Compañía de Minas Buenaventura S.A.A. (BVN) 4 Aug 212021 Q2 Earnings call transcript

Good day, ladies and gentlemen. Welcome to the Compañía de Minas Buenaventura Second Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. And please note that this call is being recorded. I would now like to introduce your host for today’s call, Mr. Relations. Investor Salas, Gabriel Mr. begin. may you Salas,

Officer. Renzo Good Manager; morning, Carlos Mr. to of discussion joining Masa, today Chief we in you be and forward-looking call available considered differ discussions. factor full and and for Mr. Roque our of and Vice encourage from such Any be our materially second thank Daniel Juan our risks our Business within with your uncertainties which within Executive Financial statements, XXXX. call Garcia, discuss Leandro Today’s by for statements Chairman. statements joining This quarter cause our and Mr. Corporate these Alejandro of President the on include disclosure President led Macher, Development today, conjunction statements. us Mr. earnings everyone, Also forward-looking read Officer; Chief will XXXX will various risk should are Vice Benavides, Mr. Operations; Commercial; subject release Hermoza, release President Sustainability; Vice statements questions that you to filed Mr. to results and the Dominguez, are concerning Ortiz, Project August could to Mr. X, results. Aldo conference actual I cautionary press

related addition, is the of to shared assumptions, impact note important will that to which these pandemic. In be it and statements include expectations COVID-XX

today’s business outlook Chief to impact and the At information change go Leandro the also continued means COVID-XX As is estimate results. ahead. on could date. Leandro, risk call turn Executive the a results of at seen the over particular, this information the that any financial on time best of of our COVID-XX available let Buenaventura’s time, provides Officer. including now about on COVID-XX affect as In the please uncertainty impact and me and the based This on Mr. Slide is statement forward-looking related results duration could our factors, pandemic. effects company’s Garcia, to X, contemplated there

Good this conference call. all, Gabriel. thank you, you morning and Thank to for attending

Before your family and friends, difficult we wish this time. well-being start like to health presentation, would this you, we and at

to Compañía quarter Minas results the Buenaventura. second We de from are from XXXX of the present pleased

have presentation, is page. Please, COVID-XX we pandemic. in consider We review our cautionary a available statement prepared to further, related PowerPoint X. the shown moment Slide a which take on web the before go disclosure to Please the

follows. Moving on to as Slide were Highlights X.

in from reached million Second reported direct quarter XXXX. quarter million XXXX operations $XX.X EBITDA two to $XX.X compared

EBITDA $XX.X $XXX.X associate adjusted Second second compared reached quarter companies million the to quarter included XXXX. XXXX million year in

Second loss quarter for million $XX.X period XXXX XXXX. net net million to compared $XX.X same the reached income

to Second was XXXX. quarter increased strategy of company’s quarter increase exploration compared revised the million the XXXX This units $XX.X in of activities. at second increase million to exploration US$X.X to operating part

the net due quarter of and been third XXXX. of and X.X% April quarter amount the Second to position The per been to of with XXXX, April XXXX, quarter July July workforce. months Buenaventura cash its on million. expected the paid coupon million last annum SUNAT sales million for for On company fourth vaccinated million $XXX a the sorry, Friday, to On same XX, as to has June Buenaventura’s million period applicable months XXXX to issued to $XX.X unsecured XXXX $XXX.X notes decrease used bond additional XX, pay from proceeds have in of Verde received – XXXX, $XXX Verde. rate XX, XX, the six cost $XX.X six capital expenditures were The an the $XX.X dispute. dividend first total the $XX.X – aggregate impacted million Cerro due XXXX. fully by compared expenses, a COVID-XX Cerro senior with is stake of in XXXX. relative it increase million reached

the quarter including our XXXX. for of in during million, were from in XX% first million higher EBITDA direct Slide increased six $XXX of quarter half compared second the affiliates EBITDA same to year, quarter XXX% compared highlights. total XXXX the revenues second in six quarter of second period of The the EBITDA, quarter to second in in million which comparison the $XX million to XXXX. of our first the months of the direct during in XXXX comparison for the first XXXX. was year, comparison $XXX including to second second to million, the XXXX. six of financial increased on increased million revenues half which the $XX a half in totaled of CapEx XXXX. second affiliates this XXXX. Total $XXX million Moving $XX first comparison X, the quarter to $XXX XXXX was to to in higher EBITDA, increase CapEx $XX to XXXX. compared was of year the $XX half months in the is for the million operations million, months $XXX from comparison of to $XX In million the is the first the in In million quarter to first $XXX.X XXXX. in to of million XXX% of operations

