Good day, ladies and gentlemen, and welcome to the Compañía de Minas Buenaventura Fourth Quarter 2018 Earnings 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. Rodrigo Echecopar, Investor Relations. Mr. Echecopar you may begin.

Good morning and welcome everyone. Presenting on the call today is Mr. Victor Gobitz, CEO. Also present and available for your questions are Mr. Leandro Garcia, Vice President and CFO; Mr. Juan Carlos Ortiz, Vice President of Operations; Mr. Raúl Benavides, Vice President of Business Development; and Mr. Alejandro Hermoza Vice President of Sustainability. Before we get started, during today’s call we will make forward-looking statements that reflect the company's current expectations about future plans and performance. These statements rely on assumptions and estimates, and actual results may differ materially due to risk and uncertainties. I encourage you to read the full disclosure concerning forward-looking statements which is in the press release we filed on February 21, 2019. With that, I will now turn the call over to Mr. Victor Gobitz, CEO. Please go ahead.

Thank you, Rodrigo. Good morning to all and thank you for attending this conference call. We are pleased to present our results of the fourth quarter of 2018 from Compañía de Minas Buenaventura. We have prepared a short Power Point presentation which is available in our webpage. Before we go further, please take a moment to review the cautionary statement shown here on slide two. Moving on to slide three, highlights were as follows: As a key initiative, the company is implementing its De-Bottlenecking Program to increase profitability and strengthen its long term business case. As part of this strategy, Buenaventura has centralized operations, re-focused mining plans on the highest-margin areas and optimized processing facilities. As a consequence, guidance adjustments were made for certain operations. EBITDA generated during 2018 from this program reached $24 million. Additionally, with the enhanced methodology of maximizing capital allocation, 2018 capital expenditures were $111.3 million, a significant decrease compared to $259.5 million in 2017. In this fourth quarter of 2018 our EBITDA from direct operations was $68.9 million, compared to $118.9 million reported in the fourth quarter of 2017, primarily due to lower metal prices and a reduction in volume sold at the company’s Orcopampa and La Zanja mines. In this fourth quarter adjusted EBITDA including associated companies reached $148.6 million, compared to $248.4 million a year ago. In this fourth quarter net loss was $72.9 million, compared to a net income of $8.3 for the same period in 2017. The loss in this fourth quarter was primarily due to Cerro Verde´s recognition of interest and penalties in the amount of $406.6 million, 100% basis related to Cerro Verde’s royalty dispute with tax authority. . The company was compensated through its Business Interruption Insurance related to problems detected in May 2017 at El Brocal’s biggest…

Thank you [Operator Instructions]. And we’ll take our first question from Carlos De Alba from Morgan Stanley.

Yeah hello! Good morning everyone. Thank you for the call. Just maybe, can you please comment on the situation at Orcopampa. How is the ramp up coming along after the shut down and the second, if you can just clarify on the De-Bottlenecking, the target for 2019? Is this a cumulative number or is just fewer incremental EBITDA in 2019 on the back of the 12 programs or phases that you are – or initiatives that you are implementing. And then finally, given the I guess settlement or the solution on the tax dispute that sort of where they had, how should we think about the implications of that resolution on the potential dividends that the company sort of were – might be it this year or next year? Thank you.

Thank you Carlos for your question. The first one is related to Orcopampa and the ramp up. Here it is from Carlos Ortiz who is our COO. He will answer this part.

Hi Carlos. Well, we are seeing operation as expect by early February. We are progressing with exploration with the nearby – in the near area for the mine where we are planning to centralize operating in the near future and we are expecting to have result from this early, where you can pay it by April, by the second quarter of this year and we will be reporting any progress as soon as we get good news from the exploration.

Just to summarize Carlos, in the fourth quarter of this year we expect to reach profitable result from Orcopampa. Clearly, we have – as Carlos said, we are obtaining very good exploration results. The second question was regarding the De-Bottlenecking program. Yeah, it’s a cumulative analysis. Probably I have to recall that these are the programs with the expansion of three years and we expect to increase the total EBITDA in the area of $120 million to $150 million. In the first year, in 2018 we have increased annual EBITDA in the area of $24 million. During 2019 we expect to increase that number in the area of $40 million to $50 million and in the last year, in 2020 we expect to capture the full value of this program. Your third question was regarding Cerro Verde, year clearly Cerro Verde after this, the solution to this tax dispute is it’s an asset with a long term perspective and very robust financial numbers. In the coming broad meeting that will be held on March 8, one point of the agenda is to discuss, define policy dividend. After that we will be able to share this information with you.

Alright, but do you see any potential negative implications from the EBITDA from the settlement and the tax payment.

No, because in the worst case scenario they are – Cerro Verde has the right to pay this amount in an extension of 66 months, which is very – from a treasury perspective is very, very easy, 66 months.

56?

66.

66, alright okay. Thank you very much.

