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Southern Copper (NYSE:SCCO)

Q3 2012 Earnings Call

October 24, 2012 2:00 pm ET

Executives

Raul Jacob Ruisanchez - Principal Accounting Officer and Comptroller

Oscar González Rocha - Chief Executive Officer, President, Executive Director, Member of Corporate Governance & Disclosure Committee and Member of Compensation Committee

Analysts

Carlos de Alba - Morgan Stanley, Research Division

Felipe Hirai - BofA Merrill Lynch, Research Division

Leonardo Correa - Barclays Capital, Research Division

Leandro Cappa - Deutsche Bank AG, Research Division

Santiago Perez Teuffer

Juan José López

Mandeep Singh Manihani - JP Morgan Chase & Co, Research Division

Jamie Nicholson-Leener - Crédit Suisse AG, Research Division

Operator

Good day, and welcome to Southern Copper Third Quarter and 9 Months 2012 Results Conference Call. With us today, we have Southern Copper Corporation, Mr. Raul Jacob, CFO of the Peruvian Operations and Investor Relations of Southern Copper, who will discuss the results of the company for the third quarter and 9 months 2012, as well as any questions that you may have.

The information discussed on today's call may include forward-looking statements regarding the company's results and prospects, which are subject to risks and uncertainties. Actual results may differ materially, and the company's cautions to not place undue reliance on these forward-looking statements. Southern Copper Corporation undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. All results are expressed in full U.S. GAAP.

You may begin.

Raul Jacob Ruisanchez

Thank you very much, Richard, and good afternoon to everyone and welcome to Southern Copper Third Quarter 2012 Earnings Conference Call. In today's conference call, we will begin with an update of our view on the metal markets. We will then talk about Southern Copper's key results related to production, sales, operating cost, financial results, expansion projects and capital spending program. After that, we will open the session for questions.

Focusing on the metal markets and prices. During the third quarter of this year, metal markets continue to be driven by negative macroeconomic events that affected consumer expectations, the most important ones being Europe's debt crisis and the possibility of a slowdown of the Chinese economy.

2012 is also a transition year, with changes in administration or elections in several key economies, as it is the case of China and the United States. Even though we believe copper fundamentals are sound, demand has been repeatedly affected by the macroeconomic outlook for Europe, China and the economic slowdown that characterize elections and administration changes. At present, we perceive a difference in the situations of the Asian markets and the developed markets.

In China, analysts point to a growth in copper demand of approximately 6% for this year, which should give support to the copper market in the next few months, particularly if a stimulus program is launched for the Chinese economy. The United States demand appears to be stronger as consumer confidence has increased and the economy is recuperating. However, European demand is decreasing and with no signs of recovery in the short term.

Analysts currently estimate that there will be a total refined copper demand growth of 2.5% for 2012. On the supply side, CRU is estimating a production increase of 2.4% for the year due to lower-than-expected labor unrest and ore grade declines. Even though this combination of weak demand with better-than-expected supply is giving a break to the copper market tightness, we believe copper fundamentals are strong as shown by copper inventory reductions.

Over the past 12 months, copper inventories in public warehouses have decreased 34.4%, which we believe demonstrates solid market fundamentals. We think that several structural factors are still affecting copper supply, which will very likely result in weak growth in the coming years. However, Southern Copper believes it is positioned to take advantage of these unsettled situation through our aggressive investment program of organic growth.

Focusing on our production and starting by copper, in the third quarter of 2012, copper mine production increased by 3% to 160,379 tons. This compares with 155,689 tons in the third quarter of 2011. This increase was the result of higher production at the Cuajone, La Caridad and Buenavista mines, which increased production by 14%, 2% and 2% -- and 3%, respectively as a result of higher ore grades and recoveries.

Molybdenum production decreased by 6.8% in the third quarter of 2012 from the third quarter of 2011 due to lower production at the Toquepala mine, partially offset by higher production at La Caridad and Cuajone due to higher grade and recovery.

Silver mine production increased by 2.3% in the past quarter when compared to the same period of last year, principally as a result of higher production at our Cuajone, Buenavista and La Caridad mines. Total production was affected by lower production at IMMSA, which holds a 45% share in our silver production, and Toquepala, which decreased also production by 15%. Refined production increased by 10% in the third quarter of 2012.