we can returning semester first the slide, shown of XXXX. the in are than this and appreciate graph you As the greater achieving even pre-pandemic on results to levels

on the year. X, production Slide X XXXX quarter is figure same attributable Total quarter second and production. Moving of was on to reported the higher which gold the XX,XXX previous ounces, the in attributable of XX% than

mainly XXXX. of ounces, shows compared production period Silver by in lower million of total XXX,XXX This increase first X.X reported explained XXXX. decrease at production production gold attributable on of than was first in to was XX% the the for semester the was Yanacocha. ounces, lower quarter an XXXX, same which XX% this silver The attributable quarter

second was XX,XXX XXXX, of million increase compared metric second quarter production significant X XXXX. first attributable silver ounces, quarter XX% XXXX, In of the than tons produced, of half a zinc in first the the XXXX. higher During were to the semester

zinc tons, XX% the same production metric quarter to the increased period than XX% the of year, The first higher quarter XXXX. of tons of in X,XXX XXXX, which In was comparison in metric is in XX,XXX XXXX. production of case higher the second the equity lead, semester to second

tons half XXXX, to tons XXXX. lead of first The metric production metric approximately XX,XXX increased the in comparison X,XXX to in

was production attributable XX,XXX of second copper the tons. our Finally, metric year the for quarter

period During an XX% XXXX, the XXXX. XX,XXX attributable was the first production tons, of compared to copper half same of metric increase

The in a the first sustaining the costs our XXXX of higher from semester operations ounce all-in to ago. is to Slide on for and to XXXX year The than costs for US$X,XXX first per direct as cost XX% were X, gold. Moving all-in cost sustaining gold, per which sales by semester of applicable of follows: XX% to decreased ounce, applicable sales. US$X,XXX

per year $XX.XX higher than For is silver, which ago. ounce, XX% a

For metric ago. ton, higher year lead US$X,XXX per which than is X% a

in Copper, ton, is to per higher XX% For ago. a comparison metric US$X,XXX year which

in Zinc, ago. than the was of a cost which US$X,XXX XX% case ton, Finally, the year per is applied sales metric higher to

been of applicable expenses As before, million impacted sales to $XX approximately has COVID-XX. related to we cost by mentioned

of pipeline projects Moving Slide to X, – on update.

one our level Here, for we one current each in projects. a development are of presenting snapshot,

X, on to Slide Moving Gabriel. San

We permit. that water mention have have construction to we the dam obtained

the EIA the as validity in dialogue quarter with working The it of authority by of a environmental MINEM Previa process stage. the – are first expire to extension Consulta will We XXXX. advanced

Trapiche. Moving on Slide XX, to

We September. are finishing the to and chloride level study trade-off expect testing by leaching pre-feasibility complete the

the second to advancing support cooperation authorities with August. of end EIA’s communal agreements are We the by workshop

the access community with we are Finally, road, alternative for final with finishing for are cooperation a working one. we and Antabamba/Molloco agreement an Mollebamba’s

Moving XX, the on observations, gold first silver and batch value. of Rio working are the We to Seco. we residue second improve submitted to Also, testing we Slide currently and batch. on activities finished EIA’s

the power authority. the project’s have and We water confirmed with viability

board stage. is Operator, on I Slide this for Thank to The XX, approved drilling Coimolache’s Moving Tantahuatay’s line attention, hand begin the your go XXXX. infill please third will call and in the you open viability questions. back to Sulfides, the to ahead. operator for quarter expected to

Thank now [Operator comes Today’s the De Morgan Alba question Instructions] with question-and-answer you. begin Carlos Stanley. ahead. from go We’ll session. first Please

Daniel, Leandro, morning, and Roque. Good Yes.

