Core Viewpoint - Southern Copper's stock performance has shown a decline recently, with a notable drop compared to major indices, while the company is expected to report lower earnings and revenue in the upcoming earnings release [1][2]. Company Performance - Southern Copper's stock closed at $104.51, reflecting a -1.28% change from the previous day, underperforming the S&P 500, which lost 0.79% [1]. - Over the past month, shares of Southern Copper have gained 10.69%, outperforming the Basic Materials sector's gain of 4.52% and the S&P 500's gain of 5.22% [1]. Earnings Expectations - The upcoming earnings report is anticipated to show an EPS of $1.09, which is a decrease of 10.66% from the same quarter last year [2]. - The Zacks Consensus Estimate for revenue is projected at $2.9 billion, down 6.86% from the previous year [2]. - Full-year estimates predict earnings of $4.75 per share and revenue of $12.21 billion, indicating year-over-year increases of +9.7% and +6.82%, respectively [3]. Analyst Estimates - Changes in analyst estimates for Southern Copper are crucial as they reflect the shifting dynamics of business performance [4]. - The Zacks Rank system, which incorporates these estimate changes, currently ranks Southern Copper at 3 (Hold) [6]. Valuation Metrics - Southern Copper has a Forward P/E ratio of 22.3, which is lower than the industry average of 23.25 [7]. - The company has a PEG ratio of 2.37, compared to the Mining - Non Ferrous industry's average PEG ratio of 0.89 [8]. Industry Context - The Mining - Non Ferrous industry, part of the Basic Materials sector, holds a Zacks Industry Rank of 69, placing it in the top 28% of all industries [9].

F E B R U A R Y 2 0 2 5 4Q24 RESULTS Disclaimer The material in this presentation has been prepared Southern Copper Corporation (SCC) and is general background information about SCC's activities current as at the date of this presentation. This information is given in summary form and does not purport to be complete. Information in this presentation, including financial forecasts, should not be considered as advice or a recommendation to investors or prospective investors in relation to holding, purchasing ...

Financial Performance - Net sales increased by 36% from $2301 million in 2Q23 to $3118 million in 2Q24[23, 25] - EBITDA increased by 61% from $1116 million in 2Q23 to $1797 million in 2Q24[23, 26] - Net income increased by 74% from $548 million in 2Q23 to $950 million in 2Q24[23, 28] - Cash cost decreased by 32% from $112 in 2Q23 to $076 in 2Q24[23] Production - Copper production increased by 7% from 227,534 tons in 2Q23 to 242,474 tons in 2Q24[19] - Silver production increased by 8% from 48 million ounces in 2Q23 to 52 million ounces in 2Q24[21] - Molybdenum production increased by 21% from 6334 tons in 2Q23 to 7654 tons in 2Q24[21] - Zinc production increased significantly by 71% from 17,223 tons in 2Q23 to 29,419 tons in 2Q24[21] Market Outlook and Dividends - The company expects a market deficit in 2024, driven by strong demand and new technologies, but notes weakness in China's real estate sector and a resilient US economy[15] - The company announced dividends, reflecting its commitment to shareholder returns[38, 40] ESG Initiatives - The company is committed to improving its ESG record, including reducing CO2 emissions by approximately 250,000 tons per year, equivalent to 7% of SCC's carbon footprint, through the use of eolic energy[32, 33]

Financial Performance - Net sales increased by 17% from $2506 million in 3Q23 to $2931 million in 3Q24[22] - EBITDA increased by 31% from $1291 million in 3Q23 to $1685 million in 3Q24[22] - Net income increased by 45% from $620 million in 3Q23 to $897 million in 3Q24[22] - Cash cost decreased by 22% from $098 in 3Q23 to $076 in 3Q24[22] Production - Copper production increased by 4% from 242474 tons in 3Q23 to 252219 tons in 3Q24[19] - Molybdenum production increased by 6% from 6859 tons in 3Q23 to 7271 tons in 3Q24[20] - Silver production increased by 91% from 16281 MM Ounces in 3Q23 to 31078 MM Ounces in 3Q24[20] - Zinc production increased by 21% from 44 tons in 3Q23 to 53 tons in 3Q24[20] Capital Investments - The company has board-approved projects that will add +156k tons of copper production[31] - Other projects are planned to add +545k tons of copper production[31] ESG Initiatives - The company delivered a Center for Research to the Universidad Nacional de San Agustín de Arequipa (UNSA), Peru, at a cost of $18 million[33] - Dr Vagón provided more than 6000 free medical services to 2050 people in Cananea in September 2024[36]

