• EBITDA: Increased to $132 million, with a margin of 40% compared to 25% in the previous year.
• Net Income: Reached $237 million, compared to a $28 million net loss in the same period of 2023.
• Silver Production: Increased to 4.4 million ounces from 1.9 million ounces in the previous year.
• CapEx: Totaled $98 million, with $77 million allocated to the San Gabriel project.
• Cash Position: Reached $458 million.
• Total Debt: $675 million.
• Net Debt-to-EBITDA Ratio: 0.5 times.
• All-in Sustaining Costs: Reduced by 69% year over year.
• San Gabriel Project Completion: Reached 65% overall completion.

• Warning! GuruFocus has detected 6 Warning Signs with BVN.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Compania de Minas Buenaventura SAA (NYSE:BVN) reported a significant increase in EBITDA from direct operations, reaching $132 million in the third quarter of 2024, up from the previous year.
• The company achieved a higher EBITDA margin of 40% compared to 25% in the previous year, indicating improved operational efficiency.
• Net income for the third quarter of 2024 reached $237 million, a substantial turnaround from a $28 million net loss in the same period of 2023.
• Silver production saw a significant increase, reaching 4.4 million ounces in the third quarter of 2024, compared to 1.9 million ounces in the same period last year.
• Buenaventura's credit rating was upgraded by Moody's to B1 with a positive outlook, reflecting operational improvements and effective debt management.

Negative Points

• Copper production decreased by 9% year over year in the third quarter of 2024, despite increased production at El Brocal.
• Gold cash costs increased year over year, primarily due to lower grades at Tambomayo and Orcopampa.
• The all-in sustaining costs for the third quarter of 2024 were reduced by 69% year over year, but the company faced increased exploration expenses and costs related to ground support works.
• The San Gabriel project, while progressing, has seen an increase in total cash costs to $1,300, up from an originally planned $800, due to changes in mining methods and rock quality.
• The company is facing challenges with the Julcani operation, which has elevated costs and is under evaluation for its continuity in the portfolio.

Q & A Highlights

Q: Can you explain why copper production at El Brocal fell by 10% despite achieving a mining rate of 12,000 metric tons per day? When will El Brocal reach the targeted rate of 12,500 metric tons per day? A: The decrease in copper production is due to the absence of exceptional production from open-pit ore, which was present last year. We plan to reach the 12,500 metric tons per day target by the first or second quarter of 2025. (Leandro Garcia Raggio, CEO; Unidentified Company Representative)

Q: Could you provide an update on the San Gabriel project's economics and any new developments on the Trapiche project? A: San Gabriel is expected to generate an EBITDA of around $100 million per year, with a cash cost of approximately $1,300 per ounce and sustaining CapEx between $5 million and $7 million annually. For Trapiche, we are advancing the feasibility study and environmental impact assessment, with significant progress expected in the next six months. (Leandro Garcia Raggio, CEO)

Q: What are the expected cash inflows and outflows for the next year, including dividends from Cerro Verde? A: We anticipate starting 2025 with a cash position of $370 million, expecting an EBITDA of $350 million to $380 million, and receiving $150 million in dividends from Cerro Verde. Outflows include $240 million to $250 million for San Gabriel and $100 million to $120 million in sustaining CapEx. (Daniel Dominguez Vera, CFO)

Q: How do you plan to ramp up production at San Gabriel to reach the full capacity of 130,000 ounces per year? A: We aim to reach 65% of production capacity by the third quarter of 2025, with commissioning activities starting in the first quarter. We are on track with mine development and equipment procurement. (Renzo Macher C., VP of Projects and Innovation; Juan Carlos Ortiz Zevallos, VP of Operations)

Q: What is the rationale for keeping the Julcani operation in Buenaventura's portfolio given its elevated costs? A: We are working to improve efficiency at Julcani by focusing on areas with higher copper and gold production. We are evaluating the mine's future in our portfolio. (Leandro Garcia Raggio, CEO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.