Good morning and welcome to the Southern Copper Corporation's Fourth Quarter 2015 Results Conference Call. With us this morning, we have Southern Copper Corporation, Mr. Raul Jacob, Vice President of Finance and CFO, who will discuss the results of the company for the fourth quarter 2015 as well as answer any questions that you might 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 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. Now, I will pass the call onto to, Mr. Raul Jacob.

Thank you very much, Richard, and good morning to everyone and welcome to Southern Copper's fourth quarter 2015 earnings conference call. Before we begin with our agenda, let me make some comments about Southern Copper's performance in 2015 and what we're expecting for this year. In 2015, we produced 742,993 tons of copper, a new production record. This allowed the company to increase its 2015 copper sales volume by 12.3%. The additional copper units have a very low cost per pound improving the company's overall cash cost and competitiveness. For 2016, our current plan indicates our copper production increase to 903,300 tons or 21.6 positive variance and again a new company record. For the years 2015 and 2016, this two-year period, Southern Copper will increase its copper production by over 225,000 tons. Also, for 2016, we will have more byproduct production of zinc and silver. Zinc production will increase by 41% and silver production by 21%. On top of this, Southern Copper has a very strong balance sheet position with a relaxed payment schedule with investment grade debt. We have no significant principal payments due until 2035. So during this low price environment, we're making our company much more cost competitive while maintaining a very solid financial condition. Consequently, Southern Copper is very well positioned to take advantage of the current market conditions. In today's call, we will begin with an update on our view of the copper market. We will then review Southern Copper's key results related to production, sales, operating cost, financial results, expansion projects, and capital expenditure program. After that, we will open the session for questions. Let me now focus on the copper market, the core of our business. We maintain our long-term confidence in the positive fundamentals of the copper market. During last year demand…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Mr. Wilfredo Ortiz from Deutsche Bank. Please go ahead.

Yes, good day, everyone. Could you please elaborate a little bit on the CapEx profile expected over the next few years. I know you mentioned 2016 and then how much of that is from Tia Maria, considering that we're still pending the construction currently for us to have a sense if this is delayed, how it's going to trickle down in the following years? And as far as your copper production profile, if you can elaborate a little bit on that? And as far as your share buyback, obviously last year was a big year in share buybacks. What are your thoughts for that into 2016? Thank you.

Okay. Thank you for your questions, Wilfredo. Okay. Let me focus first on CapEx. Overall our current forecast for capital expenditures, well, I mentioned already $1,577 million for this year. For 2017, we're budgeting $1,680 million. For 2018, $1,240 million. For 2019, $780 million. 2020, $360 million. And then it remains at that level because that's basically maintenance CapEx, what I said last number for 2020. For Tia Maria, we're considering currently a budget that – it's about $100 million for the year, considering that we expect to initiate activities in this project at some point in 2016. We're expecting the government to issue the construction permit hopefully this year for the project and that's what we have allocated of capital. And the production profile for the future years is as follows. For copper, well, as I mentioned already 903,300 tons for this year. For 2017, it should go up to 943,500. 2018, 1,060 million tons. 2019, 1,040 million tons. 2020, 1,154 million tons. On the buyback, the last question. As you have seen, we had some important activity on the buyback which is a way to return money to our shareholders indirectly. And obviously we're concerned that at this price environment we have to take care of the existing cash that the company has available as well as the one that we're going to generate, particularly on the – considering the aggressive investment program that we're undertaking. For this year, we are expecting to reduce the buybacks and it depends on how the market evolves, both in copper price as well as the share price that we may consider some purchases. But at this point, we're about to complete the program that was approved by the Board a couple of years ago and that's basically it. We're not moving forward after that program for a while.

Thank you. Our next question on line comes from Anna Zinser from Credit Suisse. Please go ahead.

Hi, Raul, good morning, and thank you for the call. Well, my first question is regarding cost. You mentioned that the increase in this year's cost was mainly due to nonrecurring costs. So if you could elaborate a bit more on at what level should we expect this in 2016 and going forward? And my second question is regarding El Pilar. I don't know if you have a bit more color on the potential synergies this project would have with Buenavista? Thank you.

