Good day, ladies and gentlemen. Welcome to the Compañía de Minas Buenaventura Third Quarter 2026 Earnings Results Conference Call. At this time, all participants are in listen-only mode. Please note that this call is being recorded. I would now like to introduce your host for today's call, Mr. Sebastián Valencia, Head of Investor Relations. Mr. Valencia, you may begin.
Thank you. Good afternoon, everyone, and thank you for joining us today to discuss our third quarter 2026 results. Today's discussion will be led by Mr. Leandro García, Chief Executive Officer. Also, joining our call today and available for your questions are Mr. Daniel Domínguez, Chief Financial Officer, Mr. Juan Carlos Ortiz, Vice President of Operations, Mr. Aldo Massa, Vice President of Business Development and Commercial, Mr. Renzo Macher, Vice President of Projects, Mr. José Malca, Vice President of Sustainability, Mr. Juan Carlos Salazar, Vice President of Geology Explorations, Mr. Roque Benavides, Chairman, and Mr. Raúl Benavides, Director. Before I hand the call over, let me first touch on a few items. On Buenaventura's website, you will find our press release that was posted yesterday after the market closed. Please note that today's remarks include forward-looking statements that are based on management's current view and assumptions.
While management believe these assumptions, expectations, and projections are reasonable in view of the currently available information, we are cautioning not to place undue reliance on these forward-looking statements. I encourage you to read the full disclosure concerning the forward-looking statements within the earnings results press release issued on October 29, 2026. Let me now turn the call to Mr. Leandro García.
Thank you, Sebastian. Good morning, everyone, and thank you for joining us today to discuss Buenaventura's third quarter 2026 results. Today, we will review our operational and financial performance and share our priorities for the coming quarters. After the presentation, we will be available to answer your questions during the Q&A session. Please go to slide two. This slide contains our cautionary statement and important information regarding forward-looking statements. I encourage everyone to review it carefully. With that, let's move to the operational and financial highlights of the quarter. The third quarter once again demonstrate the strength of our portfolio and the resilience of our business model. Starting with production, consolidated gold production reached approximately 29,000 ounces, 6% lower than in the same period last year. Consolidated silver production was 3.4 million ounces, a decrease of 21% mainly due to lower planned silver grades at Yumpag.
Copper production increased 7% to 13.6 thousand tons, supported by higher ore grade throughput at El Brocal. Turning to financial performance, total revenues increased 27% year-over-year to $545 million. This increase was mainly driven by higher realized prices together with higher copper sales volumes from El Brocal. EBITDA from direct operations increased 34% to $261 million, and the EBITDA margin expanded to 48%. Net income increased 50% to $268 million. Our balance sheet continued to strengthen. We ended September with approximately $1 billion in cash and a net cash position of $307 million. As a result, our leverage ratio improved to negative 0.25 x. This strong financial position also allowed the board of directors to approve an interim dividend of $0.5508 per share or ADS, reinforcing our commitment to shareholder returns. Moving now to operation costs.
This slide shows the evolution of C1 Cash Cost across our key operations. Starting with Uchucchacua and Yumpag, silver cash cost reached $11 per ounce. The year-over-year increase mainly reflected the continued use of more selective OCF mining method at Yumpag, additional ground support requirements, the transition to an owner-operated fleet, and lower planned silver grades. These effects were partly offset by stronger byproduct grades and lower commercial deductions. At El Brocal, copper cash cost was $5,474 per metric ton. This increase mainly reflected higher cement consumption for tailings management, scheduled maintenance, and the transition to owner-operated equipment. Importantly, copper production increased 7% year-over-year, and operation reached a processing rate of 13,500 tons per day by the quarter end. At Coimolache, cash cost declined to $1,103 per ounce, supported by higher payable gold production and stronger byproducts credits.
Overall, we continue to focus on cost discipline, productivity improvement, and stable operating performance across the portfolio. Next, let's review the progress of San Gabriel. Next slide, five, please. During the quarter, we continued to advance the initiatives required to support the ramp-up. Mining activities continued throughout the quarter, with the mining rate stabilizing at 1.7 thousand tons per day by quarter end and generating an ore stockpile of approximately 100,000 metric tons. During the quarter, we also commenced undercut mining below cemented fill, and the ramp-up remains ahead of plan. Within the processing plant, the first phase of the filtration system reinforcement was completed during this quarter. Our focus is now on optimizing filter performance through the first half of 2027. Metallurgical recovery is expected to reach approximately 70% in the fourth quarter of 2026, this year. On the tailings side, filtered tailings compaction also commenced during the quarter.
