Good morning, ladies and gentlemen. Welcome to the Compañía de Minas Buenaventura Third Quarter 2021 Earnings Conference Call. At this time, all participants will be in a listen only mode. Please note that this call is being recorded. I would now like to introduce your host for today's call, Mr. Gabriel Solís, Investor Relations. Mr. Solís, you may begin.
Good morning, everyone, and thank you for joining us today to discuss our Third Quarter 2021 Results. Today's discussion will be led by Mr. Leandro Garcia, Chief Executive Officer. Also joining our call today and available for your questions are Mr. Daniel Dominguez, Chief Financial Officer, Mr. Juan Carlos Ortiz, Vice President of Operations, Mr. Aldo Massa, Vice President of Business Development and Commercial, Mr. Alejandro Hermoza, Vice President of Sustainability, and Mr. Roque Benavides, our Chairman. This conference call will include forward-looking statements which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statements should be considered in conjunction with cautionary statements within our earnings release and risk factor discussion. I encourage you to read the full disclosure concerning forward-looking statements within the press release we filed on October 28, 2021.
In addition, it is important to note that these statements include expectations and assumptions which will be shared related to the impact of COVID-19 pandemic. As seen on slide two, our forward-looking statements also provide information on risk factors, including the effects related to COVID-19 that could affect our financial results. In particular, there is continued uncertainty about the duration and contemplated impact of the COVID-19 pandemic. This means Buenaventura's results could change at any time, and the impact of COVID-19 on the company's business results and outlook is best estimated based on the information available as of today's date. At this time, let me now turn the call over to Mr. Leandro Garcia, Chief Executive Officer. Leandro, please go ahead.
Thank you, Gabriel. Good morning to all, and thank you for attending this conference call. Before we start this presentation, we would like to wish you, your family, and friends health and well-being at this difficult time. We are pleased to present the results from the third quarter of 2021 from Compañía de Minas Buenaventura. We have prepared a PowerPoint presentation which is available in our webpage. Before we go further, please take a moment to review the cautionary statement shown on slide two. Please consider the disclosure related to the COVID-19 pandemic. Moving on to slide three, highlights were as follows. Third quarter '21 EBITDA from direct operations reached $39.5 million compared to $68.5 million reported in the third quarter of 2020.
The first nine months 2021 EBITDA from direct operations reached $141.6 million, an increase as compared to $88.1 million from the first nine months of 2020. Third quarter adjusted EBITDA, including associated companies, reached $183.7 million, compared to $183.9 million in third quarter of 2020. Nine months 2021 adjusted EBITDA, including associates, reached $593.3 million, a significant increase as compared to $298.5 million for the first nine months of 2020. Third quarter net loss reached $91.9 million, compared to $14.9 million net income for the same period in 2020.
The first nine months of 2021 net loss was $39.3 million compared to $68.9 million net loss in the nine months of 2020. It is important to note that the net loss for the third quarter of 2021 and the nine months of 2021 was impacted by $66.4 million Yanacocha impairment corresponding to Buenaventura's equity ownership position in this asset. Aligned with the company's strategy to focus primarily on exploration, the third quarter 2021 exploration and operating expenses increased by $17.1 million compared to $7.6 million in third quarter of 2020. The first nine months 2021 exploration and operating expenses increased to $40.9 million compared to $16.1 million in the first nine months of 2020.
The third quarter 2021 capital expenditures were $24 million compared to $12.9 million for the same period in 2020. Nine months 2021 capital expenditures reached $58.5 million compared to $35.2 million in the first nine months of 2020. Cost applicable to sales cash for the first nine months of 2021 reflects a $43.8 million impact due to COVID-19 related expenses. Buenaventura's cash position reached $287.9 million as of September 30, 2021. Mining and ore processing activities were suspended at the Uchucchacua mine in line with Buenaventura's strategy to reduce costs and become cash neutral while enabling the company to focus on underground exploration and optimize the current reserve exploitation sequence with a gradual operations restart. Moving on to slide 4, ESG corporate strategy.
Our company has always been committed to help local communities and to have responsible practices with the environment. We have measured some indicators, as you can see on this slide. For example, we achieve a 94% water recirculation in our open pit operations and 88% at our underground operations. We have done a special effort to improve our ESG reporting practices following international standards like the World Gold Council and Dow Jones Sustainability Index, and the United Nations Global Compact. Moving on to slide 5, continuing with the ESG corporate strategy. For several months, we have been working with our stakeholders, local communities, investors, directors, workers, et cetera, in order to start implementing a better ESG reporting system. After all the effort, we have been able to build a matrix that we are presenting on this slide.