Thank you very much, Anna. Let me focus on your first question on cost. Well, Basically, as I said, we had nonrecurring costs that were charged and if you see by the nature of them, we had about $131 million of nonrecurring costs. Basically these were the $85.1 million in copper from third parties that was copper that we acquired to maintain our smelter in Mexico and Peru, both the smelters operating at full capacity. We don’t think that having the extra production that we're expecting this year from the new concentrator of Buenavista. We don't think that we will need to buy – purchase third party's copper through 2016. The other point was the Buenavista ramping up cost that we have to do some charges to cost and initiation of Buenavista for about $26.3 million. Those charges are the initial fills for equipments that are not necessarily capitalized and that is – that explains a portion of that and some other maintenance and other works that are related to the ramping up process of the facility. And then we have some year-end adjustments of about $20 million for operating expenses. That's basically it. And we don't think that these additional expenses that we had in the fourth quarter will materialize again in 2016. We believe that our cost per pound as well as our total costs will be very competitive through the year and that's our expectation and the initial results that we're looking at are indicating that we're in the right path in that regard. On the question of El Pilar, the way that we have evaluated El Pilar is as a standalone investment. And as such, it gave a very interesting result for the company in terms of expected return that we want to have from this project. Now, having said that, there are some opportunities. We're looking at them. One possibility is that we instead of building a plant, an SX-EW plant at El Pilar, we consider using certain facilities that we have in our own operations, close in Caridad and Buenavista. We have the advantage of being long in sulfuric acid. That allows us to use this acid for producing the SX-EW pregnant liquid solution at El Pilar at a very competitive cost. And another possibility is that we may use a pipeline system to send the water with low ph and return the PLS, the pregnant liquid solution to be processed in our facilities. But these are things that we're looking at at this point, plus confirming the mineral reserves that we know at the project now are rightly determined. That's some other activity that we're undertaking now regarding El Pilar.

Thank you. Our next question on line comes from Carlos de Alba from Morgan Stanley. Please go you ahead.

Good morning, Raul. Just a quick question on the environmental remediation charges that continue to appear related to the Buenavista still. How do you see those in 2016? And if you have any forecast by quarter, that would be appreciated. And then lastly, is it fair to say that share buyback program that was approved of around $3 billion only about $250 million is left to be implemented? Thank you.

Okay. On the environmental remediation cost, we believe that we – what we incurred in the fourth quarter was the last payment on this matter, Carlos. We're not expecting any more charges to result regarding the Sonora river remediation program. On the share buyback, well, let me first mention that we had – we initiated a share buyback in 2008 and through the years we have received different approvals and expansions [indiscernible] in the program that we initiated in 2008. Between 2008 and 2014, about $2 billion were spent in share buybacks. Last program that was approved at the end of – at the beginning of 2015 was for another $1 billion. We had some leftovers of the prior program, so what we have now to be spent is about $100 million at this point. But as I said, we are going to moderate on this regard significantly due to cash flow concerns.

Thank you. Our next question on line comes from Carol [indiscernible] from Bank of America. Please go ahead.

Hi, good afternoon, Raul. Thank you for the questions. Actually I wanted to clarify a couple of points if I may. Mainly on the production and CapEx guidance, Raul, can you clarify how much of that includes Tia Maria? I know you provided the number for 2016. You mentioned out of the CapEx $100 million is Tia Maria and just to have an idea of production, when are you considering the startup in the numbers. I think 2018 and the CapEx number without Tia Maria if that's possible?

Yes. Okay. So you know we have to spend already some of the budget in Tia Maria, we have about $356 million already in equipment – equipment, engineering and some other expenses related to the project. So from the $1.4 billion that we have to spend, it's not that much. It's less. It's $1.4 billion less, $356 million. As I said, we are expecting for this year, 2016, about $100 million in expenses. Then for 2017, it's $275 million. For 2018, $400 million. And 2019, $238.7 million.

Thank you. Our next question on line comes from Mr. Matthew Korn from Barclays. Please go ahead.

Hello, everyone. Thanks for taking my questions. So I'm looking at a December presentation you offered a CapEx expectation for 2016 of $2.3 billion. And now you're looking at $1.6 billion. It appears as though Toquepala is getting delayed by around a quarter to early 2018. The High Pressure Grinding Roll is shifting back to the end of 2017 versus the beginning. Is the change in the CapEx budget essentially a function of pushing back on these projects combined with reduction in expected spend in Tia Maria or is there anything else moving?

