Buenaventura Mining Q1 Earnings Call Highlights

Key Points

• Buenaventura's Q1 was driven by the San Gabriel ramp-up — gold rose 80% to 30,000 oz and silver 6% to 3.9M oz — with sales expected in Q2 2026 and a planned ramp to 2,000 tpd by Dec‑2026 and 3,000 tpd by end‑2027, although start‑up clay/moisture issues are constraining throughput.
• Management achieved several permitting milestones — including San Gabriel's Stage 1 operating permit and water use license, ITS approvals increasing capacity at Yumpag and El Brocal, and Trapiche's EIA — which they say will unlock capacity and increase operational certainty.
• Financially the company more than doubled revenue to $625M, reported EBITDA from direct operations of $386M and net income of $355M, finished net cash positive (~$760M cash vs $708M debt) and benefited from significant Cerro Verde dividends (YTD ~$157M).

Buenaventura Mining NYSE: BVN reported first-quarter 2026 results highlighted by higher gold and silver output, a sharp year-over-year increase in revenue and profitability, and continued progress on permitting across its project portfolio, according to management on the company’s earnings call.

Production trends led by San Gabriel ramp-up

Chief Executive Officer Leandro García said gold production totaled 30,000 ounces, up 80% from the year-ago period, “mainly due to the ramp-up operations at San Gabriel.” While the mine contributed to quarterly production, García noted the company expects to “begin recording sales in the second quarter of 2026” as ramp-up continues.

Silver production reached 3.9 million ounces, up 6% year-over-year, driven largely by El Brocal, which García said processed ore previously classified as low-grade silver ore. Uchucchacua and Tambomayo also supported the increase, with Uchucchacua benefiting from higher throughput and silver content and Tambomayo improving results by prioritizing higher-grade ore from upper sections of the mine.

Copper production declined 11% year-over-year to 10,900 tons. García attributed the decrease primarily to lower production at El Brocal as the company focused on processing silver ore.

Permitting updates across San Gabriel, Yumpag, El Brocal, and Trapiche

García outlined several permitting milestones achieved during and shortly after the quarter:

• San Gabriel: Stage 1 of the operating permit was received in the first quarter, authorizing the start of operations to process and commercialize ore. In April, the company also received the water use license allowing storage and use of water at the Agani Dam.
• Yumpag: A second ITS received in the second quarter of 2026 allows an increase in ore extraction to 12,000 tons per day. García said the company expects to receive a required mine plan modification in the third quarter of 2026 to achieve that production level.
• El Brocal: A first ITS approved in the first quarter increases mine extraction capacity to 17,000 tons per day, which management said aligns with its medium-term strategy.
• Trapiche: The environmental impact assessment was approved in the first quarter, providing environmental certification for construction and operation.

García said the permitting progress “help unlock capacity, support ramp-up, and increase operational certainty across our portfolio.”

Revenue, earnings, and balance sheet strength

Buenaventura posted total revenue of $625 million in the first quarter, which García said more than doubled year-over-year due to stronger operations and a more favorable market environment. EBITDA from direct operations was $386 million, more than three times the prior-year level, and margins improved to 62% from 41%, according to García.

Net income totaled $355 million, up 142% year-over-year. Capital expenditures were $81 million, “mainly focused on San Gabriel alongside sustaining investment and Trapiche,” García said.

Management also emphasized affiliate contributions. After quarter end, Buenaventura received $59 million in dividends from its stake in Cerro Verde, bringing year-to-date 2026 dividends received to $157 million. García said the quarter ended with $760 million of cash and $708 million of total debt, “resulting in a net cash positive position.”

San Gabriel commissioning: clay, tailings, and ramp-up constraints

In response to questions about San Gabriel, Vice President of Operations Juan Carlos Ortiz said first-quarter progress included concluding commissioning and training, and integrating processing circuits including crushing, milling, cyanidation, and tailings filtration.

Ortiz described several start-up issues, including ore moisture and clay-related material handling challenges. “We have some challenges with the high moisture of the ore, getting stuck in the conveyor belt for the crushing circuit,” he said, adding the company expects improvement as it enters the dry season and makes process changes to remove clays during screening.

