Q1 2025 Southern Copper Corp Earnings Call
[music].
Operator: What Time Is it? Good morning and welcome to Southern Copper Corporation's first quarter 2025.
Good morning, and welcome to southern Copper Corporation's first quarter 2025 with US. This morning, we have southern Copper Corporation, Mr. Raul Jacob Vice President Finance, Treasurer, and CFO, who will discuss the results of the company for the first quarter.
Operator: With us this morning, we have Southern Copper Corporation, Mr. Raul Jacob, Vice President, Finance, Treasurer, and CFO, who will discuss the results of the company for the first quarter 2025, as well as answer any questions that you might have.
2025.
As well as answer any questions that you might have the information discussed on today's call may include forward looking statements regarding the company's results and prospects, which are subject to risks and uncertainties actual results may differ materially and the company cautions to not place undue reliance on these forward look.
Operator: The information discussed on today's call may include forward-looking statements regarding the company's results and prospects, which are subject to risks and uncertainties. Actual results may differ materially, and the company cautions to not place undue reliance on these forward-looking statements. Southern Copper Corporation undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
E statements.
Southern Copper Corporation undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information future events or otherwise.
Operator: All results are expressed in full U.S. GAAP.
All results are expressed in full U S GAAP.
Operator: Now I will pass the call on to Mr. Raul Jacob. Thank you very much, Gigi.
Speaker Change: Now I will pass the call onto Mr. Raul Jacob.
Raul Jacob: Thank you very much do eat good morning, everyone and welcome to Southern Copper's first quarter 2025 results conference call.
Raul Jacob: Good morning, everyone, and welcome to Southern Copper's first quarter 2025 results conference call.
Raul Jacob: At today's conference, I'm accompanied by Mr. Oscar González Rocha, CEO of Southern Copper and board member, as well as Mr. Leonardo Contreras, who is also a board member.
Raul Jacob: Today's conference in a complaint by Mr. Oscar von solid Roger.
Raul Jacob: Southern copper and board member, that's what else makes the lunar article computer with social Boardman.
Raul Jacob: In today's call, we will begin with an update on our view of the copper market and then review Southern Copper's key results related to production, sale, operating costs, financial results, expansion projects, and ESG. After this, we will open the session for questions.
Speaker Change: In today's call, we will begin with an update on our view of the copper market and then review southern Copper's key results related to production.
Speaker Change: Operating cost financial results expansion projects.
Speaker Change: After that we will open the session for questions now, let us focus on the corporate market.
Raul Jacob: Now let us focus on the copper. The London Metal Exchange copper price increased 11% from an average of $3.83 per pound in the first quarter of last year to $4.24 this past quarter. Based on current supply and demand dynamics, we estimate that the deficit at year end will stand at about 300,000 metric tons. This is the market deficit that we're expecting. Regarding copper inventories worldwide, we estimate that they are currently covering about one week of global demand.
The London metal exchange copper price increased 11% from an average of $3.83 per pound in the first quarter.
Speaker Change: Last year to $4 and 24 since this past quarter.
Speaker Change: The current supply and demand dynamics, we estimate that the deficit at year end will stand at about 300000 metric tons. This is a market that is that we're expecting regarding copper inventories worldwide. We estimate that they are currently covering about one week of global demand.
Raul Jacob: Over the past quarter, the copper market registered a significant arbitrage difference between COMEX and LME prices. At its peak, in March 26, the COMEX price was $0.73 per pound, or 17% above the London Metal Exchange price. These shoot huge difference.
Speaker Change: Over the past quarter, the corporate market Register a significant arbitrage difference between comics and deli meat prices.
Speaker Change: At its peak in March 26, the Comex price with 73 cents per pound or 17% above the London metal exchange price.
Speaker Change: These huge huge difference.
Raul Jacob: and Anjuso reflected the strong possibility of a 25% tariff to be imposed on U.S. copper imports. Although we maintain a very positive long-term outlook for copper. We believe an intense commercial war between the U.S. and China will affect economic growth worldwide, consequently impacting copper demand.
Speaker Change: And then useful reflected the strong possibility of a 25% tariff to be imposed on us coffer imports.
Speaker Change: Although we maintain a very positive long term outlook for copper.
Speaker Change: We believe an intense commercial war between the U S and China will affect economic growth worldwide.
Speaker Change: Consequently impacting corporate demand.
Raul Jacob: Now let's look at Southern Copper's production for the past quarter. Copper represented 78% of our sales in the first quarter of this year. Copper production remained stable at 240,226 tons for the first quarter of 2025. We registered positive results for Buenavista SXCW cattle production that increased by 24% and Toquepala concentrate production that upticked by 2%. These good results were partially offset by a decrease in copper production at La Caridad. due to a drop in ore grades and recurrence. At this point, we expect to produce 968,200. Tons of Copper this year, 2025. This is a 2,400 tons increase when compared to our plan of 965,000 tons a year.
Speaker Change: Now, let's look at southern Copper's production for the past quarter.
Speaker Change: Copper represented 78% of our sales in the first quarter of this year.
Speaker Change: Copper production remained stable at 240226 tons for the first quarter of 2025, we registered positive results for Buenavista Sx EW copper production increased by 24% and Tom kept talking pilot concentrate production.
Speaker Change: The uptick by 2%. These good results were partially offset by a decrease in copper production at La Caridad.
Speaker Change: Due to a drop in ore grade and recovery.
Speaker Change: At this point, we expect to produce 968200.
Speaker Change: Tons of copper this year 2025.
Speaker Change: This is at 2400 tons increase when compared to our plan of 965000 tons a year.
Speaker Change: Yeah.
Raul Jacob: Molybdenum represented 10% of the company sales value in the first quarter of this year and is currently our first by product. Molybdenum prices averaged $20.43 per pound this quarter compared to $19.84 in the first quarter of 2021. This represents an increase of 3%. Molybdenum production rose 9% in the first quarter of this year compared to the same period of 2012. This was mainly driven by an increase in production at the Toquepala, Caridad, and Buenavista mines. Fueled by Higher Org These results were partially offset by lower production at the Quajone operation. In 2025, we expect to produce 27,400 tons of molybdenum.
Speaker Change: Molybdenum represented 10% of the company's sales value in the first quarter of this year and is currently our first by pros molybdenum prices averaged $20.43 per pound this quarter compared to $19 84 in the first quarter of 2000.
Speaker Change: 24 <unk>.
Speaker Change: This represents an increase of 3%.
Speaker Change: Molybdenum production rose, 9% in the first quarter of this year compared to the same period of 2020 for.
Speaker Change: This was mainly driven by an increasing production at the toquepala cutting that in Buenavista mines.
Speaker Change: <unk> by higher ore grades.
Speaker Change: So its were partially offset by lower production at the operation.
Speaker Change: In 2025, we expect to produce 25 27400 tons of molybdenum. This is 5% above our initial plan.
Raul Jacob: This is 5% above our initial goal. For silver, it represented 6% of our sales in the first quarter with an average price of $32.31 per ounce this past quarter. This represents an increase of 38% compared to the first quarter of 2020. Silver is currently our second byproduct. Mine silver production increased 14% in the first quarter versus the same period of 2024. This was driven by better production at Buenavista, IMSA, and Cojones. Refined silver production increased by 8%, quarter over quarter, propelled by an increase in all our refineries. In 2025, we expect to comply with our plan to produce 23 million ounces of silver, an increase of 9% compared to 2025.
Speaker Change: For silver it represented 6% of our sales in the first quarter with an average price of $32.31 per ounce this past quarter.
Speaker Change: This represents an increase of 8% compared to the first quarter of 2024.
Speaker Change: Silver Silver is currently our second byproduct.
Speaker Change: Mined silver production increased 14% in the first quarter versus the same period of 2024. This was driven by better production with Navistar in Umpqua honey.
Speaker Change: Refined silver production increased by 8% quarter over quarter propelled by an increasing all of our refineries.
Speaker Change: In 2025, we expect to complying with our plan to produce 23 million ounces of silver an increase of 9% compared to 2024.
Raul Jacob: For Zinc, it represented 4% of our sales in the first quarter of this year, with an average price of $1.29 per pound in the quarter. This represents a 16% increase compared to the first quarter of 2024. Sink is currently our third byproduct. Mine sink production increased 49% when compared to the first quarter of 2024 and totaled $39,375 This was mainly driven by a 161% increase in production at the new Buena Vista Zinc Concentrator. Refined zinc production dropped 11% in the first quarter of this year vis-a-vis the same period of 2009. For 2025, this year, we expect to produce 170,100 tons of zinc in line with our plan.
Speaker Change: For zinc it represented 4% of our sales in the first quarter of this year with an average price of $1.29 per pound in the quarter.
Speaker Change: This represents a 16% increase compared to the first quarter of 2024 figure.
Speaker Change: <unk> currently our third byproduct.
Speaker Change: Zinc production increased 49% when compared to the first quarter of 2024.
Speaker Change: In total 39375 tons. This.
Speaker Change: This was mainly driven by a 161% increase in production at the new winner Vista zinc concentrate are.
Speaker Change: Refined zinc production dropped 11% in the first quarter of this year vis vis the same period of 2024.
Speaker Change: For 2025 this year, we expect to produce 170, <unk> thousand 100 tons of zinc in line with our plan.
Raul Jacob: This represents an increase of 31% over our 2024 production This growth will be driven by the production of our Buenavista Zinc Concentrator that will add 105,000 tons to our production and this facility is certainly operating at full speed and we're very pleased with the results that we're getting from this.
