Buenaventura(BVN) - 2022 Q4 - Annual Report

Revenue and Financial Performance - Total revenues for 4Q22 were $246.4 million, a 3% decrease compared to 4Q21, while FY22 revenues were $824.8 million, an 8% decrease compared to FY21[2] - 4Q22 net sales were $246.4 million, a slight decrease from $249.7 million in 4Q21, driven by lower commodity prices and reduced sales volumes of lead, zinc, and silver, partially offset by higher copper sales[90] - Net profit for 2022 was $602.9 million, a significant improvement from a net loss of $262.8 million in 2021[179] - Gross profit for 2022 was $61.3 million, down from $87.3 million in 2021, reflecting higher costs of sales[179] - Operating income from sales of goods decreased from $863.5 million in 2021 to $801.2 million in 2022[179] - Profit attributable to owners of the parent improved significantly to $602.6 million in 2022 from a loss of $264.1 million in 2021[179] - The company reported a foreign currency exchange gain of $26.9 million in 2022, compared to a loss of $18.7 million in 2021[179] EBITDA and Net Income - EBITDA for direct operations in 4Q22 was $76.9 million, a 29% increase compared to 4Q21, and FY22 EBITDA was $473.1 million, a 132% increase compared to FY21[2] - 4Q22 EBITDA from direct operations was US$ 76.9 million, compared to US$ 59.7 million in 4Q21[119] - FY22 EBITDA from direct operations reached US$ 473.1 million, including US$ 300 million from the sale of Buenaventura's stake in Yanacocha[119] - 4Q22 net income reached US$ 68.7 million, compared to a US$ 222.3 million net loss in 4Q21[119] - FY22 net income was US$ 602.9 million, compared to a US$ 262.8 million net loss in FY21[119] Production Metrics - Gold production in 4Q22 was 12,348 ounces, a 33% decrease compared to 4Q21, while FY22 gold production was 54,320 ounces, a 22% decrease compared to FY21[5] - Silver production in 4Q22 was 463,938 ounces, a 21% decrease compared to 4Q21, while FY22 silver production was 1,863,411 ounces, a 3% increase compared to FY21[5] - Copper production at El Brocal increased by 41% year on year in 4Q22 due to higher ore grades and increased ore treated[14] - Gold production from direct operations in 4Q22 was 44,632 ounces, a 9% decrease compared to 4Q21[32] - Silver production from direct operations in 4Q22 was 1,678,051 ounces, a 25% decrease compared to 4Q21[32] - Copper production from direct operations in 4Q22 was 8,937 metric tons, a 41% increase compared to 4Q21[32] - Total gold production including associated companies in 4Q22 was 53,079 ounces, a 10% decrease compared to 4Q21[32] - Total copper production including associated companies in 4Q22 was 31,479 metric tons, a 14% increase compared to 4Q21[32] - Recovery rate in 4Q22 was 84.83%, an 18% increase compared to 4Q21[36] - Ounces produced in 4Q22 were 379,520, a 66% decrease compared to 4Q21[36] - 4Q22 equity gold production was 53,079 ounces, down from 59,033 ounces in 4Q21, while silver, lead, and zinc production decreased by 25%, 30%, and 45% year-on-year, respectively, due to prioritizing higher-margin copper production[91] - 4Q22 copper production increased by 41% year-on-year to 13,789 MT, with full-year copper production up 26% to 45,301 MT[84] - Tambomayo's gold production in FY22 increased by 49% to 74,478 ounces, while silver production surged 117% to 32,124 ounces[93] - Coimolache's silver production in FY22 decreased by 54% to 296,968 ounces compared to 647,468 ounces in FY21[95] - El Brocal's 4Q22 silver production decreased by 7% to 646,125 ounces, while full-year silver production increased by 3% to 2,640,689 ounces[97] - 4Q22 gold production increased by 23% YoY to 10,163 Oz, while silver production decreased by 39% YoY to 20,088 Oz[125] - 4Q22 copper production increased by 41% YoY to 14,548 MT, while zinc production decreased by 51% YoY to 4,037 MT[130] - 4Q22 copper production attributable to Buenaventura increased by 7% YoY to 22,543 MT, driven by a 9% increase in ore volumes and a 3% increase in copper grade[134] - Silver production at Tambomayo decreased by 21% to 463,938 ounces in Q4 2022 compared to 588,138 ounces in Q4 2021, despite a 10% increase in ore milled[161] - Marcapunta's silver production increased by 29% to 477,385 ounces in Q4 2022, driven by a 15% increase in ore milled and an 8% improvement in recovery rate[161] - Tajo Norte Cu-Ag's silver production surged by 81% to 20,863 ounces in Q4 2022, despite a 25% decrease in ore grade and a 14% drop in recovery rate[161] Production Guidance - 2023 gold production guidance is 72k – 80k ounces for Orcopampa and 60k – 65k ounces for La Zanja[7][10] - 2023 