No, it's more a concern on moving forward with the project. For the Buenavista project, as I mentioned, we're pretty much finished the operational part of the project and we're focusing now in infrastructure and one project which is very important for this which is the Quebalix IV. On the Toquepala project, we have forecast – we have reviewed our forecast based on what can be actually do or done through these coming years on the project. That was why we rescheduled a little bit to 2018 the startup of the project. Previously it was in the fourth quarter of 2017. Basically, we're concerned about the company even though we believe we have enough cash to undertake the projects. We have to be very careful in this kind of price environment regarding the cash flow and how to use it. So a little bit of that concern, plus some more realistic figures on the team that is working on the Toquepala project gave us a reason for rescheduling the project.

Thank you. Our next question on line comes from Marcos Assumpcao from Itaú BBA. Please go ahead.

Hi. Good morning, everyone. First question is regarding volumes. If you could break down a little bit the additional 160,000 tons volumes, how much is coming from the SX-EW and how much is coming from the new concentrator? Thank you.

Yes. Okay, we're expecting from the new SX-EW III plant, 104,000 tons of copper for this year. For the whole and the concentrator will bring in -- two concentrators will have 308,000 tons together. As you know, one of the concentrators had a capacity – the number one concentrator, the old one, has a capacity of 125,000 tons. The difference comes from the new concentrator. So it's 183,000 tons of contained copper coming from the new concentrator. Actually, we're very pleased to see that the new Buenavista concentrator operations are running very smoothly. We were not expecting to have six mills operating at a very high level at this point in time. Five of them are at full capacity. The sixth one, it's ramping up, but very strongly. We have had already several days in December where we operated at designed capacity of the new concentrator which is 100,000 tons of milling mineral per day. So in that regard, we believe that this ramping up is very successful. We're certainly doing some adjustments as we move on through this quarter and expect to have the facility running at full speed by the beginning of the second quarter. We will report more on this when we report the first quarter's results. But as I said, we're very pleased how this equipment is operating. On the SX-EW III, it is also operating with a very competitive cost per pound as well as processing capacity. In this case, we have – we're improving the contained grade of copper in what is called the pregnant liquid solution, which is the main input of the plant for copper production. We have been operating last year with about 1.1 grams of copper per liter. And our expectation is that through 2016 we will average 1.5 grams per liter. That will allow us to improve and to produce much more copper than what we did last year in this facility.

Thank you. Our next question on line comes Sasha Bukacheva from BMO Capital Markets. Please go ahead.

Thank you. Victor, [ph] If we could just spend a little bit more time just discussing your capital allocation priorities. Like you’ve mentioned that you are concerned about your cash flow. So if prices stay low, how do you think about your capital program? Are you going to try and push ahead the rate and potentially increase your leverage or how much flexibility do you have to further slow down Toquepala?

Hello, Sasha, this is Raul Jacob. No problem. Well, we believe that we have enough funds for moving forward with this capital program. We don't think that the copper market – I mean, I said so, we see our copper market in good terms. We don't see a market that has excess supply or demand, a very weak demand. As I mentioned at the beginning of the call, we already sold 70,000 – a little bit more than 70,000 tons last year with no problems. Very good terms. And this year, we already have contracts for most of our new production. So we don't believe that we're seeing a surprise. We're working our plan as I mentioned with copper price of $2.25 per pound and we believe that we will see a recovery in the next few months on the copper market.

But do you have any thoughts in terms of do you have you a plan B in place in case you don't see the recovery? How easy would it be for you to access the debt markets? Like is that something you spend a lot of time thinking about or is that something you that don't really think as a concern at this point?

We have some flexibility in our CapEx if we need to control our cash expenditures. We don't think tapping the debt market at this point. We believe that we did the right thing going to the market in April last year when we obtained very favorable terms for a 30-year, $1.5 billion emission as well as $500 million,10-year emission.

Thank you. Our next question comes from Lucas Pipes from FBR Capital Markets. Please go ahead.

