Southern Copper : 7.24.2019 8K reporting the Q-2 2019 results

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 24, 2019 (July 23, 2019)

SOUTHERN COPPER CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-14066	13-3849074
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification Number)
	1440 E. Missouri Ave., Suite 160, Phoenix, AZ 85014
	(Address of principal executive offices, including zip code)
	[phone]
	(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

• Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
• Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
• Pre-commencementcommunications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
• Pre-commencementcommunications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Securities registered pursuant to Section 12(b) of the Act:

Title of each class:		Trading Symbol		Name of each exchange on which registered:
				New York Stock Exchange Lima Stock
Common stock, par value $0.01 per share		SCCO		Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company †

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. †

ITEM 2.02 Results of Operations and Financial Condition

On July 23, 2019, Southern Copper Corporation ("SCC") issued a press release announcing financial results for the quarter ended on June 30, 2019. In this press release, SCC reported that on July 18, 2019, the Board of Directors authorized a dividend of $0.40 per share payable on August 22, 2019, to shareholders of record at the close of business on August 8, 2019. A copy of this press release is attached hereto as Exhibit 99.1.

The information in this report and the exhibit attached hereto are being furnished and shall not be deemed as "filed" for purposes of Section 18 of the Securities Act of 1934. Accordingly, this information will not be incorporated by reference into any registration statement or other document filed by Southern Copper Corporation pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly stated in such filing.

ITEM 9.01 Financial Statements and Exhibits

1. Exhibits:

99.1 Press release of Southern Copper Corporation dated July 23, 2019, furnished pursuant to Item 2.02 of this Form 8-K.

2

INDEX TO EXHIBITS

Exhibits

99.1 Press release of Southern Copper Corporation dated July 23, 2019, furnished pursuant to Item 2.02 of this Form 8-K.3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SOUTHERN COPPER CORPORATION

By:	/s/ Andres Carlos Ferrero
Name:	Andres Carlos Ferrero
Title:	General Counsel

Date: July 24, 2019

4

Exhibit 99.1

RESULTS SECOND QUARTER AND SIX MONTHS 2019 Investor Relations: Raul Jacob +[phone] July 23, 2019 Southern Copper Corporation (NYSE and BVL: SCCO) [e-mail] www.southerncoppercorp.com Copper production increased 16.5% to 256,352 tons in 2Q19 compared with 2Q18 due to higher production at our Peruvian Toquepala mine (+67.6%) and our Buenavista mine (+11.4%) in Mexico. These increases were partially offset by lower production at our Cuajone mine (-7.3%) due to lower grades and recoveries. Copper production increased 14.2% in the 6M19 when compared with 6M18 as result of higher production at Toquepala (+53.8%), due to the successful ramping up of the Toquepala concentrator; and higher production at Buenavista (+8.9%), due to operating improvements at its SX-EW (+30.5%) and concentrator (+7.0%) plants. 2Q19 net sales were $1,818.0 million. Copper sales volume increased (+11.7%) as well as molybdenum (+24.5%). However, due to lower metal prices of copper (-11.2% LME) and silver (-10.0%); net sales decreased by 1.0% when compared with 2Q18. 2Q19 net income was $402.4 million, 1.8% lower than 2Q18 net income of $409.6 million. Net income margin in 2Q19 was 22.1% compared with 22.3% in 2Q18. The decrease was principally due to lower sales prices. 2Q19 adjusted EBITDA was $942.8 million, 1.3% lower than 2Q18 adjusted EBITDA of $955.2 million. The adjusted EBITDA margin in 2Q19 was 51.9% compared with 52.0% in 2Q18. These decreases were mainly due to lower prices. By-product production: Molybdenum production increased (+24.7%) in 2Q19 compared with 2Q18 due to higher production at all our mines, particularly Toquepala (+94.5%) as result of the new molybdenum plant that started production in April 2019. Mined silver production increased by 5.3% in 2Q19 compared with 2Q18 due to higher production at Toquepala, which was partially offset by lower production at the Cuajone, La Caridad and IMMSA operations. Mined zinc production decreased 1.3% in 2Q19, compared with 2Q18 production due to lower production at the Charcas and Santa Eulalia mines which offset the 1,133 tons production increase at the San Martin mine. Operating cash cost per pound of copper including by-product revenues credit was $0.81 in 2Q19, an improvement of 11% compared to $0.90 in 1Q19. This cost decrease is mainly due to the unit cost effect of 12.2% higher copper production. Capital investments in 6M19 were $353.5 million. These investments are in line with our growth program aiming to produce 1.5 million tons of

copper by 2025. Dividends: On July 18, 2019, the Board of Directors authorized a dividend of $0.40 per share payable on August 22, 2019, to shareholders of record at the close of business on August 8, 2019.