Zinc production increased by 1.1% in the third quarter, mainly as a result of higher grades and recoveries and gradual production recovery at the Santa Eulalia mine. The flooding problems of prior years are being resolved.

Going to our financial results. For the third quarter of 2012, sales were $1.5 billion, 11% lower than the $1.7 billion of the third quarter of last year due to lower prices in all main metals produced by SCC and lower volume in sales of molybdenum, which decreased 6.5%, zinc, which decreased 7%. The decrease in sales was -- in sales value was partially offset by a 14% increase in silver sales volume.

The company, as part of a cost in this past quarter, the company has recorded a charge at the cost of $316 million. This was part of Delaware Court's judgment by which the company received $2 billion -- $2.1 billion on the derivative lawsuit related to the Minera Mexico transaction dating back to 2005. However, in the same decision, the judge awarded, as I mentioned, $316 million in compensation payable by the company to attorneys that initiated the litigation. This charge has been reported as part of our statement of earnings.

Beside this charge, we had some other cost changes. We have a higher energy cost, labor costs and third-party copper cost, exchange rate depreciation and other operating materials increases that were partially offset by lower diesel and fuel cost, workers participation and inventory consumption. Overall, our cost increased from $784 million in the second quarter of this year to $1.1 billion in the third quarter of 2012. This is including the mentioned legal fees.

The EBITDA in the 9 months before nonrecurrent expenses was at $2.9 billion, 57.4% of margin and $849 million or 55% margin for the third quarter of 2012. Including the court-ordered legal fees, our EBITDA for the 9 months was at $2.6 billion, 51.1% margin and $532 million or 34.3% margin for the third quarter.

Operating cash cost per pound of copper before by-product credits was $1.78 per pound in the third quarter of 2012. This compares with $1.71 per pound in the second quarter of 2012. The $0.07 per pound increase in operating cash cost is the result of the already mentioned cost increments that we indicated. Southern Copper operating cash cost, including the benefit of by-product credits, was $0.82 per pound in the third quarter of this year.

Regarding by-products, we had a total credit of $337 million or $0.96 per pound in the third quarter of 2012. These figures compared with a credit of $388 million or $1.11 per pound in the second quarter of 2012. The lower by-product credit results from a reduction in our main by-product prices, molybdenum and zinc particularly, partially offset by better silver and gold prices and higher sales volumes of silver that increased 2.7%, lead that increased 10.6%, when compared to the second quarter of 2012.

Net income in the third quarter before extraordinary and nonrecurrent expenses was $534 million, 34.4% of sales. Including the payment of the court-ordered legal fees, our net income for the third quarter of 2012 was $217.9 million or 14% of sales.

Focusing on the company expansion and capital projects. Regarding the Buenavista operation, the Quebalix project has an overall progress of 98.9%. In October of this year, the company started the final testing as part of the project commissioning and expects to start operations by November of 2012. Through September 30, 2012, we have invested $71 million of total budget cost of $75 million. This investment consists of a crushing, conveying and a spreading system that improves the SXEW copper production by increasing recovery and reducing the required time to extract copper from mineral.

The SXEW 3 project, also at the Buenavista mine, is moving forward. Plant equipment from Tia Maria will allow us to increase the annual plant capacity from 88,000 tons to 120,000 tons. Overall progress of the project at the end of September is 32.8%. The new plant should begin operating in the first half of 2014 and has a total budget cost of $444 million. Through September 30 of this year, the company has spent $126.3 million of that budget.

The construction of a molybdenum plant for the current concentrator is at 66% of progress and through September 30 of this year, the company has spent $9.2 million of the $38.2 million total budget costs. The project is expected to begin operations in the first quarter of 2013. And it is expected to produce annually 2,000 tons of molybdenum contained in concentrate.

The Buenavista mining expansion project includes mine equipment acquisition and a new concentrator with an estimated annual production capacity of 188,000 tons of copper and an additional 2,600 tons of molybdenum. This project has a capital budget of $1.4 billion and it is expected to begin operations by the first half of 2015. Regarding mine equipment, through September of this year, we have received 2 of the 5 shovels, 27 of the 41 trucks and the 5 drills acquired. Basic engineering for the new concentrator is complete and detailed engineering and equipment and position are moving forward as scheduled. The bidding process for the steel structure and earthmoving equipment was conducted. Overall progress of the project is 27.7% at the end of September.