Speaker Change: This represents an increase of 31% over our 2024 production level is.
Speaker Change: Growth will be driven by the production of our Buenavista zinc concentrator that will add.
Speaker Change: 105000 tons to our production and this facility certainly operating at full speed and we're very pleased with the results that we're getting from these from.
Speaker Change: From these investments.
Raul Jacob: Moving to the financial results of the company. For net sales in the first quarter of this year, sales were 3 billion. This is 522 million above the sales register in the first quarter of 2024, or a 20% increase. Copper sales rose 19% and volume by 4% in a scenario of better performance. Regarding our main byproducts, we registered growth in sales of molybdenum by 10%, which rose on the back of higher prices and Naptic in volume. We also had a significant increase in sales of zinc, 59%, which was fueled by better prices and bolstered by rising zinc volumes.
Speaker Change: Moving to the financial results of the company.
Speaker Change: For net sales in the first quarter of this year.
Speaker Change: We're 3 billion. This is 522 million are both sales registered in the first quarter of 2024 or 20% increase corporate sales rose, 19% in volume by 4% in a scenario of better prices.
Speaker Change: Regarding our main byproducts will register growth in sales of molybdenum by 10%.
Speaker Change: Which rose on the back of higher prices and uptick in volume.
Speaker Change: And we also hope we also had a significant increase in sales of zinc 15, 9%, which was fueled by better prices and bolster by rising zinc volumes.
Raul Jacob: Sink volumes increased by 42% mainly from when I started. Finally, finally, silver sales increased 58% due to higher prices and a larger volume.
Speaker Change: Zinc volumes in.
Speaker Change: <unk> seen.
Speaker Change: So volumes increased by 42% mainly from winner.
Speaker Change: Finally, finally, silver sales increased 58% due to higher prices.
Speaker Change: Larger volume.
Raul Jacob: Our total operating costs and expenses increased $176 million, or 12%, when compared to the first quarter of 2025. The main cost increments have been in inventory consumption, workers' participation, repair materials, depreciation, exchange rate variance, and other materials such as tires, explosives, gunning media. These cost increments were partially compensated by lower fuel and leachable materials. The first quarter of 2025 adjusted EBITDA was $1,746 million, which represented an increase of 23% over the $1,418 million registered in the first quarter of 2020. The adjusted EBITDA margin in the first quarter of this year was 56% versus 55% in the first quarter of 2012.
Speaker Change: Our total operating cost and expenses increased $176 million or 12% when compared to the first quarter of 2024.
Speaker Change: The main cost increments has been in inventory consumption workers' participation repair materials depreciation exchange rate variance and other materials, such as tires explosives grinding media et cetera.
Speaker Change: These cost increments were partially compensated by lower few Alicia will materials costs.
Speaker Change: The first quarter of 2025, adjusted EBITDA was 1740 $6 million, which represented an increase of 23% over the 1400 $18 million for Easter into the first quarter of 2024.
Speaker Change: Adjusted EBITDA margin in the first quarter of this year with 56% versus 55% in the first quarter of 2024.
Raul Jacob: The first quarter adjusted the bid that was 16% over the $1,507 million registered in the fourth quarter of 2024. Operating cash cost per pound of copper before by-product credits was $2.05 per pound in the first quarter of this year. This was $0.27 lower than the value for the fourth quarter. It was $2.32 per pound. This 12% drop in the operating cash cost was driven by both decreases in cost per pound from production costs Treatment and Refining Charges, Administrative Expenses, and by an increase in the Operating Cash including the benefit of by-product credits was 77 cents per pound in the first quarter of 2012.
Speaker Change: First quarter adjusted the first quarter adjusted EBITDA was 16% over the 1500 7 million registered in the fourth quarter of 2024.
Speaker Change: Cash cost operating cash cost per pound of copper before by product credits was $2.05 per pound in the first quarter of this year.
Speaker Change: This was 27.
Speaker Change: Lower and the value for the fourth quarter it was $2.32 per pound.
This 12% drop in the operating cash cost was driven by both decreasing cost per pound from production cost.
Speaker Change: Treatment and refining charges administrative expenses and by an increase in the premium.
Speaker Change: Southern copper operating cash cost, including the benefit of by product credits was 77 cents per pound in the first quarter of 2025.
Raul Jacob: This cash cost was 19 cents lower than the cash cost of 96 cents that we had in the fourth quarter of 2024. This is a 21% reduction in... Regarding byproducts, we had a total credit of $659 million or $1.29 per pound in the first quarter of this year. These figures represent a 5% decrease when compared with the credit of $779,136 per pound in the last quarter of 2012. Total credit has increased for Molybdenum Silver and decreased for Zinc and Sulphuric For net income, the first quarter of 2025 net income was $946 million, which represented an improvement of 29% compared to the $736 million registered in the first quarter of last year.
These cash costs with 19 cents lower than the cash cost of 96 and as we had in the fourth quarter of 2024.
Speaker Change: This is a 21% reduction in cash cost.
Speaker Change: Regarding by products, we had a total credit of $659 million or dollar in 2009 cents per pound in the first quarter of this year.
Speaker Change: These figures represent a 5% decrease when compared with the credit.
Speaker Change: $779 million or.
Speaker Change: 136 cents per pound in the last quarter of 2024.
Speaker Change: Total credits has been cut increase for molybdenum silver and decrease for sink and so free cash.
Speaker Change: For net income the first quarter of 2025, net income was $946 million, which represented.
Speaker Change: An improvement of 29% compared to the $736 million registered in the first quarter of last year.
Raul Jacob: The net income margin this past quarter was 30% versus 28% in the same period of 2020. Net income in the first quarter of 2025 was 19% versus the 794 million registered in the last quarter or the fourth quarter of 2020. Regarding cash from operations, Cash flow from operating activities in the first quarter of 2025 was $721 million, which represented an increase of 9% versus a $6 million post in the first quarter of 2025. This improvement was attributable to the strong cash generation at our operations, which was driven by higher sales and cost control efficiency.
Speaker Change: Net income margin.
Speaker Change: First quarter was 30% versus 28% in the same period of 2024.
Speaker Change: Net income in the first quarter of 2025 was 19% versus the $794 million Register in the last quarter or the fourth quarter of 2024.
Speaker Change: Excuse me please.
Speaker Change: Okay.
Speaker Change: Regarding cash from operations cash flow from operating activities in the first quarter of 2025 seven.
Speaker Change: $721 million.
Speaker Change: Which represented an increase of 9% versus 6 million post in the first quarter of 2020 for this.
Speaker Change: This improvement was attributable to the strong cash generation at our operations, which was driven by higher sales and cost control efficiency.
Raul Jacob: For capital investments, our current capital program for this decade exceeds $15 billion and includes investments in projects in Mexico and Peru. Given that there is a description of our main capital projects in Southern Copper's press release, I am going to focus on updating new developments for In the case of the Mexican projects, Minera Mexico is planning to invest more than $600 million this year at both its open pit and underground mine. Half of this investment will be used to guarantee the viability of long-term operations by actively modernizing and updating assets. Remaining funds will target improvements in water usage and tailings management to ensure safety and efficiency of our operation.
Yeah.
Speaker Change: Our capital investments our current capital program.
Speaker Change: For this decade exceeds 15 billion and includes investments in projects in Mexico and Peru.
Speaker Change: Given that there is a description of our main capital projects in Southern Copper's press release Im going to focus on updating new developments for each.
Speaker Change: In the case of the Mexican project Minera, Mexico is planning to invest more than $600 million. This year adult it's open pit and underground mines half of these investments will be used to warranty the viability of long term operations by acuity modernizing and updating assets.
Speaker Change: Remaining funds will target improvements in water usage, and tailings management to ensure safety and efficiency of our operations. We will also invest in efforts to bolster optimization and growth.
Raul Jacob: we will also invest in efforts to bolster optimization and growth. for the ARCO project in Baja California, the company has. Move on with detailed engineering, which is still underway for the concentrator, as well as for the SXCW plan, water salinization, logistics infrastructure, and power delivery. SEC has several 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, Chagüi-Huitez, and the Empalme smelter, which could bolster our position as a fully integrated copper producer.
Speaker Change: For the article project in Baja California, The company has.
Speaker Change: Move on with detailed engineering, which is still underway.
Speaker Change: The concentrate or.
Speaker Change: As we look towards the Sx EW plant order study initiation logistics infrastructure and power delivery.
Speaker Change: ACC has ever approved in its Mexican pipeline that may boost organic growth if they're found to be of value for both stakeholders and the communities in which we operate.
Speaker Change: These pre Gail.
Speaker Change: <unk> and Charlie.
Speaker Change: Charlie weakness and empowerment smelter, which could bolster our position as a fully integrated copper producer.
Raul Jacob: For the Peruvian project, in the case of the Tia Maria project, as of March. of this year, the company has generated more than 628 jobs. Of those, 503 were filled with local applicants. To the fullest extent possible, we intend to fill the 3,500 jobs estimated to be required during Tia Maria's construction phase with workers from this live province. In 2027, when we start operations, the project will generate 764 direct jobs and about 5,900 indirect jobs. In the early construction phase, progress on access roads and platforms stands at 61%. We will advance these efforts alongside work to set up a temporary camp.
Speaker Change: For the Peruvian projects in the case of the Tia Maria project as of March.
Speaker Change: Of this year the company has generated more than 628 jobs.
