Buenaventura (BVN) Reports Q2 Production & Sales Volume Numbers
Buenaventura Mining BVN reported second-quarter 2023 production and volume sold from its operating mines. The company also provided the production outlook for 2023.
Gold production at Orcopampa mine and copper production at El Brocal mine exceeded expectations. Tambomayo’s gold, silver, lead and zinc production matched the company’s latest guidance. Meanwhile, gold output at Coimolache and silver at Julcani fell short of expectations.
Let’s dig deeper.
Orcopampa Ahead of Guidance
In second-quarter 2023, gold production at Orcopampa was 19,975 ounces, up 13% from the year-ago quarter. BVN sold 19,718 ounces of gold from the mine in the quarter.
The second-quarter gold production came in higher than the company’s expectations, aided by higher gold grades extracted from the Pucará and Ramal four vein system. BVN maintained the production guidance for the mine at 72000-80,000 ounces of gold for 2023.
El Brocal Beats Copper Production Expectations
El Brocal produced 13,213 MT of copper that marked a 25% year-over-year increase. Copper output was higher-than-expected due to the ramp up in underground mine production. The 2023 copper production guidance remains unchanged at 45,000-50,000 MT.
Buenaventura produced 4,377 ounces of gold from the El Brocal mine in the second quarter, which was down 2% year over year. Silver production plunged 21% in the quarter under review to 635,530 ounces. Lead production was reported at 1,275 MT, down 2% year over year. Zinc production declined 8% year over year to 3,812 MT.
In the second quarter, Buenaventura sold 2,427 ounces of gold, 508,257 ounces of silver, 1,215 MT of lead, 3,094 MT of zinc and 12,355 MT of copper.
The company expects gold production from El Brocal in 2023 to be in the range of 24,000 ounces to 26,000 ounces. Silver production is expected at 2.7 - 3.0 million ounces. Lead production is expected to be between 7,500 MT and 8,300 MT. Zinc output is projected between 23,000 MT and 25,000 MT.
Tambomayo Meets Guidance
Gold production at Tambomayo decreased 24% year over year in the second quarter to 10,896 ounces while silver production improved 25% to 540,732 ounces. The lead and zinc production at Tambomayo totaled 924 MT and 1,150 MT, respectively. Lead and zinc output were 67% and 71% lower than the year-ago quarter levels, respectively. The production numbers were in line with the company’s guidance.
Buenaventura sold 9,868 ounces of gold in the second quarter and 485,593 ounces of silver from Tambomayo. The volume of lead and zinc sold totaled 808 MT and 895 MT.
BVN maintained the production expectations for gold for 2023 at 35,000 – 40,000 ounces, for silver at 1.9 - 2.2 million ounces, lead at 2,900 – 3,200 MT and zinc at 4,800 – 5,300 MT
Coimolache & Julcani Output Lag Guidance
Second-quarter 2023 gold production at the mine slumped 52% to 9,632 ounces. In the three months ended Jun 30, 2023, BVN sold 8,170 ounces of gold.
The production numbers in the quarter came in lower than guidance due to a slower-than-expected leach pad gold extraction rate combined with longer-than-expected percolation time. Based on expectations that these factors are expected to increase in the second half, the company maintained its production guidance for 2023 at 60,000 – 65,000 ounces of gold.
Julcani’s second-quarter silver production decreased 26% year over year to 472,740 ounces. The figure came in below projections due to a negative geology reconciliation with decreased treated ore. Buenaventura sold 449,841 ounces of silver from Julcani in the second quarter.
BVN has revised its production range for 2023 at 1.9 - 2.1 million ounces of silver from the Julcani mine.
Other Updates
Buenaventura produced 2,030 ounces of gold in the second quarter and 5,322 ounces of silver at the La Zanja mine.
The company maintains the target of production initiation at Yumpag in the fourth quarter of 2023, subject to final permitting and approval required to operate.
At Uchucchacua, exploration and mine development continued during the second quarter. In the ongoing quarter, BVN will focus on ensuring processing plant operational readiness to receive ore from Uchucchacua and Yumpag by the end of 2023.
Price Performance
Shares of Buenaventura have gained 28.2% in the past year against the industry’s 11.3% decline.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Buenaventura currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Carpenter Technology Corporation CRS, Silvercorp Metals Inc. SVM and PPG Industries, Inc. PPG.
CRS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for current-year earnings for CRS is pegged at $1.04 per share, implying year-over-year growth of 6.3%. It has a trailing four-quarter earnings surprise of roughly 198.1%, on average. The stock has gained 103.7% in a year.
Silvercorp Metals currently sports a Zacks Rank of 1. The consensus estimate for current fiscal-year earnings for Silvercorp Metals is pegged at 27 cents per share, suggesting year-over-year growth of 28.6%. The stock has jumped 31.8% in the past year.
PPG Industries currently sports a Zacks Rank of 1. The Zacks Consensus Estimate for PPG's current-year earnings has been revised 0.7% upward over the past 60 days. PPG Industries’ earnings beat the consensus estimate in three of the last four quarters and missed once. It has a trailing four-quarter earnings surprise of 6.8%, on average. PPG shares have gained 30.3% in a year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
PPG Industries, Inc. (PPG) : Free Stock Analysis Report
Carpenter Technology Corporation (CRS) : Free Stock Analysis Report
Buenaventura Mining Company Inc. (BVN) : Free Stock Analysis Report
Silvercorp Metals Inc. (SVM) : Free Stock Analysis Report
