Ero Copper Corp. — Call Transcript 2026

Thank you for standing by. This is the conference operator. Welcome to the Ero Copper Fourth Quarter 2025 Operating and Financial Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press Star, then one on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing Star then zero. I would now like to turn the conference over to Farooq Hamed, VP, Investor Relations. Please go ahead. Thank you, operator. Good morning and welcome to Ero Copper's fourth quarter and full year 2025 earnings call. Our operating and financial results were released yesterday afternoon and are available on our website along with our financial statements and MD&A for the three and 12 months ended December 31, 2025. A corresponding earnings presentation can be downloaded directly from the webcast and is also available in the Presentation section of our website. Joining me on the call today are Makko DeFilippo, President and Chief Executive Officer, Wayne Drier, Executive Vice President and Chief Financial Officer, Gelson Batista, Executive Vice President and Chief Operating Officer, and Courtney Lynn, Executive Vice President, External Affairs and Strategy. Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially. For a detailed discussion of these risks and their potential impact on our business, please refer to our most recent annual information form available on our website as well as on SEDAR and EDGAR. Unless otherwise noted, all figures discussed today are in US dollars. With that, I'll now turn the call over to Makko DeFilippo. Thank you, Farooq, and thank you to everyone joining us this morning. As we pre-released our 2025 production results and 2026 guidance in early February, I'd like to take a step back here and explain why we believe Ero is extremely well-positioned in the current market environment. Last week, as many of you would have seen, we released our maiden preliminary economic analysis on the Furnas project. This was an important milestone for the company and one of our key objectives this year. Over the past 18 months, our exploration and engineering work, combined with extensive historical technical programs completed by Vale on the project since the early 2000s, has enabled the design of an integrated open pit and underground mine expected to produce a total of more than 1.2 million tons of copper, 2 million ounces of gold, and 9 million ounces of silver over an initial 24-year mine life. Highlighting the quality of Furnas and reinforcing why it is a cornerstone asset in our long-term growth strategy, over the first 15 years of operation, Furnas is expected to produce approximately 70,000 tons of copper, 111,000 ounces of gold, and more than 500,000 ounces of silver annually at first quartile C1 cash costs of approximately $0.24 per pound of copper produced. At long term consensus metal prices, the PEA delivers an after-tax NPV of approximately $2 billion and an IRR of more than 27% on $1.3 billion of initial capital. Taken together, these metrics uniquely position Furnas from a capital intensity perspective relative to comparable projects while delivering strong economic outcomes across a wide range of commodity prices. Said differently, we see an exceptional project that is both financeable and buildable. As strong as it is, the PEA is just a starting point for us, and we are focused on maintaining momentum this year. In 2026, we plan to complete an additional 50,000 meters of exploration drilling, targeting extensions of high-grade mineralization around planned underground infrastructure. We will also continue pursuing opportunities we see to further strengthen economics, which include the addition of a magnetite recovery circuit to produce a high-grade magnetite concentrate, as well as a gravity pre-concentration stage to enhance gold recoveries. Both initiatives offer potential to further increase byproduct revenue, and we are encouraged by the initial results we are seeing. Getting back to what differentiates Ero, we have clearly outlined a great long-term growth project in Furnas, and we are thrilled to be advancing it towards a construction decision over the coming years. Perhaps most importantly, the capital required to advance Furnas to that point is expected to remain relatively modest as we continue to advance technical studies, drilling, and permitting work streams. At the same time, capital spending across our existing operations is projected to decline as we transition out of a multi-year investment phase that included the construction of Tucumã and major investments at Caraíba over the past several years. These investments are either complete or, in the case of our new shaft project at Caraíba, are past peak capital spend. As a result, Ero is exiting a major investment cycle with an exceptional long-term growth asset, increasing cash generation capacity, declining consolidated capital requirements, and three operating mines with the right mix of metals at exactly the right time in the commodity price cycle. When I look across the broader sector, many companies, including most of our peers, are jumping into major project builds within the next year. We like this dynamic. Switching gears slightly, I do want to touch on our 2025 results and 2026 guidance. I would start by recognizing the resilience and dedication of our teams that work through a number of challenges to deliver meaningful improvements across the business as the year progressed. These efforts resulted in sequential quarters of improving operational performance, the unlocking of a major new additional value driver for our business at Xavantina. Starting with Caraíba, Q4 represented our strongest operating quarter of the year. Mill throughput reached nearly 1.2 million tons, up 18% compared to Q3 and an all-time record for the operation. This drove copper production 15% higher quarter-on-quarter and contributed to C1 cash costs of $2.27 per pound. At Tucumã, copper production increased more than 22% quarter-on-quarter, representing another record for the operation. Higher process grades helped offset an extended period of unplanned downtime in December, driven by a pull forward of Q1 maintenance for an early mill liner replacement. This pull forward was due to an OEM wear part quality issue that impacted multiple operations in the region, including ours. C1 cash costs in Q4 were $1.75 per pound, which I would note approximately $0.10 of this was attributable to expensing the unamortized portion of the liners. Turning to Xavantina, production increased 53% quarter-on-quarter, driven by higher grades and improved throughput as we began to see the benefits of our efforts transition the mine to mechanized mining. In addition, our gold concentrate program resulted in an incremental 15,000 ounces of gold in Q4. Total gold from Xavantina, including mine production and concentrate shipments, was nearly 20,000 ounces in a quarter and over 50,000 ounces for the full year. Behind these numbers, what makes 2025 one of our best on record, in my opinion, is that our operational teams deliver these results while achieving one of our best years ever in terms of consolidated safety performance. Whatever might be said about 2025, nothing matters to me more than this metric. As I look ahead to 2026, our guidance assumes the operational performance gains we achieved in the fourth quarter are effectively sustained through the year. While we continue to work on opportunities to further improve performance across the business, especially in the second half of this year at Tucumã, these are not reflected in our guidance. At Tucumã, we are well advanced on adding additional tailings filtration equipment this year to unlock additional throughput capacity for this operation. We have equipment being manufactured right now and if all goes according to plan, we would expect this to benefit the operation in the fourth quarter. As I mentioned, the potential benefits here, as well as the associated capital investment, have not been reflected in our 2026 guidance. This was a deliberate decision for three reasons. First, getting to steady state was important for us this year. Second, there is a lot of daylight between now and the fourth quarter. Perhaps most important, in the current metal price environment, we expect the payback on this investment to be one to two quarters. While it is a very important objective and we expect to complete it this year, it will not change our strategy or capital allocation decisions in 2026. At Xavantina, we are investing in our ventilation circuit, mine development and equipment to increase mine capacity and output. This is a low hanging long-term value driver inherent to our business when we look at the available milling capacity we have there. Last but not least, at Caraíba, we are advancing the new shaft project for the Pilar Mine and are pursuing several operational improvement initiatives we hope to discuss later this year. To touch briefly on cadence for 2026, we're guiding consolidated copper production of between 67,500 to 77,500 tons. This reflects year-over-year growth, driven primarily by higher sustained plant throughput at Caraíba and Tucumã, partially offset by lower planned grades. Copper production is expected to be weighted towards the second half of the year due to mine sequencing and a modest increase in throughput throughout the year. At Xavantina in 2026, we are guiding mine production of 40,000-50,000 ounces. We expect Q1 to be the softest production quarter of the year. This cadence reflects mine sequencing as well as a tie-in of a major ventilation upgrade during the