few a may. if I Just question,

you increase the on do how which of may – squeeze with as more give you’re and dividends. see question us payment maybe costs the in projects finally, can situation given their the color you cost as is, provide importantly, thinking idea the I increase in you to quite trending, growth recent terms going of bit Second if an And last then Orcopampa how cash forward SUNAT? saw is, about First for if on a particularly their quarter. a well the maybe new debt can Uchucchacua,

past the quarter months? this million So that – to idea, is part that you $XX Cerro we that received coming is you in there What dividends Buenaventura still to saw Verde. shareholders much. in very pay from of Thank the

Thank – reduce matters, us the Carlos. an leverage that of level. to you? your right? How know, that the the – as you, case our syndicate sale, we are growth of the allow and sale in in still well, pretend we’re asset, our question evaluating will to The you loan With pay

also leverage credit. and also lines and – our all So of

operations from will – cash get development course, expect So Gabriel we results. And to in also, San with will actions, be shape coming San we of those of Gabriel. begin the the better own that our

with positive better results following other We the Verde expect expect, from that the and in of are months. Cerro in the the also And dividends more we course, following we year.

is growth. and the So source develop our expect our support to that we growth that

dividends Carlos, In first we going terms Juan discussing if matter on some answer that up the Buenaventura, going the to today. pay of are dividends to give going we to cost, and But Verde Cerro – we to to I not you, microphone are can maybe are question. to

not short from planning the a to, We Buenaventura. are term, dividend in

following with leverage. Our some – that compromises are going first Thank the to deliver compromises, Carlos. and Juan have issuing, reduce our And you. we in to is months. we Please, bond goal we the

Thank the you, question. Leandro for

production. are we up Orcopampa, the Regarding ramping

be the production the we production. cost increased are ramping We’re a And coal bit based little schedule, on but effectively. the therefore, up behind will reduced

infill increase month with the expect development. the a there coming done, work of cost work from of will after lot in lot be mine from production in Uchucchacua we Orcopampa. lot increasing to a drilling, this work a is returns quarters the that. So And reduce of In to

with in So still start to high the quarters to recline Uchucchacua reduce the and coming coming from – cost be expect to two we year. cost

may. Juan Leandro. and I if you, Maybe Carlos Thank Leandro,

you So requirements what dividends? are allow the issuance bond came that or may pay not to the that covenants the together with

you, Thank your Carlos for question.

us Daniel Here Daniel ahead. is go Dominguez. Please with

meet we How two you? covenants. Carlos. Basically, Hi, have are to

the basically leverage net ratio ratios – are one of and of first to two below charge paying X in important fixed debt dividends. The X.X most coverage ratio is start order have times, ratio times. over to a the Those

you, And affiliate? – Daniel. participation EBITDA EBITDA so the including or Thank just consolidated in the on EBITDA, your the is

EBITDA, Consolidated Carlos.

luck Thank you much. Good very guys.

Today’s Instructions] Scotiabank. comes Tanya Jakusconek go with Please question ahead. next from [Operator

Great. everybody. the on I asset taking first. thank Good morning, for to going have my call. a just I And could. I’m questions, if start side few you

Just underway. on Uchucchacua, me can idea capacity? on give normal going mine you you mine new what your In to Uchucchacua. to the of a are get plan And you an up highlighted give is we idea of thing when Can then an back is us happening? preview the second

having model. issues Thank the just know you. block let of you meeting me there? what’s were happening in You terms underground Can

you for Tanya. your please, Hi, you could. Juan Thank Carlos, if question.

we on you mentioned quarter in mines drilling Huantajalla right access areas back are into the difficulties now. thank These well, And underground on Carmen Uchucchacua mines the are the we areas. recent focusing facing of past, the we for setting. we into Tanya and Leandro. that are The and been developing these and mined this two Yes, as and the question. and our you, in now strategy accessing have the getting new quarter delays Thank previous in is

rehabilitation fit of it’s – to with the are expected taking fleet, a slush the site than longer ventilation larger the circuit. to – cases, their process We rehabilitate tunnels up in some

need it’s have that the complete re-drill. blocks, to ventilation because we to of risers ventilation to in need expected expect. have We to some areas some that to is cases, some more And make we parallel we reinforcement roof risers in be, Some we longer taking the circuit. put access that need to

only not and have don’t because site. work, the of longer, at also we still taking we XXX% it’s headcount have because So but more