silver production guidance is 2.6M – 2.8M ounces for Julcani[13] - 2023 gold production guidance is set at 35,000–40,000 ounces, and silver production guidance is 1.9M–2.2M ounces[86] - 2023 silver production guidance for Uchucchacua is 0.7M – 1.0M ounces and for Yumpag is 1.6M – 1.8M ounces[128] Costs and Expenses - Cost applicable to sales for gold in 4Q22 was $1,704 per ounce[44] - Cost applicable to sales for silver in 4Q22 was $18.37 per ounce[44] - All-in sustaining cost for 4Q22 does not include depreciation and amortization, stoppage of mining units, and exploration in non-operating areas[52] - Consolidated cost applicable to sales for the 12 months ended December 31, 2022, was $749.2 million, a decrease from $804.441 million in 2021[61] - Exploration expenses in units in operation increased to $80.796 million in 2022, up from $56.412 million in 2021[61] - Consolidated cost of sales excluding depreciation and amortization for the 12 months ended December 31, 2022, was $465.105 million, down from $531 million in 2021[61] - Cost applicable to sales per unit sold for gold at Tambomayo was $1,355 per OZ in 2022, compared to $1,274 per OZ in 2021[63] - Cost applicable to sales for FY22 was $465.105 million, with gold contributing $153.747 million, silver $74.023 million, lead $14.559 million, zinc $48.335 million, and copper $173.798 million[68] - Exploration expenses for FY22 totaled $80.796 million, with gold accounting for $20.293 million, silver $43.337 million, lead $1.399 million, zinc $4.347 million, and copper $11.419 million[68] - Commercial deductions for FY22 amounted to $183.077 million, with gold at $16.281 million, silver $24.941 million, lead $4.317 million, zinc $29.939 million, and copper $107.599 million[68] - Selling expenses for FY22 were $20.222 million, with gold at $3.702 million, silver $5.849 million, lead $780,000, zinc $2.368 million, and copper $6.575 million[68] - Total cost applicable to sales for FY22 was $749.200 million, with gold at $194.023 million, silver $148.151 million, lead $21.056 million, zinc $84.989 million, and copper $299.390 million[68] - All-in sustaining cost for FY22 was $81.537 million, with gold at $1,525 per ounce[70] - Cost of sales for 4Q21 was $49.638 million, with gold at $1,395 per ounce[70] - Exploration expenses for 4Q21 were $9.880 million, with gold at $278 per ounce[70] - Commercial deductions for 4Q21 were $12.142 million, with gold at $341 per ounce[70] - 4Q22 copper cost applicable to sales (CAS) decreased by 12% year-on-year, and zinc CAS decreased by 49%, driven by higher head grades and improved metallurgical performance[99] - 4Q22 general and administrative expenses decreased by 8% to $17.3 million compared to $18.9 million in 4Q21[100] - 4Q22 gold production at Tambomayo decreased by 33% YoY, with Cost Applicable to Sales (CAS) increasing to 1,129 US$/Oz from 1,023 US$/Oz in 4Q21 due to lower gold grades[123] - 4Q22 gold production at Orcopampa decreased, with CAS decreasing to 919 US$/Oz from 1,023 US$/Oz in 4Q21 due to reduced sales and exploration costs[124] - 4Q22 gold production at Coimolache decreased by 14% YoY, with CAS increasing to 1,676 US$/Oz from 1,147 US$/Oz in 4Q21 due to higher sales and exploration costs[126] - 4Q22 silver production decreased by 7% YoY, with CAS decreasing by 3% to 16.05 US$/Oz from 16.52 US$/Oz in 4Q21[129] - Consolidated selling expenses for the 3 months ended December 31, 2022, were $4.732 million, compared to $6.137 million in the same period in 2021[147] - Uchucchacua's silver selling expenses for the 12 months ended December 31, 2022, were $3.393 million, a significant increase from $2.411 million in 2021[147] - Tambomayo's gold selling expenses for the 12 months ended December 31, 2022, were $2.447 million, down from $3.036 million in 2021[147] - El Brocal's copper selling expenses for the 12 months ended December 31, 2022, were $6.571 million, up from $5.572 million in 2021[147] - Cost applicable to sales (CAS) for the 12 months ended December 31, 2022, was $37.476 million, compared to $16.764 million in 2021[148] - Exploration expenses for the 12 months ended December 31, 2022, were $627,000, up from $299,000 in 2021[148] - Uchucchacua's cost applicable to sales (CAS) for the 12 months ended December 31, 2022, was $39.62 million, compared to $126.482 million in 2021[150] - All-in sustaining cost (AISC) for 4Q22 was $95.082 million, compared to $55.734 million in 4Q21[152] - Consolidated Cost of Sales (excluding depreciation and amortization) for the 3 months ended December 31, 2022, was $127.6 million, compared to $138.0 million for