quarter, including the completion of a new raise bore to surface. Production is expected to be weighted towards the second half of the year as a result. Gold concentrate sales are expected to continue throughout the year. We expect that to be relatively modest in Q1 due to the rainy season. For some additional context there, you'd be hard-pressed to find a more simple operation in our portfolio. There are only three steps. We remove the material from stockpile, we then spread it out in the sun to dry, then transport the material for shipment. As you can likely imagine, step two in that process is far less productive during the rainy season. With that, I will turn the call over to Wayne, who will walk through our financial results in more detail. Thank you, Makko. Our fourth quarter financial results were driven by record copper concentrate sales, a 59% increase in gold doré sales, the commencement of gold concentrate sales, and stronger copper and gold prices during the period. All of these factors drove quarterly revenue to a record $320 million or $143 million higher compared to the third quarter. Consolidated C1 cash costs per pound were approximately 1.5% higher quarter-on-quarter, with the increase predominantly coming from Tucumã, where we experienced higher transportation demurrage and port costs in the quarter related to the COP30 activities in Pará State. This had an impact of approximately $0.10 per pound on our Tucumã C1 costs, which were also impacted by the accelerated amortization of the mill liner Makko referenced earlier. Gold C1 cash costs per ounce declined by approximately 29% from the third quarter. As a result, the company delivered stronger operating margins, with adjusted EBITDA growing to $186.7 million in the fourth quarter and $409.7 million for the full year. Adjusted net income attributable to owners of the company was $108.4 million for the quarter and $220.4 million for the year, or $1.04 and $2.12 per share, respectively. Our liquidity position at quarter end stood at $150.4 million, including $105.4 million in cash and cash equivalents, and $45 million of undrawn availability under our revolving credit facility. We continued to deleverage our balance sheet, with net debt declining to approximately $502 million at year-end from $545 million at the end of the third quarter. Combined with significantly higher 12-month trailing EBITDA, this resulted in a material improvement in our net debt leverage ratio, which decreased to 1.2x at the end of Q4 from 1.9x in Q3 and 2.6x at the end of 2024. With copper and gold production expected to grow in 2026, as well as the additional cash flow from our Xavantina's gold concentrate sales, we intend for debt reduction and return to shareholders to be key elements of our midterm capital allocation strategy. At December 31st, we had $155 million drawn on our revolver, which we intend to pay down fully in 2026. We would like to maintain a strong cash position on the balance sheet and target a net debt to EBITDA ratio below 1x ahead of commencing a return of capital program. I'll now pass the call back to Makko for some closing remarks. Thank you, Wayne. Before we move into the Q&A session, let me recap the three key elements of Ero's value proposition. First, over the past decade, Ero has consistently unlocked value that wasn't fully recognized, often through work supported by strong partners. Clear examples include our gold concentrate program and our broader partnership with Royal Gold at Xavantina, and more recently, the advancement of the Furnas project with our partner, Vale Base Metals. Second, we've taken a disciplined countercyclical approach to capital allocation, investing in building projects during periods when development activity across the sector was limited. That strategy has positioned Ero favorably relative to our peer group that are now preparing to enter major capital investment phases. Third, Furnas represents a high quality, long life asset being advanced with a top-tier partner, and we view it as a compelling cornerstone for Ero's long-term growth. With that, I will now turn the call back to the operator to open the line for questions. Thank you. To join the question queue, you may press Star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press Star then two. First question comes from Orest Wowkodaw with Scotiabank. Please go ahead. Hi, good morning. A question around the gold concentrate stockpiles at Xavantina. You haven't issued any guidance for what those volumes could be this year, but with the 15,000 ounces you sold in the fourth quarter, is that a good guide for shipments in periods or quarters where there's no rainy season? Thank you for the question, Orest. Obviously, a bit of a tricky situation. Obviously, we came out with initial resource on the 20% of the volume that we're able to sample. It's difficult for us, as you can imagine, to give exact guidance. We certainly, you know, expect strong volumes in shipment. I would point to what we achieved in Q4. That was at the tail end of the rainy season. If you, just for context, the rainy season in Mato Grosso typically starts in November and goes through March, April, depending on the year. You know, part of those sales did occur when the rainy season was started. We're obviously advancing several initiatives on site to increase volumes from there. As I said on the outset of the call, you know, Q1 is the heart of the rainy season. This has been an exceptionally rainy year in Brazil, as you are probably aware from some of the news flow and flooding that's happened throughout the country. Therefore, we expect, you know, very modest sales in Q1, then ramp up pretty aggressively Q2, Q3. In terms of the stockpile itself, have you seen anything that may suggest that the grade for the other 80% of the stockpile would be materially different than what you have sampled? Difficult to say, Orest. Obviously, as we go in the future, we don't have samples there, but to date, nothing that suggests otherwise. Okay. Thanks very much. The next question comes from Emerson Vieira with Goldman Sachs. Please go ahead. Hello, good morning. Makko, Wowkodaw. Thanks for taking my questions. I'd like to listen a little bit more on Tucumã's filter press issue. Can you provide us an update here? Have you guys already ordered the mobile filter? That it is expected to increase the future availability and any update on time could be very helpful. Also, how long should be the maintenance in the first quarter in order to check that with the new line's replacement? Just a third one on Tucumã. Can you please reconcile the production guidance for 2026? I mean, what are you guys expecting in terms of grades and surplus ramp-up throughout the year? Those are my questions. Thank you. Thank you. Quite a bit to unpack there. If I miss something, I apologize. Just ask it again. Thanks for the questions. First on the filter press capacity, yes, that equipment has been ordered. It's being manufactured, as I said, in the prepared remarks. That is a very important objective of ours. Given what we've outlined, it's not included in our guidance, first and foremost. We expect the payback on that investment to be very fast in this environment, and we expect it to be operational in Q4. As of both the quantum of the investment there, as well as the current prevailing copper price. That investment, and completion of that project has very little influence on how we think about our business for 2026. As I said, it was not included in our guidance. That's first and foremost on that point. The second part of your question was related to the maintenance that happened related to the mill lining. To be clear there, we expected that maintenance to occur in Q1. We had to pull that into Q4. It's already been completed effectively for the year. That was approximately a 10-day period of downtime that happened in Q4 and impacted our- All right. Our Q4 results. All right, no, no more maintenance downtime for Q. That's really sad. Well, we have planned downtime every month. That is still part of our team, but we have no extended period of downtime that we're planning in Q1 of this year. All right. Thank you. Then the last one, on the reconciliation on grade and throughput, comparing to the guidance, please. Yeah. Great, great question. Thank you. You know, when we obviously came out, had a strong result last year in terms of grade, we do expect grades to come down. We are currently looking at, you know, throughout our guidance, just below 3 million tons of processed throughput. I would say somewhere between 1.3% and 1.4% copper for the full year. All right. Thank you. The next question comes from Guilherme Rosito with Bank of America. Please go ahead. Hi. Hello, everyone. Thank you for taking my questions. I have two. The first is on Tucumã. I wanted to dive a bit deeper into the C1 cash cost guidance. I just wanted to understand how we could explain the cost increasing throughout the year versus what we're earning for QF. I appreciate that there is lower grade and you're also not including the future, so with the future, there could be a change to guidance. I'm just trying to understand, as you have more fixed cost evolution, as you increase processing and also TCRCs are higher than what you guys are currently doing at Caraíba. I'm just trying to understand all these moving parts and what's driving costs higher this year. Second, on Xavantina, just wanted to explore a bit, if you could talk about the benefits from the mechanization investments you guys did last year. How should we expect that to translate into the results this year? What