Here you can see the most important subjects, which are located at the right part of the matrix and belong to the high material area. In this area, we have determined that the health and safety, the responsible use of water, and the value generation for the stakeholder are the three most important topics to work on and therefore to include in our report. Moving on to Slide 6, financial highlights. Total revenues during the third quarter were $220.4 million, which is 3% lower in comparison to the third quarter of 2020. This, in the first nine months of the year, total revenues increased to $647 million compared to the nine-month period of 2020, where total revenues were $440.5 million.
EBITDA from our direct operations in the third quarter of 2021 was $40 million, in comparison to $69 million in the third quarter of 2020. EBITDA from direct operations for the nine months 2021 increased to $142 million, in comparison to $88 million during the first nine months of 2020. EBITDA, including our affiliates in this quarter, was $184 million, which is in line with the EBITDA generated in the third quarter of 2020. EBITDA, including our affiliates for the first nine months of the year, was $593 million, compared to $299 million for the same period in 2020. CapEx increased to $24 million in the third quarter of 2021, compared to $13 million in 2020.
In the first nine months of the year, CapEx totaled $59 million, a 66% increase in comparison to the first nine months of 2020. As you can appreciate on the graph shown in this slide, we are returning to pre-pandemic levels and even achieving greater results than the first nine months of 2019. Moving on to slide seven, Uchucchacua's status. The COVID-19 pandemic adversely impacted mine preparation and exploration at Uchucchacua. As a consequence, we are working with narrower ore veins and lower silver. The suspension enables us to achieve the most significant cash preservation while de-risking future negative free cash flow generation through the following. Workforce optimization in order to reduce fixed costs from $2 million to $5 million per year. Decrease COVID-19 related expenses from 12 to 15 months in 2022.
Reevaluation of existing contracts to renegotiate, reconcile, and streamline the company's contractor base from $7 million-$9 million per year. This strategy will be implemented during the period 2021-2023, with a gradual and efficient restart of operations once related objectives have been achieved. Prioritizing exploration over ore extraction to increase reserves in the long term. Importantly, these suspensions will not affect the progress related to our high-grade Yumpag project, expected to begin production in early 2024. Moving on to slide 8 and 9, attributable production. Total gold attributable production in the third quarter of 2021 was 80,000 ounces, which is 2% lower than the figure reported in the same quarter of the previous year.
In the first 9 months of 2021, total gold attributable production was 217,000 ounces, 7% lower than the same period in 2020. This decrease was mainly explained by lower production in Yanacocha. Silver attributable production for this quarter was 3.6 million ounces, which shows an increase of 20% compared to the figure reported in the third quarter of 2020. During the first 9 months of 2021, silver attributable production was 11 million ounces, 20% higher than the first 9 months of 2020. In the third quarter of 2021, 11,000 metric tons of zinc were produced, a significant decrease compared to the third quarter in 2020. In the first 9 months of the year, zinc production decreased to 32,000 metric tons, 2% lower than the same period in 2020.
In the case of lead, equity production was 6,000 metric tons in the third quarter of 2021, which is 23% lower in comparison to the third quarter of 2020. In the first nine months of 2021, lead production increased to approximately 16,000 metric tons, in comparison to 18,000 metric tons in 2020. Finally, our copper attributable production for the third quarter of the year was 26,000 metric tons. During the first nine months of 2021, copper attributable production was 75,000 metric tons, a 12% increase compared to the same period, 2020. Sorry. Moving on to slide 10, all-in sustaining cost and cost applicable to sales.
The all-in sustaining cost from our direct operations in the first nine months of 2021 increased by 16% to $1,488 per ounce of gold. The cost applicable to sales for the first nine months of 2021 were as follows: For gold, $1,224 per ounce, which is 18% higher than a year ago. For silver, $19.54 per ounce, which is 15% higher than a year ago. For lead, $1,463 per metric ton, which is 30% higher than a year ago. For copper, $6,295 per metric ton, which is 25% higher in comparison to a year ago.
Finally, in the case of zinc, the cost applicable to sales was $2,127 per metric ton, which is 19% higher than a year ago. As we mentioned before, cost applicable to sales has been impacted by approximately $44 million of expenses related to COVID-19. Moving on to slide 11, pipeline of projects and updates. Here, we are presenting in one snapshot the current development level for each one of our projects. Moving on to slide 12, San Gabriel. We finished geometallurgy testing and confirmed the study gold recovery, 85.33%. The EIA's validity extension will be achieved by starting water dam preliminary works next year. We reached an agreement with Corire community to finalize Consulta Previa. Moyobamba community is still in process.
