Good morning, everyone, and welcome to Buenaventura's Investor Day. Thank you for joining us today. At today's session, we will highlight our progress in implementing Buenaventura's strategy and the strong financial foundations that support our long-term vision. We're excited to share how we are unlocking the full potential of our flagships and advancing on our exploration and project pipeline. Before we begin, I would like to cover a few important items. Please note that today's remarks include forward-looking statements based on management's current views and assumptions. While we believe these assumptions, expectations, and projections are reasonable in view of the current available information, we are cautioned not to place undue reliance on these forward-looking statements. For those attending in person, the presentation QR code is printed on the back of the badge and on the 10 cards at each table.
For webcast participants, the presentation can be downloaded from the Downloads tab on the webcast window. There will be a Q&A session after the presentation. We will first answer the in-person questions and then the questions from the webcast. Webcast participants may submit your questions online. Today's presentation will be led by Mr. Leandro García, Chief Executive Officer, and Mr. Daniel Dominguez, Chief Financial Officer, and Mr. Juan Carlos Ortiz, Vice President of Operations. Also, joining us and available for your questions is Mr. Roque Benavides, our Chairman. Let me now turn the presentation over to Mr. Leandro García.
Thank you, Sebastián. Good morning to all, and thank you for coming to be with us on this day that is very important for us to present our view of Buenaventura for the following 15 years. You have been witnesses of what has Buenaventura passed through the last five years. We have experienced difficult times, however, with a lot of effort, teamwork, investment in our explorations, and stability in our operations, we have been able to surpass difficult times. Today, we are a different company, and you have seen the turnaround that we have been able to make in the last two or three years. In this time, we have been excited to put in production Yumpag, San Gabriel in the near December of this year, and we have reached stabilizing our four flagships. We have very good and excellent expectations for the following years.
Today, we are in the position in the market capitalization around the 81st company. We expect to be, in the following 15 years, inside the top 50 companies in market capitalization. For this, in terms of gold production, we are in the level of 63, and we expect to be inside the top 45 producers of gold. In terms of silver, we are in the 15th position, and we expect, in the following years, to be in the top five. In terms of copper, now we are in the 34th position, and we have the expectation to be inside the 25 top companies of producing copper.
During these years, we will try to get, another time, our investment grade to be in the tier one of the new consolidated mining standard initiative that these organizations, the ICMM, The Copper Mark, are trying to form, and we will be, for sure, part of this mining standard. As you know, our revenues are a mix of 50% base metals and 50% precious metals. We feel very comfortable with that mix of production, and we will try to maintain that mix in the long run. Of course, our EBITDA will be at least 30% as a margin. Buenaventura has a strategy for sustainable value creation, and this value creation stands for mainly these four elements. Our balanced metal mix positions us to capture opportunities and mitigate risks in a rapidly changing world.
Changing world being the energy transition, the data centers, all the resources the data centers need, the artificial intelligence, the technology, and the population growth. We are going to be focused on our four flagships: Cerro Verde, that we have a partnership with Freeport-McMoRan, and it's one of our main assets; Uchucchacua and Yumpag, our silver complex; Brocal, our copper mine, and San Gabriel, that will be the center of the main producer of gold for the company, that will be beginning production in the third week of this December. We will be focused also on operational excellence. We continue all our efforts to reduce our costs and to be able to reach the best practice and to be located at most in the second quartile of the cost curve. Of course, our discipline, capital allocation, that will maximize the returns for our shareholders.
Today, with a stable production and predictability, we are able to present what we foresee for the following 15 years. In terms of production, we foresee in the long run a production of gold between 200,000 ounces per year, from 200,000-220,000 ounces per year, coming from today around 120,000, 130,000. In silver, we expect to be producing in the long run, five years from now, between 20-22 million ounces per year. In gold, including Trapiche plus the production of Brocal, we are going to be producing between 120,000 and 130,000 tons of copper. One of our main values of our company, we have increased the life of mine on all our flagships, on all our mines, and that has been the effort in the last five years. Today, we can say that we have surpassed the life of mine that we planned to have.
Today, we used to plan five years for underground mines and 10 years for the open-pit mines. Today, you will see during the presentation of Juan Carlos that we have reached and surpassed that objective, that goal. In cost optimization, we are still making all the efforts to be in the second quartile. Our promise is to generate mines and projects that at least obtain $100 million of EBITDA each year and with a 30% margin. In financial strength, we will be able and we will work to not go higher than two times our leverage ratio. You have to remember that six years ago, in 2000, or five years ago, in 2021, in the worst moment for the company, our leverage ratio was six times our EBITDA. Today, as of September 2025, we are in 0.45.
We have made a lot of effort, and I think it's good work that we have made since all our mines. The maturity, sorry, we promise at least no less than seven years of maturity to have a planning to foresee all our operations. We have shown this graph in the last presentations. Our pillars of growth will be our own mines, our organic growth, our projects, and, of course, the possibility to inorganic growth. This chart, I will be explaining the short term, midterm, and long term, and this is what I mean. In the execution today, we have advanced, as you know, in Cerro Verde, we have an operational excellence.
We support the administration, the running of the company by Freeport, and we go with them on all the efforts they make to maintain the type of production and the type of results they get every year. In Coimolache Oxides, we are working to extend the life of mine, re-leaching the current pads and looking for opportunities to re-leach the waste dump, sorry, to use the waste dump of the prior years as new mineral ore, because remember, the cut-off in the year 2011, 2012 was different than the cut-off we use today. Today, that waste is mineral. We are going to work and try to recover the mineral deposit in those waste dumps. In the case of La Zanja, also the same strategy.