the same period in 2021[165] - Consolidated Cost of Sales (excluding depreciation and amortization) for the 12 months ended December 31, 2022, was $465.1 million, compared to $531.0 million for the same period in 2021[165] - Consolidated Commercial Deductions for the 3 months ended December 31, 2022, were $45.2 million, compared to $49.6 million for the same period in 2021[167] - Consolidated Commercial Deductions for the 12 months ended December 31, 2022, were $183.1 million, compared to $196.2 million for the same period in 2021[167] - All-in Sustaining Cost for FY22 was $1,416 per ounce of gold sold for Buenaventura, $2,146 per ounce for La Zanja, and $1,596 per ounce for Tantahuatay[175] - Exploration Expenses for FY22 were $60.9 million for Buenaventura, $3.2 million for La Zanja, and $9.0 million for Tantahuatay[175] - Sustaining Capex for FY22 was $8.2 million for Buenaventura, $1.3 million for La Zanja, and $14.6 million for Tantahuatay[175] - By-product Credit for FY22 was -$154.4 million for Buenaventura, -$2.4 million for La Zanja, and -$7.1 million for Tantahuatay[175] - Gold ounces sold in FY21 totaled 113,891 ounces at a cost of $1,580 per ounce, with an all-in sustaining cost of $1,532 per ounce[176] Exploration and Capital Expenditures - Exploration costs in non-operating areas were $3.2 million in 4Q22, a 20% decrease compared to 4Q21[15] - 4Q22 exploration at operating units increased to US$ 27.2 million, compared to US$ 15.5 million in 4Q21[119] - FY22 exploration at operating units increased to US$ 80.8 million, from US$ 56.4 million in FY21[119] - 4Q22 capital expenditures were US$ 69.0 million[104] - 4Q22 capital expenditures were US$ 58.8 million, compared to US$ 32.1 million in 4Q21[119] - The company expects total CAPEX to reach between US$ 350 - 370 million during 2023[120] - CAPEX guidance for San Gabriel updated to ~US$ 190.0 million by year-end 2023, primarily for underground mine development and campsite construction[133] - Payments for acquisition of property, plant, and equipment increased by 68.3% to $151.97 million in 2022 compared to $90.31 million in 2021[158] Cash and Liquidity - Buenaventura's cash position reached US$ 253.9 million as of December 31, 2022[119] - The company collected $300 million from the sale of its participation in Yanacocha and $45 million from the purchase of La Zanja shares in 2022[158] - The company's cash and cash equivalents decreased by $123.08 million in 2022, ending the year with $253.92 million compared to $376.99 million at the end of 2021[158] - Dividends received from associates decreased by 46.7% to $79.14 million in 2022 compared to $148.41 million in 2021[158] - Net cash and cash equivalents from operating activities for the twelve-month period ended December 2022 were $41.67 million, a significant improvement from a net cash outflow of $233.50 million in 2021[158] - Current assets decreased from $739.5 million in 2021 to $620.4 million in 2022, primarily due to a reduction in cash and cash equivalents from $377.0 million to $253.9 million[177] - Current liabilities decreased from $579.1 million in 2021 to $379.6 million in 2022, mainly due to a reduction in financial obligations[178] Other Financial Metrics - Total attributable copper production across all mines reached 1,951 thousand metric tons (MT), with Trapiche contributing the highest at 1,444 thousand MT[59] - Volume sold in FY22 included 168,276 ounces of gold, 7,559,712 ounces of silver, 15,843 metric tons of lead, 30,220 metric tons of zinc, and 45,276 metric tons of copper[68] - El Brocal's Copper sales for the 3 months ended December 31, 2022, were $55.6 million, a 30.4% increase from $42.7 million in the same period in 2021[165] - La Zanja's Gold sales for the 3 months ended December 31, 2022, were $16.7 million, a 21.4% increase from $13.8 million in the same period in 2021[165] - Proceeds from sales of goods and services for the three-month period ended December 2022 were $174.22 million, a decrease of 27.2% compared to $239.47 million in the same period in 2021[158] - Total equity as of December 31, 2022, was $3.162 billion, up from $2.538 billion in 2021[156] Operational Updates - Yumpag project construction and permitting are on schedule, with production expected to begin between 4Q23 and 1Q24, pending permit approval[96] - Buenaventura recorded a US$ 16.4M write-off in 4Q22 related to oxidized low-grade polymetallic sulfide ore at El Brocal[131] Forward-Looking Statements - The company's forward-looking statements highlight potential impacts of COVID-19 on operations, liquidity, and financial growth, as well