44fd1bf3-871a-493f-a264-fd3a308e2ce9.pdf RESULTS

SECOND QUARTER AND SIX MONTHS 2016

Investor Relations:

Raul Jacob (602) 264-1375

southerncopper@southernperu.com.pe www.southerncoppercorp.com

July 25, 2016 - Southern Copper Corporation (NYSE and BVL: SCCO)

  • Operating cash cost per pound, net of by-product credits, was

$0.91 in the second quarter 2016 ("2Q16"), a decrease of 19.4% compared to 2Q15. Cash cost per pound of copper before by- products credits was $1.41 in 2Q16. The decrease was the result of the completion of the first stage of our investment program and cost savings initiatives which resulted in 2.5% lower administrative costs.

  • Copper mine production increased 26.1% in 2Q16 to 225,842 tons from 179,085 tons in 2Q15, mainly as a result of a 78.0% increase in production at the Buenavista mine in Sonora, Mexico, which increased production by 49,362 tons. With this quarter's production, we reached a new first half-year record of 447,503 tons for a first semester.
  • By-product production: Mined zinc production was 19,994 tons in the 2Q16, 43.0% higher than 2Q15 production as the Charcas and Santa Eulalia mines have solved operational issues that affected production in the prior year. Mined silver production increased by 27.5% in 2Q16 compared with 2Q15 mainly due to higher production at the Buenavista mine. Molybdenum production decreased by 7.9% to 5,305 tons in 2Q16 from 5,759 tons in 2Q15 due to lower ore grades at our Peruvian operations.

  • Despite a copper price reduction of 22%, 2Q16 net sales were $1,335.1 million, only 3.5% lower than 2Q15 net sales of $1,382.9 million. This result was achieved because of a 19.2% increase in copper sales volume.

  • EBITDA in 2Q16 was $555.4 million, 15.4% higher than the $481.0 million in 1Q16. The margin increased from 38.6% to 41.6%.
  • Net income in 2Q16 was $221.9 million (16.6% of net sales), 19.9% higher than the net income of $185.1 million (14.9% of net sales) in the 1Q16. The increase was mainly the result of the additional lower unit cost production from the Buenavista mine.
  • Capital investments were $564.9 million for the first half of 2016 ("1H16"), 6.6% higher than in 1H15, and represented 138.8% of net income. In 2016, we continue the development of our investment program to increase copper production capacity by 90% from our 2013 production level of 617,000 tons to 1.2 million tons.
  • Dividends: On July 21, 2016, the Board of Directors authorized a dividend of $0.05 per share payable on August 25, 2016, to shareholders of record at the close of business on August 11, 2016.

Commenting on the Company's results and outlook, Mr. German Larrea, Chairman of the Board, said "Our new Buenavista concentrator is fully operational and in Peru the Toquepala expansion project is moving forward on schedule. We produced 447,503 tons of copper in the first six months of 2016, an increase of 26% from the first six months of 2015, and we expect to produce 913,500 tons for the full year. In spite of the current low price environment for our main products, we continue to improve the Company performance through cost savings and production enhancements. Our cash cost, including by- product revenues, for the six months of 2016 was $0.94 per pound, a 10.5% decrease from the 2015 six-month cost of

Second Quarter

First Six Months

2016

2015

Variance

2016

2015

Variance

$

%

$

%

(in millions except per share amount and %s)

$1.05. This is a remarkable result considering that the 1H15 period included the benefit of substantially higher by-product sales prices."

Sales

$1,335.1

$1,382.9

$(47.8)

(3.5)%

$2,580.1

$2,657.7

$(77.6)

(2.9)%

Cost of sales

751.6

706.9

44.7

6.3%

1,478.5

1,386.7

91.8

6.6%

Operating income

385.1

503.1

(118.0)

(23.5)%

731.2

940.0

(208.8)

(22.2)%

Environmental

remediation

-

10.5

(10.5)

(100)%

-

16.5

(16.5)

(100)%

EBITDA

555.4

637.4

(82.0)

(12.9)%

1,036.4

1,193.4

(157.0)

(13.2)%

EBITDA margin

41.6%

46.1%

(4.5)%

(9.8)pp

40.2%

44.9%

(4.7)%

(10.5)pp

Net income

$221.9

$294.7

$(72.8)

(24.7)%

$407.0

$577.2

$(170.2)

(29.5)%

Net income margin

16.6%

21.3%

(4.7)%

(22.1)pp

15.8%

21.7%

(5.9)%

(27.4)pp

Income per share

$ 0.29

$ 0.37

$(0.08)

(21.6)%

$ 0.53

$ 0.72

$(0.19)

(26.4)%

Capital investments

$341.6

$281.0

$ 60.6

21.6%

$564.9

$529.8

$ 35.1

6.6%

Capital Investments

Mexican Projects

Buenavista Projects - Sonora: Of the $3.5 billion of this investment program, the Company has already invested $3.2 billion. Excluding the almost completed Quebalix IV project and some infrastructure facilities, all the other facilities of this program are currently operating and we are expecting to increase production by 200,000 tons to produce 460,000 tons of copper in 2016 and 500,000 tons in 2017. We also expect to increase our Buenavista molybdenum production to a capacity of 4,600 tons per year. The Buenavista program is being finished on time and below our budget. New Copper-Molybdenum Concentrator: This facility has an annual production capacity of 188,000 tons of copper and 2,600 tons of molybdenum. The project will also produce 2.3 million ounces of silver and 21,000 ounces of gold per year. The new concentrator has completed its ramping-up phase with its 6 mills already in operation. In September 2015, we obtained the first copper concentrate lot and the plant is now running at 105% of its design capacity. Crushing, Conveying and Spreading System for Leachable Ore (Quebalix IV): This project's main objective is to reduce processing time as well as mining and hauling costs. It will also increase production by improving SX-EW copper recovery. It has a crushing and conveying capacity of 80 million tons per year and is expected to be completed by the 3Q16. As of June 30, 2016, the project has a 98% progress with an investment of $248.4 million out of the approved capital budget of $340 million.

