Compania de Minas Buenaventura SAA (BVN) 2010 Q1 法說會逐字稿

Good morning. My name is Melissa and I will be your Conference Operator today. At this time, I would like to welcome everyone to the Buenaventura First Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. I would now like to turn the call over to Peter Majeski of i-Advize Corporate Communications. Please go ahead, sir.

Thank you and good morning everyone. Welcome to Buenaventura's First Quarter 2010 Conference Call. Today's call is for investors and analysts only and questions from the media will not be taken. Joining us today from the company are Roque Benavides, Chief Executive Officer, Carlos Galvez, Chief Financial Officer and other members of the company's senior management.

They will be discussing Buenaventura's results per the press release distributed yesterday evening. If you have not received a copy, please call us in New York at 212-406-3694. Before we begin, I would like to remind you that any forward-looking statements made today by Buenaventura's management are subject to various conditions and may differ materially. These conditions are outlined in the company's press release, in the disclaimer, and we ask that you refer to it for guidance. It is now my pleasure to turn the call over to Mr. Roque Benavides. Mr. Benavides, you may begin.

Thank you. Thank you to all of you for attending this conference call. During this quarter, the increase in gold sales, the positive results from Cerro Verde and Yanacocha and higher metal prices resulted in net income of US$155 million, 55% higher than the figure reported in the first quarter '09.

EBITDA from Buenaventura's Direct Operations was US$84.6 million, in line with the figure reported in the first quarter '09, while EBITDA including Yanacocha and Cerro Verde increased 25%, from US$223.8 million in the first quarter '09 to US$280.1 million in the first quarter '010.

During first quarter '010, net sales were US$187.6 million, a 15% increase when compared to the US$163 million reported in the first quarter '09. That was explained -- this is explained by the higher realized prices of all metals and an increase in the volume of gold, despite lower silver, zinc and lead sold.

In terms of our production and operating costs, Buenaventura's equity production during the first quarter of '010 was 97,770 ounces of gold, 5% lower than 102,885 ounces reported in the first quarter '09, due to a decrease in production from Antapite and Orcopampa. Silver production during the first quarter was 3 million ounces, a 25% decrease when compared to 4 million ounces reported in the first quarter '09, due to a decrease in production from Uchucchacua and Colquijirca Uchuccha.

At Orcopampa, our results were slightly impacted by a 13-day strike. However, despite the strike, total gold production was 72,119 ounces, in line with the first quarter '09 production. Production from the Chipmo mine in the first quarter was 65,130 ounces, in line with 65,224 ounces reported in the first quarter, which was complemented by the old tailings treatment that produced close to 7,000 ounces of gold, 10% lower than the first quarter '09.

At Uchucchacua, total silver production during the first quarter was 2,037,000 ounces, 30% lower than the first quarter of '09, due to a 12% decline in ore treated, mainly explained by a 14-day strike, a 16% lower silver grade and 5% lower recovery rate. Zinc production decreased 38% and lead production decreased 26%. We are going to reverse this situation in the coming months.

At Antapite, total production in the first quarter 7,000 ounces of gold, a decrease of 2% compared to the first quarter of '09, mainly due to a 15% decrease in ore milled, explained by the 20-day strike, despite a 12% increase in the gold grade and a 3% increase in the recovery rate. We are looking for a new target of exploration in the Antapite area that are exciting and that we believe will give some results in the future months.

At Colquijirca, the polymetalic ore treated decreased 17% to use plant capacity to treat -- to use the plant capacity to treat ore from Marcapunta copper deposit and leverage higher prices -- higher copper prices. As a consequence, total zinc production decreased 22%, from 15,000 metric tons reported in the first quarter '09 to 11,900 metric tons in this quarter.

Total silver production during the first quarter '010 was 609,000 ounces, a 40% decrease when compared to the 1,008,000 ounces reported in the first quarter of '09, mainly explained by the previously mentioned decrease in tonnage treatment, a 31% decrease in the silver ore grade and 8% lower recovery rate.

In terms of our operating expenses, general and administrative expenses for the first quarter were US$10.6 million, 37% lower than the figure reported in the first quarter '09, due to the decrease in the long-term compensation provision.

Exploration costs at non-operational mining sites, which include care and maintenance, during the first quarter, were US$7.9 million, an 8% increase compared to US$7.2 million reported in the first quarter '09. The main efforts were focused at the La Zanja, Breapampa, Marcapunta and Mallay.