Hey, good day, everybody. I have a follow-up question to the one that was just asked. In terms of cash flow, it came up a few times on the call and I wondered if you could maybe give us a bridge from your EBITDA guidance of $2.2 billion to kind of a free cash flow number for the full year, assuming $2.25 copper prices.

Okay. Let me first say that we don't want to – hold on a second, please. Okay. Let me first say that in our balance, we have – still $274.5 million in cash and cash equivalents, but actually what we have available is that number, plus $600 million in short-term Treasury investments that we have. Then we have about $900 million in cash. Okay? So if we generate an EBITDA of $2.2 billion this year, we are expecting to spend about $350 million of those $2.2 billion in interest payments. Then we have taxes. Let's say that we pay $500 million in taxes. That gives us $1.3 billion available for our projects. As you know, our capital budget is higher than that, but that's where the cash that we have in hand comes into the picture and allow us to move on with the projects as expected. But let's say that we have some lower copper market than this. Then we will adjust our capital program in order to accommodate what we can do, prioritizing the projects that we're developing for production as we have done with Buenavista. In the case of Buenavista of the $3.5 billion that we budget, we have to spend about $3 billion, the facilities are currently operating as I report a while ago, the SX-EW will produce at full speed this year and the new concentrator will also do a very excellent performance we're expecting in 2016. So those two facilities will be generating cash and if we have to do any adjustments in our capital expenditures, which we don't plan to, but if we have to, we will certainly prioritize moving forward with the plans that we have for increasing production and maybe delaying a little bit some other projects that are important but not necessarily something that we have to undertake if prices are much lower than where we are now.

Thank you. Our next question on line comes from Alfonso Salazar from Scotiabank. Please go ahead.

Thank you. Hello, Raul. My question is regarding your cash cost estimate, the guidance you are giving for 2016. What exchange rate, FX rates are you seeing in Mexico and in Peru for those estimates? And can you give us a breakdown by currency in Mexico and Peru how much of your cost is related to the Mexican peso and the Peruvian.

Let me focus first on the exchange rates. Basically, for Mexico, we use – for both Mexico and Peru, we use a slightly lower than current exchange rates, meaning by this in the case of Peru, nowadays we're at 350, a little bit more than 350 Soles per dollar. We use 342. In the case of Mexico, we use a little bit more than 17 pesos per dollar and we're currently at a much higher level than that. So that may be helpful for us in terms of giving us some extra savings in local expenditures. Now, focusing on local expenditures, in Mexican pesos, 39% of our total costs, in Peruvian soles, 17% of our total cost.

Thank you. Our next question on line comes from John Tumazos from John Tumazos Very Independent Research. Please go you ahead.

Thank you very much. If I could ask two questions. First, concerning the Toquepala’s 100,000-ton expansion or other expansions, are they always expansions or is there a low copper price scenario where maybe the original or older plant would be swing capacity?

I'm sorry, I couldn't understand your question.

Are your expansions purely expansions or could some of them be viewed as replacements where the original plant, the older plant, some of the plants – some of the mines at decades history or some of the older mills swing capacity if copper prices drop to 150 or lower?

Well, we don't expect copper prices to go that low. But just if that will happen, that eventually happen, will be one of the lowest cash cost company in the market and we believe that that will allow us to survive, even at a very low price scenario. Now, focusing on your questions, no, these are expansions. We usually spend between $300 million and $450 million on maintenance CapEx. Our equipment is mostly state-of-the-art equipment and what we're doing here is new facilities from zero. In the case of Buenavista, we have a concentrator that mills 85,000 tons of mineral per day. We have built a new one, an additional one, a second facility that has a capacity of 100,000 tons of milling mineral per day. In the case of Toquepala, we're operating a facility that was built in 1960, but has had two expansions through its life. Those expansions almost double the capacity of that initial Toquepala concentrator and besides this facility that has very competitive costs even though it’s an old startup, we are building a new concentrator that will – we believe will have a very good operating cost. So these are new things. It's not something that we're building to recuperate capacity, if I understood you well.

Thank you. Our next question on line comes from Guillermo Estrada from GBM. Please go ahead.