do you guys expect in terms of grades throughout the year? How they should fluctuate? What sort of volatility we should see throughout the year? That's it. Thank you. Thank you for the questions. Yeah, starting with Tucumã. Really, really good question there. Main drivers for guidance, as you mentioned, is grade. Obviously we're coming off of a year of significantly higher grades. That has a direct influence on our Q1 or our C1 costs. We also are putting in additional maintenance efforts there to stabilize the operations. Those are. I would refer to those additional costs as non-structural. On the TCRC and shipment side, you know, we've been getting some questions about differences from Caraíba to Tucumã. I would point to two major influencing factors there. Number one, the grade of the concentrate is lower, so therefore, there's more costs associated on a per pound copper basis, number one. Number two, we have quite a bit further to transport that material. When you take those two together, we do see higher TCRCs. We're seeing a market now in the TCRC across our business that looks favorable relative to where we expected it to be for the budget. That said, those are mostly longer term contracts that we have in place, so we are not getting the full benefit of the benchmark pricing. More fundamentally, as you'll probably appreciate more, better than most people, we are seeing a very strong BRL headwind across our business. That's true across all of our operations, and that's been reflected in our guidance. I would say big moving factors there on Tucumã cost drivers would be, the grade that we're mining, the additional maintenance costs that we're incurring. We do expect to see a benefit in Q4 from those costs. The TCRCs and shipments, related costs in part because the grade of concentrate is lower than Caraíba. Your second question on the benefits of mechanization really points to two things. You know, as you've heard me talk about on a number of calls here over the year, reducing exposure of our workforce is one of the top benefits of that investment, and it was one of the key driving factors in making that investment. Getting our workforce away from the work phase to the maximum extent possible. That's number one. Number two, if you just take a step back and hope to have the opportunity to show you what the team's been doing at Xavantina later this year. You know, that mill only operates between, you know, 15 and 20 days per month. That's a function of the asset being mine constraint. As we look ahead to the future, and notwithstanding the cadence of production that we just talked about this year, given the tie in as a ventilation circuit improvements that we're making, we expect over time here to be able to better match mine output with mill capacity. Again, not reflected in our long term guidance, but it's one of the key low hanging value drivers that we see in our business. You know, Gelson and the team here are working diligently, and we hope to be in a position to talk about what that might look like later in the year. Super clear, Michael. Thank you. The next question comes from Fahad Tariq with Jefferies. Please go ahead. Hi. Thanks for taking my questions. There was a comment made earlier on the call about potential capital return once the net debt to EBITDA gets to the targeted levels below one times. Maybe just any additional color on that, what form that would be in timing, et cetera? Wayne can piggyback if I missed anything or has anything to add. I would say, really there's three steps here that we see as being critically important to driving that decision and timing. First and foremost, as we mentioned, we want to see our net debt leverage ratio below 1 times. As you can see from our Q4 results, we're given where we were in Q3 to Q4, we're rapidly approaching that metric. Obviously the world is a volatile place, we'll see what happens over the next few quarters. We're pretty close to that metric at 1.2x right now. Secondly, as we mentioned, we want to pay down a revolver. As at year-end, we had $155 million drawn. That's just a logical place to pay down our debt. Again, we are cognizant that paying down debt, including a revolver is a de facto return to shareholders. That's an important component of that strategy. Number three, we're having a lot of discussions with our top shareholders about what that might look like and timing. I would say stay tuned. Let's get through steps oneand 2 before we get too excited about step three. Sounds good. Then maybe on Furnas, there, you know, the idea of you're entering a period where some of your peers are getting into a build cycle, and Furnas is, I guess, much longer dated. Any opportunity to or any appetite to try to accelerate that? Or is that even possible given, like, where's the stage it's at right now in terms of the earning agreement and what needs to be done? Yeah. We're very excited about Furnas, as you probably heard in our prepared remarks and saw in our webcast materials. The reality is, you know, it's a few years out. We like that positioning. We need to do work to advance through a pre-feasibility study, execute on some of those value drivers that we see as low hanging fruit, to increase the value of the project, increase by-product revenue. Then we still need to do advance several permitting work streams. The reality, I think, is we do have the appetite to advance that project as fast as possible. I would say that we're already doing that. We still expect modest capital spend over the next few years as a result of the acceleration there. Okay. Great. Thank you. The next question comes from Stefan Ioannou with ATB Cormark. Please go ahead. Thanks very much, guys. Just kind of curious back on the gold concentrate sales. I think originally it was suggested that you were anticipating selling down the entire stockpile over, say, 12-18 months. Just given our better understanding of the rainy season and whatnot now, is that an sort of a number we should think is probably going to be stretched out over a bit more time? Yeah. Look, let's see, right? 12-18 months, right? We talked about that timeline in November. If you put out, if you look at what we talked about in our guidance came out this year, we said through mid-2027, those timelines are- Yeah. You know, give or take a month, are pretty well aligned from our perspective. Okay. Still mid-2027-ish. Okay. Maybe switching gears just on the, you mentioned an exploration spend of $30 million-$40 million. Is that really the lion's share at Furnas or is there any other sort of notable projects we should be thinking about from an exploration point of view this year? It is. Great question. Yes, the lion's share of that is at Furnas. I would say that, yeah, we're still advancing some opportunities throughout the portfolio, both at Tucumã, and at Tucumã, Xavantina and Caraíba at various stages of development. Again, I think the best guidance I can give you at this point is that we're excited about what we're doing there. We expect to give an update at our investor day later in the year. Okay. Okay, great. Thanks very much, Michael. The next question comes from Craig Hutchison with TD Cowen. Please go ahead. Hi. Good morning, guys. I was just wondering if the heavy rainfalls, will that have any impacts on concentrated shipments or timing of shipments from Tucumã as well? Is it just isolated to Xavantina? Great question. We plan for cadence across our operations for a normal amount of operational disruption. I would say that what we've seen to date at our other operations is in line with what we expected and built into our budget and guidance for the year. We're not seeing anything out of the ordinary in terms of operational disruption. There is operational disruption across all our operations due to the rain season that's been reflected in our guidance and how we think about cadence for the full year. Okay, great. just TCRCs in terms of your C1 cash costs, are you able to provide what you're assuming for TCRCs for the year? Those are based on long-term contracts that are commercially sensitive. I would say. Okay. The what we've heard in the market is well below zero. We're not reflecting that at either of our operations. And as I said, they're long-term contracts that are commercially sensitive. Still very low in a historical context. As I mentioned, when I think about what are the big headwinds and tailwinds for our business, you know, at Caraíba we have a big tailwind from byproduct gold prices. That was probably pretty clear. And if you look at how that byproduct line item has tracked over the last several years, but we're seeing headwinds on seaborne shipping freight given what's happening in the world today. And then also on the BRL, which has been a big. I think last year the BRL was one of the top performing currencies against the US dollar, and so that's a bit of a headwind. Definitely some gives and takes. We feel pretty happy with where our guidance is at this point in time, given some of the gives and takes that we're seeing there. Obviously we'll, you know, keep everyone updated if we, if we see things moving significantly one way or another. All right, great. Thanks, guys. Once again, if you have a question, please press Star then One. The next question comes from Anita Soni with CIBC World Markets. Please go ahead. Hi. Good morning, guys. Thanks for taking my questions. I just wanted to follow up a little bit on Furnas. I was wondering in terms of, I wanted to tie in the exploration drilling that you've done with the PEA. Can you just talk about how much of the drilling that you've