The current facilities are expected to support throughput of 1.5 thousand tons per day in the fourth quarter. Additional drying areas are expected to be completed by the second quarter of 2027, ahead of the next dry season. While the ramp-up has faced temporary processing constraints, we are addressing these challenges systematically and safely, with a clear focus on reaching full operating capacity. Let me now turn to our strong cash generation during the quarter. The third quarter was marked by strong cash generation. Turning to cash flow, strong operation performance and $126 million in dividends received supported the $242 million of free cash flow generation in the third quarter. Consequently, we ended the quarter with a cash balance of $1 billion. This liquidity gives us significant flexibility to advance our growth projects, reinforce operational capabilities, and continue returning value to our shareholders.
Let me go on now to our closing remarks. Before we open the line for questions, I would like to highlight a few key messages from this quarter. First, San Gabriel. We are actively addressing the operational challenges we have identified, and our team remains fully focused on reaching full ramp-up. We are optimizing filter performance and improving recovery rates, while tailings storage capacity continues to ramp up. Second, our flagship operations. We continue advancing initiatives to unlock their full value. On the operational side, we are transitioning to an owner-operated mining fleet and increasing capacity at our mines. In parallel, we have increased our exploration budget, which allow us to extend life of mine, grow our reserves and the resources, and develop near-mine targets. These two fronts complement each other, supporting both near-term efficiency and long-term sustainability. Third, preparing for El Niño.
We have been working proactively on this front. We have already made significant progress. Our priority is the safety of our people and communities, and the continuity of our operations. Finally, shareholder returns. This quarter, we distribute an interim dividend of equivalent to 20% of our net income for the first nine months of 2026, reflecting our commitment to creating long-term value for our shareholders. The annual dividend will be proposed by the board at its next meeting. Thank you, and we will now be happy to take your questions.
Thank you. We will now begin the question and answer session. To ask a question, dial in by phone and press star, then one on your telephone keypad. Make sure your mute function is turned off, and if you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star and then two. The first question will come from Carlos de Alba with Morgan Stanley. Please go ahead.
Yeah, thank you. Good morning, everyone. Good afternoon, actually. First one is on San Gabriel. If you can give some color as to how the performance in October has been. Maybe you can comment on the mining rate, if you continue to be around the 1.7 thousand tons per day, or given the inventory that you have already accumulated, maybe you are slowing down a little bit. And similarly on the processing plant, what is the rate that you have averaged in October? And just overall, do you expect to see an improvement already palpable in the fourth quarter in terms of production and cost, or this is something that we should maybe only see in 2027? My second question is on Trapiche. If you could maybe provide an update on the latest developments for that project.
And also, would you consider developing Trapiche with a partner that maybe not only de-risks the project from a financial point of view, given the size of the CAPEX for the project, but also maybe complement your expertise, if you find someone that has open-pit mining at altitude experience for copper extraction. Thank you.
Thank you, Carlos, for your question. In general, we have advanced very well with San Gabriel. Juan Carlos should give you more color about how we are going forward with the recoveries and production. In terms of Trapiche, of course, we are open to de-risk the investment, evaluating the possibility to have a partner there. The current state of the project, maybe Renzo could give you an advancing view of which is the current point of the project. Please, Juan Carlos.
Thank you, Leandro, and thank you, Carlos, for your question. Regarding San Gabriel, we are running now in the processing plant at an average of 1,400 tons per day. We are continuing with the ramping up of the processing plant. We expect to be running at about 1,700 tons per day in November, December. That should be the expected throughput for 2027. The processing plant by itself is not the constraint. The constraint is always downstream in the drying of the tailings and the compaction of the tailings. So, that's going to be the bottleneck for 2027. Regarding gold recovery, October will reach something around 60%. We are ramping up to 65%, 69%, very close to 70% along the quarter, up to December. So, that's the average that we will have as an entry point in 2027, 70% gold recovery for 2027.