We are going to look for the waste dumps we have made during the past years, and there are opportunities to recover more gold from those operations. In the case of San Gabriel, as I told you before, we are working to get the first gold bar on December the 20th of this year. Talking about our little mines, our legacy mines, we continue evaluating the next stage to have for those mines. We have to be responsible with these mines because, as you remember, we have been there for many years, and we have a lot of responsibility for all the communities that we have in the surroundings, and we have to be cautious of what decisions we make with these legacy mines.
Of course, we understand that the size does not fit with the mines that we want to work, for example, our flagships, but we have to be very cautious of what are the second phase of these mines. In the midterm, from the following five years, you will see Brocal producing 70,000 tons of copper per year. That means our current production of 13,000 tons per day as a throughput will be changed to 17,000 tons per day. In terms of Chacua and Yumpag, our silver complex, the increased production will be from the today throughput of 3,500 tons per day to 6,000 tons per day. That will allow us to reach more than 20 million ounces per year in silver production. In this opportunity, we will be alert to any opportunity to balance our metal mix and diversify in top-tier jurisdictions.
In terms of the long run, we will be witness of the phase two of San Gabriel that we plan to treat 4,000 tons per day. We have our Coimolache sulfides that today is in the scoping stage study, Trapiche that is the feasibility and permitting stage, La Zanja sulfides that is an exploration project, and Algarrobo in the north of Peru. Talking about our ESG practices, now Buenaventura operates in eight regions in Peru and has more than 15,000 colleagues that work with us. 64% of those colleagues from the total workers are from the local in the surroundings, the area, in the local communities. One of our greatest values in our culture is safety, and we make a lot of strategies to keep all our workers safe and they can return safe and alive to their homes.
We have a phrase in Buenaventura that says, "If it is not safe, don't do it." We try to give the power to empower our people to say no if they feel there is something with risk that can evolve in a fatal accident. This year, we have zero fatal accidents. In terms of social and how we relate with our communities, yearly we buy in services and goods $240 million of the surrounding communities. That gives the business in order to increase their economic possibilities to develop. One other strategy we have is to leverage government funds to our local areas.
We help them to leverage this amount is accumulated during the since the beginning of this strategy to invest in the three main areas that we have identified and we want to develop in our communities: infrastructure, education, and health in order to close the gaps that we have found when we arrive to those areas. In terms of environmental, we are very glad to announce that 100% of our energy is renewable energy, mainly from our hydroelectrical plant Huanza. Talking about the greenhouse gas emissions, our effort is to reduce year by year these emissions, and you will see in the next slide also. In terms of governance, we have updated our code of ethics and conduct this year. The last one was in 2017, and the first was in 2006 or 2007. This is an update in order to reinforce our commitment to integrity.
We are committed in compliance to have a strong regulatory compliance and effective risk management. The last three years have been we have been able to have a great performance in permitting. We have been granted very important permitting that gives us continuity of our operations. In this, the more important permitting that we are awaiting are first the San Gabriel operation permit that we expect to be granted in the following weeks. El Brocal, we expected the operational permit in the first quarter of 2026. This permit will allow us to increase the size of our tailings dump so we have continuing operation for the midterm. Yumpag, the next permit we are working on is to increase the production from 1,000 to 1,200 tons per day. In the third quarter of 2027, to be granted a permit to produce 3,000 tons per day.
As I told you, our water resource management, sorry, our renewable energy is 100% renewable source. We have made a lot of advance in the water management. We now recirculate in our underground mines 88% of the water, and the greenhouse gas emissions, as you can see in this chart, are reducing year by year. Now, maybe it is time to talk about a little bit of what is the political situation coming next year. You know, next year will be the elections in Peru in April in 2026. During the campaign, normally there arise issues about nationalization, royalties, increased tax, but you know that any actual change really requires approval and technical review and, of course, political consensus. You will hear about these topics, but I think the context is completely different today than we have in 2021.
Recent polls show Rafael López Aliaga, a former banker and a former mayor of Lima, leading the race, followed by always Keiko Fujimori and Mario Vizcarra, that is the brother of Martín Vizcarra, our former president. Up to date, it's very early to foresee which will be the winner, of course. The elections in Peru are defined in the last month, really. No dominant left-wing contender has yet emerged. The context for the population is completely different, as I told you, as it was in 2021. Our macroeconomic fundamentals remain solid. We have a central bank, very strong, and the performance of the sol peruano has been very good with all the commodity prices. All the accounts, the national accounts look very good. At the regional level, political sentiment is shifting from left to right.
We see Ecuador, we see Argentina, the recent votation in Chile, and we expect new changes and good changes from Peru. Personally, I am very positive. Now, I will present Juan Carlos Ortiz. I will give you the glance of what should you expect for the production for the following years. Thank you.
Thank you, Leandro. Thank you for joining us today. We would like to start just showing you this picture of Yumpag. It's a very compact operation. The way it's done, all the facilities that we have in surface, but that we will see in a minute is a very significant value generator for the company. First, I would like to start with this overview of our portfolio.
These figures are the projection of reserve by the end of December this year, 2025, where we have about 15 years of gold reserve, 8 years of silver reserve, and 16 years of copper reserve and production. Now we will develop that in detail, which assets are going to be part of this production, and also giving some color about the geology that is the fundamental part of the growth and continued growth of this asset, and not only the ongoing asset, but also the project that we are developing in our portfolio. Starting with the production profile, we have in the upper part the gold profile. As Leandro mentioned, we're going to be in the range between 160,000-180,000 ounces of gold per year, as you can see in this forecast.