Guaymas sulfuric acid spill: On July 9, at our Marine Terminal in Guaymas, Sonora, there was an incident that caused the discharge of approximately 3 cubic meters of sulfuric acid into the sea in the industrial port area. The Guaymas bay has an estimated water volume of 340 million cubic meters, the spill upon entering in contact with the sea's alkaline conditions, the discharge was quickly diluted and the sulfuric acid was naturally and immediately neutralized. As a result the discharge was considered harmless, and it was found that neither the flora nor fauna of the port area were affected, according to the report from the Ministry of Navy. On July 10, the Mexican environmental protection agency ("PROFEPA") made a first inspection of the area, concluding that the Company executed all the correct procedures in order to contain the discharge, and no reference was made to the existence of negative impacts on the environment resulting from the incident. On Friday, July 19, PROFEPA revisited the facilities to carry out a second inspection, declaring a partial temporary shutdown related only to the storage process and transportation of sulfuric acid at the terminal, arguing the absence of an authorization of environmental impact. It is important to note that these facilities have been in operation since 1979, previous to the 1988 Mexican General Law of Ecological Balance and the Protection of the Environment. Therefore, these licenses are not a requirement for companies that have being operating before the mentioned law. In addition, PROFEPA's awarded in 2009 a certification of "Clean Industry and Environmental Quality" for such facility; which was subsequently renewed four times (for periods of two years each). We do not know the reasons or causes for this partial and temporary closure, but we will continue contributing with the environmental authorities with all the necessary elements in order to provide certainty with respect to the operation, in strict adherence to environmental regulations. We expect the environmental authorities to revoke the partial temporary shutdown, once they clarify their concerns. At this point, we do not expect any impact on our operations, as this terminal has no scheduled shipments until late August. Mr. German Larrea, Chairman of the Board, commenting on the Company´s progress said: "I am pleased to announce that on July 8, 2019, the Company received the construction license for the Tia Maria project. We strongly believe this $1.4 billion project will further improve the Company's asset base and profitability with an increase of 120,000 tons of annual copper production capacity at a very competitive cash cost.

We think Tia Maria will also benefit Peru through multiple business and employment opportunities at a national, regional and local level, and with royalties and taxes. On top of this, with sales estimated at $750 million, Tia Maria will improve Peru´s economy with a 0.4% increase in its GDP." "This good news, gives us the confidence to continue our efforts on our $6.7 billion greenfield Peruvian investment program, which includes Tia Maria, with an investment of $1.4 billion, Los Chancas with $2.8 billion, and Michiquillay projects with $2.5 billion. Key Financial Data 2Q19 www.southerncoppercorp.com Page 2 of 10 Second Quarter First Six Months 2019 2018 Variance 2019 2018 Variance $ % $ % (in millions except per share amount and %s) Sales $1,818.0 $1,837.2 $(19.2) (1.0)% $3,571.4 $3,678.4 $(107.0) (2.9)% Cost of sales 867.3 851.7 15.6 1.8% 1,711.4 1,728.2 (16.8) (1.0)% Operating income 713.6 787.6 (74.0) (9.4)% 1,407.3 1,561.0 (153.7) (9.8)% Net income $402.4 $409.6 $(7.2) (1.8)% $790.6 $880.3 $(89.7) (10.2)% Net income margin 22.1% 22.3% (0.2)pp (0.9)% 22.1% 23.9% (1.8)pp (7.5)% Adjusted EBITDA 942.8 955.2 (12.4) (1.3)% 1,832.6 1,894.6 (62.0) (3.3)% Adjusted EBITDA margin 51.9% 52.0% (0.1)pp (0.2)% 51.3% 51.5% (0.2)pp (0.4)% Income per share $0.52 $0.53 $(0.01) (1.9)% $1.02

$1.14 $(0.12) (10.5)% Capital investments $180.4 $253.9 $(73.5) (28.9)% $353.5 $549.6 $(196.1) (35.7)% SECOND QUARTER AND SIX MONTHS 2019 RESULTS SOUTHERN COPPER