Hi, good morning everyone. My first question is regarding tax expense as they continue to increase compared to the other quarries. If you could comment on that and give us more color for the coming results it would be very helpful. And my second question is regarding molybdenum production. As we just saw, a 1% year-on-year increase in 2015 despite new capacity leverage [ph]. What is the explanation behind this effect and what should we expect for 2016, 2017 and 2018? Thank you very much.

Okay. Thank you for your question. In 2015, we had for a while a reduction in the water supply that was for the – the water supply for the molybdenum plant that we have in Buenavista. That explains why we had almost flat production between that year and 2014. Now, on the tax rate, basically as you know, we have – in the past we had tax rate of about 34% of effective tax rate. That tax rate has increased a little bit after we – the Mexican government introduced royalty tax or special mining tax in Mexico. That is about 7.5% of EBITDA – of the Mexican operations. So we believe that that will increase our effective tax rate, because we're including that as part of the tax payments of the company by about 4 points. So now we are expecting a tax rate of about 38% for this year and the next.

Thank you. Our next question comes from [indiscernible]. Please go ahead.

Hello, and thanks for the call. My question is regarding leverage, particularly if you still feel comfortable with it considering that on a run rate basis, it is approaching almost four times net debt to EBITDA, whether there’s [indiscernible] which you would decide to undertake some measures to reduce it, or even to stop it from growing? For example, measures could be CapEx reduction, share buybacks, do you have a for that. So that is the question. Thank you.

Thank you for your question. Well, certainly, as I say, we are not considering any new bond issue or additional debt for the company. We want to reduce the total debt to EBITDA ratio that we have. We – in total that we have about $6 billion. Our – as I said, the EBITDA that we're expecting for this year is $2.2 billion. So we’re having an expected total debt to EBITDA ratio for 2016 of 2.7. We believe that this number will reduce as we move on into 2017 and on, due to the higher production that we will be achieving and the contribution of debt to our EBITDA et cetera. So we’re not doing more debt at this point. We're concerned about the use of cash for the company, this period of significant investments for the company.

Thank you. Our next question comes from Alex Hacking from Citi. Please go ahead.

Hi, Raul, thanks. I just have two questions. The first question is regarding the increase in purchase of third-party concentrates. I wonder if you could explain that a little bit, because it seems a bit confusing that you are ramping up concentrate production, but then buying more third-party concentrates at the same time in the fourth quarter? And then the second question, I guess, comes back to this issue of capital allocation, the balance sheet, and debt. I mean, is there a copper price or kind of a gross debt to EBITDA level at which you would postpone Toquepala, Tia Maria, just to simply focus on keeping the balance sheet in whatever targeted condition that you're looking for? Thanks.

Okay. First, let me focus on the – on your question on the third-party copper concentrate. Generally speaking, we are balanced in terms of concentrate production and the capacity of our smelters. Let me say this again. We used to be balanced until 2014. Now that we have the additional production from the new concentrator in Buenavista, we're long in concentrate. So your question, Alex, and I see your concern is, how come you are buying copper from third parties if you're happy – if you’re long from – for copper concentrate. And the answer is very simple. In 2015, we were not long, because our expected production for Buenavista slightly delayed to the fourth quarter of last year. That's why we had to acquire a little bit more copper concentrate than what we were expecting to do in the market in 2015. Now, generally speaking, we have, as I say a surplus of concentrate now. We don't expect to have copper purchases of concentrates for – from third parties for our Mexican operations. However, for the Peruvian operations – mainly technical reasons we may acquire now and then some copper from third parties. And this is basically an operational thing, very small. We smelt in Peru about 1.1 million tons per year. We are buying maybe 30,000 tons. So it's a small number, if you consider the size of the smelter and the requirement of those. The second question, could you – the price. Actually, well, we don't – we will see when we have that kind of environment. But at this point we don't see a reason for being concerned on the copper prices. As I mentioned, we are seeing an okay market. Prices are not the ones that we would like to have certainly, but prices – but the market is – it's in good terms. We're seeing the terms for refined copper, which is our main product to be – to improve between 2015 and now. So we see no reason for having a concern about prices. If we were to be at 1.5, we believe that that will be short-lived because of the impact that we will have on the – on some other companies. We are generating free cash flow through even this low price environment. We are not considering any drastic measures in our operations, because all of them are operating at a very low cost, which is reflected in our cash cost.