Operating income in the first quarter '010 was US$67 million, a 16% increase when compared to US$59 million reported in the first quarter '09. This result was mainly explained by a 14% increase in total revenues, from US$177 million in the first quarter '09 to US$201 million in the first quarter '010, in addition to the 37% decrease in general and administrative expenses mentioned above.

During the first quarter, Buenaventura's income from non-consolidated affiliates was US$111 million -- US$112 million, 40% higher than the US$70 million -- than the US$80 million reported in the first quarter '09. Cerro Verde's contribution to these results increased 127%, from US$20 million to US$45 million in this quarter. Likewise, Yanacocha contributed -- contribution increased 18%, from US$60 million to US$70 million in this quarter.

This quarter, Buenaventura's net income was US$155 million as mentioned before, representing US$0.61 per share, a 65% increase when compared to US$100 million reported in the first quarter '09. This was mainly explained by the 40% increase in contributions form Yanacocha and Cerro Verde, as well as 15% increase in operating income.

In terms of our projects, may I refer to Uchucchacua's manganese sulphate plant to incorporate into reserves, current ore resources with manganese content and increased production is moving forward. The development of the engineering is ongoing and we are advancing in this important project.

In Colquijirca, the expansion of metallurgical facilities to increase plant capacity from 6,000 tons to 18,000 tons per day, including the construction of a new tailing dam with a CapEx total of US$200 million. This total investment as of March 2010 was US$90 million. So we are halfway into the project.

The Huanza Hydroelectric plant, the construction of the 90-megawatt hydroelectric plant to ensure energy supplies from a clean and renewal -- renewable source for direct operations and projects. The CapEx is US$145 million. Total investment as of today is in the order of US$20 million. At La Zanja, we continue to expect -- initiate operations by July this year. A total revised CapEx of US$63 million is expected to be invested in La Zanja.

With this, we are open to any questions that you may have. We are here with Cesar Vidal, who is our Vice President for Explorations, Francois Muths, our Chief Operating Officer, Carlos Galvez, our Chief Financial Officer, and Mr. Humberto Rodriguez, our Comptroller. Thank you. We are open to any questions that you may have.

Thank you. (Operator Instructions). Your first question comes from Felipe Hirai of Bank of America.

Hi. Good morning, everyone. Good morning, Roque. My first question is related to the production that you have, actually the decline in production that you have in most metals. Roque, could you please help us identify what in this production decline was kind of expected in the quarter and what was not expected in the quarter? And also, if you could just give us a guidance of what you're expected to have in terms of production for 2010? Thank you.

Well, the thing is, essentially what we could not predict was the strike and that is obvious. We regret that we had this confrontation with the unions. Essentially, unions of the contractors. That was not expected and 13, 14 days strikes certainly have an impact. But that was being able to be reversed in the case of Orcopampa, not in the case of Antapite or more or less in the case of Antapite and certainly not in the case of Uchucchacua.

I think Uchucchacua is a mine where we are working on the metallurgical front, very intensively and we are very excited about the possibilities of having a plant to deal with the manganese on -- in the coast, essentially, with a joint venture with a chemical company. I think the production will stabilize in the course of the next months. In fact, this month of April has been a good month and we are looking forward to having a better production in the coming months.

Okay. Roque, thank you. If you could just give us some -- an updated guidance on what kind of production rates you're expecting for the year for the different metals, please?

I would say that our -- exactly the same that we hope to overcome this drop in this quarter and end the year with the predictions that we had. I don't have this on hand, but essentially Carlos may have some idea of this.

Yes, well in the case of our gold production, it will be exactly the same. You can observe that despite of the fact that we suffer this strike that Roque mentioned, we could catch up with our objectives of production. So we believe that we are not going to have any problems in terms of our guidance -- to comply with our guidance for the full year.

In the case of silver, we believe that will be not an actual very good year, due to the two issues that we demonstrated in the first quarter. First of all, in Uchucchacua, the problem that we have with the manganese content, that we will turnaround once we complete the metallurgical facilities Roque mentioned and from then on, we are going to expand, not only in our reserves, in our production, but also we reduce the costs, due to the different issues that we have already mentioned, the different opportunities.

In the case of Brocal, contribution from -- for silver, will be lower than last year. No doubt, due to the lower grades from [Flanco Vallieri] and that was the reason to work on the expansion of the metallurgical facilities in order to get -- to be competitive in spite of the fact that we were going to reduce the grades.

So in -- for the full year, Uchucchacua will produce about 10 million ounces of silver. In the case of Brocal, we will add, in total, 2.5 million ounces. And of course we are going to enjoy the byproduct, that equity share, from Yanacocha's production and Cerro Verde.

