Peru's Buenaventura paints rosy picture for 2024 on higher metals prices

Peruvian precious metals-focused miner Buenaventura projects stronger financial results for 2024 on the back of higher metals prices.

The mining company projects 2024 Ebitda at US$300-320mn, up from a previous estimate of US$250-270mn.

“At the beginning of the year we considered prices of US$8,500/t of copper, US$1,900/oz gold and US$23/oz silver. Now, with estimates of US$9,000 for copper, US$2,100 for gold, US$25 for silver, and with the start of activities in Yumpag, we project a better result,” CFO Daniel Domínguez told the company’s Q1 results call.

Buenaventura reported Q1 revenues of US$247mn, up from US$186mn in 1Q23.

All the company’s mining units – and those in which it has a major stake such as El Brocal (61.43%), Coimolache (40.09%) and Cerro Verde (19.6%) – registered an increase in almost all metals produced (copper, silver, lead and zinc). Silver production stands out due to the start-up of Yumpag and the resumption of operations at Uchucchacua.

Metal	1Q24	1Q23
Gold (oz)	36,495	38,068
Silver (Moz)	3.07	1.26
Lead (t)	5,187	1,430
Zinc (t)	8,814	1,552
Copper (t)	15,462	12,238

Source: Buenaventura

“On March 18, 2024, the Peruvian ministry of energy and mines granted Buenaventura its final operating permit to begin production at its Yumpag mine. This milestone marks the initiation of 1,000t/d uninterrupted mining at Yumpag, enabling Buenaventura to achieve its 2024 production guidance of 6.5-7.2Moz silver,” the company said in its results report.

Ebitda from direct operations amounted to US$94.4mn in 1Q24, up from US$51.6mn a year earlier. Net profit was US$67.1mn compared to US$72.8mn.

With the improved outlook, the company does not rule out readjusting its projections for 2024.

“We are evaluating operations on a daily basis. We may change the general projection at the end of 2Q24 if the scenarios we estimate come to pass,” said CEO Leandro García.

SAN GABRIEL

San Gabriel in Moquegua region is Buenaventura’s largest gold project under construction. In 2024, the company announced it will invest up to US$220mn in works after spending US$38.4mn by end-Q1.

According to the company, progress has been made with the installation and commissioning of the cement plant, and with the foundations where the processing plant will be located.

“The definitive camp has been fully completed, including offices, dining areas, and sleeping rooms. The initial phase of underground mine rehabilitation, focusing on the main ramp, has also concluded. Mine development tunneling will begin in 2Q24.” the report says.

Overall progress for the US$470mn project stands at 47% but Buenaventura does not rule out revising upwards the total investment in the project.

“We are evaluating the total cost [of the project], and we’ll have a better picture in the next presentation of results. For now, we estimate an increase of between 10% and 15% on the US$470mn previously estimated,” Domínguez added.

San Gabriel is due to begin commercial operations in the second half of 2025. Average annual production is put at 150,000oz gold over a useful life of 14 years.