relatively quick, through the year. Hopefully, we will get into the fourth quarter of 2027 with all the ramping up finished, the operating facilities at full speed. That's our expectation and, and goal. That's for Tía María.

Speaker Change: In the case of Tia Maria we will be we'll be doing the initial testing of the equipment, but that's our current plan bye bye.

Speaker Change: By the second quarter of 2027.

Speaker Change: Okay.

We do operate more than five Sx EW plants.

Speaker Change: One that is quite similar to the one that we will be building in Tia Maria It's currently operating at our when Arista mine in Mexico.

So we believe that the ramp up of this facility should be relatively quick through the year, hopefully we will get into the fourth quarter of 2027 with the.

Speaker Change: All the older ramping up finish the operating facilities at full speed Thats, our expectation and goal.

Raúl Jacob: In the case of El Pilar, which is also an SX-EW technology, process, we are expecting to finish the build-up of the plant by the end of 2027, so production should be more expected for 2028 in this case.

Speaker Change: Thats for Tia Maria in the case of our pillar, which is also an sx EW technology.

Process, we are expecting to to finish the buildup of the plan by the end of 2027, so production should be more more expected for 2028 in this case.

John Tumazos: Thank you.

Speaker Change: Thank you.

Raúl Jacob: Mm-hmm. You're welcome.

Speaker Change: Mhm.

Speaker Change: Youre welcome.

Operator: Thank you so much. One moment for our next question. And it comes from the line of Juraj Domek with Laramie VR. Please proceed. All right, your line is open from Laurent Vial.

Thank you so much one moment for our next question.

Speaker Change: Yeah.

Speaker Change: And it comes from the line of Raj <unk> with <unk>. Please proceed.

Speaker Change: Your line is open from <unk>.

Laurent Vial: Oh, hello, good morning. Thanks for the presentation. I was wondering if you could confirm us that maintenance activities have finished in Toquepala, and if we should not expect any impact in 2025? And my second question is, perhaps have your comments on the recent announcements on copper tariffs in the US. Thank you.

Juraj Domek: Oh, hello, good morning. Thanks for the presentation. I was wondering if you could confirm us that maintenance activities have finished in Toquepala, and if we should not expect any impact in 2025? And my second question is, perhaps have your comments on the recent announcements on copper tariffs in the US. Thank you.

Speaker Change: Oh Hello, good morning, Thanks for the presentation.

Speaker Change: I was wondering if you could confirm that.

Speaker Change: Maintenance activities.

Speaker Change: Finished in toquepala.

Speaker Change: And then.

Speaker Change: Okay.

Speaker Change: And if we should not expect any impact in the in.

Speaker Change: In 2025.

Speaker Change: And my second question is.

Speaker Change: Perhaps have your comments on.

On the recent announcement announcements on corporate harvest by in the U S.

Speaker Change: Thank you.

Raúl Jacob: Okay, first on the maintenance activities for the Toquepala two concentrators. Yes, it was finished in December. In November, I'm so sorry, in November. So we already finished the expansion, the main, the biannual maintenance in these two concentrators. Well, the impact in 2027 is that you will have the facilities running at full speed all the year. That is what is happening right now.

Speaker Change: Okay.

Speaker Change: First on the on the maintenance.

Speaker Change: Activities for that took a pile are.

Speaker Change: Too concentrated or yes. It was finished.

Speaker Change: In December so we have November I'm, sorry in November so we already finished.

Speaker Change: The expansion there.

Speaker Change: The bi annual maintenance in these two concentrated or <unk>.

Speaker Change: Well the impact in 2027 is that you will have.

Speaker Change: The facility is running at full speed.

Speaker Change: All of the year that is what is happening right now.

Raúl Jacob: In the case of copper tariffs, we did a review on the possible impact on the company of a copper tariff, as well as, I should say, tariffs in general, because we not only sell copper to the US, but also sulfuric acid and silver and so on. So in the case of our sales in Mexico, about 10% of the Mexican sales are directed to the US right now. Of those 10 points, 10 percentage points of the sales in Mexico, 1.5 percentage points will be absorbed by the customer.