Okay. Carlos, thank you very much.

Thank you. Your next question comes from Carlos de Alba of Morgan Stanley.

Good morning, gentlemen. Just a -- would it be possible, Roque or Carlos, to quantify how much of the production and higher costs were -- came as a result of the strike? That would probably help us put the quarter in perspective.

In my numbers, the costs -- you did a significant work or a very good job in terms of reducing expenses, which saved the quarter relative to what you were expecting. So the question also is, are this reduction in expenses sustainable through the year? And then finally, any updates on the other projects in Tantahuatay, Chucapaca and Minas Conga? Thank you.

I think the reduction in costs are sustainable and we are working on that. The thing is we believe that a strike always puts a -- out of balance the whole operation and we believe that in the next few months, we will be reporting a more reasonable type of cost from the operations. So I think that will normalize, if I may say.

In terms of the projects, Tantahuatay is going ahead very well. We have finalized buying all of the service -- most of the service rights that we need. We are looking for an environmental impact study and we will have probably in the next few months, huh?

We have the permits.

We have the permitting and we should be going ahead with the audience, the local --. We have what? Sorry?

We have the public audience and the environmental impact study approved. And we have now the budget for construction.

Well, the thing is that the construction will not start until the, probably, mid this year. So we are working on that and we are essentially going ahead with Tantahuatay and we expect to be in production by mid next year. So that is the position at Tantahuatay.

At Chucapaca, we continue exploring and we should come with a, probably, some guidance on the resources in the next couple of weeks. And at Conga, we essentially continue to work the figures and we should be looking for the making the decision before the end of this year, whether to go ahead or to continue studies.

Thank you very much.

Thank you. (Operator Instructions). Your next question comes from Imaru Casanova.

Hi, this is Ima from BJM. Most of my questions have been answered, but I have a couple extra ones. On Uchucchacua, regarding this project to incorporate resources now that have manganese content, what -- how many ounces or what's the number of ounces there're silver and gold that you would expect to add to the reserves at Uchucchacua as a result of these changes.

Well, the thing is, gold, there is very, very little gold in the area of Uchucchacua. It's essentially silver bearing ores, with very -- well, we very at -- very high manganese. Essentially, I would say that the future of Uchucchacua has to do with solving the problem of manganese sulfate.

We understand that not only in the current area of operations, but in the surroundings, in the brownfield explorations of Uchucchacua, we have found substantial resources of silver and with manganese-bearing ores, no? The thing is, this is very, very relevant for the future of Uchucchacua. Carlos Galvez would like to add some to this.

Imaru, as of today, we have already counted with the resource in the order of 3.5 million tons with about 15 ounces of silver per shore ton. But it will be incorporated into reserves as soon as we are able to turn around the issue of the manganese, as already Roque mentioned.

Of course Francois Muths, who is already here, our Vice President of Operations, is working on defining the exploration and development and even the new design of the mine for the future considering the effort that we have to carry out in the area of [Sao Paulo], which is the place where we are going to expand the mine for the future. So we have the potential opening in this area, but as of today, we can only give the figures I mentioned.

Excellent. Thank you. And then if you could just talk a little about Breapampa and what the status of that is? Any update on when you might see production from there?

Let me turn to Cesar Vidal to give us an update on Breapampa.

Thank you.

Good morning. Breapampa is a small project. It's a large and prospective piece of land in the order of 90,000 hectares, but it's only a small 200,000 ounce gold project, which [outcrossed] its on surface and we have modeled that into an open pit and we are doing all the permitting in the next few months. We've already addressed the communities involved and we want to take this for approval of environmental impact study by the end of this year and hopefully construction next year.

It's going to be a relatively small producer. We're thinking of operating an open pit at 5,000 tons a day with grades that will vary between 1 and 2 grams of gold, heat leachable, but it will give us five years in the regions to continue exploring satellite deposits and anomalies that merit small drilling. That's as far as we have taken Breapampa as of today.

Okay. Well, thank you very much.

Thank you.

Your next question comes from Victoria Santaella of Santander.

Hi. Good morning, gentlemen. I would like to understand a little bit better how is the labor environment today in Peru? Also the government environment, in terms of is there any risk for further increases, either royalties, taxes, export taxes that we have seen in other countries?

On the labor, specifically, what are your expectations in terms of employer-employee relations? We saw a significant increase in labor costs, especially at Orcopampa. Is this going to be generalized into other mines? If you can give us a little bit more color there, I would appreciate it.