Speaker Change: Of those 503 were for you with local applicants.
Speaker Change: Full its extent possible, we intend to fill the 3500 jobs estimated to be required during <unk> construction phase with workers from the slide programs.
Speaker Change: In 2027.
Speaker Change: When we start operations that will generate 764 direct jobs and about 5900 indirect jobs.
Speaker Change: In the early construction phase progress on exit rows and platforms stance at 61%.
Speaker Change: We will advance these efforts alongside work to set up a temporary camp.
Raul Jacob: Engaging Massive Airworks and Rollout Mine Operating Activities. To date, we have installed 59 kilometers of life fence to the limit. For the Los Chancas project in Apurímac, on February 4 of this year, the company acquired 3,125 hectares of surface land from the Tia Pato community. This was an important step in securing our stake in the Los Chancas project.
Speaker Change: Engaging massive air works.
Speaker Change: <unk> mine operating activities to date, we have installed 59 kilometers of license to limit the property.
Speaker Change: For the Los <unk> project in a pulling back on February four this year. The company acquired 3125 hectares of surface land in.
Speaker Change: The TF patio community. This was an important step in securing our stake in the Los <unk> project.
Raul Jacob: Sadly, between March 12th and 14th of this year, a group of illegal miners attacked the project's facilities and set fire to our camps in Mazo Pampa and Patahillas, damaging both equipment and facilities. The company is coordinating with the authorities to remove the 75 illegal miners who are squading our property so that the project development can continue.
Speaker Change: Sadly between March 12, 2014 of this year a group of illegal miners at tactic projects facilities and set fire to our camps in muscle Pampa and <unk>.
Speaker Change: Damaging both equipment and facilities the company's coordinating with the authorities to remove the 75 illegal miners who are equating are appropriately so that the project development can continue.
Raul Jacob: For the Michiquillay project, as of March in the Cajamarca region of Peru, as of March 31st of this year, the total progress of the exploration project was 39%. We have drilled almost 146,000 meters. and obtained 48,000 drill core samples for chemical analysis. Diamond Drilling will continue. And we'll provide information to interpret mineralization in geological sections, develop geological models, and evaluate mineral resources. Geometallurgical, as well as hydrological and hydrogeological studies has been initiated. The geotechnical study for the project is scheduled to begin shortly.
Speaker Change: Yes.
Speaker Change: For the <unk> project as of March in the America region of Peru as of March 31 of this year. The total progress of the expert exploration project with 39%.
Speaker Change: We have drilled almost 146000 meters.
Speaker Change: And obtained 48000 drill core samples for chemical analysis Diamond drilling will continue and.
Speaker Change: And we will provide information to interpret mineralization in geological sections developed geological models.
Speaker Change: Evaluate mineral resources.
Metallurgical work hydrological and hydro Geological studies has been initiated.
Speaker Change: <unk> Technical study for the project is scheduled to begin shortly.
Raul Jacob: for Environmental, Social, and Corporate Government. We have, in Peru, two high-performance schools named COAR. has been built by Southern Copper Corporation in the Tacna and Mokewa region. of Peru. These were inaugurated by the President of the Republic of Peru and the Minister of Education. A total of $60 million was invested through the Works for Taxes mechanism. The schools feature top-level services, which have been designed to maximize student academy, artistic and athletic activities. Every year, these core schools will educate 600 outstanding students from vulnerable areas of Peru. As well, this is a way to actively contribute to closing the educational gaps in the country.
Speaker Change: Or environmental social and corporate governments.
Speaker Change: Yes.
Speaker Change: We have in Peru, two high performance schools main corridor.
Speaker Change: Has been built by southern Copper Corporation in the <unk> region.
Speaker Change: He's worried and operated by the President of the Republic of Peru, and the Ministry of Education.
Speaker Change: It'll of $60 million was invested through the works for Texas mechanism.
Speaker Change: The schools feature top level services, which has been designed to maximize it maximizes student economy artistic analytic activities.
Speaker Change: Every year. These cores tunes. This core schools will allocate 600 outstanding students from Bruno vulnerable areas of Peru.
Speaker Change: As this is a way to actively contribute to closing the location of gaps in the country.
Raul Jacob: work to build a new core in the Apurímac region is slated to begin.
Speaker Change: Work to build a new core in the <unk> region is slated to begin soon.
Raul Jacob: Our social practices have been recognized again. This is the third consecutive year that we received the Exceptional Company Award, which recognizes our commitment to Mexican communities. This extension, best owed by Business Coordinating Council, Communications Council, and the Institute for Promotion of Quality applause our initiative to drive regional economic and recreational development by developing the Tamosura and Pinacate urban parks in the mining municipalities of Cananea and Nacosari in Sonora. Every year, more than 50,000 users will benefit from the sports, recreational, and cultural facilities developed by the company.
Speaker Change: Our social practices has been recognized again.
Speaker Change: This is the third consecutive year that we received an exceptional company award, which recognizes our commitment to Mexican communities.
Speaker Change: This extension based <unk> business coordinating council.
Speaker Change: The communications console and the institute for promotion of quantity.
<unk>, our initiative to drive regional economic and recreational development by developing.
Speaker Change: The <unk> urban park, and the mining municipalities of Cannoneer Agnico siding in Cerner.
Speaker Change: Every year more than 50000 users will benefit from the sports recreational and cultural facilities developed by the company.
Raul Jacob: We maintain our rating in the Climate Change and Water Security. in the Carbon Disclosure Project, better known as CDP, in the evaluation that this agency have done. The CDP is the world's leading environmental disclosure platform. were part of more than 24,800 companies that last year voluntarily reported their environmental impacts to the CDP, representing nearly two-thirds of global market capitalization. SEC, as part of Grupo Mexico, rank above the average for both the materials sector and the North America region in evaluations for both categories.
Speaker Change: We maintained our rating in the climate change and water security in the carbon disclosure project better known as CVP.
Speaker Change: The evaluation that this agency have done.
Speaker Change: The cdp's, the worst leading environmental disclosure platform.
Speaker Change: We're part of more than 20 24800 companies than last year, but an entirely reported their environmental impacts to the CVP, representing nearly two thirds of global market Capitalisation.
Speaker Change: ACC as part of Grupo Mexico, Frank above the average for both the materials sector in the North America region in evaluations for both categories.
Raul Jacob: Moving to Dividends. As you know, it is the company policy to review our cash position. Expected cash flow generation from operation Capital Investment Plans. and other financial needs at each board meeting to determine the appropriate quarterly dividend.
Speaker Change: Moving to dividends as you know it is the company policy to review our cash position.
Speaker Change: The cash flow generation from operations capital investment plans.
Speaker Change: And all of their financial needs at each board meeting to determine the appropriate quarterly dividend accordingly.
Raul Jacob: Accordingly, on April 10th, Southern Copper Corporation announced a quarterly cash dividend of $0.70 per share of common stock and a stock dividend of $0.50. .0099 shares of common stock per share payable on May 19, 2025 to shareholders of record at the close of business on May. to 2021. So this is basically the share dividend. This is one share per almost 100 shares of stock positions.
Speaker Change: <unk>.
Speaker Change: Copper Corporation announced a quarterly cash dividend of <unk> 70 per share of common stock.
Speaker Change: Stock dividend of <unk>.
Speaker Change: <unk> hundred 90, 999 shares of common stock per share payable on.
Speaker Change: On May 19, 2025 to shareholders of record at the close of business on May.
Speaker Change: Two 2025.
Speaker Change: Yeah.
Speaker Change: So this is basically the.
Speaker Change: Sure. Stephen This is one share for almost 100 shares of.
Speaker Change: Stock position.
Raul Jacob: So with this, ladies and gentlemen, we end up our presentation today. Thank you very much for joining us.
Speaker Change: So with this ladies and gentlemen, we are.
Speaker Change: Our presentation today, Thank you very much for joining us.
Operator: I'm.
Operator: and we would like to open the forum for questions. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.
Speaker Change: And we will like to open the forum for questions now.
Speaker Change: As a reminder to ask a question. Please press star one to one on your telephone.
Speaker Change: For your name to be announced to withdraw your question. Please press star one one again please.
Speaker Change: Please standby, while we compile the Q&A roster.
Alejandro DeMichelis: Our first question comes from the line of Alejandro Demichelis from Jeffrey. Yes. Good morning, gentlemen. Thank you very much for taking my question.
Speaker Change: Our first question comes from the line of Alejandro Demichelis from Jefferies.
Alejandro DeMichelis: Yes, good morning, gentlemen, thank you Ron for taking my question.
Alejandro DeMichelis: Two questions, if I may, please, Raul. The first one is, as you mentioned, we have seen an improvement in your cash costs this quarter. How we should think about cash costs evolving the rest of the year? That's the first question. And then the second question is, on the dividend that you just kind of mentioned, we have seen an increase in the proportion of the shared dividends. First, why was that or what was the thinking behind that and how we should think about that proportion of shares?
Alejandro DeMichelis: Two questions if I may please.
Alejandro DeMichelis: The first one <unk>.
Alejandro DeMichelis: As you mentioned, we have seen an improvement in your cash cost this quarter, how we should think about cash costs evolving the rest of the that's the first question.
Alejandro DeMichelis: And then the second question is on the dividend just kind of mentioned we have seen an increase in the.
Alejandro DeMichelis: A proportion of the share dividend so.
Alejandro DeMichelis: Plus.