Production for the consolidated production of Buenaventura is not including the production coming from Coimolache, [audio distortion] . It's only from our consolidated operations. Further to the right, you see the copper production in this case, particularly for El Brocal production. In that, the numbers that you see are pretty much the guidance range for incoming years. An important to mention early on this presentation is that even if we do have a profile of 50,000 tons of copper per year in incoming three years, we're working to develop the next increase or expansion in El Brocal that will allow us to be on the range of 60,000 tons of copper per year. Something similar is happening. You see further down to the left of the profile of silver production.
We are ramping up production in Yumpag as well as in Uchucchacua, and we will be reaching about 20 million ounces by the year 2028. We're working right now with all the permit engineering, of course, developing the production underground and continuing with exploration to support this ongoing operation, not for eight years, as I mentioned before, but way, way more than this range of time. Also, in the case of Uchucchacua, we'll have some production of zinc and copper, as you see in the further lower corner of the presentation. Now, I would like to start with the video about San Gabriel, how it's looking the project as of today. You see the processing plant ready in the southern part of the country. This is the mine adit, the underground workings. There you have another view of the processing plant, 100% completed.
Right now, we are starting with C3 commissioning process and C4 in December. We expect to have the fair gold bar pool by the end of December, a few weeks down the road. Our integration with our surrounding communities is not only to be part of doing mining, but also integrated as a good neighbor and integrate our key stakeholders into our profile of growth, growing together. Something important here is that it is not only the launch of the C3 and C4 commissioning process for San Gabriel. Something that we would like to share with you is how it is going to be the ramp-up of the production and why it is taking more months than a usual operation. In this view, you can see the plan view of the operation. I will focus now on the way the tailings dam is going to operate.
The central part is where we have the filtration plant, 3,000 tons per day capacity. To the left, to the right, you can see the reservoir where we will stock all the wet tailings during the rainy season. After the rainy season, we will take all the tailings up to these drying platforms. We will bring all the material by truck. We dump the material in these platforms, and with dosers, we will start to spread that tailings in order to reduce the moisture content from 20% down to 10% moisture. Once the tailings are drying, we will bring them to the final position where you see that the tailings are being placed at the bottom of this V-shaped valley that we are using as a final reservoir.
You see that at the beginning, at the bottom, is a small area that we have, but layer by layer, we're growing in elevation and gaining more area. The more area means that we have more tonnage to be placed on a yearly basis. That is how it's going to look like some years down the road once all the compaction is completed. This means that in the initial year, 2026, we will be in the order of 2,000 tons per day out of the full capacity of 3,000 tons per day. Why? It's because we're going to be starting to place the tailings at the bottom part of the valley where we have a little limited area.
Once we start putting more layer on top of each layer, we will increase the area, the compaction area, and we will be matching the production from the processing plant with the capacity to compaction of tailings in the final tailing reservoir. That's the reason we do have this production profile. Next year, it's going to be around 2,000 tons per day. In 2027, we'll be around 2,800 tons per day. In 2028, we will reach full capacity as a throughput, how much tons we will process in a year. They will be in that order of magnitude, like phase one. In phase two, we're planning to increase production, optimizing the processing plant in order to reach 3,500 tons per day. Translating that production throughput into gold production, down below in yellow, you see the production in gold terms.
Next year, it's going to be in the range of 75,000-80,000 ounces of gold. Next year, 90,000-95,000 ounces. And then in the order of 100,000 ounces of gold per year. That's for phase one. Phase two is going to be beyond that number. The bottleneck, the plant, we get experience to know how to operate this processing plant, the ore that we have in there, and to get the whole of the ore that we are putting through this processing facility. We expect to be in phase two, reaching 3,500 tons per day and go over 100,000 ounces of gold per year. Important to mention also is that correlated with the increase in throughput, it's going to be a downward trend in the operating cost.
If we put cost expressed on dollars per ounce of gold produced, cash cost, C1, we will be having this trend starting next year with $2,000 per ounce of gold and bringing it down to around $1,500 per ounce of gold. How is it going to be working like that? Of course, throughput is key. Increasing the throughput, we are allowed to dilute all the fixed costs in the operation. In addition to that, the mining method that we do have is something similar that some miners in Nevada do here, like Barrick and Newmont. They do in the underground operation they have in Nevada. They have a mining method called underhand drift and fill, in which you need to drive a tunnel, then you backfill it with cemented backfill. Once it is completely hard, 21-28 days later, you go one lift beneath that.
You are using the top lift as a roof for the next lift underneath. The most expensive part of this mining method is driving the top cut. That is where you need to put heavy roof support. Once you are one layer beneath that, it is way cheaper. At the beginning, it is going to be 100% of the production coming from the top cuts. Gradually, this blend will equilibrate in one-third of the production of gold coming from the top cuts and two-thirds of the production coming from the undercuts. That is way, way cheaper. That puts that also debt cost structure coming down. Number three is that we are continuing to develop the mine. We will keep doing the mine deepening for the next three years. Once we complete that in year 2028, 2029, costs will be reduced again because developing will be done.
We will continue to do exploration. Probably there is more to be going further in depth. At this time, the completion of that task will also allow to reduce the operating cost for the remaining 17 years' life of mine of San Gabriel. That is for gold production. If we move now to copper, copper at this time in the next five years is going to be produced in El Brocal mine. Before getting into the production numbers, I would like to go a little bit deeper into the geology of El Brocal. At the left, we see a plan view of the deposit. This area with red, green, and orange is the underground mine that has been mining for the last 25 years. The geology of the deposit is a volcano at the center, and there is a mineralization all around the volcano, like a donut-shaped body.