Ortiz also noted a milling issue tied to an electronic device that has been replaced, and minor mechanical adjustments in cyanidation, including pump speeds and resizing small boxes to prevent leachate spills. On filtration, Ortiz said the company is at “50% delivery from the vendor” for filter presses and is increasing pressure step-by-step toward the 14 bars contemplated in the design.

Tailings handling remains a key ramp-up factor. Ortiz said work on the tailings dam will begin in the second half of May by pulling tailings from a temporary reservoir to dry them, with placement into the dam expected in June. He added that staff from Tambomayo will help train the San Gabriel team on drying, placement, and compaction.

Ortiz said the “main constraint will be the area that we have available in the tailing dam,” describing the site as a narrow valley where each compacted lift increases available area. The company expects to reach 2,000 tons per day by the end of December 2026 and full capacity of 3,000 tons per day by the end of 2027.

On clay specifically, Ortiz told analysts the deposit contains montmorillonite, an expansive clay that varies from 1% to 8% depending on location. Moisture increases during the rainy season can worsen stickiness in the crushing circuit. He said recoveries have not been negatively impacted, though the company adjusts slurry density to manage viscosity. Ortiz also said the company is developing a clay distribution model to help manage blending and reduce days with higher clay content.

Asked about the cost of mitigation measures, Ortiz said one option—a “banana screen” with washing—would involve about $300,000 for the equipment and roughly $1 million total installed capital, with an operating cost impact of about $0.10 per ton.

Cerro Verde dividend outlook, cost pressures, supply chain, and hedging

Buenaventura executives also discussed expected dividends from Cerro Verde. García said the company foresees “an excellent year” at Cerro Verde but does not have a fixed dividend payment policy. Chief Financial Officer Daniel Domínguez said that with copper prices “over $12,000 per ton,” Cerro Verde could generate more than $2.5 billion of EBITDA in 2026. Domínguez cited expected CapEx of $350 million to $400 million, taxes around $1 billion, and no debt, estimating free cash flow of $1.2 billion to $1.3 billion for the year under current prices. He added Cerro Verde “should be distributing around $200 million-$200 million to Buenaventura,” noting $160 million had already been distributed from January through April.

Domínguez addressed cost pressures tied to personnel expenses, attributing the increase primarily to workers’ profit sharing as profitability rose. He said profit sharing increased from $2.5 million last year to nearly $19 million this year, affecting both cost of sales and administrative expenses. Domínguez said wages rose only with inflation and that higher headcount at El Brocal and Uchucchacua related to new equipment did not drive a major year-over-year change.

On supply chain conditions, Domínguez said the company has not seen major disruptions. He noted diesel prices increased about 50%, with diesel representing about 5% of total operating costs, translating into an estimated 2% to 2.5% cost increase. He said there were no supply issues for reagents such as cyanide or sulfuric acid and that Buenaventura maintains one month of stock at mines and an additional three months of critical supplies in Lima at the port of Callao.

Buenaventura also reiterated its stance on hedging. In response to a question about remaining unhedged, Vice President of Business Development and Commercial Aldo Maza said the company can hedge but “prefer not to hedge,” citing past issues with SUNAT audits related to hedging activity.

In closing remarks, García thanked Vice President of Sustainability Alejandro Hermoza, noting it was Hermoza’s last earnings call after nearly 25 years with the company.

About Buenaventura Mining NYSE: BVN

Compañía de Minas Buenaventura SAA. NYSE: BVN is one of Peru's leading precious metals producers, primarily engaged in the exploration, development and operation of gold, silver and base metal mines. Headquartered in Lima, the company's core activities cover the entire mining cycle from concession acquisition and project evaluation to extraction, milling and metal refining. Buenaventura also holds interests in smelting, refining and trading services, enabling it to market its products both domestically and internationally.

The company's principal assets include several operating mines in Peru such as Uchucchacua (silver-lead-zinc), Orcopampa (gold-silver) and the Tambomayo gold mine.

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