Compañía de Minas Buenaventura (BVN) has reported a significant increase in its first-quarter earnings for 2024, with a notable 83% rise in EBITDA from direct operations compared to the previous year.
This boost was primarily due to improved performance at its El Brocal and Yumpag operations. The company also highlighted an increase in copper production and the successful receipt of dividends from Cerro Verde, which has bolstered its financial position.
Key Takeaways
- Buenaventura's EBITDA from direct operations surged by 83% year-over-year.
- Copper production increased by 26%, and silver production reached 3.1 million ounces.
- Oil production saw a 4% decline due to lower output at Orcopampa and Tambomayo.
- The company received dividends from Cerro Verde, enhancing its cash reserves.
- First-quarter CapEx was reported at $58 million, with a strong cash position of $174 million.
- Net debt EBITDA ratio stood at 1.78 times.
- The San Gabriel Project is 47% complete, with the first gold bar expected in the second half of 2025.
- Buenaventura is focusing on extending mine life to over 10 years and improving cost efficiency.
Company Outlook
- Buenaventura is committed to the San Gabriel Project, aiming for the mill construction to complete in early Q2 2025.
- Commissioning of the mill is expected in early Q4 2025, with commercial production anticipated in the same quarter.
- The company expects a 10-15% increase in the initial CapEx estimate for San Gabriel, which was $470 million.
- To date, $220 million has been disbursed for the San Gabriel Project.
Bearish Highlights
- Oil production has slightly decreased by 4%.
- Production of fresh ore in Coimolache halted in February 2024, with a resumption expected in Q1 2025, leading to increased costs in the coming quarters.
Bullish Highlights
- Dividends from Cerro Verde are expected to be between $120 million and $150 million for the year.
- The company anticipates receiving $180 million to $200 million from the sale of a royalty asset.
- Improvements at Brocal are expected to lead to a production increase to 11,000 tonnes per day by year-end.
Misses
- The deadline for the sale of the Coimolache royalty is July 15, with a second phase planned if the target price is not met.
Q&A Highlights
- Tanya Jakusconek inquired about underground development costs for Q2, and Aldo Massa provided clarification.
- Management discussed the possibility of adjusting the sale price of the Coimolache royalty if necessary.
- Commercial deductions decreased due to improved commercial terms and the sale of concentrate.
Buenaventura's first quarter has set a strong precedent for the rest of 2024, with the company making significant strides in its operations and financial health. The focus on the San Gabriel Project and the strategic sale of assets demonstrate the company's proactive approach to ensuring long-term sustainability and profitability.
Despite some operational setbacks, the overall outlook for Buenaventura remains positive as it continues to optimize its mining operations and strengthen its balance sheet.
InvestingPro Insights
Compañía de Minas Buenaventura's (BVN) impressive first-quarter performance is further illuminated by real-time data and insights that underscore the company's financial dynamics and market valuation. Here are some key metrics and tips to consider:
InvestingPro Data:
- The company has a market capitalization of approximately $3.96 billion, reflecting its significant presence in the mining sector.
- Buenaventura is trading at a high earnings multiple, with a P/E ratio of 199.73, indicating investor confidence in its future profitability.
- The stock is currently trading near its 52-week high, with the price representing 96.92% of this peak, showcasing the recent upward trend in its market valuation.
InvestingPro Tips:
- Buenaventura is expected to see net income growth this year, which aligns with the company's strong first-quarter earnings report and future projections.
- The company's gross profit margins are impressive, standing at 41.22% for the last twelve months as of Q4 2023. This robust margin underpins the company's financial health and operational efficiency.
Investors interested in further insights can explore additional InvestingPro Tips tailored for Buenaventura, which are available on the platform. Currently, there are 11 additional tips that can provide a deeper understanding of the company's performance and potential investment opportunities. For those looking to access these valuable insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Full transcript - Compañía de Minas Buenaventura (BVN) Q1 2024:
Operator: Good day ladies and gentlemen and welcome to the Compañía de Minas Buenaventura First Quarter 2024 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. And please note that this call is being recorded. I would now like to introduce your host for today's call Mr. Gabriel Salas Investor Relations Officer. Mr. Salas you may begin.