Then we could delay in project, if needed, Raul, I mean, that's the question?

Well, we could do so, but I already mentioned – well, we could do so, but it depends on -- basically, what we will do is, we will be much more concerned on finishing what we are doing you now. We're already finishing the Buenavista projects, and we will be focusing on the Toquepala project. In the case of Tia Maria, since we haven’t started, we could postpone it if prices are drastically low. But at this point we see no reason for that.

Thank you. Our next question comes from Tony Rizzuto from Cowen & Company. Please go ahead.

Thank you very much. I appreciate you taking my question. And I guess it has to do with the capital allocation now, was intrigued by your comment you – one of your opening remarks we’re all about being very well positioned to take advantage of opportunities, and haven't heard any discussion about M&A. But clearly, I think, everyone knows that you guys have very good flexibility in terms of organic growth. But I'm wondering about the current time period when so many of your competitors are under pressure. And it's likely that certain assets, high quality Tier 1 assets will be shaken free. And I'm wondering do you think you have the flexibility to perhaps pursue some of these assets that might become available and might you consider maybe slowing down Tia Maria, possibly issuing equity in the current environment? Your stock has held up very well compared to your peer group. How do you look at and weigh these other opportunities that might come up in this marketplace?

Okay. If there are good assets available that have a good fit with our current operations, we will certainly look at them. That is the responsible thing to do for us as management, and we will recommend our Board an action on that regard. Possible actions, if that scenario appears, or we will be starting, different options. And that's something that we will entertain if we have to do that. If – but at this point, we're focusing on our organic growth. As you have seen, we have an aggressive growth program, and we're focusing on delivering the new copper units at – on-time, under budget, and at a very competitive cost for the market. That's our current – those are our current goals. Obviously, if there is a good opportunity, we will look into it and recommend a course of action to our Board.

Thank you very much. I appreciate it.

You're welcome.

Our next question comes from Leonardo Correa from BTG. Please go ahead. If your line is muted, please unmute. If you're on a speaker phone, please pick up the handset.

I think we can move on, Richard.

Okay. We have a follow-up question from Marcos Assumpçao from Itaú BBA. Please go ahead. Marcos Assumpçao: Hi, Raul. Just a quick question here on – I was trying to reconcile here your EBITDA guidance, not guidance, but EBITDA estimate for 2016. Can you tell us how much of byproduct revenue are you considering for 2016?

I can give you on the prices, I don't have the breakdown of that with me. I can give you an idea on the prices that we have used for that. Marcos Assumpçao: Okay.

Okay. As I said, copper, 225; molybdenum, 5; zinc, 75; silver, 15; gold, 1,100. If I take today's prices, we're lower most of these assumptions than the market today other than copper, of course. Marcos Assumpçao: Okay. And so a lot of the – when we compare to the fourth quarter 2015, when EBITDA was 330, so much lower level, for sure there’s some EBITDA growth that is coming from volume and from production, as you already pointed. But in terms of EBITDA per ton, there’s nearly $0.15 coming – $0.15 per pound coming from lower cost, as you guided 150 versus 166. But there's a lot coming also from the improvement in prices, right, embedded in that number?

Yes, we use – well, we use 225 for copper. Our [Multiple Speakers]. On the byproducts I gave you the prices already, we have higher volumes of zinc and silver. That is also helping. So it's basically that, plus some assumptions on the cost per pound of the additional units that allow us to drive to this number. Marcos Assumpçao: Okay. All right. Yes, just looking at the…

By the way, Marcos, you keep in mind, you – I'm sure that you keep in mind that the fourth quarter was not representative of our long-term trend in cost. Marcos Assumpçao: Perfect. Yes, but it was like 170 versus the 150 that you're guiding, right?