done, how much was included in this PEA, and is there still, like, some that was outlined that didn't get included? Yeah, perfect. Thank you for asking the question. You're absolutely right. The PEA, we started drilling at the tail end of 2024. The PEA includes 28,000 m of drilling of the 50,000 m that we drilled last year. We expect to complete another 50,000 m this year. If you're looking for, you know, there's several stages under the earn-in agreement. We'll have effectively, we expect to complete all phases of drilling, all drilling requirements by the end of 2026. As I mentioned, that PEA only includes 28,000 m of drilling. Our objectives with the drill program that we completed in the second half of last year and the first part of this year are twofold. Number one, as we move to pre-feasibility study, we need to convert that inferred mineralization that's included in the PEA into measured and indicated resources, so we can include it in the mine plan. Number two, we, as you can see in the production profile, you know, really years 2016 through 2024, we see a drop off and that's related to the really to the extent of drilling we've been able to do. We've targeted as part of our drill program some key step outs around some of the planned underground infrastructure that that is successful. We expect to improve the production profile later in the mine life. Obviously, we still need to do the drilling and the mine planning to support what I just said there, but we're looking forward to advancing that work stream and getting it included into the pre-feasibility study. Yeah, that was the second question. Just I'm wanting to drill a little bit into the Inferred category. What kind of drill density do you have now, and what do you need to get it into for the M&I? I don't have that right off the top of my head. We can circle back on that one. I, what I can tell you is that about 60% of the material that we have included in the PEA is inferred. Yeah, I will follow up with you just after this call on drill spacing. Obviously, that'll be outlined in the technical report that'll be filed here shortly. I just don't have that information right at my fingertips. Oh, that's fine. If you're going to file the technical report, that's, that was my third question when you're going to file that, because I'd like to get into the weeds on that. I would also then want to figure out some of the dilution questions as well, because I noticed your M&I and Inferred does not have any dilution at all in the Canaccord. That's it for my questions. Thank you. Yeah. Yeah. Just to clarify there, it's an important point on dilution. You're correct. The resource statement doesn't include dilution. The mine plan's been fully diluted. You'll see that reflected around the assumptions that they're outlined in the technical report. Okay. All right. Thanks. Thanks for that. The next question comes from Dalton Baretto with Canaccord Genuity. Please go ahead. Yeah, thanks for squeezing me in, guys. Morning, Makko and team. I just want to follow up on some of that pronounced drilling there, but from a different perspective. Makko, you talked about all the drilling that was done last year that was not included, a lot of the drilling this year. My understanding was that, sort of the high grade cores of the deposit, they extend down deeper and possibly deeper than Vale had anticipated. I'm just trying to understand how much of your drilling is chasing that higher grade material and whether we could see some sort of a grade bump on the next resource update. Thanks. Good questions. Look, I think the way that I would think about this is, the project as it stands today, it stands on its own two feet, right? We're working on some additional value drivers to smooth out the production profile to further enhance the economics. As you see from the numbers, it absolutely stands on its own two feet. If you look at the last drill hole that we drilled as part of the PEA, I'm going to quote some numbers here, so take this with a little bit of grain of salt, but it was about around 115 m at 0.8% copper and a half gram gold, more or less. That was the last hole that we drilled that was included in the PEA of that 28,000 m program. That intercept was 600 m below surface. We clearly see opportunity to extend the deposit both to depth and laterally along strike. We expect to include those in future studies. As I said, we'll be advancing those drill programs here. In terms of grade, a grade bump, look, we still need to do the infill drilling that will be included in the pre-feasibility study, so there are several stages of technical studies to go here. I would say the work that, you know, not only we did, but also the very, very strong technical work that Vale has done over the years, to build an incredible foundation that we're able to build on, I think really speaks to the quality of the project. You know, we work with our technical team regularly. We have an excellent relationship and we're really moving this forward together to create the best value possible. When I think about what we've done collectively to drive, you know, not only production substantial underground, but also, you know, the mine calls for about 30% of its tailings, expected tailings production to go back underground as paste backfill. We've really worked jointly to reduce the environmental footprint, and hopefully set ourselves up for a excellent fast-track project. Thanks, Makko. Can you remind me, is there some sort of a mechanism in your agreement with Vale that gives you the option to buy the piece that you currently won't earn into? No, we're very happy to be pursuing this project in partnership with Vale Base Metals. Great. Thanks. This concludes the question and answer session. I would like to turn the conference back over to Makko DeFilippo for any closing remarks. Please go ahead. Yes. Thank you everyone for joining us today. Obviously we're always available for follow-up questions. Appreciate the robust discussion on the Q&A side as usual. I think one last bit of housekeeping here. Shortly on our website, for those of you who are interested, we will be hosting a Capital Markets Day in mid-September. That will be physically in person in São Paulo and obviously virtually. As I said, that information will be on our website shortly. Thank you all very much. Have a great weekend. Thank you. Bye-bye. This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

Speaker 9: Thank you for standing by. This is the conference operator. Welcome to the Ero Copper Fourth Quarter 2025 Operating and Financial Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press Star, then one on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing Star then zero. I would now like to turn the conference over to Farooq Hamed, VP, Investor Relations. Please go ahead. Thank you for standing by. thank you for standing by This is the conference operator. this is the conference operator Welcome to the Ero Copper Fourth Quarter 2025 Operating and Financial Results Conference Call. welcome to the ero copper fourth quarter 2025 operating and financial results conference call As a reminder, all participants are in listen-only mode and the conference is being recorded. as a reminder all participants are in listen-only mode and the conference is being recorded After the presentation, there will be an opportunity to ask questions. after the presentation there will be an opportunity to ask questions To join the question queue, you may press Star, then one on your telephone keypad. to join the question queue you may press star then one on your telephone keypad Should you need assistance during the conference call, you may reach an operator by pressing Star then zero. should you need assistance during the conference call you may reach an operator by pressing star then zero I would now like to turn the conference over to Farooq Hamed, VP, Investor Relations. i would now like to turn the conference over to farooq hamed vp investor relations Please go ahead. please go ahead

Speaker 6: Thank you, operator. Good morning and welcome to Ero Copper's fourth quarter and full year 2025 earnings call. Our operating and financial results were released yesterday afternoon and are available on our website along with our financial statements and MD&A for the three and 12 months ended December 31, 2025. A corresponding earnings presentation can be downloaded directly from the webcast and is also available in the Presentation section of our website. Joining me on the call today are Makko DeFilippo, President and Chief Executive Officer, Wayne Drier, Executive Vice President and Chief Financial Officer, Gelson Batista, Executive Vice President and Chief Operating Officer, and Courtney Lynn, Executive Vice President, External Affairs and Strategy. Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially. Thank you, operator. thank you operator Good morning and welcome to Ero Copper's fourth quarter and full year 2025 earnings call. good morning and welcome to ero copper's fourth quarter and full year 2025 earnings call Our operating and financial results were released yesterday afternoon and are available on our website along with our financial statements and MD&A for the three and 12 months ended December 31, 2025. our operating and financial results were released yesterday afternoon and are available on our website along with our financial statements and md&a for the three and 12 months ended december 31 2025 A corresponding earnings presentation can be downloaded directly from the webcast and is also available in the Presentation section of our website. a corresponding earnings presentation can be downloaded directly from the webcast and is also available in the presentation section of our website Joining me on the call today are Makko DeFilippo, President and Chief Executive Officer, Wayne Drier, Executive Vice President and Chief Financial Officer, Gelson Batista, Executive Vice President and Chief Operating Officer, and Courtney Lynn, Executive Vice President, External Affairs and Strategy. joining me on the call today are makko defilippo president and chief executive officer wayne drier executive vice president and chief financial officer gelson batista executive vice president and chief operating officer and courtney lynn executive vice president external affairs and strategy Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially. before we begin i'd like to remind everyone that today's discussion will include forward-looking statements which involve risks and uncertainties that may cause actual results to differ materially For a detailed discussion of these risks and their potential impact on our business, please refer to our most recent annual information form available on our website as well as on SEDAR and EDGAR. Unless otherwise noted, all figures discussed today are in US dollars. With that, I'll now turn the call over to Makko DeFilippo. For a detailed discussion of these risks and their potential impact on our business, please refer to our most recent annual information form available on our website as well as on SEDAR and EDGAR. for a detailed discussion of these risks and their potential impact on our business please refer to our most recent annual information form available on our website as well as on sedar and edgar Unless otherwise noted, all figures discussed today are in US dollars. unless otherwise noted all figures discussed today are in us dollars With that, I'll now turn the call over to Makko DeFilippo. with that i'll now turn the call over to makko defilippo

Speaker 8: Thank you, Farooq, and thank you to everyone joining us this morning. As we pre-released our 2025 production results and 2026 guidance in early February, I'd like to take a step back here and explain why we believe Ero is extremely well-positioned in the current market environment. Last week, as many of you would have seen, we released our maiden preliminary economic analysis on the Furnas project. This was an important milestone for the company and one of our key objectives this year. Thank you, Farooq, and thank you to everyone joining us this morning. thank you farooq and thank you to everyone joining us this morning As we pre-released our 2025 production results and 2026 guidance in early February, I'd like to take a step back here and explain why we believe Ero is extremely well-positioned in the current market environment. as we pre-released our 2025 production results and 2026 guidance in early february i'd like to take a step back here and explain why we believe ero is extremely well-positioned in the current market environment Last week, as many of you would have seen, we released our maiden preliminary economic analysis on the Furnas project. last week as many of you would have seen we released our maiden preliminary economic analysis on the furnas project This was an important milestone for the company and one of our key objectives this year. this was an important milestone for the company and one of our key objectives this year Over the past 18 months, our exploration and engineering work, combined with extensive historical technical programs completed by Vale on the project since the early 2000s, has enabled the design of an integrated open pit and underground mine expected to produce a total of more than 1.2 million tons of copper, 2 million ounces of gold, and 9 million ounces of silver over an initial 24-year mine life. Highlighting the quality of Furnas and reinforcing why it is a cornerstone asset in our long-term growth strategy, over the first 15 years of operation, Furnas is expected to produce approximately 70,000 tons of copper, 111,000 ounces of gold, and more than 500,000 ounces of silver annually at first quartile C1 cash costs of approximately $0.24 per pound of copper produced. Over the past 18 months, our exploration and engineering work, combined with extensive historical technical programs completed by Vale on the project since the early 2000s, has enabled the design of an integrated open pit and underground mine expected to produce a total of more than 1.2 million tons of copper, 2 million ounces of gold, and 9 million ounces of silver over an initial 24-year mine life. over the past 18 months our exploration and engineering work combined with extensive historical technical programs completed by vale on the project since the early 2000s has enabled the design of an integrated open pit and underground mine expected to produce a total of more than 1.2 million tons of copper 2 million ounces of gold and 9 million ounces of silver over an initial 24-year mine life Highlighting the quality of Furnas and reinforcing why it is a cornerstone asset in our long-term growth strategy, over the first 15 years of operation, Furnas is expected to produce approximately 70,000 tons of copper, 111,000 ounces of gold, and more than 500,000 ounces of silver annually at first quartile C1 cash costs of approximately $0.24 per pound of copper produced. highlighting the quality of furnas and reinforcing why it is a cornerstone asset in our long-term growth strategy over the first 15 years of operation furnas is expected to produce approximately 70,000 tons of copper 111,000 ounces of gold and more than 500,000 ounces of silver annually at first quartile c1 cash costs of approximately $0.24 per pound of copper produced At long term consensus metal prices, the PEA delivers an after-tax NPV of approximately $2 billion and an IRR of more than 27% on $1.3 billion of initial capital. Taken together, these metrics uniquely position Furnas from a capital intensity perspective relative to comparable projects while delivering strong economic outcomes across a wide range of commodity prices. Said differently, we see an exceptional project that is both financeable and buildable. As strong as it is, the PEA is just a starting point for us, and we are focused on maintaining momentum this year. In 2026, we plan to complete an additional 50,000 meters of exploration drilling, targeting extensions of high-grade mineralization around planned underground infrastructure. At long term consensus metal prices, the PEA delivers an after-tax NPV of approximately $2 billion and an IRR of more than 27% on $1.3 billion of initial capital. at long term consensus metal prices the pea delivers an after-tax npv of approximately $2 billion and an irr of more than 27% on $1.3 billion of initial capital Taken together, these metrics uniquely position Furnas from a capital intensity perspective relative to comparable projects while delivering strong economic outcomes across a wide range of commodity prices. taken together these metrics uniquely position furnas from a capital intensity perspective relative to comparable projects while delivering strong economic outcomes across a wide range of commodity prices Said differently, we see an exceptional project that is both financeable and buildable. said differently we see an exceptional project that is both financeable and buildable As strong as it is, the PEA is just a starting point for us, and we are focused on maintaining momentum this year. as strong as it is the pea is just a starting point for us and we are focused on maintaining momentum this year In 2026, we plan to complete an additional 50,000 meters of exploration drilling, targeting extensions of high-grade mineralization around planned underground infrastructure. in 2026 we plan to complete an additional 50,000 meters of exploration drilling targeting extensions of high-grade mineralization around planned underground infrastructure We will also continue pursuing opportunities we see to further strengthen economics, which include the addition of a magnetite recovery circuit to produce a high-grade magnetite concentrate, as well as a gravity pre-concentration stage to enhance gold recoveries. Both initiatives offer potential to further increase byproduct revenue, and we are encouraged by the initial results we are seeing. Getting back to what differentiates Ero, we have clearly outlined a great long-term growth project in Furnas, and we are thrilled to be advancing it towards a construction decision over the coming years. Perhaps most importantly, the capital required to advance Furnas to that point is expected to remain relatively modest as we continue to advance technical studies, drilling, and permitting work streams. We will also continue pursuing opportunities we see to further strengthen economics, which include the addition of a magnetite recovery circuit to produce a high-grade magnetite concentrate, as well as a gravity pre-concentration stage to enhance gold recoveries. we will also continue pursuing opportunities we see to further strengthen economics which include the addition of a magnetite recovery circuit to produce a high-grade magnetite concentrate as well as a gravity pre-concentration stage to enhance gold recoveries Both initiatives offer potential to further increase byproduct revenue, and we are encouraged by the initial results we are seeing. both initiatives offer potential to further increase byproduct revenue and we are encouraged by the initial results we are seeing Getting back to what differentiates Ero, we have clearly outlined a great