Gabriel Salas: Good morning everyone and thank you for joining us today to discuss our first quarter 2024 results. Today's discussion will be led by Mr. Leandro Garcia, Chief Executive Officer. Also joining our call today and available for your questions are Mr. Daniel Dominguez, Chief Financial Officer; Mr. Juan Carlos Ortiz, Vice President of Operations; Mr. Aldo Massa, Vice President of Business Development and Commercial; Mr. Alejandro Hermoza, Vice President of Sustainability; Mr. Renzo Macher, Vice President of Projects; Mr. Roque Benavides, Chairman; and Mr. Raúl Benavides, Director. Before I hand our 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 close. Please note that today's remarks include forward-looking statements that are based on management's current views and assumptions. While management believes that its assumptions, expectations, and projections are reasonable in view of the currently available information, you are cautioned not to place undue reliance on these forward-looking statements. I encourage you to read the full disclosure concerning forward-looking statements within the earnings results press release issued on April 29th, 2024. Let me now turn the call to Mr. Leandro Garcia.
Leandro Garcia: Thank you, Xavier. Good morning to all and thank you for joining us today to discuss the quarterly results of Compañía de Minas Buenaventura. On Slide 2, it's our cautionary statement, important information that we encouraged you to read because a couple of certainties severities. Today, we will be discussing our performance for the first quarter 2024, highlighting key achievements and strategies moving forward. After the presentation, we will be available for our Q&A session, where our team will be happy to answer your questions. The next slide please. I would like to highlight a few key areas that contribute to our strong first quarter 2024 results. Our EBITDA from direct operations for the first quarter has increased 83% compared to the previous year, primarily driven by improved performance at El Brocal and Yumpag. This is also reflected in a higher EBITDA margin of 38% compared to 28% from the previous year. Third quarter 2024 operating income reached $46.9 million compared to the last year's $12.6 million. Copper production increasing 26% year-over-year, driven by steady provision rate at El Brocal, which surpassed 10,500 tons per day in the underground mine. Silver production reached 3.1 million ounces, a significant increase compared to the 1.3 million ounces produced last year for the same period. From this 1.5 million ounces come from Uchucchacua and Yumpag where we got approval of the final mining operating permit earlier than expected. Oil production decreased 4% year-over-year, reaching 36,500 ounces since we are now mining lower rates of Orcopampa and Tambomayo. We are pleased to inform that the dividends from Cerro Verde were received on April 26 last Friday. These dividends will strengthen our overall financial standard. Buenaventura's CapEx in first quarter 2024 total $58 million, which includes $38 million allocated to the San Gabriel Project . Our cash position reached $174 million with a total debt of $699 million. We continued deleveraging the company reaching a net debt EBITDA ratio of 1.78 times, lowest in the two years -- in two years and within our target range. Moving on to our cost structure in Slide 4, please. First quarter 2024 all-in sustaining costs are reduced by 58% year-over-year, this reduction is primarily attributed to the copper production at El Brocal and see the contribution from June. However, it is important to mention that part of the Uchucchacua, have been considered to be CapEx. Normalized all-in sustaining cost should be around US$3,600 per ton of copper, still below than the previous year. Moving on the cost applicable to sales strength. As you can see the prioritization of copper ore at El Brocal and the ramp-up in the underground mine is translating into a continuous cost reduction trend. Silver CAS has decreased year-over-year, primarily driven by higher contribution of to Uchucchacua and Yumpag Silver ounces, normalized cash including Yumpag cost is expected to be between $17 and $18 per ounce. Gold CAS has decreased year-over-year and even quarter-over-quarter primarily driven by higher grades and ore nil at El Brocal underground mine, despite lower grades at Tambomayo and Orcopampa. On the next slide, we will be presenting the free cash flow generation. During the first quarter of 2024, we reduced our cash position by $46 million, primarily due to the intensive capital expenditures campaign which includes San Gabriel. The EBITDA to free cash flow reconciliation is explained by the following breakdown of inflows and outlets. El Brocal, Yumpag and Orcopampa have been the main contributor for the first quarter 2024. As we have mentioned before, Buenaventura is going through a growth based placed with an intensive CapEx related to San Gabriel. The previously reported dividend from San Gabriel will be registered in the second quarter of 2024. Moving on to Slide 6. In the next year Buenaventura, we will be focusing most of its efforts in the San Gabriel Project. On this slide, you can see the projects, the Buenaventura progress reaching a 47% overall progress by the first quarter 2024, primarily driven by the full installation and operational concrete plan. The key milestone, we are closely monitoring for the next quarter is the start of the mine development tunnelling and the start of the SAG Mill assembly. On the next slide, we are showing the competition of the Definite Campsite that is fully operational since February. We have more than 2,000 sleeping beds, installed considering the definite and organic Campsite. Water treatment plant, offices and dining areas are fully operational. On the next slide we are showing the progress the processing platform. Here is the Milling area where we are planning to start the SAG Mill assembly during the next quarter. And on the next slide, you can see the installation of the Thickener. Finally, I would like to finish the presentation with a couple of closing remarks, first, encouraging production resource at Yumpag a clear reflection of our success delivering mining products. With final mining permit approved, we are now focusing on achieving a stable and efficient production rate at 1,000 tons per day. This will be reflected in a significant increase in revenues in the following quarter. Excellent performance at El Brocal, in line with plan to reach 11 tons per day by the end of the year, supported by a positive trend in copper prices. Third, we are proud to announce that we have achieved a significant progress at The San Gabriel project. Now, standing at an impressive 47% overall completion. On track as we aim of our first gold bar by the second half of 2025. Currently reassessing the project's CAPEX to ensure an accurate total cost while identifying opportunities to optimize the construction. We continue our efforts to transform our mining operations into assets with plus 10 years of Life of mine and focus on optimization them to achieve greater cost efficiency. Thank you for your attention and I will hand the call back to the operator to open the line for question. Operator, please go ahead.