The current labor situation is normal. It is -- regardless of the fact that we have had this strike, which was exacerbated, essentially, by this profit sharing scheme that we have in place in Peru and that sometimes is not well understood. So the thing is, the labor situation is currently, essentially stable. We don't foresee major problems.

The relationship between the company and our employees is essentially good. Not a problem -- a major problem. But that has to with the negotiations with the labor -- or the salaries' increase and essentially we are working on that front. So that is essentially not a problem, more than what a normal employer-employee relationship can be. No?

And, Roque, when you say we're working on it, you mean there's going to be further salary increases during this year in other mines that we should be expecting or (inaudible)?

There, there is a --

Yes.

There is a yearly negotiation with the unions and we hope that the labor costs don't go up, but the other thing that is affecting, of course, labor costs is the exchange rate in Peru. Exchange rate, as you know, is revaluing compared to the US dollar, so that is one of the reasons why our costs -- labor costs in US dollars are going up. So it is nothing that is exceptional, if I may say. No?

Okay.

On the government taxes and royalties, we do not foresee any of those coming in the next months or years, no?

As you well know, many of the very large mining investments do have tax stabilization contracts and that was put in place many years ago, essentially to give a stable environment for investment and government has respected that. As I said, they do understand that companies are contributing to the development of the country and that they don't need to increase taxes.

The main problem in Peru is you ask me on taxation is the informal economy that accounts for probably 50% of the economy. So the focus of the government in terms of taxation is more in getting the informal economy into the formal economy and, by doing that, increasing the taxes overall.

So essentially we believe that we are in a very stable situation and on the political front, of course, I think I have spoken to some of you, in the sense that we feel quite relaxed, in the sense that most of the candidates, the potential candidates, are stable people, people that are very much for market economy and for business friendly, if I may say. So things are going very well in Peru .

If I may add, Victoria, getting back to the labor issue.

Sure, Carlos.

There is a couple of things that I would like to share with you. First of all, that, as Roque mentioned, we are going to have a negotiation, but it is not easy for the negotiation if we consider that we have had almost zero inflation last year. Without having the level of inflation, the negotiation will impact anyway because you cannot say that you are not going to increase anything in the salary.

On the other hand, you have the question of the different level of salaries between people in our payroll and the people in our contractors' payroll. This is something that we are working on in order to reduce the differences and this will impact some in terms of the total labor expense.

But this is something that we have to work on reducing by improving the productivity in our operations. That's why it's so important, the solution of -- in our Uchucchacua mine by working not in a selective exploitation, but a massive one, once we turnaround this mining situation.

Excellent. If I may, one follow-up question is regarding your M&A activity, which I've seen on the news wires, very active in the past couple of weeks, with explorations now in Mexico and the Minas Chanka claims. Is there any change on your M&A activity? Do you see more participation? Or this is part of your normal operation work?

It is absolutely normal. In the case of Chanka, it is an expansion of our land package or our potential land package in the case of our Mallay exploration and we believe that Chanka has some potential for silver-bearing ores and we are very pleased that we've reached an agreement and that we may have an option to acquire up to 75% of that property.

And in the case of Solitario in Mexico, it has been in negotiation that we have been going on for the next -- for the last few months and that have reached an agreement and we are very pleased about that. And we are working on other fronts. We have repeated many times that we have been looking for opportunities abroad, trying to diversify geographically, but each time we found something -- there was something better in Peru. So Peru continues to offer a lot of opportunities.

We -- regardless of that, we are working on other deals and we should inform the market when -- whenever we reach those. But essentially, our M&A is focused on properties that add value, are not the sort of going out shopping, buying companies that are already fully valued. We believe that the value is in properties that have still substantial potential for exploration and for finding new ores. So that is, to answer your question, normal activity for us.

Excellent. Thank you very much, gentlemen.

Thank you. Your next question comes from John Bridges of JPMorgan.

Good morning, Roque, Carlos. I just wondered to what extent the strike action is perhaps related to the election and will go away once the election is passed?

Well, I would love to tell that that is the case. I would say that elections for regional and municipality authorities are coming in October and -- but next year we will have presidential elections. So the thing is, this is part of the normal democratic situation of Peru and we have to cope with that. I would say that elections and especially regional and municipality elections are exacerbating these negotiations, this labor situation, especially in the rural areas where all of our operations are located.

Oh, okay. Then in the Orcopampa section, you speak about a 35% increase in labor costs. This -- if pay's going up at that rate, I might be tempted to go to the mines myself.