In the last 25 years, we only mined the northern part and a little bit of the western part. Now we're driving tunnels to develop the western face and also the eastern face around the volcano. There is about 5 kilometers more to continue and close the ring around the volcano. It will take at least 5 years of full steam to develop all this area for exploration and for mine development. We do have geophysics and a few drill holes that confirm mineralization all around. Now the task is to get access to that area. Twenty-five years of production in here and a big future to continue. In that northern part where we see all the red, orange, and blue dots is where we do have the next 17 years of production of El Brocal. This is where we have our reserve.
The plan is to continue to ramp up production very slightly in the next three years, 2026, 2027, and 2028, because we do need to do some mine development, mine adits, ventilation, deepening the mine, prepare the mine for all the water that we are going to collect at the bottom of the mine, and do some minor change in the processing plant. The ore is way harder than it was in the open pit, so we need to make some arrangement in the crushing and grinding circuits in order to allow to increase production with the existing footprint. The investment that we are going to do in exploration, mine development, and processing plant upgrading will let us jump into almost 70,000 tons per day in El Brocal.
We do have the permit to 25,000 tons, so probably we need to do only minor change in our permit profile in order to accommodate an additional set of equipment between or incorporated into the existing license that we do have. How it looks like now in production terms, as I mentioned earlier, the production of copper will be around 50,000 tons of fine copper per year up to the year 2029, which we do have the expansion happening, reaching 17,000 tons per day and reaching a 60,000 tons per day copper production. Along with the copper, we have silver and gold production, as you can see there, also working or bringing us additional credits for the copper production. It will translate that into our cost structure in copper. We are bringing it down to 5,000 tons per $5,000 per ton of copper. This is a combination of two factors.
One, of course, is the credits coming from silver and gold. The increasing price is also helping us to reduce our overall copper cost. Number two, we do have a penalty for the arsenic content in our ore. The market right now is changing a lot, and that penalty is coming down year by year. The cost of producing copper, in particular in El Brocal, is coming down from these two market conditions, from the increasing value of the gold and silver credits and also by the reduction of the arsenic penalties. In addition to that, we are changing our business model in El Brocal. For the last 15 years, the mine was operated by a contractor. This year, 2026, we are buying $20 million of equipment. We are doing the mining and developing by ourselves.
We are reducing our cost by being more efficient, capturing that 30% general administrative and profit from the contractor and doing that work by ourselves. Not only doing that same work because we're bringing larger equipment. Instead of having 10-ton loaders, we're moving to 20-ton loaders in the underground operation to make our cost structure more competitive as well. The combination of all these factors will allow us to increase production and reduce the cost to a level of $5,000 per ton of fine copper. In the case of Uchucchacua- Yumbag, these are our silver assets. They are pretty close to each other. You see farther to the center of the slide in red, all the Uchucchacua areas that we have been mining in the last 50 years. Some 7 km to the east, we have Jumbak. All along this fault, the Cachipampa Fault.
There is some ground to explore in between. We are coming from Tambomayo to the south and from Uchucchacua to the north to connect and fill the gap in between. We are getting good information. All the exploration, particularly in Tambomayo, is showing good evidence of mineralization of Bonanza-style mineralization. What we call Bonanza is more than 20 ounces of silver per ton. It is a ton of ore that is worth more than $1,000 per ton. High value with a cost of around $150 per ton. It is a big margin generator, a big volume generator. We do have evidence that the mineralization continues to the north, continues to the west, and continues further down below. We are not only concentrated in the production in between these two assets, the Uchucchacua and the Tambomayo. We are opening the district for exploration as well.
We do have Chonta to the north. It is about 4 km to the north. We have evidence of copper mineralization in there, a skarn type. We are starting right now. We have the permit to start doing the geophysics, and probably next year we will start with the infill drilling or start with drilling in the project. We also have an old mine, Pozo Rico, in this corner. We have, in general, a district of 5 km by 5 km in which we are going to concentrate our exploration. Our processing plant is close to Uchucchacua, so we can easily incorporate any additional discoveries into our existing footprint for the long term. We do have roof or tailings. We have permits for increasing capacity to 6,000 tons. We will do some accommodation for the particular ore that we are going to incorporate to the production.
Those minor changes probably will not need any heavy permitting in addition to what we already have. Based on the existing reserve in these two areas, Uchucchacua and Yumpag, we have this profile of production in the lower part of the slide. We do have a ramp-up production to 2,500 tons per day in Uchucchacua, more on the polymetallic type of ore, where in Yumpag we will be reaching 2,000 tons per day in the coming years. Basically here, the constraint that we have are permitting. We are expected to have the first permit to 1,200 tons per day by June 2026 and to 2,000 tons per day in 2027. Continue increasing the production as a throughput. If we translate that production into silver ounces, we do have here the profile of production. In the case of Uchucchacua, only for silver, it is about 4 million ounces per year.
We will be reaching that level of production. In the case of Yumpag, we will be close to 20 million ounces of silver, just Yumpag itself. This is Yumpag at 2,000 tons per day. As Leandro mentioned, we are filing for a permit for 3,000 tons per day. Probably we can increase that. We will have the permit to do so. We need to keep at the same pace of production, also doing the exploration in the mine. It is a very important and very relevant asset for ourselves because you can make the math. You can have here the cost, C1 cost for producing a silver ounce in the order of $9 per ounce, $10 per ounce. With the current price, you can make easily the margin that we are making here in Uchucchacua and Yumpag. It is about almost $40 per ounce of silver.