Operator: Thank you. We will now begin the question-and-answer session [Operator Instructions] And the first question will come from Cesar Perez-Novoa with BTG Pactual. Please go ahead.
Cesar Perez-Novoa: Thank you. Good morning, everyone. If I may I have three questions. The first one relates to your guidance. Essentially, we have seen a meteoric rise in basin precious metals. And given the implications that it has for revenues and by-product credits, is management looking to review the volumes the revenue and EBITDA that you outlined in the previous call for this year? My second question relates to cost. There was an important 71% drop CAS – in Gold CAS at Coimolache to $1000. Is this due to higher volume or specific initiatives? I believe you mentioned in the press release that the company could not place fresh ore in the pads which makes me think that there may be some room for improvement. And finally at El Brocal costs went down too and wanted to understand if this was due to efficiencies attained in the first quarter or if the company used stockpiled mined inventories to dilute the costs. Those would be my questions, gentlemen. Thank you.
Leandro Garcia: Thank you, Cesar for your question. In terms of – if we can change the guidance, we are evaluating all the operation day. We maybe can change the guidance at the end of the second quarter, if things are as we are thinking that will be. In terms of Coimolache, remember that last year we didn't produce any ounces in Coimolache. So this is a comparison this quarter to the last quarter through the first quarter of the last year. The information you have with real respect of – we are not allowed to put more ore in production. It's true. We are just waiting the permit to construct to build the new platform to put more ore. And we expect any moment that permit. But the production will begin in the first quarter of the provision ore, where we will begin in the next quarter of the following year. So we should expect to increase the production of gold ounces in the second quarter of the 2025. And El Brocal, actually we are making many airports to be more efficient. I pass the microphone to Juan Carlos maybe he can give more color of your question.
Juan Carlos Ortiz: Thank you, Leandro. Thank you for the question. Yes, with this increase in price of Coimolache, there is a lot of incentives to increase production. We are reviewing our mining plans but at this moment, we are looking more to be in the upper range of our guidance the annual guidance. So probably we're going to be more closer to the upper range in that guidance. Any follow review, Leandro comment, we probably announced if there is any for the next conference call. In the case of Coimolache, last year, at the end of last year in December, we have a window of opportunity because there was no rain in the area. So we placed almost 200,000 tons of ore in the past, in the last few days of 2023. So we have an advanced work in 2023. And that's the reason we have the ounces of gold in 2024 that part of the call was done, was incurred during the last quarter of 2023. So that's the reason we have a good looking the cost -- in the cash cost of Coimolache. But as Leandro mentioned, we stopped the production of fresh ore in February this year. We will be waiting for the permits and the construction of the new areas in the Yumpag, probably the permit by the end of the year and construction at the same time the operation of new -- obviously, the breaking of fresh ore will be in the first quarter of next year and probably the ounces of gold start coming down from Yumpag in the second quarter of 2025. So, probably in the coming quarters the cost of Coimolache -- the cash cost of Coimolache will be coming slightly up, because we are not doing more fresh ore and production of gold will start to decrease in the coming quarters, and the next year that we will resume the placing of fresh ore. And regarding Brocal, yes, where there was a lot of improvements in the operation. We are close to 10.5 kilo tons per day in production. We are looking forward to reach 11,000 tonnes per day by the end of this year. We are well track on that purpose. And we are reducing cost. We have been done this increase in production without any additional people or any additional scope or track. It's just a matter of improvement. We would only around this budget system that we helping a lot to increase the productivity of our equipment and we are ramping up the results of that investment in the previous quarter. So, just more on the improvement and operational expertise that we are working off the benefits and getting this no cost in El Brocal.