John, this is Carlos. In the case of Orcopampa, what happened is that we have been [brisking] additional volumes to replenish reserves and expanded the resources. This is not an easy situation to work and that's why we increased this labor cost.

Well, you're right. We would like to continue holding our cash costs lower than US$300, but there is a -- we are pushed to increase the salaries due to the conditions of the mines, this is one. Additionally we have to improve certain conditions of operations to prepare the infrastructure for the manipulation. This is not easy and we have to work on that and this allows us to demand additional labor effort.

Okay. Great. Then finally, on your chemical project, the manganese asset and the silver sulfate. I recognize with something like that, it's difficult to put a time line together, but what steps do you have to take and how far along are you with that?

We expect to be ready and in production in a year's time at the most. Essentially, the company that we are dealing with, which is a local chemical plant or chemical company, is working on obtaining all the permitting for the construction of this plant. It is a known technology and that they feel quite comfortable.

We need to do some additional testing, which is in the hands of the Tenge labs in here locally and that we believe that we will have no problems. So to answer your question, essentially, we hope that it will be ready before the end of the year, but certainly we are looking for the most of the year's time to be dealing with these concentrates.

So there are no pieces of equipment that have long lead times?

No.

No, not at all. We -- the equipment we use basically comes from the shelf and there are some tags in the facilities that we are going to use. And there is no [part in it]. Yes, having said that, this process could eventually have its own economic results or result, but this is not our main driver. The main driver is increasing the value or creating value in our mine. This is the focus, no?

Understood. It sounds very exciting. Well done, guys. Congratulations.

Thank you.

Thank you. (Operator Instructions). Your next question next question comes from Michael Holme of Altima.

Good morning. Most of my questions have been answered. I'd just like to understand on the taxation side, your taxes were very low this quarter. If you could please explain that, I'd appreciate it. Thank you.

The -- well, we'll have to check on those. We -- there have been no changes in taxation. Certainly not for higher taxation. But net lower. It may be book keeping, but nothing exceptional that we can recall.

Okay. Thank you.

Your next question comes from Luisa Moreno of Lusight Research.

Hello. Good morning. I just wanted to -- I just have another question as well related to Uchucchacua. So you had lower grades, decrease of about 16%, which led to higher cash cost results. I just wanted to know whether you expect that beyond 2010.

Well, this is exactly what we mentioned before. Trying to avoid the area with very high manganese, the selective exploitation led us to lower grades of silver. This is the condition and the situation that we are going to manage the next 12 months. Once we turn around the issue of the manganese, we are going to be able to exploit easily the 15 ounces per ton ores. So you're right.

My other question is related to Yanacocha. You also saw lower production from Yanacocha. I just wondered if you could share with me what is your expected total production for Yanacocha for this year, perhaps next year as well.

Well, the total production guidance was in the order of 1.5 million ounces for year 2010 and this is a nice opportunity to -- well, to take advantage of the higher prices, to downgrade the operations and to incorporate into the results something that hasn't been reported as a reserve.

You know that we calculated our reserves on the price of US$800 to US$1,000 and -- but taking advantage of US$1,100 per ounce is an opportunity to place in the leach pad ores that otherwise would have been considered waste. But this is the main reason and opportunity to take -- to earn some time to continue exploring and expanding our resource.

Could you please share with us what is your opinion about the gold price, since you mentioned it. Do you think these prices are sustainable at the US$1,200 -- close to US$1,200 ounces per -- US dollars per ounce? Hello? Hello?

Please hold, just one moment.

Hello? You cut me off, ma'am.

No. I'm sorry. This is the Operator. Please hold. We are experiencing technical difficulties. Please just hold one moment.

Okay. Very inconvenient. So when I was asking the tough question, they went into technical difficulties. I'm on the conference call and they cut me off. They said it's technical difficulties. I'm like, yes. [I wonder if they got] any of my questions anyway.

Ladies and gentlemen, please continue to hold. The conference will resume momentarily. Thank you.

Hello? Sorry. Sorry for the interruption.

Hello?

Yes. Sorry for the interruption. Something happened with the line.

No problem. The -- I don't know if you heard my follow-up question.

No.

Oh, you did not. Okay. So I was just -- okay, we're talked about Yanacocha and so you answered me and I was asking your opinion about the gold prices, whether you think the -- what's your view about the gold prices?