If we have a combined production in the order of 20 million ounces, you can make that these assets could be in the potential range of $600 million-$700 million of EBITDA or margin per year, just Tambomayo and Uchucchacua. It is a very significant asset. The first picture that I show, small footprint, very compact operation, where we are planning to do our high performance teams, is having a significant impact in our portfolio production. Now, I would like to talk about a little bit of Coimolache. We have been discussing previously that Coimolache was kind of the limited speed because we do have to wait for the permit to put our pad, our leaching pad, in full range. We got that permit back in August. We are now operating at full speed in the leaching pad.
That explains the increase in production that we have down below in yellow. From 48,000 ounces of gold, we have a profile over 60,000 ounces of gold this year and going over 100,000 ounces of gold next year. As Leandro mentioned here, we are revisiting the whole district in Coimolache for gold first. First, looking for the low-grade areas around the existing open pits. Number two, looking for revisiting the stockpile of the waste dump that we have generated for the last 15 years. In the first evidence that we do have, we have areas of that waste dump that was dumped 10-12 years ago that now have a grade that is economic to be fitted into the process in the leaching pad. We are drilling that area.
Probably by the second quarter, we have the result to know how much of that material could be incorporated in the production plan. The internal idea is to keep driving or operating at around 100,000 ounces of gold for the incoming two or three years in Coimolache, bringing that material that is already broken and available, putting it into the leaching pad to add additional ounces of silver and gold for our production. The other opportunity that we do have in here, we are learning how to re-leach our material, how to again remove the material in some places of the path to another place and at the same time mix it with oxygen and allow the leaching reaction to happen again.
We do have also material in the path, in the lower layers of the path, the original, the older ones that we can take from the bottom and bring it to the top in a sequence that allows us to recover the gold that was remaining in that stockpile or that value that was stocked in that area. We do have these actions all together in our plants. We have a small schedule here: mining the mining oxides up to 2029, mining the low-grade pushbacks and lay-backs on the open pits, 2028 and 2029. Also, that's important in a minute, mining the mixed ore. That's a combination or a transition between the oxides and the sulfide down below and processing also the low-grade material and re-leaching the path.
Coming back to the mixed ore or what we call the transitional ore, transitional ore is what's in between the gold and the copper. The main area that holds this kind of reserve is the Tantahuatay open pit. What we are doing right now is preparing the open pit for the transition to copper. We are doing all the pushbacks, all the laybacks, all the ramp access. We do have all the land that we require. We will have at the bottom of the pit, a big area where all the copper sulfides are established. When we reach, we will do the pre-stripping of the copper while recovering the gold content in the upper layers. By 2021, we will have the copper all open in our project.
At the same time, most of the waste that we are generating will be backfilled in the old open pits, the old open pit of Mirador and Tantahuatay West. These two will be the backfill. Part of the waste to do the pre-stripping of the copper will also be part of the dikes for the future tailings dam. We are preparing the transition between gold and copper in the incoming five years. Along with the drilling, along with the engineering, along with the permitting, we will be doing all the transition in the existing footprint to be ready to make an easy transition to copper 2031, 2032. That is a key part of our strategy. Not only generating value and cash with the mining of the gold, but also preparing the footprint for an easy transition, a lower CapEx, quick transition into flotation plant for copper.
This is what I was mentioning also, the sulfide transition. The trade-off studies for the copper sulfide will be ending this year. We will start or continue with the conceptual study in 2026. We are going to be drilling, doing the infill drilling in 2026, 2027, and start working with the pre-feasibility study at the same time. We expect to have the pre-feasibility study at 2028. Probably at that time, we can start filing the permit while at the same time working for the pre-feasibility and the tailings engineering on the project. It is progressing in the same time we are mining the gold. Mine gold will be financing the stripping, the engineering, and all the needed CapEx for transitioning to the copper. This is not the only copper project that we do have. We do have also Trapiche. Trapiche is also evolving in a good way.
We expect to have the environmental permit granted early next year for the leaching operation. We expect to complete the power line right of pass to buy all the land to bring the power line into the operation. We expect to complete all the negotiation for accessing the land in 2026 and complete also additional drilling, geotechnical, hydrogeological for the tailing engineering. The feasibility, the tailing engineering, and probably the construction permit will be by the end of 2027, early 2028. Trapiche is also on track to become the next project to be delivered for our own project portfolio. All right. Now I'll pass to Daniel.
Thank you. Thank you, Juan Carlos. Good afternoon to everybody. Thank you for joining our investor presentation. In this part of the presentation, we will talk about financial performance and our strategy in terms of capital allocation.
As all we know, 2025 was a very solid year for Buenaventura, not only because of the higher metal prices, but also due to the strong production in most of our operations. In terms of revenues, this year, 2025, we will generate between $1.4 billion and $1.5 billion. Our revenues will be pretty stable during 2026 and 2028, with production coming from San Gabriel and offset by the depleting mines of Orcopampa and Tambomayo. In year 2029, we expect an important increase in production with additional silver coming from Yumpag, Uchucchacua, and of course, El Brocal increasing its copper production. As you can see, the prices that we are assuming are for gold, $3,200 per ounce; for silver, $35 per ounce; and for copper, $9,500 per ton. These increasing revenues will have a consequence in the EBITDA. For this year, we expect an EBITDA of around $550 million to $600 million.