long-term growth project in Furnas, and we are thrilled to be advancing it towards a construction decision over the coming years. getting back to what differentiates ero we have clearly outlined a great long-term growth project in furnas and we are thrilled to be advancing it towards a construction decision over the coming years Perhaps most importantly, the capital required to advance Furnas to that point is expected to remain relatively modest as we continue to advance technical studies, drilling, and permitting work streams. perhaps most importantly the capital required to advance furnas to that point is expected to remain relatively modest as we continue to advance technical studies drilling and permitting work streams At the same time, capital spending across our existing operations is projected to decline as we transition out of a multi-year investment phase that included the construction of Tucumã and major investments at Caraíba over the past several years. These investments are either complete or, in the case of our new shaft project at Caraíba, are past peak capital spend. As a result, Ero is exiting a major investment cycle with an exceptional long-term growth asset, increasing cash generation capacity, declining consolidated capital requirements, and three operating mines with the right mix of metals at exactly the right time in the commodity price cycle. When I look across the broader sector, many companies, including most of our peers, are jumping into major project builds within the next year. We like this dynamic. At the same time, capital spending across our existing operations is projected to decline as we transition out of a multi-year investment phase that included the construction of Tucumã and major investments at Caraíba over the past several years. at the same time capital spending across our existing operations is projected to decline as we transition out of a multi-year investment phase that included the construction of tucumã and major investments at caraíba over the past several years These investments are either complete or, in the case of our new shaft project at Caraíba, are past peak capital spend. these investments are either complete or in the case of our new shaft project at caraíba are past peak capital spend As a result, Ero is exiting a major investment cycle with an exceptional long-term growth asset, increasing cash generation capacity, declining consolidated capital requirements, and three operating mines with the right mix of metals at exactly the right time in the commodity price cycle. as a result ero is exiting a major investment cycle with an exceptional long-term growth asset increasing cash generation capacity declining consolidated capital requirements and three operating mines with the right mix of metals at exactly the right time in the commodity price cycle When I look across the broader sector, many companies, including most of our peers, are jumping into major project builds within the next year. when i look across the broader sector many companies including most of our peers are jumping into major project builds within the next year We like this dynamic. we like this dynamic Switching gears slightly, I do want to touch on our 2025 results and 2026 guidance. I would start by recognizing the resilience and dedication of our teams that work through a number of challenges to deliver meaningful improvements across the business as the year progressed. These efforts resulted in sequential quarters of improving operational performance, the unlocking of a major new additional value driver for our business at Xavantina. Starting with Caraíba, Q4 represented our strongest operating quarter of the year. Mill throughput reached nearly 1.2 million tons, up 18% compared to Q3 and an all-time record for the operation. This drove copper production 15% higher quarter-on-quarter and contributed to C1 cash costs of $2.27 per pound. At Tucumã, copper production increased more than 22% quarter-on-quarter, representing another record for the operation. Switching gears slightly, I do want to touch on our 2025 results and 2026 guidance. switching gears slightly i do want to touch on our 2025 results and 2026 guidance I would start by recognizing the resilience and dedication of our teams that work through a number of challenges to deliver meaningful improvements across the business as the year progressed. These efforts resulted in sequential quarters of improving operational performance, the unlocking of a major new additional value driver for our business at Xavantina. i would start by recognizing the resilience and dedication of our teams that work through a number of challenges to deliver meaningful improvements across the business as the year progressed. these efforts resulted in sequential quarters of improving operational performance the unlocking of a major new additional value driver for our business at xavantina Starting with Caraíba, Q4 represented our strongest operating quarter of the year. starting with caraíba q4 represented our strongest operating quarter of the year Mill throughput reached nearly 1.2 million tons, up 18% compared to Q3 and an all-time record for the operation. mill throughput reached nearly 1.2 million tons up 18% compared to q3 and an all-time record for the operation This drove copper production 15% higher quarter-on-quarter and contributed to C1 cash costs of $2.27 per pound. this drove copper production 15% higher quarter-on-quarter and contributed to c1 cash costs of $2.27 per pound At Tucumã, copper production increased more than 22% quarter-on-quarter, representing another record for the operation. at tucumã copper production increased more than 22% quarter-on-quarter representing another record for the operation Higher process grades helped offset an extended period of unplanned downtime in December, driven by a pull forward of Q1 maintenance for an early mill liner replacement. This pull forward was due to an OEM wear part quality issue that impacted multiple operations in the region, including ours. C1 cash costs in Q4 were $1.75 per pound, which I would note approximately $0.10 of this was attributable to expensing the unamortized portion of the liners. Turning to Xavantina, production increased 53% quarter-on-quarter, driven by higher grades and improved throughput as we began to see the benefits of our efforts transition the mine to mechanized mining. In addition, our gold concentrate program resulted in an incremental 15,000 ounces of gold in Q4. Higher process grades helped offset an extended period of unplanned downtime in December, driven by a pull forward of Q1 maintenance for an early mill liner replacement. higher process grades helped offset an extended period of unplanned downtime in december driven by a pull forward of q1 maintenance for an early mill liner replacement This pull forward was due to an OEM wear part quality issue that impacted multiple operations in the region, including ours. this pull forward was due to an oem wear part quality issue that impacted multiple operations in the region including ours C1 cash costs in Q4 were $1.75 per pound, which I would note approximately $0.10 of this was attributable to expensing the unamortized portion of the liners. c1 cash costs in q4 were $1.75 per pound which i would note approximately $0.10 of this was attributable to expensing the unamortized portion of the liners Turning to Xavantina, production increased 53% quarter-on-quarter, driven by higher grades and improved throughput as we began to see the benefits of our efforts transition the mine to mechanized mining. turning to xavantina production increased 53% quarter-on-quarter driven by higher grades and improved throughput as we began to see the benefits of our efforts transition the mine to mechanized mining In addition, our gold concentrate program resulted in an incremental 15,000 ounces of gold in Q4. in addition our gold concentrate program resulted in an incremental 15,000 ounces of gold in q4 Total gold from Xavantina, including mine production and concentrate shipments, was nearly 20,000 ounces in a quarter and over 50,000 ounces for the full year. Behind these numbers, what makes 2025 one of our best on record, in my opinion, is that our operational teams deliver these results while achieving one of our best years ever in terms of consolidated safety performance. Whatever might be said about 2025, nothing matters to me more than this metric. As I look ahead to 2026, our guidance assumes the operational performance gains we achieved in the fourth quarter are effectively sustained through the year. While we continue to work on opportunities to further improve performance across the business, especially in the second half of this year at Tucumã, these are not reflected in our guidance. Total gold from Xavantina, including mine production and concentrate shipments, was nearly 20,000 ounces in a quarter and over 50,000 ounces for the full year. total gold from xavantina including mine production and concentrate shipments was nearly 20,000 ounces in a quarter and over 50,000 ounces for the full year Behind these numbers, what makes 2025 one of our best on record, in my opinion, is that our operational teams deliver these results while achieving one of our best years ever in terms of consolidated safety performance. behind these numbers what makes 2025 one of our best on record in my opinion is that our operational teams deliver these results while achieving one of our best years ever in terms of consolidated safety performance Whatever might be said about 2025, nothing matters to me more than this metric. whatever