Early construction works are expected to start after both communities ratify agreements with Minem, the Minister of Energy and Mines. Moving on to slide 13, Trapiche. We started on-site metallurgical column testing, and we finished chloride leaching trade-off study. The evaluation on primary ore is the next step. We agreed with Senace to hold a second EIA workshop by late November, followed by EIA submission early 2022. The project access road agreement draft was released to Antabamba and Mollocco communities for approval. Moving on to slide 14, Tantahuatay sulfides. Coimolache's board approved viability stage, as informed in the previous conference call. The in-field drilling started and is currently at 24% of the advance. Thank you for your attention. I will hand the call back to the operator to open the line for questions. Operator, please go ahead.
Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then one using a touchtone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset before pressing the keys to ensure the best sound quality. Once again, that is star and then one to ask a question. We will pause momentarily to assemble the roster. Once again, if you would like to ask a question, please press star and then one. Our first question today comes from Tanya Jakusconek from Scotiabank. Please go ahead with your question.
Great. Good morning, and happy Friday, everyone. Thank you for taking my questions. I have two that I'd like to ask on two different assets. Can I start on Uchucchacua? I just want to try and understand, as you go through this whole evaluation, on this asset, is it fair to assume that this asset will be down from the rest of 2021 and all through 2022?
Hi, Tanya. Thank you for your question. Well, as you know, we have been struggling with a lot of problems in Uchucchacua. As we have informed in the last four conference calls, we have been doing our best efforts to not stop production, but finally we have decided to hold our production in order to make more efficient the mine to go further with all the works we have for geology explorations and mine preparation. Actually, we expect to have this mine stopped for at least one year. We will be evaluating this resumption of operation during 2022.
Any additional comment, maybe Juan Carlos can give us some more color about this.
Thank you, Tanya, for your question. Yes. We will plan to continue with the exploration workings underground, developing of tunnels and diamond drilling along 2022. Based on those results, we will review our decision on whether to restart the operation in 2023. If we don't have the conditions at that time and we will prefer to continue with exploration, we'll probably extend that strategy along 2023.
Okay. Given you've stopped the mine, should I be thinking that this care and maintenance now is going to have a cost for us to have? If so, what is the cost of care and maintenance, you know, either per quarter or per year, whatever is easier for you.
It's a combination of two things. One is gonna be obviously the care and maintenance per se. It's about fixed costs in the range of $1.5 million per month, payroll plus all the ancillary services, pumping, water treatment. On top of that, we will have mine tunneling for exploration to get new access to different areas for diamond drilling. That amount's still under review with our people. We are working on our annual budget in November.
Okay. I guess you will give us some sort of guidance next year. At least 1.5 per month of holding costs as long as this is down. Okay. just-
That's correct.
Just on the, you know, you mentioned narrower veins that you're seeing, and you're putting the effort in to do this exploration. I, you know, as you go into narrower veins, usually you have to kinda change your mining method because you know you're gonna have to be more selective mining, which is more expensive. I'm just wondering how, you know, you mentioned that you don't really see much impact to your reserves and resources with this being down. Just because the veins are narrower, I just, I'm trying to understand how it could not have an impact.
Yes. The things that right now we have, we don't have isolated veins. Usually they came, like, in a package, several veins all together. We need to fill all the gaps in between in order to have an idea of how many veins do we really have all together closer to each other and optimize the design of the mining facilities to mine that area. Right now we're mining certain veins, and sometimes we duplicate the infrastructure, like an additional ramp or an additional ventilation infrastructure for a vein that it's only 90, 80 meters to the north or to the south. We need to have time to explore the other veins, get all the information all together in addition to the existing veins that we already reported in our reserve.
Once we have all that information, we locate the ramps and all the infrastructure to serve more tonnage than we are doing right now. That's the reason we need time for exploration to include all those veins that we have now as potential resources in order to have an optimized design. That's the reason we need some time for continued exploration near the existing reserve blocks. In doing so, we expect to dilute the infrastructure costs and get back into production with pretty much the same operating costs or improved operating costs from the underground mine.
Okay. From what I'm hearing, it appears to me, and maybe I'm wrong, that maybe you haven't done enough detailed tighter space drilling to really understand. Maybe someone can tell me what your drill spacing has been on your mine planning. It appears if you're not able to connect all of these veins together, you kinda have to do more tighter space drilling. Is that a correct assumption?
Well, no. In the blocks that we already have reserved, in some areas, of course, we need to go from maybe 22 meters, I think it was, to 15 m spacing. That's according to the new guidelines and updated statistics. We need probably to make shorter distance drill hole for part of an existing reserve. That will be part of the migration to the S-K 1300 standard. What I mentioned was structures or veins that are parallel to the existing ones. You know, 20 meters, 60 meters, 80 meters to the north or to the south of the existing ones. We will add those potential resources now into our mining plan. That's what the strategy we will focus on in the core reserve.