For the following years, using the conservative prices that I mentioned, for year 2026, we expect around $475 million of EBITDA and a slight increase in the EBITDA for the following years to peak in year 2029 in close to $750 million. This year, 2029, as I mentioned, will be boosted by increasing production from Yumpag , Uchucchacua, and of course, El Brocal. We will show later, and Juan Carlos has already shown, our strategy to reduce costs and to increase the EBITDA margins. As you can see, this year, we will report around 40% of EBITDA margins. This will be maintained in the order of 40+% for the following years. Regarding costs, we strongly believe that in an environment of high metal prices, as we are right now, we need to strengthen our cost control and cost reduction strategy.
For this, we have strategies in all of the mines that we operate, as Juan Carlos has mentioned. This year, we will start San Gabriel operation. We will start the ramp-up of San Gabriel next year. The cash cost that we estimate is around $2,000 per ounce. This is because we will be ramping up the operation during the year. When we get to the 3,000 tons per day production or 3,000 tons per day throughput and continue with some of the initiatives that we are going to start at San Gabriel, such as the transition from top cuts to undercuts and increasing the recovery by implementing the flotation plant, we will reduce the costs of San Gabriel down to $1,500-$1,400 per ounce. At El Brocal, this year, we will report around $6,000 per ton cash cost.
We will reduce this gradually to $5,000 per ton. How are we going to do this? Basically, by increasing the throughput. We will increase the throughput to 15,000 tons per day in two, three years. In year 2029, we should be reaching the 17,000 tons per day throughput at El Brocal. That will permit us to dilute the fixed costs and decrease the cash cost to and stabilize it in $5,000 per ton. At Uchucchacua, this year, we will report a cash cost of around $12 per ounce, Uchucchacua -Yumpag. As Juan Carlos mentioned, we will reduce this cost down to $9-$10 per ounce, basically by increasing the throughput at the plant to 4,500 tons per day. Remember that currently, we are producing at a rate of 2,500 tons per day.
Finally, at Coimolache, we will reduce the cost significantly from $1,400 per ounce down to $1,100 per ounce by increasing the throughput and placing more ore in the leach pads. Getting into capital expenditures, this year was a strong and intensive year for capital expenditures in Buenaventura. We have disbursed or we estimate to disburse this year around $400 million in CapEx, from which $300 million is devoted basically to San Gabriel construction. The remaining $100 million is basically for sustaining CapEx at El Brocal and Uchucchacua. For the following years, we will have a peak of sustaining CapEx in year 2026, $229 million, basically for San Gabriel tailings dam storage facility, the waste dam, and the mine development. At El Brocal, we will build during 2026 and 2027 the paste backfill plant and, of course, the tailings dam expansion.
Finally, at Uchucchacua-Yumpag, we will complete or we will start the construction of the transmission line, continue with the mine development at both mines, and also we will add some trackless equipment. For the following years, the sustaining capex between 2027 and 2029 will come back to the former levels of sustaining capex, which is in the order of $100 million-$120 million. On top of this, we will have some growth capex devoted to Trapiche initial or early studies and land purchasing. As you all know, we have almost 20% in Cerro Verde, which is a strategic asset for Buenaventura. We expect a streaming of $150 million-$170 million of dividends per year in a very stable long term. As you can see, Cerro Verde is generating more than $2 billion of EBITDA per year.
They have very small CapEx, around $300 million, $320 million, and they have no debt. We expect Cerro Verde to continue distributing to Buenaventura dividends in the order of $150 million-$170 million. Going through our cash flow generation, in the past, we have had a negative cash flow generation due to the construction of San Gabriel. Before that, due to this issue, we had also to paralyze operations at Uchucchacua in year 2021. However, since next year, starting next year 2026, we will have positive free cash flow. We expect $150 million of cash generation in year 2026, basically with the $450 million EBITDA that we will generate and the dividends that we receive from Cerro Verde. The CapEx, as I mentioned, will be in the order of $340 million.
In year 2027, we expect to finish the year or to start the year, sorry, with a cash position of $600 million. The $650 million, the EBITDA that we will generate in year 2027, $600 million capital expenditures will be reduced to $170 million. We will continue receiving dividends from Cerro Verde. We expect to generate $400 million of free cash flow in year 2027. The same for year 2028, we expect a free cash flow of $400 million. In year 2029, when having El Brocal increasing the throughput, the final production, and Tambomayo contributing with almost 14-15 million ounces of gold, we expect to generate $500 million and finish the year 2029 with a cash position of between $1.8 billion-$2 billion.
is very important to consider that in this cash flow generation, in these estimates, we are not considering the dividend payment, which, of course, we will consider every year. Finally, our capital allocation strategy will be focused on operational stability, strategic expansion, and dividend payout. We will finish the year with $660-$680 million of cash and a debt of $710 million. This will give us the lowest leverage ratio that we have had in the last five years. As Leandro mentioned at the beginning, five years ago, when we issued our first international bond, our leverage ratio was in excess of five times net debt over EBITDA. The sustaining capex this year will be focused on improving, optimizing our current operations to increase the life of mine at El Brocal, San Gabriel, and Uchucchacua -Yumpag. Growth capex, of course, our main projects, Trapiche, then Coimolache.
We have also El Algarrobo for the long term. Dividends, we need to resume our dividend policy with our shareholders, which is not less than 20% of the net income from the previous year. Now I give back to Leandro.