Cesar Perez-Novoa: All right, guys. [indiscernible]
Leandro Garcia: So this is Daniel, I think there's a couple of additional comments to you Cesar.
Daniel Dominguez: Good morning, Cesar.
Cesar Perez-Novoa: Okay. Thank you.
Daniel Dominguez: Just to put some numbers to your question regarding the EBITDA. At the beginning of the year, we considered the metal prices of $8,500 for copper, $1,900 for gold and $23 for silver. And our EBITDA was an estimated EBITDA of between $250 million and $270 million. Today, we have higher prices and considering $9,000 for copper $2,100 gold and $2,500 for silver in addition to the production from Yumpag, that is coming along since March. We are estimating a consolidated EBITDA of between $300 million and $320 million. That will be the improvement of the additional EBITDA that we expect.
Cesar Perez-Novoa: Okay. Thank you very much, Daniel. So it’s a large 50 million shrink at the EBITDA level. Very clear. Thank you all gentlemen, for your detailed questions. Thank you.
Operator: Your next question will come from Carlos De Alba with Morgan Stanley (NYSE:MS). Please go ahead.
Carlos De Alba: Yes. Thank you very much, and good morning, everyone. A couple of questions. First one is can you please quantify what the impact was of not having -- not taking the cost of Yumpag through the P&L and since they were capitalized according to the exploration permit as definitely that was a positive surprise, but I just wanted to understand how much of a EBITDA impact that represented, the fact that it was not run through cost but take into CapEx. And second, any comments on Cerro Verde? We saw that Cerro Verde paid $29.4 million for the second quarter dividends. That is down from the $41 million or so level that the company had paid in the last six -- can you provide any color? Is the expectation that this is the new range that we will see in the coming quarters? Or do you think that there is upside to increase but not what you think, but more like what Freeport has said they will do? Thank you.
Leandro Garcia: Thank you, Carlos. Thank you for your question. Well, the impact of the cost assigned to the CapEx instead of the operating cost, it's kind of difficult to calculate, but we expect the cost of Yumpag will be around $16 per ounce -- between $16 and $17 per ounce. From beginning the second quarter, we will have the exact calculation revealed in our financial state. In the case of Cerro Verde, the dividends, actually, we were not expecting any dividends in this quarter coming from the profit from them, which for us was a surprise. But still, we maintain the expectation to have in the total of the year, total dividends between $120 million and $150 million. We believe that with this level of prices that figure can be completed at the -- fulfilled at the end of the year. I don't know, maybe Juan Carlos or Daniel want to add some comment.
Juan Carlos Ortiz: Yeah, regarding the Yumpag, we have a total CapEx total of $8 million in the first quarter. That was not only part of the operation, but it's the whole package of construction was breaking the ore and transportation of ore into the Uchucchacua facility. So as Leandro mentioned, it's kind of a bulk number, but probably more linked to the production not only from the quarter, but for at least the whole year. So it's a number that need to be taken with caution because it didn't match exactly the amount of ounces of silver that we produced in the quarter. It's a combination of properly CapEx and part of the effort dedicated to creating the ore and transport of the ore from Yumpag into the Uchucchacua processing facility. Maybe Daniel has some color or the specifics.
Daniel Dominguez: I would like to comment about Cerro Verde question. At this level of prices, Cerro Verde should be generating an EBITDA of around $1.8 billion. The working capital that we expect is around $0.7 billion to $0.8 billion, with very small CapEx, around $300 million to $350 million, which gives us a free cash flow of around $750 million. These are at level of prices of close to $9,000. Having there, the minimum cash already in their balance, they should be distributing dividends in the order of $750 million, which gives us the $150 million that Leandro mentioned at the beginning.
Carlos De Alba: Great. That would be great news. Just to follow-up on that, Daniel. Is this -- has this been approved by Cerro Verde's Board? Or is just an expectation at this stage?
Daniel Dominguez: These are numbers -- sorry.
Carlos De Alba: No. Go on, sorry.
