Good day, ladies and gentlemen, and welcome to the Compañía de Minas Buenaventura First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please also note today's event is being recorded. At this time, I'd like to introduce your host for today's call, Mr. Rodrigo Echecopar, Investor Relations. Mr. Echecopar, you may begin.
Thank you. Good morning, everyone, and thank you for joining us today to discuss our first quarter 2021 results. Today's discussion will be led by Mr. Leandro García, CEO. Also joining our call today and available for your questions are Daniel Dominguez, CFO, Mr. Juan Carlos Ortiz, Vice President of Operations, Aldo Massa, Vice President of Business Development and Commercial, Alejandro Hermoza, Vice President of Sustainability, Renzo Macher, Project Manager, and also available for questions are Mr. Roque Benavides, our Chairman, and Raúl Benavides, our Board Member. 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 factors discussions.
I encourage you to read the full disclosure concerning forward-looking statements within the press release we filed on April 29, 2021. 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 facts related to COVID-19, that could affect our financial results. In particular, there is significant uncertainty about the duration and contemplated impact of the COVID-19 pandemic. This means when Buenaventura results could change at any time, and the impact of COVID-19 on the company's business results and outlook is a best estimate based on information available as of today's date. Please note that in the interest of safety, we are again utilizing a more virtual approach in exercising social distancing while conducting this call this quarter.
We would ask you to please bear that in mind in light of any potential technological difficulties which could occur. At this moment, let me turn the call over to Mr. Leandro García. Leandro, please go ahead.
Thank you, Rodrigo. 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 of the first quarter of 2021 for Compañía de Minas Buenaventura. We have prepared a PowerPoint presentation, which is available on 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. EBITDA from direct operations reached $38.2 million in first quarter 2021, compared to $-6.7 million reported in the first quarter 2020. First quarter 2021 adjusted EBITDA, including associate company, reached $182.9 million, compared to $30.1 million in the last year, the same quarter.
First quarter 2021 net income of $16.4 million, compared to a net loss of $68.6 million for the same period in 2020. First quarter 2021 exploration and operating units increased to $9.3 million, compared to $6 million in first quarter of last year. This increase was due to an internal policy change to boost exploration activities despite COVID-19 personnel restrictions at some of our operations. First quarter 2021 capital expenditures were $13.1 million, compared to $10.7 million for the same period in 2020. Buenaventura's cash position reached $225.4 million for the first quarter 2021. Moving on to slide four, financial highlights. Total revenues during the first quarter were $185.9 million, which shows a 62% increase comparing to total revenues in the first quarter of 2020. Increased commodity prices, excluding lead, supported the net sales figures despite reduced volumes sold.
EBITDA from our direct operations in the first quarter of this year was $38.2 million in comparison to $-6.7 million in the first quarter of 2020. EBITDA including our affiliates in this quarter was $182.9 million, which is significantly higher than the figure of this quarter in 2020. This increase mainly comes from better results from Cerro Verde. The net income in this quarter was $18.1 million compared to a net loss of $80.4 million a year ago. The CapEx has increased to $13.1 million in the first quarter of 2021 compared to $10.7 million in the first quarter of 2020. The free cash flow in the first quarter of the year was $8.1 million compared to $22.3 million of free cash flow in the first quarter of 2020. Moving on to slide five and six, attributable production.
Total gold attributable production in the first quarter of 2021 was 62,900 oz , which is 29% lower than the figure reported on the same quarter of the previous year. This decrease was mainly explained by lower production in Yanacocha. Silver attributable production for this quarter was 3.5 Moz , which is in line compared to the figure reported on the past year. This is mainly due to less production in Uchucchacua. The first quarter of 2021, 9,300 metric tons of zinc were produced, a 27% decrease compared to the first quarter in 2020. This is mainly due to a 47% decrease in production of zinc at our Uchucchacua mine. In the case of lead, equity production was 4,440 metric tons in the first quarter of 2021, which is 37% lower in comparison to the first quarter of 2020.
Finally, our copper attributable production for this quarter was 24,000 metric tons, in line with the figure reported in the first quarter of 2020. Moving on to slide seven, all-in sustaining cost and cost applicable to sales. The all-in sustaining cost from our direct operations in the first quarter of 2021 decreased by 21% to $1,631 per oz of gold. The cost applicable to sales for the first quarter of 2021 were as follows. For gold, $1,295 per oz, which is 14% lower than a year ago. For silver, $19.39 per oz, which is 17% higher than a year ago. For lead, $1,321 per metric ton, which is 6% lower than a year ago. For copper, $5,594 per metric ton, which is 8% higher in comparison to a year ago.