might be said about 2025 nothing matters to me more than this metric As I look ahead to 2026, our guidance assumes the operational performance gains we achieved in the fourth quarter are effectively sustained through the year. as i look ahead to 2026 our guidance assumes the operational performance gains we achieved in the fourth quarter are effectively sustained through the year While we continue to work on opportunities to further improve performance across the business, especially in the second half of this year at Tucumã, these are not reflected in our guidance. while we continue to work on opportunities to further improve performance across the business especially in the second half of this year at tucumã these are not reflected in our guidance At Tucumã, we are well advanced on adding additional tailings filtration equipment this year to unlock additional throughput capacity for this operation. We have equipment being manufactured right now and if all goes according to plan, we would expect this to benefit the operation in the fourth quarter. As I mentioned, the potential benefits here, as well as the associated capital investment, have not been reflected in our 2026 guidance. This was a deliberate decision for three reasons. First, getting to steady state was important for us this year. Second, there is a lot of daylight between now and the fourth quarter. Perhaps most important, in the current metal price environment, we expect the payback on this investment to be one to two quarters. At Tucumã, we are well advanced on adding additional tailings filtration equipment this year to unlock additional throughput capacity for this operation. at tucumã we are well advanced on adding additional tailings filtration equipment this year to unlock additional throughput capacity for this operation We have equipment being manufactured right now and if all goes according to plan, we would expect this to benefit the operation in the fourth quarter. we have equipment being manufactured right now and if all goes according to plan we would expect this to benefit the operation in the fourth quarter As I mentioned, the potential benefits here, as well as the associated capital investment, have not been reflected in our 2026 guidance. as i mentioned the potential benefits here as well as the associated capital investment have not been reflected in our 2026 guidance This was a deliberate decision for three reasons. this was a deliberate decision for three reasons First, getting to steady state was important for us this year. first getting to steady state was important for us this year Second, there is a lot of daylight between now and the fourth quarter. second there is a lot of daylight between now and the fourth quarter Perhaps most important, in the current metal price environment, we expect the payback on this investment to be one to two quarters. perhaps most important in the current metal price environment we expect the payback on this investment to be one to two quarters While it is a very important objective and we expect to complete it this year, it will not change our strategy or capital allocation decisions in 2026. At Xavantina, we are investing in our ventilation circuit, mine development and equipment to increase mine capacity and output. This is a low hanging long-term value driver inherent to our business when we look at the available milling capacity we have there. Last but not least, at Caraíba, we are advancing the new shaft project for the Pilar Mine and are pursuing several operational improvement initiatives we hope to discuss later this year. To touch briefly on cadence for 2026, we're guiding consolidated copper production of between 67,500 to 77,500 tons. This reflects year-over-year growth, driven primarily by higher sustained plant throughput at Caraíba and Tucumã, partially offset by lower planned grades. While it is a very important objective and we expect to complete it this year, it will not change our strategy or capital allocation decisions in 2026. while it is a very important objective and we expect to complete it this year it will not change our strategy or capital allocation decisions in 2026 At Xavantina, we are investing in our ventilation circuit, mine development and equipment to increase mine capacity and output. at xavantina we are investing in our ventilation circuit mine development and equipment to increase mine capacity and output This is a low hanging long-term value driver inherent to our business when we look at the available milling capacity we have there. this is a low hanging long-term value driver inherent to our business when we look at the available milling capacity we have there Last but not least, at Caraíba, we are advancing the new shaft project for the Pilar Mine and are pursuing several operational improvement initiatives we hope to discuss later this year. last but not least at caraíba we are advancing the new shaft project for the pilar mine and are pursuing several operational improvement initiatives we hope to discuss later this year To touch briefly on cadence for 2026, we're guiding consolidated copper production of between 67,500 to 77,500 tons. to touch briefly on cadence for 2026 we're guiding consolidated copper production of between 67,500 to 77,500 tons This reflects year-over-year growth, driven primarily by higher sustained plant throughput at Caraíba and Tucumã, partially offset by lower planned grades. this reflects year-over-year growth driven primarily by higher sustained plant throughput at caraíba and tucumã partially offset by lower planned grades Copper production is expected to be weighted towards the second half of the year due to mine sequencing and a modest increase in throughput throughout the year. At Xavantina in 2026, we are guiding mine production of 40,000-50,000 ounces. We expect Q1 to be the softest production quarter of the year. This cadence reflects mine sequencing as well as a tie-in of a major ventilation upgrade during the quarter, including the completion of a new raise bore to surface. Production is expected to be weighted towards the second half of the year as a result. Gold concentrate sales are expected to continue throughout the year. We expect that to be relatively modest in Q1 due to the rainy season. For some additional context there, you'd be hard-pressed to find a more simple operation in our portfolio. There are only three steps. Copper production is expected to be weighted towards the second half of the year due to mine sequencing and a modest increase in throughput throughout the year. copper production is expected to be weighted towards the second half of the year due to mine sequencing and a modest increase in throughput throughout the year At Xavantina in 2026, we are guiding mine production of 40,000-50,000 ounces. at xavantina in 2026 we are guiding mine production of 40,000-50,000 ounces We expect Q1 to be the softest production quarter of the year. we expect q1 to be the softest production quarter of the year This cadence reflects mine sequencing as well as a tie-in of a major ventilation upgrade during the quarter, including the completion of a new raise bore to surface. this cadence reflects mine sequencing as well as a tie-in of a major ventilation upgrade during the quarter including the completion of a new raise bore to surface Production is expected to be weighted towards the second half of the year as a result. production is expected to be weighted towards the second half of the year as a result Gold concentrate sales are expected to continue throughout the year. gold concentrate sales are expected to continue throughout the year We expect that to be relatively modest in Q1 due to the rainy season. we expect that to be relatively modest in q1 due to the rainy season For some additional context there, you'd be hard-pressed to find a more simple operation in our portfolio. for some additional context there you'd be hard-pressed to find a more simple operation in our portfolio There are only three steps. there are only three steps We remove the material from stockpile, we then spread it out in the sun to dry, then transport the material for shipment. As you can likely imagine, step two in that process is far less productive during the rainy season. With that, I will turn the call over to Wayne, who will walk through our financial results in more detail. We remove the material from stockpile, we then spread it out in the sun to dry, then transport the material for shipment. we remove the material from stockpile we then spread it out in the sun to dry then transport the material for shipment As you can likely imagine, step two in that process is far less productive during the rainy season. as you can likely imagine step two in that process is far less productive during the rainy season With that, I will turn the call over to Wayne, who will walk through our financial results in more detail. with that i will turn the call over to wayne who will walk through our financial results in more detail

