Compañía de Minas Buenaventura S.A.A. Q2 FY2026 earnings call

• San Gabriel Ramp-up Progress

  • San Gabriel began commercial sales in Q2 2026 and started contributing to company results, though throughput remains constrained by tailings management and filtration challenges
  • Primary ventilation infrastructure is complete, and full mining fleet development is ongoing; undercut mining below cemented fields is expected to begin in Q3 2026
  • Current operational priorities are stabilizing throughput, improving moisture control and filtration performance, and optimizing metallurgy to increase gold recoveries in H2 2026
  • Filtered tailings compaction is scheduled to begin in Q3 2026, with ongoing expansion works to support higher throughput as the operation approaches steady state

• Growth Portfolio Execution

  • A key milestone was achieved at Yumpac (IMPAC), with regulatory approval to increase the mining rate from 1,000 tons per day to 1,200 tons per day, the first step toward unlocking the operation's full potential

• Exploration Long-Term Strategy

  • Exploration remains a core company priority, focused on extending mine lives and replenishing resources to support sustainable long-term production growth and value creation

• Financial Position

  • The company generated strong free cash flow in Q2 2026, ending the quarter with a cash position of $759 million (this balance does not include the $118 million Cerro Verde dividend received in July post-quarter end)
  • Strong operating performance, disciplined capital allocation, and favorable commodity prices have strengthened the balance sheet, providing financial flexibility for growth investments, long-term strategy execution, and shareholder returns via dividend policy

Copper: Cash cost performance remained stable year-over-year, led by stable performance at El Brocado. Silver: Cash costs increased year-over-year, primarily due to higher commercial deductions tied to price-based escalators at Uchuchacua and Yucca. Gold: Gold costs were impacted by the commencement of commercial sales at the new San Gabriel mine. San Gabriel recorded cost of sales for the first time this quarter during its ramp-up phase, with current unit costs not representative of long-term costs as production and sales volumes remain below expected steady-state levels. No segment revenue contribution percentages were provided in the transcript.

• San Gabriel ramp-up is on track to be completed by mid-2027. Gold recovery is targeted to reach 70% by the end of 2026, and rise to the budgeted level of ~85% by the end of 2027 following the implementation of an additional flotation circuit
• Yumpac will see a 10% increase in annual production from the 20% throughput increase, with positive impacts on unit costs via fixed cost dilution; grid connection in Q4 2026 will further reduce operating costs
• Cerro Verde 2026 full-year copper production guidance is maintained at ~370,000 to 380,000 tons of fine copper, which is slightly lower than prior year production with no changes to original guidance
• 2026 total dividends received from Cerro Verde are expected to be ~$324 million to $374 million, with 2027 dividends expected to be $50 to $80 million lower than 2026 levels, depending on commodity prices
• Julcani's current gold-silver production mix will remain stable through the second half of 2026, with 2027 production guidance to be released after an ongoing operational review is completed
• Pre-development work on the Trapiche copper greenfield project will continue over the next 12 to 18 months to assess project economics and reduce development risk, with no accelerated construction timeline confirmed yet

• San Gabriel ramp-up risks: Throughput remains constrained by structural issues with tailings filter press structures, and gold recovery is held back by problematic organic matter and refractory sulfides in the ore, which require capital investment to address; steady-state production is not expected until mid-2027
• Price-based escalator contracts for Uchuchacua silver are tied to a $50 per ounce base price from September 2026, up from $35 per ounce in H1 2026, which will keep cash costs elevated if silver prices decline
• A strong El Niño event is expected to bring heavy rainfall to Peru starting in December 2026, which poses potential flooding and operational damage risks to mining operations
• Near-term inflationary cost pressures from higher diesel prices are expected to increase overall costs by 5% to 7%, with a slight additional increase from higher worker profit sharing
• Cerro Verde dividends are exposed to commodity price volatility, with expected declines in 2027 dividend distributions linked to potential price moves

Q: How are San Gabriel's mining and processing progressing relative to plan, and what work remains to reach steady-state production? / A: Underground mining is progressing exactly to plan, with the fourth full mining fleet arriving by end of August 2026 and two additional contractor fleets coming online by November 2026. Processing is facing two core challenges: structural reinforcement is needed for the three tailings filter presses to increase throughput, which will cost an estimated $5 to $10 million. Gold recovery is being dragged down by organic matter and refractory sulfides; new reagents arriving in August 2026 are expected to help push recovery to 70% by end-2026, and a new $15 million flotation circuit to be built by end-2027 will push recovery to the 85% budgeted target.

Q: What is the outlook for 2026 dividends from Cerro Verde, and how will levels look in 2027? / A: Buenaventura has already received ~$274 million in Cerro Verde dividends in 2026, with an additional $50 to $100 million expected, bringing full-year 2026 dividends to roughly $324 million to $374 million, higher than historical levels. For 2027, dividend levels are expected to be $50 to $80 million lower than 2026, depending on copper prices.

Q: Yumpac received approval for a 20% throughput increase; how will this impact production and costs? / A: The 20% throughput increase is expected to deliver a 10% increase in full-year 2026 silver production relative to original guidance. Fixed cost dilution from higher output will improve the unit cost structure, and connection to the national electric grid in Q4 2026 will further reduce operating costs.

Q: What preparations are being made for the expected strong El Niño event, and has it already impacted operations? / A: No operational damage has occurred to date. The company has formed site-level risk committees, mapped all potential flood and structural hazard risks, and allocated an additional $12 million in 2026 CAPEX for preparedness works, including increased pumping capacity, expanded water treatment facilities, and reinforcement of critical water retention structures ahead of the December 2026 rainy season.