Finally, in the case of zinc, the cost applied to sales was $2,059 per metric ton, which is 8% higher than a year ago. Moving on to slide eight, pipeline of projects. Here we are presenting in one snapshot the current development level of each one of our projects. Moving on to slide nine, San Gabriel. We are working with the authorities to resume the Consulta Previa process, aiming at completion by the second half of 2021. Additionally, we are currently working to obtain the construction permit. We have already submitted the water dam construction permit. Moving on to slide 10, Trapiche. We are working with the communities on defining development opportunities to support the second environmental impact assessment workshop by the end of [third-quarter] of 2021. We continue with the chloride leaching test, obtaining good results and evaluating its inclusion in the EIA, sorry.
Moving on to slide 11, Rio Seco. We are executing solvent extraction tests to increase gold and silver residue value. Also, we are currently working on responding to the EIA-issued observation points. Moving on to slide 12, Tantahuatay Sulfides. Coimolache's board approved viability stage. We are currently defining a drilling contractor to increase reserve certainty. 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 we will now begin the question-and-answer session. To ask a question dial-in by phone and press star and then one on your telephone keypad, If you're using a speakerphone we do ask you please pick up your handset before pressing the keys to ensure the best sound quality. To withdraw your question you may press star and two. Once again that is star and then one to ask a question. We'll pause momentarily to assemble the roster. Our first question today comes from Carlos De Alba from Morgan Stanley. Please go ahead with your question.
Thank you very much. Good morning, everyone. Hope you're doing well. I have a few questions, if I may. The first one is, if you could elaborate a little bit more on the $550 million debt or bond that the Board of Directors approved and that the shareholders are going to be voting upon. If you could maybe provide a little bit of background and confirm if this is related with the tax dispute that you are right now facing in Peru, and if you could provide an update on that tax dispute, that'd be appreciated. My second question has to do with the CapEx outlook for Buenaventura. If you can confirm the number that you expect for this year, maybe you have already sort of a view for next year. How does the Yanacocha Sulfides project, which may be approved in a few months, play into that?
How is that project going to be financed? In the release, you mentioned it could be a $2 billion in the autoclave, is a route that is most likely the company will follow. How will the project be financed? That'll be great. Finally, if there are any comments that you would like to make addressing the uncertainty that we're facing in Peru. What are the certainties that the mining companies and extraction companies in Peru have in the event that one of the candidates becomes President and carries on with the comments about maybe claiming a little bit more of the wealth that the mineral resources in Peru generate? Thank you.
Thank you, Carlos. The first question was about the $500 million in negotiable obligations that we mentioned in our press release. Well, we are asking for approval to the shareholders in order to be prepared for the debt and our obligations to SUNAT we have. We are looking for that approval. We are preparing a plan, a complete plan, to solve the current situation of SUNAT in Buenaventura. Well, we are expecting that approval, and we will continue, and we inform which will be the way we are following, and we will announce to the market. In terms of CapEx, there is no significant change in our view for the guidance for this year. We continue with the CapEx expected in the beginning of the year. In Yanacocha, for the Sulfides project, as you know, the decision will be made in the second half of 2021.
We have not yet discussed how to finance this project with Newmont. Well, we are working together, reviewing all the projects, and whenever the decision is made, it will be announced. Finally, your question about the political situation. Yes, now it's a special political situation, internal political situation in the country. However, we are sure that the country will, all the people in Peru, will think profoundly how it's going to be their vote. I think they will prefer the trend of development. In the meantime, as the company, we do not make any participation of political issues or any comment about that. We continue with our work, with all the sustainability we have with our people and with the communities that are in our areas. Well, we are expecting to continue in that way.
I don't know if Roque wants to make an additional comment about that.
Thank you, Leandro. I don't know why they call on me always for political comments, anyway. I think the elections have shown that there is no majority leader in Peru. Between the two candidates, they obtained less than 30% of total votes. Between the two that went for the runoff. The problem being is Congress, in fact. It's a Congress that has a number of political parties. If I'm correct, 10 different political parties that are part of the Congress. That is going to make it difficult to pass some laws.
Our impression is that these elections should show that Peru continues in the trend of development. Obviously, we are not sure of what is going to happen. We think Peru has shown to be a reliable country in economic terms. The central bank is very respected, and we hope most of the parties that are in Congress will support that position from the central bank, and that should give us some assurance. Difficult to say. It's five weeks to go until the runoff, and I don't think there is a clear winner yet.
Thank you, Leandro and Roque.
Once again, if you would like to ask a question, please press star and then one. To withdraw yourself from the question queue, you may press star and two. Our next question comes from Tanya Jakusconek from Scotiabank. Please go ahead with your question.
Yes. Good morning, everybody. Thank you for taking my questions. Roque, maybe if I could just continue, and I know you're the expert on this political situation in Peru. Just any thoughts that you might have or what you're hearing on mining laws and taxation in Peru if Castillo wins the presidential election?