Probably more information on that, we will be giving more color about that during the investor days, a couple of weeks down the road in New York.
Please, Renzo.
Yes. In regards to Trapiche, we have resumed some drills, about 20,000 meters of drilling, half of it for exploring the primaries, and the other half to get new samples, new fresh samples, to continue with the investigation on bioleaching to see if we can reduce the acid consumption. We continue our work to de-risk the project, advancing the engineering and permits for the access road and the power line, very important for the project. Thank you.
Thank you.
The next question will come from César Pérez-Novoa with BTG Pactual. Please go ahead.
Yes. Thank you. Two questions. Coming back to San Gabriel, with around 100,000 tons of ore stockpiled and the mining rates having stabilized at around 1,700 tons, what processing throughput should we expect by mid-2027, and what is the timeline to reach nameplate capacity? Not the repairs, but the effective nameplate capacity and the effective production rates. My second question is on El Brocal. You have reached 13,500 tons by the end of the third quarter, but grades and recoveries are declined. How much additional production growth can come from throughput increases versus requiring grade improvement? In the press release, you also comment that cement consumption for tailings continues to pressure costs. Is this a temporary issue, or should we expect the reported cash cost profile in the third quarter to persist into 2027? Thank you.
Thank you, César. Well, in terms of Brocal, we are working on the expansion of throughput from 13,000 tons per day to 17,000 tons per day. However, the fine copper, the fines of copper will be almost the same in the long term run. In the case of San Gabriel, we are preparing our budget for the following year. We are expecting to have a throughput between 2,000, 2,500 at the end of 2027, very close to 2028. Sorry, your last question, César, was around the tonnage of-
Yeah. On San Gabriel, the nameplate capacity, which I assume it would be late 2027 or beginning 2028, and then the production profile from gold ounces.
Yeah. Maybe Juan Carlos can give you more color in the exact number of the production.
Okay.
Yeah. Hi, César. Thank you for your question. The average production for 2027 is going to be in the order of 600,000 tons the whole year, 2027. In 2028, we expect to be around 800,000 tons per year. But at the end of 2028, we expect to reach nameplate capacity. Again, the problem is not in the processing plant. The bottleneck is actually in the capacity of the drying areas and also the available area in the dry stacking in order to compact the whole production in an organized way. So we need to have more available area. Remember that the tailing dam, in the case of San Gabriel, is dry stacking, and we are starting right now at the bottom of a V-shaped valley.
So we have a very small area at the bottom, and as long as we are making the compaction of the tailings, we move step by step upwards and gain more available area for compaction. The more area translate into more capacity for compaction or more tons of tailings to be compacted. So, we will be reaching the full nameplate capacity by the end of 2028.
Okay. All right. Understood. Thank you.
Again, if you have a question, please press star and then one. The next question will come from Tanya Jakusconek with Scotiabank. Please go ahead.
Oh, great. Good morning, everybody. I just wanted to finish off on San Gabriel. Maybe someone can just update me on what the ultimate recovery is expected. Is 70% what we're getting? It seems a bit low. Maybe what the ultimate recovery is and how do we get there? The second thing I want to have an update on San Gabriel is, how is the structure of the tailings facility? How's the repairs going, and are we on track to repair the structure?
Thank you, Tanya. Juan Carlos, please.
Yeah. The expected recovery for San Gabriel, gold recovery, is in the order of 85%. We are ramping up. We have been needed to add additional reagents to facilitate the cyanidation process. We are in the process of implementing that right now, as of today, and that's the reason we are ramping up to 70% by December. The gap to reach 85%, it's an ongoing process, but we need to add additional circuits to our flow sheet in order to achieve that number. That has to be tested. It's something that we have preliminary results so far, but we believe we are going to be reaching that in 2028. It's going to take a little bit more of time to get not only to full nameplate capacity of throughput, but also to reach the full project expected recovery for gold.
Regarding the repairs for the press filters, we are ongoing with the preliminary repairs. We started by the end of September with these works for repairing two of the three filters. We expect to have all the three filters set up, repaired, and with the supports, the steel and concrete supports, ready by April, May next year. At that time, after the rainy season in Peru, we will have our three press filters for tailings ready for production.