For the Angangueo project, the basic and detailed engineering are moving forward as scheduled to develop this underground polymetallic deposit in Michoacan in Mexico. With an estimated investment of $131 million, Angangueo will have potential annual production of 10,400 tons of copper, 3 million ounces of silver, 9,700 tons of zinc and 3,900 tons of lead. The project is scheduled to begin production in the first half of 2015.

The Toquepala projects. Through September 30 of this year, we have spent $220 million in them. These expenditures include a new crusher and a conveyor belt system to replace rail hauling and other costs, which will allow for future savings.

In the case of the Cuajone project, as of September of the year, the company has spent $122.2 million on 2 projects related to this unit's production plans: the Variable Cut-off Ore Grade project and the High Pressure Grinding Rolls project. Current production is showing the initial benefits of both projects, which will be at full capacity by the third quarter of 2013, adding an estimated average of 22,000 tons of additional copper and 700 tons of molybdenum to Cuajone's annual production.

For Tia Maria, we continue to work on a new environmental impact assessment study that will address recent government guidance on these studies in order to reach an agreement that is mutually satisfactory to all parties.

For the case of the Tantahuatay investment, in these mines where the company hold a 44.2% interest, in the 9 months of 2012, we have recognized $38.2 million in earnings for our share of the net income of the mine.

At this point, we're expecting to spend approximately $1 billion in capital expenses in 2012.

Regarding the recent dividend announcement, in order to determine the appropriate quarterly dividend, it is the company's policy to review at each board meeting the capital investment plans, available cash resources and expected future cash flow generation from operations. In this quarter, as a way to maintain a more efficient capital structure, our Board of Directors have decided to declare a dividend that consists of payment of approximately 100% of our third quarter of 2012 non-adjusted net income and the full $2.1 billion receipt from AMC in satisfaction of the Delaware Court decision. Therefore, the Board authorized a cash dividend of $2.75 per share payable on November 21, 2012, to shareholders of record at the close of business on November 8, 2012.

With these in mind, ladies and gentlemen, thank you very much for joining us and we would like to open up the forum for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Carlos de Alba from Morgan Stanley.

Carlos de Alba - Morgan Stanley, Research Division

Raul, the first question that I have is regarding CapEx and particularly the CapEx around pulps [ph]. I see that the company continues to do -- to make good progress on the growth projects. However, it seems that the CapEx guidance declined from $1.5 billion for the year to $1 billion and we do see a little bit of a slowdown in the ramp-up -- in your CapEx deployment. Can you talk a little bit about this? What were you expecting? Why the delays and what is, if you have any, guidance for 2013?

Raul Jacob Ruisanchez

Yes, Carlos. Well, yes, there are 2 factors here. In some cases, we have -- we're seeing some delay in equipment deliveries that was not -- were not expected to happen. That is affecting a little bit our senses on CapEx. On the other hand, in some cases, we are on track in terms of where we want to go or where we want to be in terms of the execution of the project. But the terms of payment have changed a little bit and there are much more favorable at this point for the company. And that's why we haven't spent as much as we believe we were going to spend at the beginning of the year. At this point, we understand that we are going to spend, as I'd say, about $1 billion in 2012 for capital expenses.

Operator

Our next question comes from Felipe Hirai from Bank of America.

Felipe Hirai - BofA Merrill Lynch, Research Division

So I have 2 questions. The first one is related to your sales in the third quarter. We saw that there was a slight decline in this quarter. We just wanted to check understanding [ph] if there was any particular reason for this issue? And if you could give us some guidance of what you expect to see in terms of production for next year, if there was any change on that.

Raul Jacob Ruisanchez

Yes. Well, mainly, our sales decreased as a result of lower prices. The prices for the year, as we know, have been decreasing when you compare them to last year. If we compare this quarter with the third quarter of 2011, copper is at 14.2% lower; molybdenum, 19.2% lower; zinc is 14.9% lower; silver, 22.5% lower; and gold, 2.7% under what we expect or we had last year. Regarding sales, the company has managed to maintain its copper sales, as well as -- but we have some decreases in molybdenum and zinc sales that were partially offset by 14% in round numbers in our silver sales. Now regarding the forecast for production for next year, we're still in the process of reviewing our plans, but we are expecting to be at a better level next year. This year, I would say -- I didn't mention it, but we are going to fulfill our forecast of 640,000 tons that we indicated at the beginning of the year. In that forecast, about 2.5% of the production will come from a third party's copper, the rest will be our own copper. That number has improved from where we were at the beginning of the year. For next year, we're expecting a little bit better production than what we have expected -- that we have forecasted for 2012.