They have the right to refinance the number.

Understood.

Thank you, Carlos.

Thank you, Carlos.

Thank you. We’ll take our next question from Tanya Jakusconek.

Hi, good morning everybody. Thank you very much. Maybe just coming back to the De-Bottlenecking, so I am 150% sure, you mentioned that it is cumulative. So you've done 24 million in 2018. So on a cumulative basis you are expecting you know to get to the $40 million to $50 million, another $20 million or so improvement into ‘19 is that correct?

No, it’s not correct, Tanya.

No, so its $40 million to $50 million on top of the $24 million.

Yes, on top.

On top, okay. Alright, so that’s that. Actually my big question was on the reserves. I really notice that your grade at Orcopampa, Tambomayo and Uchucchacua really fell quite substantially on your reserves. Can someone take to me about what happened at those three mines?

Yeah, thank you Tanya for the question. Its topic related to the De-Bottlenecking program. Here, Juan Carlos Ortiz will answer it.

Hi Tanya. As a consequence of the cost reduction that we are reaching in our operations, particularly in Tambomayo and Orcopampa, we reduce our cutoff. As a consequence of that, we increment the volume of fine gold and polymetallic material from the category of resources into reserve to be economical at this point. So that’s an increment of when the previous year was reported to us. It was not reported in our reserve. It was part of our mid-30 of services of low grade, now the jump from resource into reserve due to the reduction of the cutoff rate.

Okay, so it’s just a matter of cutoff grade at Tambomayo – at all of the operations or just all three of them had a reduction.

None of these have cross over effect that’s more sensitive on Tambomayo, Orcopampa and Uchucchacua.

Yeah Tanya, let me add just the concept of regarding through this De-Bottlenecking program we are reducing our production cost and at the end we are reducing our capital, that’s the implication.

Yeah, no I got that. It’s just there was a lot of tons added at very lower grade to really have lowered the grade by half on what the reserve grade was last year. Yeah.

But we have to remember that through these De-Bottlenecking programs we are increasing the efficiency. We are able to generate margins with low grade materials.

Okay, and at San Gabriel you mentioned you have selected a mining method for the underground. What mining method are you thinking right now?

Yeah, here its Raúl Benavides. He will answer it. Raúl Benavides: Yes Tanya. While we are using cut and fill, and that we have been checking the quality of the work and we feel very confident with cut and fill that we can work very nicely the ores in San Gabriel.

Yeah, let me add some information, that in addition to the cut and fill we will use primary and secondary stops. In the primary stops we will use segmented backfill.

Okay, so we are talking then potentially higher mining costs than you were originally contemplating when you were thinking about San Gabriel, because it’s a more selective mining method with back fill.

Not really more selective. It’s just that we are talking all the contingencies out, so that if the rough is better than what we think will increase efficiencies. So we are giving the worst case scenario into the project, so that the only – you know we can expect better things and at better costs than what we are achieving.

Okay, and then finally what were we thinking the mining method to be in the cost when you originally through about San Gabriel?

Well, we were looking long drill holes, so that we could have more efficiencies. But the problem is when you use that, you may get into problem if the rock is not competitive enough. So what we have done is go to the worst case scenario, and we are using the worst case scenario in order to run the numbers, a and the numbers are very solid with the worst case scenario, so we are very confident that we will have no problem.

Okay, thank you.

Thank you, Tanya.

Thank you. We’ll take our next question from Luis Vicente with Credicorp.

Hi Victor, hello guys. I just have a question about costs and I don’t know if you can give us some guidance for Orcopampa and Uchucchacua which I think are they minus, that they are being most affected with the De-Bottlenecking program and since this will continue on 2019, I don’t know if you can give us some guidance on the costs.

Thank you, Luis for the question, yeah. Here it’s Juan Carlos Ortiz. He will answer the – he will break down this number for Orcopampa and Uchucchacua.

Hi Luis. Well, we expect to reach by the end of the year a total cost reduction, in the fourth quarter of 2018 to fourth quarter of 2018, to the fourth quarter of 2019 of 20% to 25% cost reduction in Uchucchacua and about 10% cost reduction in Orcopampa. That’s the range we are expecting to reach by the De-Bottlenecking program along this year.

Okay, but during the De-Bottlenecking program, I mean before reaching this reduction, do you have, I mean a guidance or something you can give us?

A guidance in terms of production goals?

Yeah.

In terms of US dollar per ton, give me seconds.

Yeah, we – this year we ended up with a run of $120 in Uchuchacua, $120 per ton process and we expect to be in the low $100 by the end of the year 2019. In the case of Orcopampa, we ended up with around $350 per ton, cumulative 100% of the total of 2018 and we expect to reach about 250, 280 by the end of 2019.

Yeah, it’s a significant change for the case of Orcopampa.

Okay, okay thank you very much.