Speaker Change: In the case of corporate tariffs, we beat a review on the possible impact on the company.

Speaker Change: Cooper tire.

Speaker Change: I should say tariffs in general.

Speaker Change: Does it not only we not only sell.

Speaker Change: Copper to the U S federal social formic acid and silver and so on so in the case of our sales in Mexico.

Speaker Change: 10% of the Mexican sales.

Speaker Change: Are directed to the U S right now.

Speaker Change: Of those 10 points 10 percentage points of the sales in Mexico.

Speaker Change: One five percentage points.

Speaker Change: We will be absorbed by the by the customer we already have we already have.

Raúl Jacob: We already have, we already have, some talks with the customers, that we have over there, and they, believe that they will keep buying our materials, even though, they have to pay a higher tariff. It will be the case, by the way, for all the US consumers of the new, of the, of these products. The rest, say 8.5 percentage points of the 10 points that are the 10% of our total sales, that, that can be redistributed if it is necessary. We can, redirect these, sales to these, these sales to some other markets. At the end of the day, we, we operate in- we operate producing commodities, and that is one of the characteristics of the commodities, that you can, you can, send it to different markets.

Speaker Change: Some talks with the customers.

Speaker Change: That we have over there and the.

Speaker Change: I believe that they will keep buying our materials.

Speaker Change: Even though.

Speaker Change: They have to pay a higher tariff it will be the case by the way for all the U S consumers of the new book days of these projects.

Speaker Change: The rest.

Speaker Change: Say eight five percentage points of the 10 that are in the 10% of our total sales.

Speaker Change: That can be redistribute if it is necessary we can redirect these.

Speaker Change: Sales to this segment the.

Speaker Change: Sales to some other markets.

Speaker Change: At the end of the day, we were operating we operate producing commodity.

Speaker Change: That is one of the characteristics of the commodities have you can you can.

Speaker Change: Send it to different markets, particularly in the case of copper, we believe that the corporate deficit that the U S housing <unk> production versus consumption will require will require.

Raúl Jacob: Particularly in the case of copper, we believe that the copper deficit that the US has vis-à-vis its production versus its consumption would require some material that goes to the US, and then we'll see. We haven't had any talks on regarding specifically on copper. Hopefully, this will not materialize. We hope to... This is our expectation, but if so, it will affect in 10% of the sales, and we believe that most of that can be redirected to different markets, to some other markets.

Speaker Change: Some material that goes to the U S. And then we will see we haven't had any talks on regarding specifically in copper hopefully this will not materialize. We hope to this is our expectation that if so it will affecting 10% of the sales and we believe that most of that can be redirected.

Speaker Change: Two different markets to some other markets.

Laurent Vial: Perfect. Thank you very much.

Juraj Domek: Perfect. Thank you very much.

Speaker Change: Perfect. Thank you very much.

Raúl Jacob: You're welcome.

Operator: Thank you. As a reminder, if you do have a question, simply press star one one to get in the queue. Mr. Jacob, I don't see any further questions in the queue.

Speaker Change: Thank you.

Speaker Change: As a reminder, if you do have a question simply press star one one to get in the queue.

Speaker Change: Okay.

Speaker Change: And Mr. Jacob I don't see any further questions in NICU.

Raúl Jacob: Thank you very much, Carmen. Well, with this, we conclude our conference call for Southern Copper's Q4 2024 and the full year results. We certainly appreciate your participation and hope to have you back with us when we report our Q1 2025 results. Thank you very much for being with us, and have a nice day.

Speaker Change: Thank you very much garmin well this will conclude our conference call for southern Copper's fourth quarter of 2024, and the full year results. We certainly appreciate your participation and hope to have you back with US when we report our first quarter of 2025.

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

Speaker Change: Have a nice day.

Operator: With that, I thank you, everyone who participated in today's conference. You may now disconnect.

Speaker Change: And with that I. Thank you everyone participating in today's conference you may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: [music].

Q4 2024 Southern Copper Corp Earnings Call

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