Alejandro DeMichelis: Why was that.
Alejandro DeMichelis: What's the thinking behind that how we should think about that proportion of shares.
Raul Jacob: on the video. Well, we are relatively prudent regarding the management of cash flow for the company. We, as you know, we don't want to hoard cash, but at the same time we have to fund our operations properly. In the case of the past... Quarter, we have some, well, the first quarter of the year, we usually have to pay, do a final payment of taxes to the tax authorities in both Mexico and Peru. And when you have a year where prices or productions, as it has been the case, are better than, excuse me, please. As I would say, when you have a year where...
Alejandro DeMichelis: On the dividend side.
Alejandro DeMichelis: Well, we are relatively prudent regarding.
Alejandro DeMichelis: The management of cash flow for the company.
Alejandro DeMichelis: We as you know, we don't want to hoard cash, but at the same time, we have to fund our operations appropriately.
Alejandro DeMichelis: In the case of.
Alejandro DeMichelis: Of the past.
Alejandro DeMichelis: Quarter, we got.
Alejandro DeMichelis: We have.
Alejandro DeMichelis: Well the first quarter of the year, we usually have to pay.
Alejandro DeMichelis: Do a final payment of taxes to the tax authorities in both Mexico and Peru.
Alejandro DeMichelis: And when you have a year where prices ore production as it has been the case.
Alejandro DeMichelis: Our better than excuse me please.
Yes.
Alejandro DeMichelis: So I would say.
Alejandro DeMichelis: When you have that.
Alejandro DeMichelis: A year where.
Alejandro DeMichelis: Okay.
Raul Jacob: So when we have a year where results are better than the prior one, usually you have to do much higher payment for the closing of the year, of the prior year for taxes and some other benefits for the workforce such as the profit sharing. Last year in particular we had to pay on top of all the taxes that we paid through the year 2024 a final closing payment of $711 million in taxes. That was for 2024. That made our cash flow operation relatively smaller than what may be expected given the prices and production profile of the company.
Alejandro DeMichelis: So when we have a year where.
Alejandro DeMichelis: Results are better than the prior one usually you have to do.
Much higher payment for the closing of the of the year of the prior year for taxes and some other.
Alejandro DeMichelis: Benefits for the workforce such as the profit sharing.
Alejandro DeMichelis: Last year in particular, we have to pay.
Alejandro DeMichelis: On top of the taxes that we paid through the year 2020 for a final closing payment of $711 million in Texas.
Alejandro DeMichelis: For 2024.
Alejandro DeMichelis: That meet our cash from operation relatively smaller than what maybe you expected given the prices and production profile of the company.
Raul Jacob: And besides this... We have to pay also two specific taxes in both Mexico and Peru that are due in the first quarter. All of this has, as I say, affected a little bit our cash flow generation in the first quarter, but we believe that this will not be the case in the rest of the year, particularly in the second quarter, because usually the Mexican taxes are paid in the second quarter of the year, and this time for just the calendar that we had for these payments, we had an unusual payment in the first quarter for the Mexican operation.
Alejandro DeMichelis: And besides this.
And we have to pay also two specific taxes in both Mexico and Peru.
Alejandro DeMichelis: During the first quarter.
Alejandro DeMichelis: All of these.
Alejandro DeMichelis: I think that a little bit our cash position in the first our cash flow generation in the first quarter, but we believe that.
Alejandro DeMichelis: This is.
Alejandro DeMichelis: This is this will will be will not be the case in the rest of the year.
Alejandro DeMichelis: Particularly in second quarter because in.
Alejandro DeMichelis: Usually the Mexican taxes are paid in the second quarter of the year and this time for <unk>.
Alejandro DeMichelis: The calendar that we had for for these payments we had an unusual payment in the first quarter for the Mexican operations going.
Raul Jacob: Going back to your first question, cash costs for the rest of the year, well... It depends on how are we seeing the market prices. We're doing a little bit better than our initial plan. And I expect this to be the case through the year. So if we have the same prices that we're seeing for our by-products, my expectation is that we end up the year in this range of 75 to 70 to 80 cents per pound of copper as a cash cost for 2021. That's very clear.
Alejandro DeMichelis: Going back to your first question on cash cost for the rest of the year.
Alejandro DeMichelis: Well it depends on how are we seeing the market prices.
Alejandro DeMichelis: We're doing a little bit better than our initial plan.
Alejandro DeMichelis: And now you expect this to be the case through the year.
Alejandro DeMichelis: If we have the same prices that we're seeing for our by products.
Alejandro DeMichelis: My expectation is that we ended the year in this range of 75 to $7 <unk> per pound of copper.
Alejandro DeMichelis: Cash costs for 2025.
Alejandro DeMichelis: Thank you.
Alejandro DeMichelis: That's great. Thank you.
Alejandro DeMichelis: Youre welcome.
Operator: One moment for our next question.
Alejandro DeMichelis: Thank you one moment for our next question.
David Feng: Our next question comes from the line of David Feng from China International Capital Corp.
Speaker Change: Our next question comes from the line of David Fang from China International Capital Corp.
David Feng: Hi, good morning, Raul, Victor, and Tim. Thanks for taking my question. So my first question is regarding your capex. So we can see that your capex increased a lot, both year-over-year and quarter-over-quarter during the last quarter. So we know how much does Tia Maria's construction cost accounted in this capex? And besides Tia Maria, is there any increment from other projects? That's my first question.
David Fang: Hi, Good morning, Victor and Tim Thanks for taking my question.
David Fang: So my first question is regarding your Capex. So we can see that your capex increased both year over year and quarter over quarter during the last quarter or so.
David Fang: But we know how much the Tia Maria construction costs accounted in this paradox and besides Tia Maria is there any increments on other projects.
Raul Jacob: I'll come back with my second one. Okay. For Tia Maria specifically, we expect to spend a little bit less than $200 million this year, 2025. Next year, 2026, we will be spending about $980 million, and in 2027, $460 million. That's basically it for Tía María. In the case of the other projects, well, Michiquillay and Los Chancas will start spending more money as we move on from the exploration part of the development of the project towards the construction. And that is being reflected in our capital for the next few years. I'll give you the number of our forecast at this point for CapEx.
David Fang: My first question I'll come back with my second one.
David Fang: Okay.
David Fang: Okay.
David Fang: For Tia Maria specifically, we expect to spend a little bit less than $200 million. This year 2025.
David Fang: Next year 2026, we will be spending about $980 million.
David Fang: And in 2027 $468 million, that's basically for Tia Maria.
David Fang: In the case of the <unk>.
David Fang: Other projects will <unk> and a chunk of cash will start spending more money as we move from the exploration.
David Fang: Part of the.
David Fang: Development of the project took towards the construction.
David Fang: And that is that is being.
David Fang: <unk> been reflected in our capital for the next few years.
David Fang: If you the.
David Fang: The number of our forecast at this point for Capex.
Raul Jacob: It's for this year $1.5 billion, for next year 2026 will be $2.3 billion, 2027 $2.7 billion, 2028 $2.7 billion. And about that, until we start finishing our projects, that should be by about 2031, 2032.
David Fang: For for this year $115 billion for next year 2026 will be $2 3 billion 2020, 727 billion $2028 7 billion.
David Fang: And about that.
David Fang: Until we start finishing our projects.
David Fang: That should be by about 2031 2013.
David Feng: Thank you, Raul. That's really helpful.
David Fang: Thank you that's very helpful.
David Feng: And my second question is, we know that the Treatment and Refining Charges, or TCRC, has been active for a long time in the spot market. So I just wonder how much flexibility do you have at this moment for you to sell more copper concentrate instead of refined copper, based on the current market conditions and the long-term contract you have? Well, we want to, well, the first thing is that we have to comply with our contracts and our contracts are a little bit north of 70% based on refined copper or further processed materials such as rock.
David Fang: My second question is we know that the.
David Fang: Treatment and refining charges or TC IC is a negative for a long time in the spot market. So just wonder how much flexibility to have that.
At this moment for you to sell more copper concentrate instead of refined copper based on the current market conditions and the.
David Fang: A long term contract we have.
David Fang: Well, we went to well the first thing is that we have to complying with our contracts and our contracts higher a little bit north of 70% based on refined corporate or further process materials, such as road Rob.
David Fang: And.
Raul Jacob: and Copper Concentrates. Well, when you produce refined copper, you not only have the copper itself, but also have precious metals that sometimes are not recognized when you sell copper concentrates. And you have some other materials. So the main one of the byproducts of a smelter, for instance, is sulfuric acid. So, when you do all the aromatics, even though the terms of TCs, RCs are very favorable now for concentrate producers, the smelters, at least in our case, are very competitive and we believe that we're doing more or less a very small difference between selling concentrates or selling refined copper.
David Fang: And copper concentrates.
David Fang: Well when you.
David Fang: <unk> refined copper do not already have.
David Fang: The copper itself, but also have the precious metals.
David Fang: Sometimes have not recognized when you sell copper concentrates.
David Fang: And you have.
David Fang: Some other some other materials.
David Fang: So.
David Fang: One of the byproducts of a smelter for instance is forecasted.
David Fang: So when you do all the all the arithmetic, even though the terms of.
David Fang: Tcs Rcs.
David Fang: <unk> favorable now for.
David Fang: Concentrate producers.
David Fang: Smelters at least in our case.
David Fang: Very competitive and we believe that we are doing more or less.
David Fang: But very small difference between.