Core Insights - The article emphasizes the importance of utilizing Zacks Premium for investors to enhance their stock market strategies and confidence [1] Zacks Style Scores - Zacks Style Scores are indicators designed to help investors select stocks with the highest potential to outperform the market within a 30-day timeframe [2] - Stocks are rated from A to F based on value, growth, and momentum characteristics, with A being the highest score [2] Value Score - The Value Style Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - The Growth Style Score assesses a company's future growth potential by analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Style Score is based on price trends and earnings outlook changes, helping investors identify optimal times to invest in high-momentum stocks [5] VGM Score - The VGM Score combines Value, Growth, and Momentum Scores, providing a comprehensive evaluation of stocks based on their weighted styles [6] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to assist investors in building successful portfolios [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8] Stock Selection Strategy - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B to maximize potential success [9] - The direction of earnings estimate revisions is crucial; stocks with lower ranks but high Style Scores may still face downward price pressure [10] Company Spotlight: Southern Copper Corporation - Southern Copper Corporation (SCCO) is engaged in mining, exploring, smelting, and refining copper and other minerals across several countries [11] - SCCO holds a Zacks Rank of 3 (Hold) and a VGM Score of B, indicating moderate potential [11] - The company is projected to experience a 6% year-over-year earnings growth for the current fiscal year, with positive earnings estimate revisions [12] - SCCO has an average earnings surprise of 3.7%, making it a noteworthy option for growth investors [12]

Group 1 - Southern Copper Corporation has recently achieved record revenue and net income, driven by high copper prices [1] - The future supply-demand balance of copper remains uncertain, which may impact the stock's performance [1] Group 2 - The analyst has over 10 years of experience researching various companies across different sectors, including metals and mining [1]

Core Viewpoint - Solis Minerals Limited is advancing its copper-gold projects in Peru, with significant drilling activities planned to explore and unlock value in its portfolio [2][4][10]. Group 1: Chancho al Palo Project - Drilling will commence at the 100% owned Chancho al Palo copper-gold project, with a diamond drill-rig mobilized to the site [3][4]. - The diamond drilling program will cover approximately 2,500 meters across several priority targets, aimed at testing multiple anomalies identified through recent surface mapping and geophysics [4][10]. - This marks the first drilling at Chancho al Palo, representing a major milestone in the company's exploration strategy [4][8]. Group 2: Ilo Este and Cinto Projects - The Ministry of Energy and Mines of Peru has approved the drill permit for the Ilo Este project, which is also 100% owned by Solis Minerals and located 20 kilometers from Chancho al Palo [5]. - A 5,000-meter diamond drilling program at Ilo Este is expected to commence in June 2025 [5][10]. - An induced polarization (IP) survey at the Cinto project is nearing completion, with results anticipated in June 2025 [6][10]. Group 3: Company Strategy and Leadership - The CEO of Solis Minerals expressed excitement about the maiden drill campaign at Chancho al Palo, highlighting its potential in a premier copper-producing region [8]. - The company is committed to maintaining a strong news flow across its copper-gold portfolio, with ongoing drilling and survey activities [9][10]. - Solis Minerals is strategically positioned to capitalize on growth opportunities within the mineral-rich region of South America, holding concessions totaling 69,200 hectares [12][13].