We are approaching to the end of our presentation. We want to highlight our commitment to these five concepts. First, operational excellence, essential to unlock the value of our current operations. Project development in order to have the best projects we can make and get the best value of them. Inorganic growth to be alert of any opportunity that is presented to us in order to balance our mixed production that we want to maintain. Commitment to our shareholders, delivering solid, sustainable results and rewarding their trust. Finally, vision for the future, building the foundation for long-term success.
Before end, I want to, I'm sure that some of our colleagues are watching this presentation in Lima, Peru. I also want to thank them, especially the guys, our colleagues in the mines. They work very hard in an altitude of more than 3,800 meters above sea level. Their work is the responsible of what we have been presenting here today. Of course, all the support areas, permitting, human resource, explorations, logistics, finance, everyone there. Thank you very much. We really appreciate all the effort in the last five years. Thank you. Thank you very much. Thank you for coming today.
Now, we may begin with the Q&A questions. Please, Carlos.
Thank you very much for the presentation, Carlos de Alba with Morgan Stanley.
On San Gabriel, maybe a little bit more of where do we stand in terms of the testing, the trials, the dry testing completely done so you are ready to production? If not, or even if they are done, what is still pending for you to really be able to produce that first bar in four weeks?
We already got the connection to the National Grid. We do have power now with the National Grid. We can start commissioning the whole circuit, not machine by machine, but the whole circuit altogether. We did start last week on that work. We are fully commissioning the crushing, all passing through the crushing circuit, feeding the ore bin. Next week, we will start with the wet commissioning of the two mills, the SAG mill and the ball mill. We already have all the tests dry.
Now we are starting with the slurries. We have week by week scheduled for wet commissioning of the grinding, leaching. In December, the second week, we will start doing the filtration. At the same time, we will be collecting all the carbon loaded with gold in order to start the recovery of the production of the gold precipitates. That is in the schedule to have the fair gold bar by December 20, in pretty much one month.
Thank you. On the tailings management of San Gabriel, it is a very comprehensive operation. I wonder how much is the cost per ton or how does that compare to other operations that you have, just given how complicated the logistics seems to be?
We do have the experience of doing that in Tambomayo. In Tambomayo, we have been doing that for the last eight years.
The process of filtration, transportation to a reservoir where we store the tailings during the rainy season, then taking out for drying and compaction is the whole process of dry stacking. We are doing exactly what other companies do for dry stacking in their own businesses. The cost is in the order of $9-$10 per ton from filtration up to the last step of compaction. The good thing about that is that you are doing your closure at the same time you are doing your compaction. You are not leaving any cost to the end of the life of the project. You are doing your closure at the very same time. The very important thing is that it is a kind of dry area in the country. You recover more than 85% of the water by doing that. You recycle 85% of the water.
The only water missing is the remaining moisture that is left on the tailings to keep it altogether. It is a very efficient method. We have been doing that for the last eight years in Tambomayo. We in Peru have experience doing that in some other operations as well.
Thank you.
Vladimir Putin ordered his gold miners to process all their heap where there is a lot of gold that would not be economic, let's say $1,100 or $2,000. I think other people are going to do the same. Are you planning that?
Yes. In the case of Coimolache, in the open pit in 2010, 2011, we have a different cut-off, like 0.2, 0.25 grams of gold per ton. Right now, our cut-off is below 1.1. So 0.1 gram. 0.1. Yeah, right now. In the past, 0.25.
Between 0.1 and 0.25, there is some quantity of material in our waste dumps that need to be reprocessed. We are re-drilling the waste dump, and the early result that we do have is that almost 50% of the material that displaces as waste can be reclaimed, put in the pad for leaching, and the low, low-grade material will go to a new waste dump.
Do you have a guess at how much it would cost per ton to process?
Very little, because there is no blasting, there is no transportation because it is very close to the pad. In comparison to the pit, open pit, the waste dumps are in between the open pit and the leaching pad, so halfway in between. We need to load it and place it, whatever is needed, into the pad.
The quantity of reagent needed is similar to the ongoing fresh ore that we have. It is going to be in the range of $1,000-$1,200 per ounce of gold, in line with what we are doing right now.
$1,000-$1,200 per ounce.
Yes.
With $3,200 or $4,200, you make $2,000 or $3,000 an ounce.
That is correct.
You are going to do that.
Yes.
Other people will too.
In La Zanja, in Coimolache, we are also revisiting the low-grade areas in Orcopampa mine, the underground operation. Also waste dumps in the Orcopampa area. Everything is under review.
Thank you.
Do you currently have a hedging strategy, or do you have hedges out there now, or do you plan on incurring it? That is for gold. You could have separate for gold, silver, and copper.
In the past, we used to hedge. We hedged copper, we hedged gold. In Peru, we have the IRS, the local tax authority that does not understand at this point in time how the rules for hedging should be. In this environment with the IRS not understanding this tool that is very common in the market, we will be very cautious. It is always over the table. We understand that it is important to hedge, especially for our bondholders. First, we need to understand, to let the IRS, the local IRS, understand these tools.
If we do not have any more questions, turn it to Carlos.
Thank you again. Maybe one on the SUNAT. Any update on the case that you are still fighting? That would be a very nice money back to the balance sheet.
The case is progressing slowly.
We are having some wins and some losses that will continue in the court. We have recovered slightly a small portion of the total amount of the case, which is $550 million. We have recovered $30-$35 million. This will take a long time. It is not only one case. These are four separate cases that are running in separate courts with separate lawyers. We think that we could win some cases and continue progressing in other ones.
Our expectation is to win as a total around between 50% and 60% of the amount. Long term. At the end.
That ending is five years from now or
three years.