David Fang: Selling concentrates or selling refined copper so in that regard we are where we're okay with what we do and as I would say our main point. This year is to complying with the contracts that we have signed.
Raul Jacob: So, in that regard, we're okay with what we do and, as I say, our main point this year is to comply with the contract that we have signed and to deliver copper to our industrial customer base as well as some other customers that we have in the case of Southern Copper. Honest, too.
David Fang: And to deliver corporate to our industrial customer base as well as <unk>.
David Fang: Some other customers that we have.
Speaker Change: In the case of southern copper.
David Feng: Thank you very much. Thank you.
David Fang: Understood. Thank you very much.
David Fang: Welcome.
Operator: One moment for our next question.
David Fang: Thank you.
David Fang: One moment for our next question.
Timna Tanners: Our next question comes from the line of Timna Tanners from Wolf Research. Yes, good morning. Thanks, Raul. I wanted to ask a few questions. about the Mexican pipeline. You mentioned a few projects, Tufts Suites and I just wanted to understand how imminent they might be, how incremental, it looks like there is some decent information about the opportunity there online, but I'd like to hear it from you. And then can you remind us of your exposure to the CME as well, we keep getting questions about that.
David Fang: Our.
Speaker Change: Question comes from the line of Timna Tanners from Wolfe Research.
Speaker Change: Yes, good morning. Thanks.
Speaker Change: Did you ask a few questions about the Mexican pipeline you mentioned, a few projects Kenneth suite days and another one I just googled.
Speaker Change: So I just wanted to understand how imminent they might be how incremental it looks like theres. Some decent information about the opportunity there online, but I'd like to hear from you and then can you remind us of your.
Speaker Change: Those are to the CMA is why we keep getting questions about that thank you.
Timna Tanners: Tina, I'm so sorry, but I couldn't get your first question well. Oh, sure. So, just trying to understand, you mentioned in the press release and in the remarks that you're looking into some new opportunities to expand the pipeline in Mexico. I might butcher this, but Chalchituites and another one that you detailed, again, hard to pronounce. So, wondering if you could provide some further detail about how imminent they might be, what MIND products you're looking at, what time frame. Thank you. Okay, in the case of, well, we have the other project that has been mentioned, Angangueo.
Speaker Change: Gina.
Speaker Change: So sorry that I Couldnt get your first question.
Speaker Change: Will.
Speaker Change: Oh sure.
Speaker Change: Just trying to understand you mentioned in the press release and in the remarks that you are looking into some new opportunities to expand the pipeline in Mexico.
Speaker Change: I might switch, but Charles suite Phase G suite and.
Speaker Change: Another one that you detailed again hard to pronounce. So wondering if you could provide some further detail about how M&A might be what what mind products youre looking at what timeframe. Thank you.
Okay.
Speaker Change: In the case of.
Speaker Change: Well, we have the other parties as Katherine mentioned Gail.
Raul Jacob: It's an underground project that we were looking in the Michoacan state. It has copper, silver, zinc, and lead as materials, and it's very, very attractive, so we're looking into it. We are still on the initial steps of this project. The other one is Chay Chihuites, that's probably the one that had some difficulties for pronunciation. This is in the Zacatecas region, and it's also in the exploration phase, but they are very interesting. And besides this, we're considering the construction of a new smelter in Empalme, in the region of the northern part of Mexico. And this is something that we will review and entertain as a possible investment.
Gail.
Speaker Change: It's it's an underground.
Speaker Change: The project that we were looking at the meet truck on state.
Speaker Change: It has copper silver zinc and lead.
Speaker Change: Materials, and it's very very attractive so where we're looking into it there are still on the on the initial steps of this project.
Speaker Change: The other one is China, a key witness that's probably the one that had some difficulties for pronunciation.
Speaker Change: This is the Zacatecas region needs.
Speaker Change: On the exploration phase, but they are very interesting and besides this.
Speaker Change: We're considering the construction of.
Speaker Change: A new smelter in Empire and me in a region of the northern part of Mexico.
Speaker Change: And this is something that we will we will review and.
Speaker Change: Entertainment is a possible investment but at this point I think this is not the best time to build a smelter, but whenever conditions are are the proper once the company.
Raul Jacob: But at this point, I think that this is not the best time to build a smelter.
Timna Tanners: But whenever conditions are the proper ones, the company will consider to move on with Okay, so in terms of timeline, would we think about tacking them on your existing project pipeline, or is it something that could be more imminent? And again, yeah. It is not that imminent. As we move on with the projects, we will report on them, and we'll add them to our list of projects at the Mexican operations when it is proper. Okay, helpful. Thank you.
Speaker Change: We will consider to move on Windows.
Speaker Change: Okay. So in terms of timeline would we think about taking them on your existing project pipeline or is it something that could be more.
Speaker Change: Our M&A.
Speaker Change: And again, yes. It is.
Speaker Change: It is not that imminent.
Speaker Change: As we move on with the projects, we will report on them and we'll add them to our to our list of projects at the Mexican operations.
Speaker Change: When it is appropriate.
Raul Jacob: And then about the CME exposure, if you could remind us on that as well. What do you mean by CME? The comics, versus the LME exposures. Oh, okay, okay, the comics. Okay. Well, we do have some of some of our contracts based on comments. There is still a spread. Now, it's much lower than the one that I mentioned. It's about less than 10% now, about 7% if you look at the prices yesterday.
Speaker Change: Okay helpful. Thank you and then about the CMA exposure, if you could remind us on that.
Speaker Change: Paul.
Speaker Change: Yes.
Speaker Change: What do you mean by CME, the comex versus the ome, okay, Okay to comex okay.
Speaker Change: Sure.
Speaker Change: Well.
Speaker Change: We do have some more southern power contracts based on comex.
Speaker Change: <unk>.
Speaker Change: There is still a spread now it's much slower than the one that I mentioned.
Speaker Change: Less than 10% now about 7% if you look at the price yesterday.
Timna Tanners: And we are, well, basically dealing with this as we deal with some other issues at the commercial side of the Okay, and one last one, if I could, please. You commented broadly on a trade war and the negative impact on global demand for copper, but any thoughts about Mexico possibly getting excluded in an early negotiation of USMCA, or any insights? Have you been in dialogue with the Mexican government? Just wanted your thoughts there. Actually, not much to report. At this point, we have no duties, tariffs applied to the Mexican or the Peruvian operations for copper.
Speaker Change: And we are well basically dealing with this as we deal with some other issues at the commercial side of the business.
Speaker Change: Okay, and then one last one if I could please.
Speaker Change: You can broadly on a trade war and the negative impact on global demand for copper, but.
Speaker Change: Any thoughts about Mexico, possibly getting excluded in early negotiation of U S MCA or any any insights have you been in dialogue with the Mexican government just wanted your thoughts there. Thank you.
Speaker Change: That's really not much to report at this point, we have no no.
Speaker Change: Duties tariffs applied to the Mexico Mexican Nord the Peruvian.
Raul Jacob: And this is, in my view, a very positive action from the U.S. because the U.S. is significantly short of copper. So putting tariffs on imported copper wouldn't make the country production move on just with the tariffs. And basically, it will increase the cost for the end consumers of the products that are manufactured with copper and reduce the country competitiveness in several industries. So to me, it's a wise decision that the U.S. government has not put any tariffs on copper so far.
Speaker Change: Operations for copper.
Ed: This is Ed.
Speaker Change: In my view a very.
Speaker Change: Positive.
Speaker Change: Action from the U S because it's.
Speaker Change: Yes.
Speaker Change: It significantly.
Speaker Change: Significantly short of copper, so putting tariffs on imported copper wouldn't make.
Speaker Change: The country production.
Speaker Change: Move on with just with the tariffs.
Speaker Change: And.
Speaker Change: And basically it.
Speaker Change: We'll increase the costs for the end consumers of the products that are that are.
Speaker Change: And refractory with copper and.
Speaker Change: Reduce the company.
Country competitiveness in several industries. So to me, it's a wise decision that the U S. Government has not put any tariffs on copper so far.
Operator: Okay, great. Thanks again. Thank you. One moment for our next question.
Speaker Change: Okay, great. Thanks again.
Speaker Change: <unk>.
Speaker Change: Thank you one moment for our next question.
John Tumazos: Our next question comes from the line of John Tumazos from John Tumazos Very Independent Research, LLC. Congratulations on the good results, Raul. Some other large mining companies have had a lot of cost escalation. First Quantum and Newmont, for example, had 10-15% unit cost. Sequential escalations, Newmont had a $2,000 gold cost in Argentina, for example.
John Tumazos: Our next question comes from the line of John Tumazos from John Tumazos, very independent research LLC.
Speaker Change: Congratulations on the good results level.
Speaker Change: Some of the large mining companies have had a lot of cost escalation.
Speaker Change: First quantum and Newmont for example had 10, 15% unit cost sequential Escalations newmont.
Speaker Change: $2000 gold cost in Argentina for example.
John Tumazos: Could you explain? in a little more detail. The ability of Southern Copper to hold the cash costs at 77 cents. How Your Suppliers Don't Hold You Up. Get Price Hikes or This is how you're able to keep costs under control so uniquely and superbly.
Speaker Change: Could you explain.
Speaker Change: And a little more detail.
Speaker Change: The ability of southern copper to hold the cash costs at 77.
Speaker Change: How your suppliers to hold you up.
Speaker Change: Jeff price hikes or.
Speaker Change: Just how youre able to keep costs under control, so uniquely and superbly.