Operator

Our next question online comes from Leonardo Correa.

Leonardo Correa - Barclays Capital, Research Division

My first question is regarding the Quebalix project. Raul, as you mentioned, the project is close to conclusion, it's close to a start up. So I just wanted to understand exactly if you can quantify maybe a bit more the overall impacts on cost and production rates, that would be very helpful. And the second question is a bit more broad, Raul. Just trying to get your thoughts on the copper price outlook that potentially you're using in your budget. Considering that 2013 will be a year of a bit more of supply coming in the copper market, are you expecting copper prices to be higher year-over-year, so just to get your latest thoughts on whether copper prices are higher.

Raul Jacob Ruisanchez

Okay, Leonardo. Well, the Quebalix, it's a facility that is related to our SXEW production. Quebalix is -- it basically process the mineral that is the end deposit on the pads that the company use for processing the -- from producing -- for producing SXEW copper. If you don't have a Quebalix, to put it simply, you will probably recuperate less copper on the mineral that you deposit on the pads and you will not have the same recovery rate. In other words, you recuperate more copper and in less time with Quebalix. The effect of this is already embedded in our cost, since we already have 2 Quebalix, and this one is going to be the third one that the company will operate in Mexico at the Buenavista operation. As part of the SXEW project, we will recuperate the benefits of the Quebalix through the higher production and low cost that the SXEW plant in Buenavista has. And your second question, please, Leonardo? On the copper price, right. Copper, well, basically we are following the supply and demand of copper. We believe that, structurally speaking, the supply is limit. We're seeing a little bit more than what we expect at the beginning of the year. However, we also believe that on the demand side, the structure of the world demand for copper have changed. And as soon as we see a more stronger recovery from the emerging economy, we should see -- we will see a much stronger demand for copper that will impact in the price. At this point, we don't have a guidance on price for next year, but we are -- we believe that our copper will maintain its characteristic of being the metal -- the basic metal with the best fundamentals.

Operator

Our next question comes from Leandro Cappa from Deutsche Bank.

Leandro Cappa - Deutsche Bank AG, Research Division

So can you give us an update on the Tia Maria project in the licensing process? And also, we are seeing some global mining companies reviewing its projects, its budgets, postponing most projects. Do you believe you can review your projects and postpone some of the -- of your lead projects in light of the macro conditions?

Raul Jacob Ruisanchez

Let me address the Tia Maria -- your Tia Maria concern. Basically, we are working on our environmental impact assessment. We expect to finish it through the fourth quarter. On this impact assessment, the company is focusing on one of the alternative that we had in the past, which we indicated is using desalinated or sea water for the process, not taking any water from other sources or land sources to say it so. And regarding postponing projects, the company has no intention on doing that since we are -- we have a very competitive cost position. We usually review our capital budgets at the time of the first board of the year, that is going to be in January of next year. At this point, we are not considering postponing any project. And I don't think that we will do that since these projects are, in general terms, very competitive cost wise.

Operator

Our next question comes from Santiago Perez Teuffer from Crédit Suisse.

Santiago Perez Teuffer

My first question is regarding corporate structure. Raul, as I recall, the day the Delaware verdict came out, SCC was announcing bond issuance, do you think there is a chance that this could repeat? Or it's something we could be seeing in the midterm? And my second question is can you give us more color on what brought down Toquepala's production and an update on this project's permits and on the [indiscernible] if it's been approved and everything.

Oscar González Rocha

Yes. On the bond issue, the company is basically analyzing if we are going to proceed with these initiatives. At this point, we have no decision. We have no final decision on this matter. We are still looking into it. Regarding Toquepala, we have a lower ore grade in the Toquepala operation this year. Our mining plans long term are basically very stable at this point in terms of ore grade and as such. However, we, now and then, have a kind of a rough spot to say it so where we have a lower ore grade for a period. That's the case this year with the Toquepala operation and that is affecting the production of these units. Regarding the environmental impact assessment for Toquepala, we are still pending the final meeting for the approval of this investment and we're working with the national, as well as the regional authorities and the communities to explain what the project is about and how is this going to benefit the regions where we operate.