Well, again, I go back to what I said. In Congress, there is no majority group. Whatever comes out of Congress, whatever law is given in Peru, will require the consensus of a number of political parties. It is funny, I am no expert, Tanya. Certainly, politics in Peru is something that is very difficult to understand. Essentially, candidates say that they are going to do such and such. At the end of the day, they will have to discuss these matters with the other political parties. I hope that the right analysis is made in the sense that what we need is laws that attract more investment in order to develop our resources and other activities in Peru.
I think if Mr. Castillo is the winner, which, as I said, there is no clear winner at this point in time, he will have to get to consensus with other groups.
Great. Thank you so much, Roque, for that color. I appreciate it. All the world obviously looking forward to seeing what comes out of Peru in the next short while. If I could move off from Peru and maybe just move to the financing plan, can I just confirm that debt is sort of the route that you are going, or are asset sales still an option for you?
Thank you, Tanya, for your question. Maybe Daniel can make more comments about this for your question. Yes. Go ahead.
Yes, Tanya. Thanks for your question. The debt that we are evaluating is to pay 100% of the SUNAT controversy that we have. As you know, starting in July, we should start paying to the SUNAT the initial amount, and then continue with the other installments. With this debt, with this liquidity, we should pay 100% of our controversy with SUNAT. We are still evaluating the asset sale, as you mentioned, in order to increase our liquidity and also to improve our debt ratios.
Yeah, I was just going to ask what you think is an appropriate leverage ratio for Buenaventura?
We think that between 2.5x and 3x net debt ratio is a good ratio for Buenaventura.
Okay. Can I ask where we stand? Because we've got to obviously San Gabriel capital coming forward if we want to build that mine. We obviously have the Yanacocha Sulfides, your portion of the capital there. Can I ask just maybe your strategy on funding of these and where does the Cerro Verde dividend stand?
Okay. Thank you, Tanya. Well, as you know, we have a variety of investments to evaluate. As you know also, we are working on choosing a group or type of assets that we will sell. We are evaluating all the alternatives. With that, we should pay the current debt we have with the syndicate debt. With that, we get free of covenants, and we can expand our line of credit in order to finance, as you know, our most important project today, that is San Gabriel. We are working on that. We feel that we can continue with this investment proposal we have and our project. I don't know if Renzo wants to make some comments about our San Gabriel project, additional comments about CapEx.
Well, more than that, what it's holding us from starting construction is the construction permit. Mainly the social part of it. We have been working with the government over that permit for the last two and a half years or so. We have been impacted by the recent elected community authorities. We see from all these discussions with the government that there is an interest in pushing San Gabriel forward, because it's going to help a lot into reviving the Peruvian economy. Social distancing measurement has not played in our favor lately. Our best guess is that we're going to have the construction permit in the second half of this year, as we stated in the press release. Meanwhile, we're continue advancing engineering to mitigate any possible delays with the project.
Okay. My understanding, I think, is that you're looking to finance San Gabriel from your credit facility once you're able to alleviate some of the covenants. Is that correct?
Sorry. Sorry, I was on mute. Yes, that's correct
Okay. What about our Cerro Verde dividend? Will that be coming any time soon? Can that be used for Yanacocha Sulfides portion of your CapEx there?
Well, as you know, we are about to receive our dividend in these days. I think between today and Monday, we will receive the first dividend. With the prices we have of the copper today, the current prices, we are expecting more dividends in the future, and I will. This is not already defined with our partners in Cerro Verde. Of course, we expect more dividends, and also can be the way to finance our own projects also.
Okay. I think there's monies within the joint venture at the asset level that could help finance some of Yanacocha, right?
Excuse me. Excuse me, Tanya. I didn't get your question.
Yeah. I'm just trying to understand two things. One, how big is the Cerro Verde dividend that we're going to get? Number two, how much money is in the Yanacocha joint venture that can be used to pay for this project?
Okay. The current cash that Yanacocha holds in their balance sheet is around $800 million. $816 million, I think. That is roughly the amount. If we see the CapEx that we are expecting for the Sulfides project is around $2 billion. We also think that Yanacocha by itself can finance by its own the rest of the money they need to build the project, the Sulfides project. It's $1.2 billion. Of course, maybe they can ask for some warranty from the partners. We think that they are capable to finance by itself.
Okay. Maybe just lastly, what size of dividend are we expecting from Cerro Verde?
The dividend from Cerro Verde?
The size. Well, the last one is $200 million. Our part is $39 million. Our share. No?
Okay. We're expecting something in that order.
Yeah.
Okay.
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Okay. I really appreciate it. Thank you so much. Good luck with the financing options.
Thank you, Tanya.
Ladies and gentlemen, with that, we'll conclude today's question- and- answer session. At this time, I'd like to turn the conference call back over to Mr. García for any closing remarks.
Sorry, I was on mute. Before we finish today's conference call, thank you very much for making your time to be here, and we wish you a wonderful day, and please be safe in this moment. Thank you.
Ladies and gentlemen, that concludes Buenaventura's first quarter 2021 results conference call. We would like to thank you again for your participation. You may now disconnect your line.