Three years. All right. Okay. On Coimolache, what is the expectation as you transition into copper sulfide? Would you continue to operate the asset, or what is the idea there?
No, that is a discussion that we have to make with our partners. We are working today on the project to develop a profitable project. Let's see. We continue working as business as usual.
Last one for me, sorry, for monopolizing the mic. The cash cost trends that you showed today, if we looked at the cash that you report for your operations, can we assume the same decline on a percentage basis? Both.
Yes.
Yes.
Yes. All right. Thank you.
Now, turning to the Q&A questions from the webcast. Our first question comes from Burak Dominic at LarrainVial. You mentioned M&A opportunities in the Strategy 2024 slide. Are you considering staying in the precious metals plus copper, or are you considering new metals or markets?
No. We are considering to stay in the metals we feel comfortable. Gold, primarily.
We think that we should look for additional production in the following six years. We'll be mainly looking for gold mines.
The second question is, given the current prices, should we expect a reserve increase in Tambomayo, Orcopampa, and thus further production down in 2026?
No. We continue with the exploration in these two properties. Of course, now with the increasing price, we are more comfortable looking for mid-grade or low-grade materials in the district. With the current structures and veins and ore bodies, we have limited room for increase with the current price. It is more on the potential nearby the operation than in the ongoing structure that we are mining as of today.
Our next question comes from Yordin Lozano at Kallpa Securities. Could you provide some CapEx figures from the planned expansion at the El Brocal and Uchucchacua-Yumpag area?
Also, could you share expected CapEx for the Coimolache Oxide project?
In the case of El Brocal, for more than expansion is modification. We have been running for 17,000 tons per day in the past, but it was with very soft ore. Now we need to accommodate the hard rock copper coming from the underground mine. We need to put an extra set of crushers and probably additional flotation cells. It is not that big, probably in the order of $100 million, less than $100 million CapEx to make all the transition from soft rock into hard rock at 17,000 tons per day. In the case of Chacua, probably it is going to be, we do not have a definite budget so far, but between $50-$60 million to increase to 6,000 tons per day. We do have the power, the water, the tailings dam.
It's going to be more to accommodate an additional crushing and grinding circuit for processing the ore. In Coimolache, we start very early on the engineering. We do not have a definite figure so far.
Our next question comes from Cesar Perez at BDG. Regarding the redaction on arsenic-related penalties applied to El Brocal copper concentrate, to what extent can this be attributed to shifting market tolerance parameters, advancing chemical assay precision, or the influence of unexpected concentrate volume resultant from the marketing integration of Cerro Verde's copper ores?
Can you repeat that? Yeah. We actually do not have any problem to sell all our concentrate of Brocal. Actually, we think that we have the capacity to sell twice the total concentrate we produce today. We have, as Juan Carlos told us, seen a decrease in the penalties.
There is room for more concentrate in this complex concept for the market.
Also, in addition to that market condition, we are kind of fine-tuning the quality of our concentrates. Instead of going to high copper, high arsenic, we are going to a middle point where the market prefers to have the quality of the concentrate. We are kind of switching the quality of the concentrate, reducing a little bit of the copper, but at the same time reducing the amount of arsenic that goes linked to the copper. The market prefers that particular quality rather than the previous one, high copper and high arsenic at the same time. It is a market, but at the same time, we are doing our task in the operation.
Correct. The next question comes from Omar Avellaneda at Vinci Compass.
Why does the sustaining CapEx increase so much in 2026? Also, in Cerro Verde, we do expect the unit to increase processing capacity.
No. In Cerro Verde, we think that the production will be stable. We stabilize at 4,020 tons per day. The production will be similar from this year. In terms of CapEx for the following year, Juan Carlos mentioned, there are some additional investments that we have to make in the tailings dams. You have seen the videos. It is a stage by stage, stage by stage complement. Also in Chacua and El Brocal, we have to make all the waste management investment in order to warranty the long-time production.
Maybe to add and put some figures to what Leandro said, at San Gabriel, next year, we will have a CapEx of around $60 million devoted to what Leandro said and Juan Carlos, basically to complete some of the tailings dams and waste dams that we have already building. At El Brocal, there will be around $80 million-$90 million CapEx for the purchase of equipment and also the management of the tailings.
The next question comes from Alexander Emery at S&P Global. Trapiche Algarrobo looks to turn Buenaventura into an increasingly copper-focused producer. Given that project CapEx will be considerable for both, will Buenaventura seek for joint venture partners?
Four years ago, five years ago, I would respond that we may look for a partner for Trapiche. Today, our answer is may not. Maybe we can do it by ourselves.
As you have seen, the figures shown by Daniel, we have a very high cash expected during the years. Our focus today has to be to prepare an excellent project, a quality project. We are going to invest the best in all the studies we have to develop in order to have a profitable project. In Algarrobo, also, we are very positive in all the things we are going on with the community, our neighbors. It is kind of in a longer stage. We expect to generate that project after we construct Trapiche.
Correct. Finally, Gabriela Bendezu at Lucror Analytics, please, can you give us more information on your expected dividend payments?
Our policy is at least 20% of the profit. We are going to resume that policy. This year already, we are paying dividends in 20%.
We will, of course, evaluate to pay in excess of that 20%.
With that, we have concluded the Q&A questions.
Thank you very much.
Thank you.
Thank you.
Thank you very much for being with us today and spending a couple of hours. Next year, we will have the 30th anniversary of being in the New York Stock Exchange. Since now, we invite you to come with us to celebrate the 30 years of being a listed company in New York Stock Exchange. We will send you the invitations promptly.