Operator

Our next question comes from Juan José López from GBM.

Juan José López

I have some questions. The first one will be regarding the adjustment payment you received from Grupo Mexico. We looked at the balance sheet and looked -- I'm not sure that you adjust equity of that and you made a provision of receivable for the payment. Nevertheless, you didn't recognize that payment, that $2.1 billion payment in income statement. I just want to have it cleared or maybe if you could tell me, the next quarter, when you actually reduce the cash flow, the inflow and the outflow for the dividend as you're recognizing it in P&L, especially for tax purposes. And the second question will be regarding molybdenum production, which was down quarter-over-quarter and year-over-year, if you're reiterating your guidance or if you could give us an updated one.

Oscar González Rocha

Okay. Regarding the $2.1 billion payment that AMC did to Southern Copper, after looking into this matter with our accountants and our auditors, the company register it as part of a paid-in capital in the capital or equity part of our balance sheet. We are not -- according with the U.S. GAAP, we are not having these sub-P&L elements, so we're not having these as part of our sales or revenues in other sales, other income, et cetera. And in the case of the legal fees that we paid related to this lawsuit or judgment, basically, it is an expense financially speaking and we already incorporated it to our P&L. And on your -- in the case of the molybdenum production, we are seeing a decrease in the Toquepala production. It's related to the ore grade temporary reduction that I mentioned. At this point, we are not changing our guidance for molybdenum production for the year since a significant portion of the production lost by the Toquepala reduction has been carried by the other operating unit.

Operator

Our next question comes from Carlos de Alba from Morgan Stanley.

Carlos de Alba - Morgan Stanley, Research Division

I'm back. Just -- do you have any more specific guidance for CapEx of -- in 2013 and volume growth for production of copper in the next few years and the projects are given those more detailed guidance, so I wonder if you have any updates on that. And also, can you comment about the Pilares project? It's not listed in your press release or earnings release and I wonder if there is any update on that one.

Raul Jacob Ruisanchez

Okay. Let me start by the CapEx. For 2013, our current estimate is about $1.9 billion; for 2014, $2.1 billion; for 2015, $1.3 billion; and for 2016, about $600 million. Regarding the copper production, as I mentioned, we are 640,000 tons for this year 2012. For the next year, we have a forecast that is under review, it's about 670,000 tons. And that depending on how we proceed with our projects, we'll escalate to over 1 million tons in the next 4 years. We will be more specific on this, Carlos, at the next quarter's call.

Carlos de Alba - Morgan Stanley, Research Division

And what about Pilares?

Raul Jacob Ruisanchez

Pilares. In the case of Pilares, basically, the company is still working on this project. We have some talks with some local communities regarding some of the issues related to the project and that's why we're not reporting it as part of our current pipeline. Once we solve these matters, we'll incorporate it to our guidance.

Operator

Our next question comes from Jim Jury [ph] from AIG.

Unknown Analyst

Just a follow-up at this point. Most of my questions have been answered. But I guess in response to the question from CS about a financing plan, you said it's still under evaluation. I was wondering if that's something that also has to be discussed at a board meeting or could that happen anytime.

Raul Jacob Ruisanchez

No. We have -- this has been reviewed at our board and we have some guidance on what to do on this matter. However, we don't have a final decision on this.

Operator

Our next question comes from Mandeep Singh from JPMorgan.

Mandeep Singh Manihani - JP Morgan Chase & Co, Research Division

My question is related to Toquepala project. I just wanted to get an update on where the project is concentrating. There was very limited in terms -- very limited increment in terms of the amount spent on the project in the last quarter.

Raul Jacob Ruisanchez

Yes, Mandeep. In Toquepala, we have, at this point, 2 projects. One is the expansion project that is -- in which we are in talks with the local communities, the regional government for having the final audience and we expect to have this some time between the fourth quarter of this year and the next quarter or the first quarter of 2013. That project will increase our milling capacity from 60,000 tons to 120,000 tons of copper or mineral milled per day. And in terms of copper, that will increase our production of about -- by about 100,000 tons of copper and 3,100 tons of molybdenum. That's on the expansion project. On that, as you mentioned, we have not spent as much as we expect at this point. In the case of the second project, we have a technological improvement project in Toquepala. This project consists -- in 2 major things, a new crusher that is an impede [ph] crusher that process the mineral that goes out of the mine and sends -- and we'll send it through our conveyor belt to our concentrator. This project is -- aims to produce savings at our current process. It will replace our rail haulage by a conveyor belt haulage to -- of the mineral to our concentrator. We are moving forward with this project and it's basically at a good speed and in line with its budget, as well as its timetable. However, on the expansion for Toquepala, we're still requiring the final goal, which is the approval of the environmental impact assessment in order to go ahead with the project.

