Compañía de Minas Buenaventura SAA Q3 FY2026 earnings call

• Operational Performance & Costs:
  • Gold production decreased 6% to ~29,000 oz; Silver production dropped 21% to 3.4M oz due to lower grades at Yumpac.
  • Copper production rose 7% to 13.6k tons, supported by higher ore grade throughput at El Brocal.
  • At Yumpac, silver cash costs rose to $11/oz due to selective OCF mining, ground support needs, transition to an owner-operated fleet, and lower planned grades, partially offset by stronger by-product rates.
• San Gabriel Ramp-Up:
  • Mining rate stabilized at 1.7k tons/day by quarter-end, creating an ore stockpile.
  • Processing plant average throughput in October was 1,400 tons/day, expected to reach 1,700-1,800 tons/day in Nov/Dec.
  • Gold recovery is ramping up: ~60% in October, targeting ~70% by December 2026, with a long-term goal of 85%.
  • Tailings compaction has commenced; current facilities support 1.5k tons/day in Q4 2026. Additional drying areas to be completed by Q2 2027.
  • Nameplate capacity (3k tons/day) expected by end of 2028, constrained by tailings drying area expansion.
• Strategic Initiatives:
  • Transitioning to an owner-operated mining fleet across key operations (Yumpac, Uchubchaguan, El Brocal, San Gabriel) to improve efficiency and control.
  • Increased exploration budget to extend mine life, grow reserves/resources, and develop near-mine targets.
• El Niño Preparedness: Proactive measures taken to ensure safety of personnel/communities and operational continuity.
• Shareholder Returns: Board approved an interim dividend of $0.5508 per share/ADS, reflecting strong cash generation and balance sheet strength.

The transcript does not provide a detailed breakdown of financial performance by specific product segment (e.g., Gold vs. Silver vs. Copper) with absolute revenue figures or revenue contribution percentages for each. It reports consolidated total revenues of $545 million, up 27% year-over-year, driven by higher realized prices and increased copper sales volumes from El Brocal. Consolidated gold production was approximately 29,000 ounces (-6% YoY), silver production was 3.4 million ounces (-21% YoY), and copper production increased 7% to 13.6 thousand tons.

• San Gabriel Throughput: Expect processing plant throughput to reach ~1,700-1,800 tons/day in November and December 2026.
• San Gabriel Recovery: Target gold recovery of ~70% by December 2026 as an entry point for 2027.
• San Gabriel Production Profile: Average annual production for 2027 expected to be ~600,000 tons of ore; ~800,000 tons in 2028, reaching nameplate capacity (1 million tons/year) by end of 2028.
• San Gabriel Operating Cost: Steady-state operating cost expected to be around $180 per ton.
• San Gabriel Final Production: Steady-state gold production estimated at 110,000–120,000 ounces per year.
• Cerro Verde Dividends: Expect additional dividends of $50–70 million from Cerro Verde by end of 2026 (totaling ~$320–340 million for the year). Conservative outlook for 2027 dividends, potentially around $200–250 million, pending further discussion.

• San Gabriel Operational Constraints: Ramp-up faces temporary processing constraints and bottlenecks specifically in tailings drying and compaction capacity, which limits throughput growth despite processing plant improvements.
• Lower Grades at Yumpac: Decreased silver grades contributed significantly to the 21% drop in silver production and increased cash costs.
• Mine Life Expiration: Tambomayo mine is nearing the end of its life of mine, requiring review in Q2 2027 regarding continuation or partial hold, shifting focus to districtal exploration.
• Recovery Gap: Significant gap between current gold recovery (~60-70%) and ultimate target (85%) at San Gabriel, requiring additional reagents and potential flowsheet modifications.

Q: Analyst asked about San Gabriel's October performance, specifically if mining/processing rates would stabilize or slow down given inventory, and whether production/cost improvements would be visible in Q4 2026 or only in 2027.

A: Management confirmed processing plant averaged 1,400 tons/day in October, expecting 1,700 tons/day in Nov/Dec. Gold recovery was ~60% in October, ramping to ~70% by December 2026. Bottleneck remains tailings drying/compaction, limiting immediate full capacity but showing steady progress toward 2027 targets.

Q: Analyst inquired about Trapiche project updates and whether Buenaventura would consider a partner to de-risk high capex and complement expertise in high-altitude open pit mining.

A: Management stated they are open to evaluating partners for Trapiche to manage investment risk. Current activities include completing drilling programs (20,000 meters) and advancing engineering, permits, access roads, and power lines for the project.

Q: Analyst asked about San Gabriel's nameplate capacity timeline and El Brocal's production growth potential despite declining grades/recoveries.

A: San Gabriel aims for 2,000-2,500 tons/day throughput by late 2027, reaching full nameplate capacity (3,000 tons/day) by end of 2028 due to tailings storage constraints. For El Brocal, management noted work on expanding throughput from 13,000 to 17,000 tons/day, though refined copper output may remain similar due to grade/recovery declines.

Q: Analyst sought clarification on San Gabriel's ultimate recovery target (questioning if 70% is low) and repairs status for press filters/tailings structure.

A: Ultimate recovery goal is 85%, currently ramping via additional reagents and testing new circuits, expected to reach this level by 2028. Press filter repairs are underway, with all three filters expected to be ready by April/May 2027 after the rainy season.

Q: Analyst asked about the scope and capital expenditure for transitioning to owner-operated mining fleets across operations.

A: Management detailed progress: Yumpac is 100% mined by Buenaventura with 75% equipment owned; Uchubchaguan is ~75% owner-mined; El Brocal will reach 100% underground production ownership by Q2 2027; San Gabriel is 100% production-owned. Total capex for next year's fleet deliveries is estimated at $25–30 million.