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Southern Copper boosts net income 256% despite production challenges - Q1 2021 report

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(Kitco News) - Southern Copper, one of the largest integrated copper producers worldwide, today announced that its copper production slightly decreased by 1.5% in 1Q21 when compared with 1Q20.

The company said that this decline was mainly attributable to lower production at its Peruvian mines (-3.0%) and La Caridad mine (-1.8%) and driven by a decrease in ore grades. This was partially offset by an increase in production in IMMSA operations (+9.5%) due to higher production at the San Martin mine (+52.8%).

Molybdenum production increased slightly by 0.2% in 1Q21 compared to 1Q20, which was mainly due to higher production at Peruvian mines (+10.1%) and partially offset by a decrease in production at Buenavista (-21.9%).

Mined silver production decreased by 6.3% in 1Q21 compared with 1Q20, due to lower production at Buenavista (-13.4%) and IMMSA (-9.4%).

Mined zinc production decreased 14.5% in 1Q21, compared with 1Q20 production, which was mainly attributable to lower production at the Charcas, Santa Barbara and San Martin mines.

The company’s 1Q21 net income was $763.8 million, a 255.6% increase over 1Q20 net income of $214.8 million. Net income margin in 1Q21 was 30.2% compared with 12.5% in 1Q20. These increases were mainly attributable to higher sales (+47.3%), driven by significantly higher metal prices for copper (+50.4% - LME), silver (+55.8%) and zinc (+28.9%), and stable operating costs (-0.5%).

Operating cash cost per pound of copper, net of by-product revenues, was $0.74 in 1Q21, compared to $0.77 in 1Q20. This 3.9% decrease in cash cost was mainly the result of a significant increase in by-product revenues (+18.5%).

Southern Copper is one of the largest integrated copper producers in the world. The company believes it currently has the largest copper reserves in the industry. The company is a NYSE and Lima Stock Exchange listed company that is 88.9%

owned by Grupo Mexico, a Mexican company listed on the Mexican stock exchange. The company operates mining units and metallurgical facilities in Mexico and Peru and conducts exploration activities in Argentina, Chile, Ecuador, Mexico and Peru.
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