Operator

Our next question comes from Jamie Nicholson from Crédit Suisse.

Jamie Nicholson-Leener - Crédit Suisse AG, Research Division

I just have a quick clarifying question about the legal fees which show up on your balance sheet as accrued legal expenses. And I'm just wondering, what is the timing when you expect to be paying that out in cash and do you expect to pay it over time or in one lump sum?

Raul Jacob Ruisanchez

We already received the $2.0 billion from AMC and we paid already, on October 9, the legal fees for $316 million. However, at the time of the -- as of September 30, we have to record this as a receivable, as well as a legal fee or a payable in the case of the legal fees.

Operator

Our next question comes from Ignacio Ochoa [ph] from Crédit Suisse.

Unknown Analyst

As a follow-up on Carlos' question, can you give us more color on how did terms of payments for certain projects have improved? And does this mean that any specific price CapEx have decreased?

Raul Jacob Ruisanchez

I'm sorry, I couldn't copy you well. Could you repeat your question, please?

Unknown Analyst

Yes, of course. As a follow-up on Carlos' before question, can you give a bit more color on how did terms of payments for certain projects have improved? Does this mean that any specific project CapEx have decreased?

Raul Jacob Ruisanchez

No. Capital expenditures or capital prices, to say it so, haven't decreased and that is not the reason for our lower capital expense. What I meant is that once you have your budget done, you go back to your vendors of equipment and start negotiating for terms of payment. And in several cases, we have improved the budget that we have in order -- considering certain payments at a certain number of months. That's a part of the benefit that we had for spending less capital in 2012. However, that does not mean that we have lower prices for capital goods.

Operator

[Operator Instructions]

Our next question comes from Dan Richman, who's a private investor.

Unknown Shareholder

My question relates to your provision for income taxes. How much of your income tax expense for the third quarter relates to the Delaware Court settlement net of the attorneys fees? And how much of that is current and how much of that is deferred as a deferred into company transaction?

Raul Jacob Ruisanchez

Okay. This is according with our -- following U.S. GAAP, our accountants have indicated us that we need to record the revenues of the Delaware, the AMC compensation as paying capital. As such, we don't have to consider a tax on that until the time where you sell the stock to a third party, and that has no specific date, the case of revenues. The case of the legal fees, by the same token there, we're not recording any tax liability related to them since they are part of the same transaction. So at this point, we have no tax reflection in our financials of these 2 parts of the Delaware-related transaction.

Operator

[Operator Instructions] Our next question comes from Juan José López from GBM.

Juan José López

It's me again. I have another question. It is related to your Ilo refinery. We see a decline in production of smelting and refining copper. We know that, by your news, that you shut down the Ilo refinery during September. Is it ready now? Is it working at full capacity and since which date?

Raul Jacob Ruisanchez

Well, on the first days of October, the -- actually, what we do biannual maintenance on the smelter. The smelter produces the input that the refinery processes. So each 2 years, we do a major maintenance of our smelter. You have to shut it down for almost a month. We have this maintenance scheduled for August, however, we managed to postpone it to September. In September, we started the maintenance of the Ilo smelter and we stopped the production of copper and also our [ph] receipt of the refinery. That maintenance ended at the beginning of October. Currently, both facilities are working in full capacity and we have made, at the same time of the smelter maintenance, certain improvements in the process, the smelting process that the company has in Ilo. So we are expecting to have a much more efficient smelter for the next 24 months until the next major smelter of -- major smelter maintenance.

Operator

[Operator Instructions] We have no further questions at this time.

Raul Jacob Ruisanchez

Okay. Thank you very much, Richard. And well, with this, we conclude our conference call for Southern Copper's third quarter results. We certainly appreciate your participation and we expect to have you back with us when we report our fourth quarter results of 2012. Thank you very much and have a nice day.

Operator

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.

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