Group 1 - The company anticipates that tariffs initiated by President Trump will lead to a cost increase of 1%-3% [1]

Part I. Financial Information [Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) For the first quarter of 2025, Southern Copper Corporation reported a net income attributable to SCC of $945.9 million, a 28.5% increase year-over-year, driven by higher sales and metal prices [Condensed Consolidated Statements of Earnings](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) Net sales for Q1 2025 increased by 20.1% year-over-year to $3,121.9 million, leading to a 29.1% rise in operating income to $1,535.5 million and a diluted EPS of $1.19 Condensed Consolidated Statements of Earnings | Financial Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $3,121.9 | $2,599.8 | 20.1% | | Operating Income | $1,535.5 | $1,189.7 | 29.1% | | Net Income Attributable to SCC | $945.9 | $736.0 | 28.5% | | Diluted EPS | $1.19 | $0.95 | 25.3% | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to $19.79 billion from $18.71 billion at year-end 2024, primarily due to a significant increase in cash and cash equivalents to $4.12 billion Condensed Consolidated Balance Sheets | Balance Sheet Item | March 31, 2025 (in millions) | Dec 31, 2024 (in millions) | | :--- | :--- | :--- | | **Total Current Assets** | $7,220.0 | $6,174.3 | | Cash and cash equivalents | $4,116.3 | $3,258.1 | | **Total Assets** | **$19,791.2** | **$18,713.5** | | **Total Current Liabilities** | $1,944.4 | $2,248.1 | | Long-term debt, net | $6,747.0 | $5,758.5 | | **Total Liabilities** | $10,154.5 | $9,475.4 | | **Total Equity** | **$9,636.7** | **$9,238.1** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash from operating activities was $721.4 million, with cash and cash equivalents increasing by $858.2 million, supported by new debt issuance and partially offset by capital expenditures and dividend payments Condensed Consolidated Statements of Cash Flows | Cash Flow Activity (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $721.4 | $659.7 | | Net cash (used in) provided by investing activities | $(290.7) | $56.2 | | Net cash provided by (used in) financing activities | $432.9 | $(620.1) | | **Increase in cash and cash equivalents** | **$858.2** | **$100.7** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant financial events, including a $1.0 billion senior note issuance, ongoing legal challenges for the Tia Maria project, secured labor stability in Peru, and subsequent dividend declarations and debt payments - In February 2025, the company's subsidiary, Minera Mexico S.A. de C.V., issued **$1.0 billion** of fixed-rate senior notes due in 2032 with an annual interest rate of 5.625%[53](index=53&type=chunk) - The company faces five ongoing lawsuits related to the Tia Maria project in Peru, challenging its Environmental Impact Assessment and construction license, which the company asserts are without merit[85](index=85&type=chunk) - In Peru, the company signed long-term collective bargaining agreements with all six of its unions, with expirations ranging from 2027 to 2033, ensuring labor stability[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - As of March 31, 2025, the company had committed approximately **$305.2 million** to capital investment project developments[135](index=135&type=chunk) - Subsequent to the quarter end, on April 10, 2025, the Board authorized a quarterly dividend of **$0.70 cash** and a stock dividend of **0.0099 shares per share**, and on April 22, 2025, the company paid off **$500 million** in principal on its 2015 senior notes[166](index=166&type=chunk)[168](index=168&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a 20.1% year-over-year increase in Q1 2025 net sales, driven by higher metal prices and volumes, resulting in a 28.5% rise in net income and an improved operating cash cost per pound of copper [Executive Overview & Key Matters](index=53&type=section&id=Executive%20Overview%20%26%20Key%20Matters) In Q1 2025, net sales reached $3.12 billion and net income attributable to SCC was $945.9 million, driven by favorable metal prices and higher sales volumes, with operating cash cost per pound of copper falling to $0.77 Executive Overview & Key Matters | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $3,121.9 M | $2,599.8 M | 20.1% | | Net Income (SCC) | $945.9 M | $736.0 M | 28.5% | | EPS | $1.19 | $0.95 | 25.3% | - Sales composition in Q1 2025 was dominated by copper (**77.9%**), followed by molybdenum (**9.6%**), silver (**5.7%**), and zinc (**3.6%**)[174](index=174&type=chunk) - Mined production highlights for Q1 2025 vs Q1 2024: - Copper: Stable at **529.6 million pounds** - Molybdenum: Increased **8.6%** to **16.9 million pounds** - Silver: Increased **13.8%** to **5.4 million ounces** - Zinc: Increased **49.3%** to **86.8 million pounds**, driven by the Buenavista Zinc concentrator[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - Operating cash cost per pound of copper, net of by-product revenues, decreased by **28.4%** from **$1.07** in Q1 2024 to **$0.77** in Q1 2025[193](index=193&type=chunk)[195](index=195&type=chunk) [Capital Investment Programs](index=61&type=section&id=Capital%20Investment%20Programs) The company's capital investments totaled $317.8 million in Q1 2025, with major projects like Tia Maria ($1.8 billion) and El Pilar ($310 million) advancing to support long-term organic growth - Tia Maria (Peru): A **$1.8 billion** project to produce **120,000 tons** of copper cathodes annually, now in early construction with access road progress at **61%**[206](index=206&type=chunk)[207](index=207&type=chunk)[209](index=209&type=chunk) - El Pilar (Mexico): A **$310 million** project to produce **36,000 tonnes** of copper cathodes annually, with project development and on-site environmental activities in