Raul Jacob: Well, thank you very much for your comment, John. Well, in reality, what we do is it's a part of the company DNA to be very extremely cautious about costs, operating costs. And the other point, which is very important, is that we continue investment, our continued investment in maintaining our facilities in very good shape. I think that in general, we do negotiate and have a very good relationship with our vendors. And at the same time, we are focusing on increasing our production, maintaining our cost in line. And particularly in this year, we're seeing the positive effect of the important investment that we did in the last three years in Buena Vista by building a new concentrator that is giving the company excellent results.
Speaker Change: Well. Thank you very much for your comments John.
Speaker Change: Well in reality, what we do with it.
Speaker Change: Part of DNA eroded company DNA to be very extremely cautious about costs.
Speaker Change: Operating cost.
Speaker Change: And the other point, which is very important is that we continue investment in our continuing investment in maintaining our facilities.
Speaker Change: In very good shape.
Speaker Change: That debt.
Speaker Change: In general, we do negotiate and half.
Speaker Change: Very good relationships with our.
Speaker Change: Sure.
Speaker Change: Vendors.
Speaker Change: <unk>.
Speaker Change: And at the same time, we are focusing on increasing our production maintaining our our cost in line and particularly in this year, we're seeing the positive effect of the important investment that we need.
Speaker Change: In the last.
Speaker Change: Three years in Buena Vista by building, a new concentrator that it's.
Speaker Change: Given the company.
Raul Jacob: The cash cost of these facilities is extremely low per pound of zinc. And we are seeing that as a major contribution of value this year. Besides that, the company had a very good year last year in production, and we are maintaining our production level this year, which is excellent for us. So I think that this combination of being well-focused on keeping our production on track, increasing it as much as we can, obviously without jeopardizing the long-term situation of the company, as well as having strategic alliances and development of opportunity together with our partners. Suppliers, it's some of the reasons why the company is maintaining a very competitive cash cost, very likely the lowest of companies of this size in the copper space.
Speaker Change: Excellent results the cash cost of this facility is extremely low per pound of zinc.
Speaker Change: And we are we are seeing that may your contribution.
Speaker Change: Value this year.
Speaker Change: Besides that the company had a very good year last year in production and we have we're maintaining our production level. This year, which is excellent for us. So I think that this combination of beam.
Speaker Change: We'll focus on keeping our production on track increasingly best matches, we can obviously without jeopardizing the long term.
Speaker Change: The situation of the company.
Speaker Change: Well as <unk>.
Speaker Change: <unk> strategic alliances and development of.
Speaker Change: Opportunity together with our.
Speaker Change: Suppliers.
Speaker Change: One of the reasons why the company it's maintaining.
Speaker Change: Very competitive cash cost.
Speaker Change: Very likely the lowest of companies of this size in the copper space.
Operator: Thank you. One moment for our next question.
Speaker Change: Thank you.
Speaker Change: Youre welcome.
Speaker Change: Yeah.
Speaker Change: Thank you one moment for our next question.
Myles Allsop: Our next question comes from the line of Myles Allsop from UBS. Great. Thank you. Just a few quick questions, maybe on the production guidance, you've talked to 2025. Could you give us a sense whether you'll be able to maintain production in 2026 and 2027 as well? Or are you expecting a bit of a dip to come through? That's the first question. OK, we will have an adjustment in production for next year. At this point, we want to maintain our production level where it is. but eventually we may reduce a little bit our profile next year for copper.
Speaker Change: Our next question comes from the line of Myles Allsop from UBS.
Speaker Change: Great. Thank you just a few quick questions maybe on the production guidance you talked to 2025 could you give us a sense of the ability to maintain production.
Speaker Change: In 2026, and 2027 as well or are you expecting a bit of a dip to come through so first question.
Speaker Change: Okay.
Speaker Change: We will have.
Speaker Change: And adjustment in production for next year at this point, we want to maintain our production level, where it is.
Speaker Change: But.
Speaker Change: Eventually we may we may.
Speaker Change: Reduce a little bit there were profile next year for Cooper.
Raul Jacob: After that, you will see the impact of our new projects, particularly in 2027, Tia Maria, and we are expecting it to move towards over a million tons for production in 2028 and on. We will be increasing our production from a little bit north of 1 million tons in 2028 up to 1,080,000 tons by 2030. Okay.
Speaker Change: After that you will see the impact of our.
Speaker Change: New projects, particularly in 2027 Tia Maria.
Speaker Change: And we're expecting it to to move toward over 1 million tons.
Speaker Change: <unk> four for production in 2028.
Speaker Change: We will we will be increasing our production from a little bit north of 1 million tons in 2028 up to one 1 million on 80000 tons by 2030.
Speaker Change: Okay.
Raul Jacob: Maybe just on Canaria as well. When do you expect, I know you normally issue bonds ahead of the big CAPEX, is um you know is the delay in the financing for Tia Maria a reflection of the project or the market you know and should we expect um some of that step up in CapEx to be pushed out or is it imminent should we say? No, we will move on with Tia Maria, let me put it differently. We have no concerns on the Tia Maria construction in terms of the project viability. We believe that the project is moving forward in a very nice way.
Speaker Change: Maybe just on <unk> as well.
Speaker Change: When when do you expect I know you know me.
Speaker Change: <unk> bonds ahead of the Big Capex is.
Speaker Change: Yes, it did.
Speaker Change: Delay in the financing for Tia Maria a reflection of the project towards the market.
Speaker Change: Should we expect.
Speaker Change: Some of that step up in capex to be pushed out.
Speaker Change: Is it imminent should we say.
Now we will move on with Tia Maria.
Speaker Change: Yes.
Speaker Change: Put it differently.
Speaker Change: We have no concerns on the Tia Maria construction in terms of the Protium <unk>, we believe that the pre keeps moving moving forward on a very nice.
Raul Jacob: We're very happy to how the community is working with the company at several instances to develop the project as fast as we can. I would say that we are considering moving forward with some financing for the project, but we believe that the market has to be more stable and reflect better the qualities that the company, the credit that the company has for going to finance. So, for now, I would say that your question is more the market than specifically. Has there been any protests over the last quarter at Tia Maria or has the project now been more widely accepted by the local communities?
Speaker Change: The way, we're very happy to how the community is working with the company. Several instances two to develop the project as fast as we can.
Speaker Change: I will say that.
Speaker Change: We are considering.
Speaker Change: Moving forward with some financing for the project, but we believe that the market has to be more stable and reflect bidder the qualities that become particularly that the company has.
Speaker Change: For going to finance it.
Speaker Change: Alright, so so for now I would say that to your question is more more of the market down specifically.
Speaker Change: Specifically approach.
Speaker Change: And then there has been any protests over the last quarter.
Speaker Change: <unk>.
Speaker Change: Project now being more widely accepted by the local communities.
Raul Jacob: Quite clearly, it's the second option. The project has been. very widely approved and supported by the locals. There is always a small group of people that is against it, that's part of human nature. About 40 persons that demonstrate against the project in an area where 52,000 people live. So you may imagine that this is not getting any traction. Okay, that's encouraging.
Speaker Change: Quite quite clearly as the second option the project has been.
Speaker Change: Very widely.
Speaker Change: A proof and supported by the locals.
Speaker Change: There is always a small group of people that is against it.
Speaker Change: That's part of human nature about 40.
Speaker Change: Persons that demonstrate against the project in an area, where 52000 people leaf. So you may imagine that this is not getting any traction at all.
Myles Allsop: Maybe on the project El Pilar, it's not mentioned at all in the release, is that reflecting a change in heart with that project or is it still bubbling along in the background? No, we're doing some work. We haven't reported it because there is no update that has changed vis-a-vis what we have been reporting. The epilator, we're looking into ways to improve the recovery of the project. That is something that we're focusing in. And we believe that we should have some information to report through the year. But for now, in this first release, didn't believe it was necessary to include it, because they had no significant changes since the last.
Speaker Change: Okay, that's encouraging maybe.
On the projects LP light is not mentioned in the release is that.
Speaker Change: Reflecting a change in heart without project or is it.
Speaker Change: Still bubbling along in the background.
Speaker Change: No. We're we're doing some work we haven't reported it because there is no update to that that has changed vis vis what we have been reporting.
Speaker Change: We're looking into.
Ways to improve the recovery of the project that is something that we're focusing and we believe that.
Speaker Change: We should we should have some information to report through the year, but for now.
Speaker Change: At least we.
Speaker Change: Uh huh.
Speaker Change: Do you believe it was necessary to included because they had no significant changes since the last time.
Myles Allsop: Okay, that makes sense.
Okay that makes sense, maybe one very last.
Myles Allsop: Maybe one very last question on the projects. Los Chancas, have you bought all the land that you need to buy? And when, oh yeah, how long's a piece of string? I mean, with these illegal miners, it seems every quarter that there's a challenge still to remove them. Yeah, is there any meaningful progress or, you know, when can we expect kind of drilling to restart that? With the acquisition that we mentioned in the first release, we are basically have acquired pretty much almost all the land that we need. a very high percentage of what we need.
Speaker Change: Question on the projects most shanghai's.
Speaker Change: Have you bought all the land that you need to buy and.
Speaker Change: When.
Speaker Change: Well, yeah, Alan's piece of string I mean, these illegal miners it seems every quarter.
Speaker Change: This challenge still to.
Speaker Change: To renew them.
Speaker Change: Is there any meaningful progress so when can we expect.