Daniel Dominguez: These are numbers that were shared by Cerro Verde, of course, at lower price of copper. We have adjusted them internally. But there is no -- as you know, there is no dividend policy, but what they normally do is to pay dividends of the -- in excess of the cash that they have -- in excess of the minimum cash that they have, which is $500 million.
Carlos De Alba: Thank you. Thank you very much.
Operator: [Operator Instructions] Our next question will come from Tanya Jakusconek with Scotiabank. Please go ahead.
Tanya Jakusconek: Hi, good morning, everyone. Thank you so much for taking my questions. Daniel, I just have some very simple modeling questions for you and then I have some other questions on the assets. So can I just start on the simple modeling questions? Can I just -- your D&A was kind of low at $42 million in Q1 as was your G&A at $10 million and as was the CapEx at $58 million. Can you review with me, what you're expecting for those three numbers for the year?
Daniel Dominguez: Tanya, for the D&A as you know we -- in the last two quarters of last year, we had -- recognized the first stripping that we had in the asset for El Brocal reserves. So in the first quarter, it was a minimum of $5.5 million that we recognized related to these -- to the deferred stripping. In the third and the fourth quarter, this amortization was over 23 -- $20 million $23 million. So what we expect for the following quarters is, something about $35 million from depreciation and amortization.
Q – Tanya Jakusconek: $35 million, a quarter for the next three
Daniel Dominguez: Yes. For quarter, for D&A.
Q – Tanya Jakusconek: Okay. And then G&A.
Daniel Dominguez: G&A, as you know we have sold Contacto and there is a decrease in G&A from that we are not considering any more the Contacto figures. And we have been doing also other adjustments to our expenses. For example, we have reduced the size of our location, our headquarter. So we expect per quarter around $12 million of G&A.
Q – Tanya Jakusconek: Okay. Perfect. And then the CapEx, which I think was originally guided around $300 million for the year, it looks like you would have only done $58 million in Q1. So is that $300 million still viable?
Daniel Dominguez: Yes, this should be catching up the rate of expenditures. So, we
Q – Tanya Jakusconek: But San Gabriel, I asked about the sale of the Yanacocha royalty. I thought we mentioned it would done in April. Can we just talk about the balance sheet. Yet we are going to get money’s coming from the Cerro Verde dividend which is great but can you talk to me about what else are you seeing in terms of sources of cash besides your operating cash flow that’s coming from your mine. That other sources of cash from sales and/or banks and lending?
Daniel Dominguez: Yes, apart from our operating our EBITDA generated by our operations, we do expect the sale of one asset. We should be receiving this year between $180 million and $200 million from that sale. Then we expect the sort of early dividends, which could be between $120 million and $150 million. And in addition to that, we have already compromised three RCFs revolving facilities with three local banks. And these are -- these three facilities are up to $200 million. Currently they are undrawn, but probably we will use them between the third and fourth quarter in order to fund any requirement for San Gabriel.
Q – Tanya Jakusconek: Okay. And the one asset sale, is that an asset or a royalty like -- there's a difference one is an asset and one is the royalty.
Daniel Dominguez: It's a royalty.
Q – Tanya Jakusconek: Royalty. Okay. That's helpful. Thank you. And then if I could ask one more question. I am very interested in San Gabriel and what is happening there. And I see from the slides that you are -- you've done quite a bit. You've got the bag that you've got to assemble, you've got the underground tunneling -- the development of the underground ramp. And I guess it's ramp on additional declines in levels. Can someone just walk me through, the second half of this year into 2025 again what needs to be done? And then Daniel for you, the last capital I remember on this mine was $450 million to $470 million. Can you let me know how much we have spent to date and when we're getting this new CapEx number? Thank you.
Leandro Raggio: Of course, Tanya. Here with us is Renzo Macher, he can explain to you all your questions in San Gabriel.
Tanya Jakusconek: Thank you.
Renzo Macher: Hi, Tanya. So what's coming in -- hi-- as you can see in the pictures and there's great progress and it’s moving out of the way of the critical path. And we have started with all the complete placement. And we have the mechanical, steel and piping contractor on site. So we're going to see a lot of advancement in that area. The underground contractor for development in the mine it's already on site. So we're going to see the first -- in the next quarter we're going to see the first mine development advancing. And the electrical and signal controller, we shall be closing that contract towards end of May, beginning of June. So you're going to see all those three main contracts, which is pretty much all of them, the remaining big contracts, fully onboard, producing first area. Again we have this 98% of engineering and procurement. So it's about managing this advantage in favor of deposits.