The remaining projects to complete the $3.5 billion budgeted program include minor investments in infrastructure (power lines and substations, water supply, tailings dam, mine equipment shops, internal roads, etc.).

Peruvian Projects

Toquepala Expansion Project - Tacna: This project includes a new-state-of-the-art concentrator which will increase annual production capacity by 100,000 tons of copper to 235,000 tons in 2018, and will also increase molybdenum production by 3,100 tons at an estimated capital cost of $1.2 billion. Through June 30, 2016, we have invested $431.1 million in the project. The project is expected to be completed by the 2Q18. Toquepala High Pressure Grinding Roll (HPGR) system: The main objective of this project is to ensure that our existing concentrator will operate at its maximum milling capacity of 60,000 tons per day, even with an increase of the ore material hardness index. Additionally, recoveries will be improved and production enhanced with a better ore crushing. The budget for this project is $40 million and we have invested $11.7 million as of June 30, 2016. It is expected to be completed by the 4Q17. Cuajone´s Heavy Mineral Management Optimizing Project - Moquegua: The project consists of installing a primary crusher at the Cuajone mine pit with a conveyor system for moving the ore to the concentrator. The project aims to optimize the hauling process by replacing rail haulage, thereby reducing operating and maintenance costs as well as the environmental impact of the Cuajone mine. The crusher will have a processing capacity of 43.8 million tons per year. The main components, including the crusher and the overland belt, have been acquired and we have started excavations and civil work. As of June 30, 2016, we have invested $102.2 million in this project out of the approved capital budget of $165.5 million. The project is expected to be completed by the 2Q17. Conference Call

The Company's second quarter and first six months earnings conference call will be held on Tuesday, July 26, 2016, beginning at 11:00 AM - EST (10:00 M Lima and Mexico City time).

To participate:

Dial-in number: 888-771-4371 in the U.S.

847-585-4405 outside the U.S.

Raul Jacob, SCC Vice President of Finance & CFO

Conference ID: 43057797 and "Southern Copper Corporation Second Quarter 2016 Earnings Results"

Average Metal Prices

LME

Copper ($/lb.)

COMEX

Copper ($/lb.)

Molybdenum ($/lb.)

Zinc ($/lb.)

Silver ($/oz.)

Gold ($/oz.)

1Q 2016

2.12

2.11

5.27

0.76

14.87

1,181.21

2Q 2016

2.15

2.13

6.89

0.87

16.83

1,259.36

6M 2016

2.13

2.12

6.08

0.81

15.85

1,220.28

1Q 2015

2.64

2.66

8.41

0.94

16.70

1,219.22

2Q 2015

2.75

2.77

7.45

1.00

16.38

1,192.82

3Q 2015

2.38

2.40

5.75

0.84

14.87

1,124.01

4Q 2015

2.22

2.20

4.75

0.73

14.75

1,104.40

6M 2015

2.69

2.72

7.93

0.97

16.54

1,206.02

Average 2015

2.50

2.51

6.59

0.88

15.68

1,160.11

Variance: 2Q16 vs. 2Q15

(21.8)%

(23.1)%

(7.5)%

(13.0)%

2.7%

5.6%

Variance: 2Q16 vs. 1Q16

1.4%

0.9%

30.7%

14.5%

13.2%

6.6%

Variance: 6M16 vs. 6M15

(20.8)%

(22.1)%

(23.3)%

(16.5)%

(4.2)%

1.2%

Source: Silver - COMEX; Gold and Zinc - LME; Molybdenum - Metals Week Dealer Oxide

Production and Sales

Three Months Ended June 30,

Six Months Ended June 30,

2016

2015

%

2016

2015

%

Copper (tons)

Mined

225,842

179,085

26.1%

447,503

356,701

25.5%

3rd party concentrate

1,662

5,450

(69.5)%

9,784

5,466

79.0%

Total production

227,504

184,535

23.3%

457,287

362,167

26.3%

Smelted

147,043

140,367

4.8%

302,200

288,626

4.7%

Refined and Rod

205,551

196,091

4.8%

420,682

398,678

5.5%

Sales

220,222

184,814

19.2%

433,086

353,452

22.5%

Molybdenum (tons)

Mined

5,305

5,759

(7.9)%

10,876

11,615

(6.4)%

Sales

5,290

5,700

(7.2)%

10,892

11,538

(5.6)%

Zinc (tons)

Mined

19,994

13,979

43.0%

38,023

29,174

30.3%

Refined

27,971

24,548

13.9%

53,294

50,028

6.5%

Sales

28,071

24,345

15.3%

53,323

51,045

4.5%

Silver (000s ounces)

Mined

4,103

3,217

27.5%

8,122

6,416

26.6%

Refined

4,075

3,012

35.3%

7,825

6,271

24.8%

Sales

4,147

3,295

25.8%

8,248

6,576

25.4%

Southern Copper Corporation published this content on 25 July 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 25 July 2016 13:25:05 UTC.

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