[Operator Instructions] We'll take our next question from Thiago Ojeda with Goldman Sachs.

Hi, good morning everyone and thanks for the questions. First of all, I would like to clarify that on your reported EBITDA you had the insurance gain at El Brocal of $20 million included on that and if there is any similar insurance gain expected in the future. And second, if you can provide the guidance in terms of CapEx in the situation in Quecher Main and Marcapunta would be useful. Thank you.

Thiago, thank you. Yeah, your first question is related to the insurance policy. We don't expect any problems as we faced in 2018. But this number is – at the end this money, in some sense it’s the insurance company’s recognition, the loss of production and the loss of profitability coming from El Brocal. So also that mean that we have a very good policy insurance that cover all of our mines you know, because my number was very significant. So but, your question is you expect something similar this year? No, the answer is no. And your second question was related to CapEx. Here is Leandro Garcia, our CFO, he will answer it.

Yeah, we are – hi Thiago. We are planning – we have budgeted for this year 2019 to have CapEx between $80 million and $120 million, the same level of last year.

Can you just discuss a little bit the next phase on the Quecher Main in Marcapunta.

Each of our mine is, as you know it’s under development. It’s under control of – you know its part of Yanacocha. When we discuss about our CapEx we are not concealing this number, but clearly the cash position in Yanacocha is very strong. So this trade doesn’t require any fund from the stakeholders. You see this is your – concerning your question. And the second one…

No, my question is more when, when – sorry, no my concern is more when the projects will be – build a plan, when it will be in operation, more fine lines.

Yeah, they started in the last year in 2018, in the last quarter, they started to put some minerals in the paths. So they – in the last quarter of this year, Quecher Main will be in full products, so it was a very successful period. And in the case of your second question or another question was related to Marcapunta. Marcapunta is an expansion of the higher end operation, on the ground operation. So it is not significant in terms of CapEx you know. It’s more related to solve some restrains, some modern things.

Thank you.

Thank you, Thiago.

Thank you. We'll take our next question from John Bridges with JP Morgan.

Thank you. Good morning Victor, everybody. Just following on from Tanya’s question may be, the mining method. It’s not uncommon to sort of start off with a conservative mining method like cut and sell and then as you get comfortable with the rock, maybe go to a cheaper method. Is that something that might happen?

Yeah, so this helps it soften, but here's Raúl. Raúl Benavides: Yes, hello John. Yes, you know it happens. The rock is not homogeneous, so when you get into operations you normally have some bad and good rock. What we are assuming is that the worst case, because we have some elements that the rock is not good. But I mean it always happens in mining that you run into better quality rock and there will be probably an opportunity to reduce cost using long drill holes and more efficient mining methods. What we were doing is just again trying to use the worst case scenario, so that we are in the safe way in any case.

Yeah, we like good surprises on this side of the street. Just on the forecast for 2019, you have them individually in your release, but I wondered if you have a sort of some guidance as to what the totals were for gold, silver and maybe the base metals.

Yeah, give me a second, but we in the – during our Investor Day we intent to present to the market the production and also the production cost for the coming three years, will we have enough time to share this information, but here we have some numbers. In the case of gold, we will produce in the range of 600,000 ounces of gold and in the case of silver, in the range of 24 million to 26 million ounces. In the case of lead, we will produce in the range of 50,000 to 55,000 metric tons of lead and in the case of zinc in the range of eight to 100,000 metric tons of zinc. And finally in the case of copper, including our equity participation in Cerro Verde, in the order of 125,000 to 145,000 metric tons of copper.

Okay, great. And then presumably, is that going to be rather stable over the next three years or is it going to be a pickup from Tambomayo?

Yeah, we prefer to analysis this information in terms of profitability. We have a more detailed analysis in addition to production and costs in terms of profitability, and as I said, I will like to share this information with you in our coming Investor Day.

Okay, I appreciate that. Thanks guys. Best of luck!

Thank you, John.

Thank you. We’ll take our next question from Carlos De Alba from Morgan Stanley.

Yeah sorry, my question was asked already. Thank you very much.

Okay, thank you Carlos.

Thank you [Operator Instructions]. It appears to be there are no future questions at this time. I will now turn the call back over to Victor Gobitz.

Okay, thank you. Thank you again everyone for joining our conference call this morning. As Buenaventura team, we are committed to developing the full potential of our existing assets, through our De-Bottlenecking program, prioritizing the long term perspective in order to become a more profitable company in terms of production and profitability. Furthermore, we are implementing a disciplined process for value generation through enhanced methodology in order to optimize our capital location. To let you know, we will be attending the BMO's Global Metals & Mining Conference next week in Miami. And finally, we are glad to invite you to our Investor Day that will take place on Thursday March, 7 in New York. Please contract our IR team for further information. Thank you again and have wonderful day!

Thank you. This does conclude today’s conference. We appreciate your participation. You may disconnect your lines at this and have a great day!