Key points for investors:
- Operations: Gold production rose to ~30 koz (+80% YoY) driven by San Gabriel ramp-up; silver production was 3.9 Moz (+6% YoY) led by El Brocal, Uchucchacua and Tambomayo; copper production was 10.9 kt (‑11% YoY) due to focus on silver ore at El Brocal. San Gabriel entered ramp-up and is expected to begin recording sales in Q2 2026.
- Ramp-up details & risks: San Gabriel has completed most commissioning but faces operational issues (sticky montmorillonite clays in crushing, some mill and pump fine‑tuning, filter press delivery at ~50%). Management expects these issues to be largely resolved in Q2, tailings placement to begin in June, 2 ktpd by Dec 2026 and full 3 ktpd capacity in 2027. Small incremental CapEx (~$1M) and minor OpEx impact (~$0.10/t) may be required for clay handling (screens/drums).
- Permitting progress: Multiple permits received in 2026 including stage one operating permit and water use license for San Gabriel, ITS increases at Yumpag and El Brocal, and Environmental Impact Assessment approval for Trapiche — increasing medium‑term capacity and project optionality.
- Financials & balance sheet: Q1 revenues $625M (+>100% YoY), EBITDA from direct operations $386M (margin ~62%), net income $355M (+142% YoY). CapEx Q1 $81M. Cash position $760M at quarter end, with net cash positive. Dividends received from affiliates (notably Cerro Verde) of ~$157M YTD, including $59M in April.
- Cash generation from affiliates: Management expects very strong cash generation at Cerro Verde in 2026 (management estimates EBITDA and free cash flow well above historical levels) and potential additional dividend distributions to Buenaventura.
- Costs & inflation: Cost pressures driven mainly by higher workers' profit sharing (large increase YoY), higher personnel costs, increased cement consumption and FX impact; diesel price increases will raise OpEx modestly (diesel ~5% of OpEx implying a ~2–2.5% OpEx increase). Company maintains one‑month site inventories and ~3 months in Lima for critical supplies—no major supply disruptions expected.
- Capital allocation & strategy: Management is reviewing whether to develop Trapiche solo or with a partner (decision not made); they continue de‑risking Trapiche (acid logistics, exploration, permits). Corporate policy remains generally unhedged on metals.
- Governance / other: No expected near‑term adverse changes to tax/royalty regime based on the likely composition of the new Peruvian Congress per management; political uncertainty monitored but not viewed as an immediate threat to permitting or fiscal stability.
Overall: The company reported a strong quarter driven by operational ramp‑up and affiliate dividends, good liquidity and a positive balance sheet. Key near‑term investor watch items are San Gabriel ramp‑up progress and timing of additional Cerro Verde distributions.
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