with the holes drilling drill for and the longer we in at So difficulty expected. it’s We contractor the than for reach contractor taking quarter, a there than than the production are we of changed are we that first lower change The facing expected way infill drill to level expected the or contractor of pace regarding infill grade we is in behind contractor. new the more is the work mine drilling have the program. previous in our that and – from that the

difficulty So the is what short planning, reconciliation blocks. is ore taking getting volumes planning those in and a that the for are negative term for term in the again, grades information yielding long the of we the that some us of

of we And demo rate of a of So, about are to this achieve back the X,XXX quarter, some the we – month delayed meters mine – or on expect their of those plans, to blocks development to expect drilling. to those meters this having delays in have get to – getting achieving track drilling At a on reschedule and quarter. about with proper information some are in proper per our our fourth rate X,XXX altogether, level of delays plans we of be areas. underground we we in time, on

So be up to it’s the pace current on. a that going we moving of are gradual based things on ramp

previous We new to that previous in of the to back be will phase for we the – or following get level next the the expect having in production schedule quarters. to XXXX about the the to news – production in quarter

on is is mine. particularly attending something what’s in the now going The starting around now. also The this headcount issue that So are we Uchucchacua. is vaccination

fully percentage try a So reduce in vaccinated difficulty to Uchucchacua. our some quarters, is facing we have impact larger that in a that that and for two – workforce the or generating of expect operational next we purpose big

So the COVID effect will be reduced.

We to the that reducing coming of be expect in effect two quarters XXXX.

one? get the be I – going can assets When rank vaccination. that on Gabriel to at an an it in news San asset you your as up that those you now good the funds How look reapply Sulfides, monies in to sale, move order asset selling so interest to Can to mentioned does you that development. Yanacocha how your for on just That’s the you sale? are for does

– we which have. alternative for best still looking, are is best Tanya, Well, answer we the we the are

the have know – we You treasury shares that our shares.

as have you on And Verde. the in, We – our Yanacocha. mentioned, count also, Cerro in participation our participation in we

We alternatives, have different and evaluating. we are

and decided – the evaluating. project this sulfide still founding, be year. it December still are will it’s is evolution We Yanacocha, in

So we are also in that process.

in sale stakes just in Verde equity for as for all of your assets, are to sale possibilities those and consider you Yanacocha Would trying addition your Cerro also. two I’m to understand if

alternatives, future the which are We the flows. is our all will affect That cash evaluating less object.

Okay. I are Can costs. conference costs been about inflationary Peru are what many you. noting you talking both you operating pressures can I consumables in ask on us pressures, inflationary companies And in about have then talk seeing other? capital Thank – in and to labor, calls, and

are there – the pressures Well, cost. some in

rate. However, mainly caused these by as exchange the – are

revenues additional in there our not feeling are political great a do not be pressure the our Maybe demand with of – as standpoint today and However, on communities of will dollars, are XXX% current as too economic But as the you definition. expect inflation. situation. we much inflation some income we from our from know, so

what the are Okay. Peru, new his to could you if impact my would that Roque, Buenaventura. the love leadership be if about see And and Thank he’s you. – on, hear from thoughts question to in for I expecting and last on

that has Let not me But deal this like government difficult to is It with easy the been elected. with. we that the have are to a tell you circumstances. situation we deal living people that is

see that days, we XX some XX the in going changes are to government. days or think the next I in

political share are XX is that press. by leader lot only of questioned that two ministers. few Libre I of me of a know, Tanya, the And their women. don’t Peru you, integrity governments. This last are – in there the out and terms the Castillo with terms Let just never ministers in the of of in Mr. the has even the party, happened questioned people is There

and is see, to believe better. this So to that for I the change, going but we will it change and have wait think I

much. seeing Peru. all for are Thank looking forward Okay. We very to that you

Thank you.

this And the back over to today’s conference ladies concludes to session. for Garcia gentlemen, I’d turn you. and question-and-answer Thank final like Mr. remarks.

we Great. thank and conference to finish much you you a call, safe. again, Well, today’s making very before time and the us. have Thank day, be for join wonderful

We call. today’s Thank for attending concludes you presentation. you. thank today’s This conference all

your disconnect have a wonderful day. lines You may now and