progress[203](index=203&type=chunk)[204](index=204&type=chunk) - Los Chancas (Peru): An illegal miner attack in March 2025 damaged facilities, and the company is working with authorities to remove the squatters to continue project development[215](index=215&type=chunk) - Michiquillay (Peru): A **$2.5 billion** project with an expected output of **225,000 tonnes** of copper per year, with exploration **39%** complete and geo-metallurgical and hydrological studies underway[216](index=216&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) [Results of Operations](index=66&type=section&id=Results%20of%20Operations) Consolidated net sales for Q1 2025 increased 20.1% to $3,121.9 million, and operating income rose 29.1% to $1,535.5 million, driven by strong performance across Peruvian and Mexican operations Average Metal Price | Average Metal Price | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Copper (LME, $/lb) | $4.24 | $3.83 | 10.7% | | Molybdenum ($/lb) | $20.43 | $19.84 | 3.0% | | Zinc (LME, $/lb) | $1.29 | $1.11 | 16.2% | | Silver (COMEX, $/oz) | $32.31 | $23.35 | 38.4% | - Peruvian Operations: Operating income rose **22.7%** to **$561.5 million**, driven by higher sales volumes of copper, molybdenum, and silver, along with higher metal prices[234](index=234&type=chunk) - Mexican Open-pit Operations: Operating income grew **28.6%** to **$965.5 million**, mainly due to a significant increase in zinc sales volume from the Buenavista concentrator and higher metal prices[235](index=235&type=chunk) - Mexican Underground (IMMSA): Turned a **$6.8 million** operating loss in Q1 2024 into an **$18.4 million** operating income in Q1 2025, driven by higher metal prices and a **10.6%** reduction in operating costs[237](index=237&type=chunk) [Liquidity and Capital Resources](index=73&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash position strengthened significantly in Q1 2025, with cash and cash equivalents increasing by $858.2 million to end the quarter at $4.12 billion, supported by operating cash flow and new debt issuance Cash Flow Summary (in millions) | Cash Flow Summary (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $721.4 | $659.7 | | Net cash (used in) provided by investing activities | $(290.7) | $56.2 | | Net cash provided by (used in) financing activities | $432.9 | $(620.1) | | **Increase in cash and cash equivalents** | **$858.2** | **$100.7** | - Financing activities in Q1 2025 were primarily driven by the proceeds from the issuance of debt (**$993.8 million**), partially offset by cash dividends paid to common stockholders (**$553.3 million**)[16](index=16&type=chunk) [Quantitative and Qualitative Disclosure about Market Risk](index=79&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) The company's primary market risks include commodity price volatility, foreign currency exchange fluctuations, and open sales risk from provisionally priced contracts, with a $0.10 per pound change in copper price estimated to impact net earnings by $92.5 million Metal Price Change Impact on Net Earnings | Metal Price Change | Impact on Net Earnings (in millions) | | :--- | :--- | | Copper: +$0.10 / lb | $92.5 | | Molybdenum: +$1.00 / lb | $26.3 | | Zinc: +$0.10 / lb | $18.6 | | Silver: +$1.00 / oz | $10.6 | - A **10%** appreciation of the USD against the Peruvian sol would increase net earnings by **$15.1 million**, while a **10%** appreciation against the Mexican peso would decrease net earnings by **$3.2 million**[252](index=252&type=chunk) - Provisionally priced sales of copper and molybdenum contain embedded derivatives that are marked to market through earnings each period, creating exposure to price fluctuations prior to final settlement[253](index=253&type=chunk) [Controls and Procedures](index=81&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2025, the company's management concluded that its disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[257](index=257&type=chunk) - No material changes in the company's internal control over financial reporting occurred during the first quarter of 2025[258](index=258&type=chunk) Part II. Other Information [Legal Proceedings](index=83&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference the detailed discussion of legal matters from Note 10 of the financial statements, primarily relating to ongoing litigation concerning the Tia Maria project, the 2014 Buenavista mine spill, and various labor issues - The report refers to Note 10, "Commitments and Contingencies," for detailed information on legal proceedings[266](index=266&type=chunk) [Risk Factors](index=83&type=section&id=Item%201A.%20Risk%20Factors) The company has updated its risk factors to address the potential negative impacts of U.S. regulatory uncertainty, tariff threats, and international trade tensions, which could significantly affect cost structures and profitability - A key updated risk is the potential for new U.S. tariffs and trade tensions to adversely affect the company's cost structures, pricing, and profitability[268](index=268&type=chunk) - The company notes that reciprocal tariffs enacted in April 2025, though later paused, caused fluctuations in the market prices for its main products and common stock, highlighting the volatility of the trade environment[269](index=269&type=chunk) [Other Items (Item 2, 4, 5, 6)](index=83&type=section&id=Other%20Items%20(Item%202,%204,%205,%206)) This section addresses other required disclosures, confirming no unregistered sales of equity securities, no applicable mine safety disclosures, and no Rule 10b5-1 trading arrangement adoptions or terminations by directors or officers - Item 2: No unregistered sales of equity securities were conducted[271](index=271&type=chunk) - Item 5: No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025[273](index=273&type=chunk)

