Detailed Narrative
San Gabriel Project Update and Ramp-up Challenges
The San Gabriel project has reached 99% overall completion by Q4 FY25, with the first dore bar produced in December. However, the 2026 gold production guidance has been lowered to 48,000-55,000 ounces, down from previous expectations. This revision is primarily due to pending earthworks, ventilation system upgrades, and a redesign of the ventilation sequence after an accident, which restricts mining flexibility to 3 levels instead of 6, impacting the average gold grade. Management expects to achieve a stable 2,000 tonnes per day throughput by Q3 2026, with a target of 3,000 tonnes per day in FY27.
FY25 Financial Performance
Buenaventura reported a significant increase in EBITDA from direct operations, reaching $812 million in FY25, an 88% increase year-over-year. Net income also saw substantial growth, totaling $830 million for the full year, which included a $208.9 million contribution from the sale of Chaupiloma. The company maintained a strong balance sheet, ending the year with $530 million in cash and a leverage ratio of 0.22x, supporting its capital allocation strategy.
Capital Expenditure and Allocation
The company provided FY26 total CapEx guidance of $385 million to $415 million, which is higher than prior expectations. This includes $200 million to $220 million for sustaining CapEx, focused on mine development and upgrades at existing operations, and $185 million to $195 million for growth CapEx, primarily for completing San Gabriel and advancing the Trapiche project. The Board approved a dividend of $0.9904 per share, representing 40% of FY25 net income, exceeding the minimum 20% policy, reflecting confidence in financial performance and capital discipline.
Cost Trends and Drivers
Cash costs applicable to sales increased across copper, silver, and gold in Q4 FY25. Copper costs rose due to higher personnel expenses, increased cement consumption, and FX impact🌐s at El Brocal. Silver costs were affected by higher commercial deductions at Yumpag, nonpayable value, and escalators linked to rising silver prices, partially offset by increased ore throughput at Uchucchacua and Julcani. Gold costs increased due to lower throughput and reduced scale efficiency at Orcopampa and Tambomayo.
Exploration and Asset Portfolio Review
Buenaventura plans to increase its exploration budget for FY26 to $90 million-$100 million, up from $70 million previously, with a focus on San Gabriel, El Brocal, Uchucchacua, Yumpag, and greenfield projects. The company is also actively reviewing its portfolio, including the potential sale of mines like Orcopampa, Tambomayo, and Julcani. While a decision is pending, the recent increase in precious metals prices is prompting a re-evaluation of these assets, with a current inclination towards selling them separately if a sale proceeds.
Affiliate Contributions and Dividends
The company highlighted solid performance from its affiliate companies, with Coimolache operating at full capacity. Cerro Verde distributed $98 million in dividends attributable to Buenaventura's stake in January 2026. For the full year 2026, Buenaventura expects to receive approximately $200 million in dividends from Cerro Verde, with payments scheduled throughout the year.