In addition to that, of course, explore potential areas where in the past we had ore bodies with a larger thickness and a higher grade. We identified basically the model that we are understanding better in Yumpa. We're bringing that experience from exploration into Uchucchacua mine, and we identified several targets pretty much in the anticlinal of Uchucchacua. It will be two-set strategy. Working for or looking for more structures, more veins near our existing reserve, plus opening new areas of exploration near the mine, 600m, 500m from the existing facilities in that anticlinal sector with particular horizons in limestone that pretty much follow the same model in which we're very successful right now exploring Yumpag.
We're bringing that lithological control into Uchucchacua in the anticlinal sectors to look for ore bodies, high-grade veins that we already had in the past. We're connecting the dots in that kind of near-mine areas as well.
Okay. As I understand it, there's some tighter space drilling to be done within your reserve blocks, plus step out to, you know, try and target some of these veins close by to bring them in.
That's right. Yeah.
My last question, if I can, just on San Gabriel. You mentioned the validity of the EIA extension to be achieved. So are you saying that you're going to be getting this EIA by putting in this water dam next year? Or what is it that you still need to do to just get this EIA approved?
Thank you, Tanya. With that also is Renzo Macher, our project manager, and he will explain a little bit more about our process in San Gabriel. Please, Renzo.
Sure. Thank you. The EIA is already approved. These instruments have a shelf life of five years. Because of the COVID-19, we haven't been able to start construction, and it is getting to the end of that shelf life. In order to extend that shelf life, we need to start something. We have all the working permits to start a water dam. If we start the early process of the water dam, we're gonna be initiating the execution, and therefore, the environmental impact assessment shelf life is gonna continue. That's the strategy.
Okay. Then when you've done this, you know, water dam, like what else, you know, and you're doing consultation with the communities is to, you know, to finalize, you know, the process. Once we've done that, are you then ready to make a decision for construction?
The construction permit has already been submitted a year and something ago. There's no more technical questions about it. We're ready to start. The only thing that is missing is this, to finish the Consulta Previa with the community that has been impacted by the COVID-19 activities. Now, we have had some advances in the last quarter. One of those being, that we have been able to have public assemblies with the community. That was one of the main obstacles to reach agreements with them. Second, the community directors have been finally assigned. They have all the paperwork ready to make decisions. That's another big step. Third, the government have been helping us, sending the right letters to the community. However, they have changed.
The new officers in the ministry are new, and we are working with them to kind of know each other again. We are still expecting to start construction, full construction by the end of the rainy season, that is March 2022. That's our best. We're holding with that in mind.
Okay, great. Thank you so much for the clarity.
Our next question comes from Jens Spiess from Morgan Stanley. Please go ahead with your question.
Hello, and thank you for taking the questions. I just want to ask, how much do you expect to get from dividends from Cerro Verde next year? Also for us to model this, going in the further years, what payout ratio are you expecting Cerro Verde to have in upcoming years? If I can do the follow-up question, I just wanted to ask if you have any sense of how much the government might increase the mining taxes. Because obviously they haven't given any details about specific rate, but I was just wondering if you have got any sense of that. Thank you.
Hi, Jens, and thank you for your question. Responding to the first question about the Cerro Verde dividend. You have seen the results of this last third quarter of Cerro Verde, and the operation is going very well. Of course, we will expect an additional dividend for this last part of the year. We have not talked with Freeport-McMoRan, but I'm sure that all the shareholders will expect an additional dividend before the end of 2021. The payout rate, we have to talk with them. I think the future years of Cerro Verde, we do not have any big investment planned for the following years. The CapEx is limited for the following years also.
It's around $300-$400 million. All the cash with these prices that generates Cerro Verde, of course will finish some part of dividends for shareholders. Regarding your second question about tax, we are not sure with how will be the final number of increasing the tax for mining. We have received some message from the minister in public declarations that will increase for the higher profit margins for the companies that earn profit greater and in the higher level of the profit margins for companies that are located at them.
He has been very clear telling the press in all the declarations that he will be vigilant and he will preserve the competitiveness of the mining industry. That is the message that we have received from him. We expect some additional tax or royalties additional increase, but in the higher level of profit margins. Well, we will see it in the following weeks how is the final number.
Okay.
Thank you, Jens.
Ladies and gentlemen, at this time, we would like to conclude today's conference call, and I would like to turn the floor back over to Mr. Garcia for any closing remarks.
Well, thank you for attending this conference call, and have a great day and be safe. Thank you very much.
Ladies and gentlemen, that does conclude today's conference. We do thank you for attending. You may now disconnect your lines.