Investment Rating - The industry rating is "Recommended" [7] Core Insights - In Q1 2025, the mined copper production remained flat year-on-year at 240,226 tons, with a slight quarter-on-quarter increase of 0.6% [1][18]. - The unit operating cash cost for copper decreased by 28.0% year-on-year to $0.77 per pound, primarily due to a reduction in operating costs and an increase in by-product revenue [2]. - The net sales for Q1 2025 reached $3.1219 billion, reflecting a year-on-year growth of 20.1%, driven by increased sales volumes across copper, molybdenum, zinc, and silver [9][19]. - The net profit for Q1 2025 was $945.9 million, up 28.5% year-on-year, with a net profit margin of 30.3% [9][19]. Production and Sales Summary - Copper production in Q1 2025 was 240,226 tons, with sales of 243,601 tons, marking a 3.6% increase year-on-year [1][18]. - Molybdenum production increased by 8.5% year-on-year to 7,684 tons, with sales of 7,731 tons, reflecting a 9.9% increase [3][4]. - Zinc production surged by 49.3% year-on-year to 39,375 tons, with sales of 36,530 tons, a 42.4% increase [5][19]. - Silver production rose by 13.8% year-on-year to 5.442 million ounces, with sales of 5.653 million ounces, a 14.1% increase [6][8]. Financial Performance - The adjusted EBITDA for Q1 2025 was $1.7456 billion, up 23.1% year-on-year, with an adjusted EBITDA margin of 55.9% [9][19]. - Capital investment expenditures for Q1 2025 were $317.8 million, representing a 48.6% increase year-on-year [10][19]. Project Updates - The company plans to invest over $600 million in its Mexican projects in 2025, focusing on asset modernization and safety improvements [11]. - The Tia Maria project in Peru is expected to produce 120,000 tons of SX-EW cathode copper annually upon completion [12]. - The Los Chancas project in Peru aims for an annual production of 130,000 tons of copper and 7,500 tons of molybdenum, with an estimated capital investment of $2.6 billion [14].