Okay. Can you remind me when you get to steady state, which nameplate capacity in 2028, what do you expect your mining cost per ton to be, and what would the production level in ounces be?
Okay. We should be around 1 million tons per year. That is about 3,000 tons per day. The operating cost at that time will be in the order of $180 per ton.
Okay. Are we looking at production of 150,000 ounces? I just forget what the grade will be ultimately. I say that because your recovery is moving, your grade is moving. So, what do you think a steady state production level is?
Yeah. I think it is about, Tanya, about 110,000, 120,000 ounces of gold per year.
Okay. That's helpful. Thank you. I wanted to also ask, you mentioned you want to go to owner mining at your operations. Can you, number one, remind me what operations you want to go to owner mining? And number two, what amount of capital should I be thinking about as you buy all the trucks and et cetera, et cetera? That's going to be high CAPEX, is it not, to go to owner mining?
Yes. The number one is Yumpag. Yumpag right now is 100% mined and developed by Buenaventura. We already bought in the order of 75% of equipment. We have outstanding deliveries of equipment, underground fleet, for the first quarter of 2027, in the order of $6 million additional equipment. Most of the capital is already being made. The equipment were delivered. In the case of Uchucchacua, we have about 75% of the mining done by Buenaventura, and probably 50% of the developments. In the case of El Brocal, we are right now with. Probably we will reach, to point it the other way, we will reach 100% of the production from the underground mine by Buenaventura by the second quarter of 2027. At the same time, we will reach almost 50% of the developments.
The other 50% of the developments in the more extended areas will be done by contractors. Finally, in San Gabriel, we have now 100% of the production and about 75% of the developments done by Buenaventura.
Okay. So, when I think of all of the capital you would need to put in for equipment and other, should I be thinking under $50 million? I'm just trying to get a sense of-
Yeah. For next year, I think putting it all together, I think it is in the order of $25 million for next year. All the deliveries of underground fleet that will be delivered by first and second quarter, I think it is in the order of $25 million-$30 million.
Okay. That is helpful. Thank you. My final question for Daniel Domínguez. Cerro Verde and the dividend, can you just remind us again what you are expecting? We keep seeing a nice dividend come from them. What are you expecting for dividends for 2026, and how should I be thinking for 2027?
Good morning, Tanya Jakusconek. This year, Cerro Verde has already disbursed $270 million, and we expect an additional dividend by the end of the year should be in the order of $50 million- $70 million.
Okay. Should I be thinking $300 million for next year?
Not necessarily. This is something that we have to discuss first. We are conservative with the plans of Cerro Verde, and we normally consider around $200 million, $250 million. But maybe we will have additional information for that in the investor day.
Okay. Thank you so much for taking my questions.
Thank you.
Ladies and gentlemen, with that, we will be concluding today's audio question and answer session. I would like to turn the floor back over to Sebastián Valencia, Head of Investor Relations, for any webcast questions.
Thank you, operator. The last question comes from Luis Rojas of Profuturo AFP. What is the remaining life of mine for Orcopampa and Tambomayo mines as of today? Has any consideration been given to extending the life of mine of them?
If you allow me, Leandro, to-
Yes, of course.
Thank you. Regarding that, we are continuing doing exploration in both mines. In the case of Orcopampa, we see, as in previous years, we have a short-term life in the order of two, three years to continue mining as we know the structures, but we continue exploring underground and starting an exploration in the vicinity of the operations. In the case of Tambomayo, we are getting a hold of operations in the mine and be focused more on the district exploration, where we are having very good results from the exploration done, performed during this year, 2026. Orcopampa will keep running for at least two, three years more, and in the case of Tambomayo, we will review our expectation to continue mining in the second quarter of 2027.
At this time, there are no further questions. I would like to turn the call over to the operator.
Thank you. That concludes the question and answer session of today's conference call. I would like to turn it back over to management for any closing remarks.
Thank you, operator. I want to thank you all for your time today, and I wish you an excellent day and best for this year-end. See you in two weeks in Buenaventura Day.
Ladies and gentlemen, that concludes Buenaventura's third quarter 2026 earnings results conference call. We would like to again thank you for your participation. You may now disconnect.