Speaker Change: Kind of drilling to restart that.
Speaker Change: We did acquisition that we mentioned in the personal lease we are.
Speaker Change: Basically have acquired pretty much almost all of the land that we need.
Speaker Change: Very high percentage of what we need.
Raul Jacob: In the case of the removing of illegal miners, we are working with the authorities and we are developing our own plans to move on and retire these people from where they are operating. We're seeing very positive actions by the national government on this matter. So we believe that we could see some progress through the year and retire. We initiate the work that we have to move on with. We believe that if we solve this problem, we will probably in a year, year and a half, we'll be finishing the environmental as well as permitting part of the project.
Speaker Change: In the case of.
Speaker Change: The removing of illegal miners, we are working we did priorities and we are developing our own plans to move on.
Speaker Change: And retired these people from there.
Speaker Change: Our operating we're seeing very positive.
Speaker Change: Actions by the National government on this matter.
Speaker Change: So we believe that we could see some progress through the year.
Speaker Change: <unk>.
Speaker Change: <unk>.
Speaker Change: Initiate the work that we we have to move on with.
Speaker Change: We believe that if we were we.
Speaker Change: We solve this problem we will.
Speaker Change: In a year year, and a half would be finishing the environmental us where the permitting part of the protocol that could open up the construction of la chunk us.
Myles Allsop: And that could open up the construction of Los Chancas, hopefully a little bit better than we're expecting now. But that's more. a discharge and the actual forecast that we have. Okay, I know that's very helpful. Thank you. One moment for our next question.
Speaker Change: Hopefully a little bit better than we're expecting now but thats.
Speaker Change: <unk>.
Speaker Change: More.
Speaker Change: These higher than the actual forecast that we have.
Speaker Change: Okay No that's very helpful. Thank you.
Speaker Change: You're welcome.
Speaker Change: Thank you one moment for our next question.
Yuray Domik: Our next question comes from the line of Yuray Domik from La Raine, Ville Alemania.
Speaker Change: Our next question comes from the line of Eli Dominique from La Ryan Leon.
Yuray Domik: Good morning, everyone. Sustain a very Saint Heinz. Look at how that Man so far in the second half of the season. Mountain, Columbia.
Eli Dominique: Hello, Hello, Good morning, everyone. Thanks for taking our question.
Speaker Change: Just a single one from our side.
Speaker Change: Just to have your comments in how have been demand so far in the second quarter.
Speaker Change: Have you seen any variability or weaknesses in any.
Speaker Change: Of the markets. Thank you.
Raul Jacob: I'm so sorry, Jurak, could you repeat it because I couldn't get, are you referring to a specific market or the copper market, please? No, not any specific market, just an overall view. Overall, we are positive in general on the copper future. We believe that the fact that we have, what we're seeing is a replacement of demand coming from infrastructure, mainly from Asia, towards new energy technologies. Artificial Intelligence that are kicking in at a very strong speed and the very positive news of that for us is that, generally speaking, for instance, if you consider, a plan for for solar energy.
Speaker Change: I'm so sorry.
Speaker Change: Could you could you repeat it because I.
Speaker Change: Good.
Speaker Change: Are you referring.
Speaker Change: Referring to any specific market or.
Speaker Change: The copper market place could do it.
Speaker Change: Sure.
Speaker Change: No no no no Daniel specific markets, an overall view.
Speaker Change: Perfect.
Speaker Change: Overall, we are positive.
Speaker Change: In general in the on the copper copper future.
Speaker Change: But we believe that the fact that we have.
Speaker Change: Sure.
Speaker Change: What we're seeing is a replacement of of demand coming from newer structures mainly from Asia.
Speaker Change: Towards.
Speaker Change: A new energy technologies.
Speaker Change: Artificial intelligence that are kicking in.
Speaker Change: Very strong speed.
Speaker Change: The very positive news of that for US is that generally speaking for instance, if you consider.
Speaker Change: Hap.
Speaker Change: Our plan for solar energy.
Raul Jacob: The tons of copper per megawatt of installed capacity is much higher than the traditional ways to generate such as hydro or gas combustion or some other carbon coal power. So, in that regard, we're seeing a very positive development. EOLIC, for instance, overseas, requires a much more, much more... copper per ton of installed capacity of generation. For instance, it may be 10 tons of copper per megawatt of installed capacity in an offland or an in-sea eolic plant. And when you, the option to that is maybe two or three with a gas burn facility for power generation.
Speaker Change: Dave.
Speaker Change: Turns of copper.
Speaker Change: For megawatt of installed capacity is much higher than the traditional ways to generate such as hydro or gas.
Speaker Change: <unk> combustion or on some other carbon.
Speaker Change: Coal coal coal power.
So in that regard, we're seeing are very positive.
Speaker Change: Development.
Speaker Change: He already for instance overseas requires.
Speaker Change: Much more much more.
Speaker Change: Colbert per ton of installed capacity of generation for <unk>.
Speaker Change: For instance, it may be 10, 10 tons of copper per megawatt of installed capacity in an off land.
Speaker Change: Or and you can see.
Speaker Change: <unk> plant.
Speaker Change: And when you the options for to that is maybe two or three with the gas burn with a gas burn facility for power generation. So the outlook in that regard it's very positive.
Raul Jacob: So it's the outlook in that regard is very positive. Besides that, we have the new developments of artificial intelligence that are requiring significant amounts, not only for copper, but some other materials such as zinc and silver. These three materials are being produced for us, so we see good support for our prices in the next few years. The only one concern that we have is that when you have the two major economies in a commercial war. Well, it's a concern that may slow down economic growth and indirectly affecting the copper demand, but that will be a short-lived impact, if any.
Speaker Change: Besides that we have the new <unk>.
Developments of artificial intelligence that tire requiring significant amounts not only for copper, but some other materials such as zinc and silver is.
Speaker Change: Three materials are being produced for us. So we see good support for our prices in the next few years.
Speaker Change: The only one concern that we have is that when you have the two major economies.
Speaker Change: In our commercial war.
Well, it's a concern.
Speaker Change: It may slow down economic growth.
Speaker Change: And indirectly affecting the corporate demand, but that will be shortly for impact if any.
Operator: Perfect, thank you very much. Thank you.
Speaker Change: Okay perfect. Thank you very much.
Speaker Change: Yeah.
Camila Barter: One moment for our next question.
Speaker Change: Thank you.
Speaker Change: Enrollment for our next question.
Camila Barter: Our next question comes in the line of Camila Barter from Bradesco BBI. Good morning. Thank you for the opportunity of taking my questions. I have two questions here. The first one, you mentioned you see don't find rifts to copper production in 2026. I'm just, I was just wondering if copper prices remain at low levels. Could you consider perhaps altering your production plans and going to areas of lower grades to increase production next year? That's my first question. And the second question, just to follow up on costs, you mentioned costs after byproducts in the range of 0.7, 0.28 for this year.
Speaker Change: Our next.
Speaker Change: Question comes from the line of Camilo BARDA from Bradesco BVI.
Camilo BARDA: Good morning, Thank you for taking my questions I have two questions here.
Speaker Change: First of all on the you mentioned Youll see those lines makes to copper production in 2026.
Speaker Change: I'm just I was just wondering if copper prices remain at low levels could you consider perhaps auto production.
Speaker Change: Production plans.
Speaker Change: Goldman.
Speaker Change: Yes.
Speaker Change: Lower grades to increase production next year.
Speaker Change: That's my first question and then the second question just to follow up on costs you mentioned.
Speaker Change: Cost offer by Carlos in the range of.
Raul Jacob: Can you comment please Expectations of Cash Costs Before By Progress for 2025. I think I mentioned already that we're expecting copper cash cost to be at about 75 to 80 cents per pound through this year. Hopefully, with better by-product prices, we may be a little bit better off than that, but that's our current expectation. And for copper prices, generally speaking, we don't move our long-term production plans due to Copper Prices Changes. We're doing our plants using a much lower copper price. We're very conservative in that regard. Our plants are prepared using a long-term price of $3.30.
Speaker Change: 0.7 here at <unk>.
Speaker Change: Can you comment please on.
Speaker Change: Expectations of cash cost before byproducts for 2025. Thank you.
Speaker Change: I think I mentioned already we're expecting copper cash cost to be at about 75 to <unk> 80 per pound through this year.
Speaker Change: Hopefully with better byproduct prices, we may be a little bit better off than that but thats our current expectation.
Speaker Change: Four four corporate prices generally speaking, we don't we don't move our long term production plans do too.
Speaker Change: Corporate prices changes we're.
Speaker Change: We're doing our plans using a much lower.
Speaker Change: Corporate price, we're very conservative in that regard our power plants are are prepared using a long term long term price of $3 30 that is very very conservative price nowadays.
Camila Barter: That is a very conservative price nowadays. And for us, it will be more like we can maintain our production next year. That will be excellent. But so far, the plant calls for a small reduction in our production. That is currently under review. OK, thank you. Just the. Any other questions, Camila? Camila, your line is still open. Can you hear me? Yes, we do.
Speaker Change: And for US it will be more like if we can we can maintain our production next year that will be excellent, but so far the plan calls for a small reduction in our production that is currently under review.
Speaker Change: Okay. Thank you Justin.
Speaker Change: Any other questions.
Speaker Change: Okay.
Speaker Change: Camilo Your line is open.
Speaker Change: Can you hear me.
Speaker Change: Yes, we do.