On the fourth quarter, yes. Marcos Assumpçao: Yes, okay. All right. That's clear enough. Thank you very much. And just one last question now. As there were a lot of questions regarding the free cash flow here and eventually some constraints if commodity prices remain at low levels, when you look back for the past two years when the company did a very aggressive buyback of $1.7 billion, do you think that was the right decision for the company, or you will be in a better position today, if you had that much more unleveraged balance sheet and eventually looking for opportunities, you could be more – much more flexible looking for opportunities in the market? A - Raul Jacob I think that we – the company has always had a very strong commitment towards shareholders. And as part of that, the buyback is a way to reward our shareholders. And I think that any cash that is available for purposes of buybacks is fine. In this case, we are focusing, as I said on our organic growth. If there’s an opportunity in the market, we'll look at it and see a way of addressing that, if necessary. Marcos Assumpçao: All right. Thank you very much, Raul.

You're welcome.

We have a follow-up question from Sasha. Please go ahead.

Yes, thank you, Raul. Can we just get back to the CapEx program. I'm curious, if you can talk about the order of magnitude in terms of how much CapEx you would be able to cut and defer in 2016 and 2017 in the other projects category before it affects Toquepala timeframe?

Okay. In order to finish the Toquepala expansion, we will need to – we could cut – this is very drastic, okay. Maybe $150 million from the Peruvian operations capital budgets on Toquepala, another $100 million on the Ilo. So those are $250 million.

That's in 2016, right?

It’s Tia Maria, if necessary, we don't want, but if necessary that – since we haven't started, we can do that, we don't want to do it. And in the case of Buenavista or the Mexican project, we will be able to reduce our budget by about another $200 million to $250 million. So we have some flexibility on this that we haven't used, but it's there. We haven't also used the flexibility that we have in our operations. We're sticking to our long-term production plans. But, for instance, you can reprogram your stripping for certain activities, which is very costly and doesn't add production to your operations and that will help us to reduce our cost as well. We are not doing that, because we believe that our cash cost is quite competitive. We are generating the cash that we need plus the $100 million that we have in hand to be – to go ahead with our program. So that's basically what we think.

Okay. Thank you very much.

You're welcome, Sasha.

We have a follow-up question from John. Please go ahead.

Thank you. Your cash costs are wonderfully low. There are other copper companies with weaker finances selling properties. Is Southern Peru willing to buy other mines that might have cash costs $0.25 or $0.50 higher? And could you explain, if Grupo Mexico, which owns [indiscernible] is the place in the family, where the high cost – higher cost mines go?

Well, that question – the last question has to be directed to the Grupo Mexico’s conference call, which is going to be later on today. Basically, we see – if there’s an asset, which is interesting, that has a good fit with our operations. Meaning by this that is cost competitive, it won't change the nature of Southern Copper, and will provide either synergies or some advantage to the company, we will look into that. That's the responsible thing to do for us. And basically a difference in cash cost in the range that you mentioned, maybe not $0.50, but $0.25 wouldn't be a problem for us. But we think that rather than focusing just on the cost is the whole – the whole deal that we have to look at and see what other circumstances that you may face. We – for instance, we would like to have new assets in areas, where we have.- We do know that governments are friendly towards mining activities. We think that that's important, not only the geological characteristics of the asset itself, for instance. So there are several parameters and criterias that we have to comply with in order to recommend the purchase of a specific asset, not only the cash cost is the driver for that.

Thank you.

And our final question comes from Lucas Pipes. Please go ahead.

Hey, thank you for taking my follow-up question. So you mentioned you have about $900 million between cash and short-term investments. And I wondered, if you have a minimum number in mind that you wouldn't like to fall below on this cash and short-term investment figure?

Well, in terms of our operating needs, we can operate with about $300 million in cash, other than that, we can use the rest for supporting our projects.

Got it. Got it. So we can think about that number as in kind of if EBITDA is a little lower, because copper prices stay weaker than expected than kind of once that $300 million number is to be breached, is that the point where we should expect you to change your CapEx budgets and such?

Well, yes, that could be a situation. Even before that, we will act, because we don't want to be cornered before we act and we want to anticipate situations. If we see that market circumstances are unfavorable, we will act. But we don't see that, as I mentioned already.

Got it. Okay. Well, thank you very much and good luck. A - Raul Jacob Thank you very much, Lucas.

And at this time I see we have no further questions.

Well, with this, we conclude our call for the fourth quarter 2015, as well as the year 2015 results. We certainly appreciate your participation and hope to have you back with us when we report the first quarter of this year. Thank you very much to all of you and have a nice day.

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