Well, our opinion on the gold price is as is stated in our presentation, which we have on our web page, but essentially we believe that there is some possibility of inflation in the world, that there is a strong demand for gold and that it's a safe haven in this financial environment, so we believe that the price of gold is quite strong and that will maintain at this level. We do not like to speculate on higher prices, but we are prepared for those as well.

Okay. Thank you. So I just have one last question. Could you please tell us what's your expected CapEx, total CapEx, for the year? I wonder if you guys revised that.

Yes, the total CapEx for -- throughout this year is US$196 million, including our equity share on Brocal and our sustained CapEx and the development of -- the construction of our hydro electrical plant.

Okay. And --.

This is, as well, duly described in our presentations held on our web page.

Okay. Fantastic. So can you just tell -- what's your maintenance CapEx?

The maintenance CapEx is in the order of US$30 million.

US$30 million. Okay. Thank you so very much for your -- for your questions -- for your answers.

You're welcome.

Your next question comes from Carlos de Alba of Morgan Stanley.

Thank you. Just a follow-up question, coming back to the tax issue. Carlos, do you have an estimate -- an expectation of what should be a normalized tax rate for the remaining of the year?

The question, Carlos, is that you have to bear in mind that the tax rate is the 30% regular, but applicable on our own pre-tax profits, without considering the contribution of our affiliates, Yanacocha and (inaudible). Because we incorporate into our P&L the after-tax contribution of those companies.

On the other hand, from our pre-tax profits, you have to take away the benefit, not the benefit, but the -- we have the tax shelf that are carrying out losses, created in the past, when unwinding our hedge book. So calculating our pre-tax profit from our [various] operations, you have to take only 50% of that and apply 30% income tax.

Okay. Okay. Thank you very much.

You're welcome.

Thank you. Your next question comes from Michael Holme of Altima.

I'd just like to get your comments on what happened with Tia Maria, with Southern Copper? I'm just wondering if that's having any impact on the operations of Cerro Verde and possibly the expansion plans that Freeport is talking about? Thanks.

It is difficult to refer to other companies' activities, but I'll try to do my best. The thing is Tia Maria is a project that has been advancing and that proposed initially to use water from the sea and to treat this water and then after, when the public hearing was being organized, they stated that they may need to have some water from wells. That, of course, had a reaction from the local farmers.

In addition to that, there is another factor that has to be taken into consideration and it was that Southern Copper suggested to build a reservoir at 4,000 meters over the sea level in the [Mokiwa] region and while Tia Maria is located in the Arequipa region.

Right.

This may sound ridiculous to you, but the thing is, the local authorities started fighting for the reservoir to be built in the Arequipa region and not in the Mokiwa region. The reservoir in the Arequipa region will have to be replaced at 2,500 meters over sea level, which essentially will generate a lot of sediment because it is lower, while the Mokiwa reservoir will be at 4,000 meters over sea level that will generate very little sediment.

So from a technical standpoint, the logical thing is to build the reservoir at the Mokiwa region. But this has to do with the local fights between these authorities. So the thing is there have been, if I may say, misunderstandings from the side of the company, of the local authorities, maybe the regional and municipality elections have also an impact on this reaction.

The thing is, I believe that in the long run, the company will be able to pass the message in a better way and go for the public hearing and get this, I hate the term, but anyway the social license that is required for this -- for going ahead with our project. I think the local people will realize that this is a very important investment and they will generate a lot of benefits for the whole region.

Okay. Very good. Thank you very much for that color, Roque.

By the way, I don't think this will have a major impact in new projects. I think each project has to be evaluated by itself and this -- each of them have their own peculiarities. So I believe that this is not the case of an emblematic project that will have an impact in the future.

In fact, you have to realize that Conga had its public hearing and it went very well. Tantahuatay is going ahead, La Zanja is going ahead. So the thing is, there are other examples, very positive ones, and we in generally believe that the current social situation in Peru is improving.

Okay. If I can add, there has been already a public audience a month ago in Cerro Verde, for mine expansion [with the purchase of that]. They can do it, no?

So Cerro Verde also has something to show in this respect.

Very good. Thank you.

Thank you. Your next question comes from [Luis Guzman] of Santander.

Good morning. Thank you very much. All my questions have been answered.

Thank you.

Thank you. At this time, I would like to turn it back to management for closing remarks.

Thank you very much. Thank you for the time. I want just to report, as we do every conference call, that we will be attending the Merrill Lynch Global Mining Conference in Miami next week and that -- or no in two weeks' time and that we will also be open to any questions that you may have directly to us. Thank you very much for your attention and have a good day.

Thank you for participating in today's conference call. You may now disconnect.