Raul Jacob: On the cash cost, my question was actually on cost before byproducts. Oh. Okay, okay, okay. That one has decreased and keep in mind that we are adding to that cost, the total cost of operation, the cost of a new zinc concentrator, which was not included two years ago. So, our cash cost has decreased on a per pound basis, given the productivity that the company has. And I think it's important to share this point. The concentrator that we have built for Buena Vista has made us to process zinc only this year. But we could do a mix between zinc and copper production.
Speaker Change: On the cash calls my question was actually on cost before byproducts.
Speaker Change: Okay. Okay. Okay.
Speaker Change: Churn has decreased and keep in mind that we.
Speaker Change: We are adding to that cost the total cost of operation the cost of the new zinc concentrator <unk>, which was not included two years ago. So.
Speaker Change: Our cash cost has decreased on a per pound basis, given the productivity that the company.
Speaker Change: Yes.
Speaker Change: And.
Speaker Change: I think it's important to share at this.
Speaker Change: At this point.
Speaker Change: The concentrate or that we have built for four <unk>.
Speaker Change: Has has made us to process think only this year.
Speaker Change: But we could do a mix between zinc and copper production.
Raul Jacob: in the Buena Vista facilities that we are not doing now because we have found that there is much more value in focusing only on zinc this year and in a few more than specifically copper on this specific facility. So that has decreased the production that we may get from the Buena Vista facility for about 2,000 tons that we had last year. And we are not having that volume this year. So there is always possibilities of improving production. But in this case, we did a review of the process and concluded that it was better to focus on zinc-only production with the Buena Vista zinc facility than doing the mix between zinc and copper.
Speaker Change: In the Buena Vista facilities.
Speaker Change: We are not doing now because we have found that there is much more value in focusing only on sync this year and in a few more than specifically copper on this specific facility. So.
Speaker Change: That has.
Speaker Change: Decrease the production that we may get from the from the <unk> facility.
Speaker Change: For about 2000 tons.
As we had.
Speaker Change: We had last year.
Speaker Change: And we are not.
Speaker Change: Having that.
Speaker Change: That volume that volume this year. So so that there is always possibilities of improving production, but in this case, we did have.
Speaker Change: Our review review the process.
Speaker Change: <unk> concluded that it was.
Speaker Change: Better to focus on zinc only production with whether it be stressing facility.
Speaker Change: We're doing the mix between sync.
Operator: Because by changing the processes from one metal to the other one, we spend some time that has generated less value if we were only focusing on zinc. And that's what we're doing in this year and probably a couple of more. Thank you. Thank you very much. Thank you. One moment for our next question.
Speaker Change: And copper because by changing.
Speaker Change: The processes from one to the other one we spent some time.
Speaker Change: That has.
Speaker Change: <unk> generated less value if we were only focusing on zinc and that's what we're going we're doing this year and probably a couple of more.
Speaker Change: Thank you. Thank you. Thank you very much.
Speaker Change: Thank you one moment for our next question.
Timna Tanners: Our next question comes from the line of Timna Tanners from Wolf Research. Thanks for letting me back in. I just wanted to follow up on my last question and fully appreciate that we haven't seen tariffs on copper exported to the U.S. yet, but the market is obviously pricing in some chance of that happening, and it would be great to hear what Southern Copper's response could be to a 25% tariff on imports. How could Southern Copper react to that? Thank you.
Speaker Change: Our next question comes from the line of Timna Tanners from Wolfe Research.
Timna Tanners: Thanks for letting me back in I just wanted to follow up on my last question and fully appreciate that we havent seen tariffs on copper exports to the U S. Yet, but the market is obviously pricing in some chance of that happening and it would be great to hear what southern copper's response could be to a 25% tariff.
Speaker Change: On imports how could southern copper.
Timna Tanners: Back to that thank you.
Raul Jacob: We believe that if we have a tariff As the one that you mentioned, it will make us to reassign some of the production that we have to some other markets. By doing that, we will very likely have decreased significantly the impact that this may have to the company. At this point, we prefer to wait and see what's the end of this situation. As I mentioned, we are pleased to see that the U.S. government has recognized the important role of copper as a material to be imported with zero duties, and hopefully that will be the case in the long term.
Speaker Change: We believe that.
Timna Tanners: If we have we.
Timna Tanners: We have.
Timna Tanners: Terry.
Timna Tanners: As the one that you mentioned it will have.
Timna Tanners: It will make us to reassign some of the production that we we have to some other markets.
Timna Tanners: By doing that we will very likely have.
Timna Tanners: Decreased significantly the impact that these may have to to the company.
Timna Tanners: At this point.
Timna Tanners: We prefer to wait and see what what's the end of this situation as I mentioned, we are seeing.
Timna Tanners: We are pleased to see that the U S. Government has recognized the important role of Cooper.
Timna Tanners: Is there some material to be imported with zero duties and hopefully that will be the case in the long term.
Timna Tanners: Okay. Thank you.
Timna Tanners: Yes.
Operator: Thank you. One moment for our next question.
Timna Tanners: Thank you one moment for our next question.
Emerson Vieira: Our next question comes from the line of Emerson Vieira from Goldman Sachs. Hi guys, good morning. So I got two questions. The first one is on the COMEX LME price arbitrage. So I understand that the company might have been benefiting from this exposure to COMEX sales. So a few questions on this matter. What percentage of your contracts are spot and what is the average duration for the remaining ones? And just to follow up on this COMEX LME price arbitrage, for how long do you guys think you can benefit from this? I mean, U.S. consumers will not want to double pay the tariff and no U.S.
Speaker Change: Our next question comes from the line of Amit <unk> from Goldman Sachs.
Hi, guys. Good morning, So I got two questions. The first one is on the Comex lemme price arbitrage.
Speaker Change: I understand that the company might have been benefiting from these exposure to Taco Mac sales soften. Your question was on this matter.
Speaker Change: What percentage of your contracts are spot and what is the average duration for the remaining ones and just a follow up on this call, Matt Let me perhaps arbitrage.
Speaker Change: For how long do you guys think you can benefit from this.
Speaker Change: Customers.
Speaker Change: Not the one to double pay the tariff and non U S customers would eventually switched to <unk>. That's what do we think so are you guys seeing clients in comex contract alright, asking for renegotiation or early cancellations.
Emerson Vieira: consumers would eventually switch to LME. That's what we think. So are you guys seeing clients in COMEX contracts already asking for renegotiation or early cancellation? Those are my questions.
Raul Jacob: Thank you. Well, we are, generally speaking, we are not commenting on this.
Speaker Change: Those are my questions. Thank you.
Well, we are generally speaking we are not commenting on this task where our commercial team is.
Raul Jacob: It has, where our commercial team is talking with our customers on this matter, and so sorry Emerson, but I have no comments to your We saw by late March some news regarding protests from local communities in Peru's Tapaqui region. So you guys have any update on the situation, how this is being addressed? And for Tia Maria specifically, do you guys already have local agreements? How do you see this relationship evolving in Tia Maria's region? What we're seeing in the case of Tía María is that the population of the area is much more focusing on seeing the opportunities and the advantages that the project is bringing them than protesting against Tía María.
Speaker Change: It is.
Speaker Change: Talking with our customers on this matter and so sorry, the Emerson I have no comments to your question.
Speaker Change: No worries at all.
Speaker Change: Can I just follow up on the point Dan.
Speaker Change: We saw by late March some news regarding project profits from local communities through Cynthia region.
Speaker Change: You guys have any update on the situation the holiday needs to be addressed and for Tia Maria specifically do you guys have looked like if I may ask how you see this is that relationship evolving and Jeff's marinas region. Please.
Speaker Change: What we're seeing in the in the case of Tia Maria is that the population of the area is much more focusing on seeing the opportunities and the advantages that the project is bringing.
Speaker Change: I'm, Dan protesting against Tia Maria I mentioned before that.
Raul Jacob: I mentioned before that the number of protesters is relatively small, vis-à-vis the 52,000 the population of the Islay province and we believe that and we hope that this environment prevails through the construction phase. So far we are not seeing any significant, we don't have any significant concerns regarding the protest in Tiamat.
Speaker Change: The number of protesters.
Speaker Change: Tivoli small vis vis the 52000.
Speaker Change: Population also the slight province, and we believe that we hope that this environment prevails through the construction phase so far we're not seeing.
Speaker Change: Seeing any any significant we don't have any significant concerns regarding the purpose Tia Maria.
Raul Jacob: Okay, thank you Raul and Tim, thank you very much, it was very helpful. Thank you.
Speaker Change: Okay. Thanks, Carroll and team. Thank you very much very helpful.
Raul Jacob: At this time, I would now like to turn the conference back over to Raul Jacob for closing remarks. Thank you very much, Gigi. With this, we conclude our conference of Southern Copper's first quarter 2025 results. We certainly appreciate your participation and hope to have you back with us when we report the second quarter of this year. Thank you very much for being with us today and have a nice day.
Speaker Change: Thank you at this time I would now like to turn the conference back over to Raul Jacob for closing remarks.
Raul Jacob: Thank you very much GE with this we conclude our conference of Southern Copper's first quarter 2025 results. We certainly appreciate your participation and hope to have to back with us when we reported second quarter of this year results. Thank you very much for being with us today and have fun.
Speaker Change: Nice day.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Okay.
Speaker Change: Yes.
Speaker Change: [music].
Yeah.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Sure.
Speaker Change: Jim.
Speaker Change: [music].