Buenaventura Mining NYSE: BVN reported higher second-quarter 2026 production, revenue and earnings, supported by the ramp-up of its San Gabriel gold project, increased output at Yumpag and favorable metal prices.
Chief Executive Officer Leandro García said consolidated gold production rose 12% year over year to 30,500 ounces in the quarter. Silver production increased 2% to 3.6 million ounces, primarily reflecting higher production at Yumpag, while copper production increased 2% to 13,500 tons as El Brocal maintained stable output.
San Gabriel produced 2,800 ounces of gold during the quarter and began commercial sales, marking its first contribution to Buenaventura's sales volumes. The operation remains in its ramp-up phase, with management targeting a stable and sustainable operation by the middle of 2027.
Financial Results and Balance Sheet
Total revenue increased 43% from a year earlier to $529 million. EBITDA from direct operations more than doubled, rising 113% to $277 million, while the EBITDA margin expanded to 52% from 35% in the prior-year period.
Net income reached $261 million, up 165% year over year. García attributed the results to stronger operational performance across core assets and the favorable commodity-price environment.
The company ended the quarter with $759 million in cash and $692 million in total debt, resulting in a net cash position of about $67 million. Net debt to EBITDA was negative 0.05 times.
Buenaventura also continued to receive dividends from its Cerro Verde investment. García said year-to-date dividends reached $274 million, including $118 million received in July after the end of the second quarter. Chief Financial Officer Daniel Domínguez said the company expects an additional $50 million to $100 million in dividends by the fourth quarter, implying total 2026 Cerro Verde dividends of $350 million to $380 million.
San Gabriel Ramp-Up Challenges
Management said San Gabriel’s underground mine is progressing in line with its plan, including the implementation of an undercut-and-fill mining method. The company expects to have its fourth underground mining fleet in place by the end of August and two additional contractor-operated fleets by November.
However, processing throughput has been constrained by tailings filtration issues. Juan Carlos, Buenaventura’s vice president of operations, said the high-pressure filter foundations have experienced structural movement beyond required tolerances. The company plans to reinforce the structures supporting its three press filters, with estimated spending of roughly $5 million to $10 million.
The company is also working to improve gold recoveries, which have been affected by organic matter and sulfides in the ore. Management plans to begin industrial-scale testing of additional reagents in August after laboratory tests produced favorable results. Buenaventura expects gold recovery to reach about 70% by the end of 2026.
To move closer to the approximately 85% recovery level in its budget, the company is designing an additional flotation circuit intended to remove organic material and recover gold associated with sulfides. Juan Carlos said the circuit could cost about $15 million and may be implemented by the end of 2027. The added operating cost was estimated at $1 to $2 per ton, compared with an operating cost base of about $130 per ton.
García said Buenaventura expects total 2026 capital expenditures of about $500 million, after spending roughly $200 million to $220 million in the first half. Remaining 2026 spending at San Gabriel is expected to total about $60 million.
Yumpag Expansion and Cost Initiatives
After the quarter ended, Buenaventura received approval to increase Yumpag’s mining throughput to 1,200 tons per day from 1,000 tons per day. García said the approval should support a roughly 10% increase in production compared with the company’s original expectations for the year, given that the approval came midway through 2026.
The throughput increase is also expected to reduce costs by spreading fixed expenses over more production. In addition, Yumpag is scheduled to connect to Peru’s national electrical grid during the fourth quarter, replacing diesel-generated power with grid electricity.
Juan Carlos said the combined effect of higher throughput and lower power costs could reduce Yumpag’s operating costs by roughly 15% to 17% from first-half levels by year-end.
Silver cost applicable to sales increased during the quarter, mainly because of higher commercial deductions tied to price-based escalators at Uchucchacua and Yumpag. García said the floor price used in the contracts during the first half was about $35 per ounce. Aldo Massa, vice president of business development and commercial, said new contracts beginning in September will use a $50-per-ounce base through December.
Other Projects and Weather Preparation
At the Trapiche copper project, Vice President of Projects Renzo Macher said higher copper prices have made the potential development of primary sulfides beneath the project’s secondary sulfides more relevant. The company expects to spend the next year and a half evaluating whether the opportunity is economically viable while continuing work on access roads, power lines, licenses and acid-consumption analysis.
Buenaventura has also allocated an additional $12 million of capital spending for preparations related to a potential strong El Niño event. Juan Carlos said the company has established committees at each mine to identify risks and prepare measures including increased pumping capacity, power for pumps, water-treatment facilities and reinforcement of critical water structures. Management said it had not experienced operational damage to date but is preparing for heavier rainfall beginning with the next rainy season in December 2026.
García added that the company does not currently expect to reconsider production at Orcopampa or Tambomayo following the recent decline in gold prices, although it continues to review the value generated by each ounce produced.
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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