Tanya Jakusconek: Okay. So these three contracts are going to be placed, it looks like in Q2. So the concrete still the underground development and the electrical, right? These three are going to be placed in, or awarded in Q2 then you're going to have all of that work, obviously, done Q2 onwards. And then when do we actually expect the mill to start to turn wet commissioning, dry commissioning? When are we expecting that?
Renzo Macher: We already have from those three contracts you mentioned, the concrete, mechanical piping, and steel it's already signed and it's running now. Underground is fine and we'll be producing now, and electrical and signal is the one that we need to -- we're at the final stage of the bidding process. So it should be finished in May and awarded on May. Now in the pictures you can see that we are constructing the mill already. Foundations, the first foundation has been put. We're going to be finishing construction towards the early second quarter of next year and that's when the commissioning is going to start.
Tanya Jakusconek: Okay. And how long do you think commissioning will take? Is it like 60% of capacity for 30 days in terms of getting to commercial production?
Renzo Macher: Towards early fourth quarter we shall be.
Tanya Jakusconek: Okay. So Q4, it's going to take you two quarters to go commercial.
Renzo Macher: Yes. I mean, we are very advancing. We're going to be very advanced in construction, so we can start commissioning earlier for sure.
Tanya Jakusconek: Okay. Yeah, I should start thinking commercial in Q4. That's when we start taking this through the income through revenue. Okay. And Daniel just for you, can I just get an update on the CapEx number like $450 million to $470 million was the last number I have. Maybe you can give me a little bit of an idea when a new one is coming and where are you seeing changes in this CapEx number positive and negative?
Daniel Dominguez: Yes, Tanya. We are still evaluating the total CapEx. We will have a better figure for the next quarter conference call. But we expect from the initial CapEx of $470 million, we expect around 10% to 15% increase. And currently we have been -- we have already disbursed since 2022 until the end of last quarter, $220 million for San Gabriel.
Tanya Jakusconek: Okay. That's great. And then I guess in Q2 someone can give me an idea about when you're doing your development, how the development is coming in terms of costing for the underground as well? Thank you so much for helping me.
Leandro Raggio: Tanya, if I may pass the call to Aldo, he want to make a little more -- give you a little more color about the sale of the Coimolache.
Aldo Massa: Hi Tanya. I want to clarify a little bit the time for the sale of royalty of Coimolache. We have time until July 15. If we don't reach the price -- the target price, we can go to the second phase and ask for a lower price first to new one and then to the interest in that volume. But the idea is to try to finish that sale during this year. But in the first stage, we have time until July 15.
Tanya Jakusconek: Okay. So, if I understand correctly, you have until July 15 in this first phase. If you do not get the price you want, then you go to a second phase. And how do you go back to new ones because new ones I think has the right to use that longer.
Aldo Massa: It’s a right of person fleet. It’s a little bit different, but we have to ask for a price of new one. If they don't accept to buy at that price, we also can go to the market again. This is already done.
Tanya Jakusconek: Okay. Got it. Okay. All right. So, if we don't get anything by July 15, then we're going to Phase 2.
Aldo Massa: Yes. Exactly.
Tanya Jakusconek: Okay. Great. Thank you for the clarification. I really appreciate it.
Aldo Massa: Thank you.
Operator: 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 Gabriel Salas, Investor Relations Officer for any webcast questions. Please go ahead.
Gabriel Salas: Thank you, operator. The first question comes from Orlando Barriga from Credicorp (NYSE:BAP) Capital. Can you please comment on commercial deductions? They decreased in a per ton of unit sold basis. So I would appreciate some color on that.
Aldo Massa: Okay. Sorry Leandro. Thank you for the question. It happen two things in the market. The first one is that the commercial direction has to go lower a lot. We have better commercial terms for this year. That's why one of the reasons why the commercial is going down. And the second one was that we sold 13 dry metric tons of concentrate during the first Q with no worse in Brocal. And that gives us of course better terms and lower reductions. That was the two main reasons why the reaction was so low in this quarter.
Gabriel Salas: Thank you, Aldo. At this time, there are no further questions. I would like to turn the call over to the operator.
Operator: Thank you. That concludes the question-and-answer session for today. I would like to turn it back over to management for any closing remarks.
Leandro Garcia: Thank you, operator. Before we finish today's conference call, thank you. I want to thank you very much for making the time to join us and be interested in our company. Thank you again and have a wonderful day.
Operator: Ladies and gentlemen, that concludes today's conference call. We would like to thank you again for your participation. You may now disconnect. Goodbye.
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