Speaker 12: Thank you, Makko. Our fourth quarter financial results were driven by record copper concentrate sales, a 59% increase in gold doré sales, the commencement of gold concentrate sales, and stronger copper and gold prices during the period. All of these factors drove quarterly revenue to a record $320 million or $143 million higher compared to the third quarter. Consolidated C1 cash costs per pound were approximately 1.5% higher quarter-on-quarter, with the increase predominantly coming from Tucumã, where we experienced higher transportation demurrage and port costs in the quarter related to the COP30 activities in Pará State. Thank you, Makko. thank you makko Our fourth quarter financial results were driven by record copper concentrate sales, a 59% increase in gold doré sales, the commencement of gold concentrate sales, and stronger copper and gold prices during the period. our fourth quarter financial results were driven by record copper concentrate sales a 59% increase in gold doré sales the commencement of gold concentrate sales and stronger copper and gold prices during the period All of these factors drove quarterly revenue to a record $320 million or $143 million higher compared to the third quarter. all of these factors drove quarterly revenue to a record $320 million or $143 million higher compared to the third quarter Consolidated C1 cash costs per pound were approximately 1.5% higher quarter-on-quarter, with the increase predominantly coming from Tucumã, where we experienced higher transportation demurrage and port costs in the quarter related to the COP30 activities in Pará State. consolidated c1 cash costs per pound were approximately 1.5% higher quarter-on-quarter with the increase predominantly coming from tucumã where we experienced higher transportation demurrage and port costs in the quarter related to the cop30 activities in pará state This had an impact of approximately $0.10 per pound on our Tucumã C1 costs, which were also impacted by the accelerated amortization of the mill liner Makko referenced earlier. Gold C1 cash costs per ounce declined by approximately 29% from the third quarter. As a result, the company delivered stronger operating margins, with adjusted EBITDA growing to $186.7 million in the fourth quarter and $409.7 million for the full year. Adjusted net income attributable to owners of the company was $108.4 million for the quarter and $220.4 million for the year, or $1.04 and $2.12 per share, respectively. This had an impact of approximately $0.10 per pound on our Tucumã C1 costs, which were also impacted by the accelerated amortization of the mill liner Makko referenced earlier. Gold C1 cash costs per ounce declined by approximately 29% from the third quarter. this had an impact of approximately $0.10 per pound on our tucumã c1 costs which were also impacted by the accelerated amortization of the mill liner makko referenced earlier. gold c1 cash costs per ounce declined by approximately 29% from the third quarter As a result, the company delivered stronger operating margins, with adjusted EBITDA growing to $186.7 million in the fourth quarter and $409.7 million for the full year. as a result the company delivered stronger operating margins with adjusted ebitda growing to $186.7 million in the fourth quarter and $409.7 million for the full year Adjusted net income attributable to owners of the company was $108.4 million for the quarter and $220.4 million for the year, or $1.04 and $2.12 per share, respectively. adjusted net income attributable to owners of the company was $108.4 million for the quarter and $220.4 million for the year or $1.04 and $2.12 per share respectively Our liquidity position at quarter end stood at $150.4 million, including $105.4 million in cash and cash equivalents, and $45 million of undrawn availability under our revolving credit facility. We continued to deleverage our balance sheet, with net debt declining to approximately $502 million at year-end from $545 million at the end of the third quarter. Combined with significantly higher 12-month trailing EBITDA, this resulted in a material improvement in our net debt leverage ratio, which decreased to 1.2x at the end of Q4 from 1.9x in Q3 and 2.6x at the end of 2024. Our liquidity position at quarter end stood at $150.4 million, including $105.4 million in cash and cash equivalents, and $45 million of undrawn availability under our revolving credit facility. our liquidity position at quarter end stood at $150.4 million including $105.4 million in cash and cash equivalents and $45 million of undrawn availability under our revolving credit facility We continued to deleverage our balance sheet, with net debt declining to approximately $502 million at year-end from $545 million at the end of the third quarter. we continued to deleverage our balance sheet with net debt declining to approximately $502 million at year-end from $545 million at the end of the third quarter Combined with significantly higher 12-month trailing EBITDA, this resulted in a material improvement in our net debt leverage ratio, which decreased to 1.2 x at the end of Q4 from 1.9 x in Q3 and 2.6 x at the end of 2024. combined with significantly higher 12-month trailing ebitda this resulted in a material improvement in our net debt leverage ratio which decreased to 1.2 x at the end of q4 from 1.9 x in q3 and 2.6 x at the end of 2024 With copper and gold production expected to grow in 2026, as well as the additional cash flow from our Xavantina's gold concentrate sales, we intend for debt reduction and return to shareholders to be key elements of our midterm capital allocation strategy. At December 31st, we had $155 million drawn on our revolver, which we intend to pay down fully in 2026. We would like to maintain a strong cash position on the balance sheet and target a net debt to EBITDA ratio below 1x ahead of commencing a return of capital program. I'll now pass the call back to Makko for some closing remarks. With copper and gold production expected to grow in 2026, as well as the additional cash flow from our Xavantina's gold concentrate sales, we intend for debt reduction and return to shareholders to be key elements of our midterm capital allocation strategy. with copper and gold production expected to grow in 2026 as well as the additional cash flow from our xavantina's gold concentrate sales we intend for debt reduction and return to shareholders to be key elements of our midterm capital allocation strategy At December 31st, we had $155 million drawn on our revolver, which we intend to pay down fully in 2026. at december 31st we had $155 million drawn on our revolver which we intend to pay down fully in 2026 We would like to maintain a strong cash position on the balance sheet and target a net debt to EBITDA ratio below 1 x ahead of commencing a return of capital program. we would like to maintain a strong cash position on the balance sheet and target a net debt to ebitda ratio below 1 x ahead of commencing a return of capital program I'll now pass the call back to Makko for some closing remarks. i'll now pass the call back to makko for some closing remarks

Speaker 8: Thank you, Wayne. Before we move into the Q&A session, let me recap the three key elements of Ero's value proposition. First, over the past decade, Ero has consistently unlocked value that wasn't fully recognized, often through work supported by strong partners. Clear examples include our gold concentrate program and our broader partnership with Royal Gold at Xavantina, and more recently, the advancement of the Furnas project with our partner, Vale Base Metals. Second, we've taken a disciplined countercyclical approach to capital allocation, investing in building projects during periods when development activity across the sector was limited. That strategy has positioned Ero favorably relative to our peer group that are now preparing to enter major capital investment phases. Third, Furnas represents a high quality, long life asset being advanced with a top-tier partner, and we view it as a compelling cornerstone for Ero's long-term growth. Thank you, Wayne. thank you wayne Before we move into the Q&A session, let me recap the three key elements of Ero's value proposition. before we move into the q&a session let me recap the three key elements of ero's value proposition First, over the past decade, Ero has consistently unlocked value that wasn't fully recognized, often through work supported by strong partners. first over the past decade ero has consistently unlocked value that wasn't fully recognized often through work supported by strong partners Clear examples include our gold concentrate program and our broader partnership with Royal Gold at Xavantina, and more recently, the advancement of the Furnas project with our partner, Vale Base Metals. clear examples include our gold concentrate program and our broader partnership with royal gold at xavantina and more recently the advancement of the furnas project with our partner vale base metals Second, we've taken a disciplined countercyclical approach to capital allocation, investing in building projects during periods when development activity across the sector was limited. second we've taken a disciplined countercyclical approach to capital allocation investing in building projects during periods when development activity across the sector was limited That strategy has positioned Ero favorably relative to our peer group that are now preparing to enter major capital investment phases. that strategy has positioned ero favorably relative to our peer group that are now preparing to enter major capital investment phases Third, Furnas represents a high quality, long life asset being advanced with a top-tier partner, and we view it as a compelling cornerstone for Ero's long-term growth. third furnas represents a high quality long life asset being advanced with a top-tier partner and we view it as a compelling cornerstone for ero's long-term growth With that, I will now turn the call back to the operator to open the line for questions. With that, I will now turn the call back to the operator to open the line for questions. with that i will now turn the call back to the operator to open the line for questions

Speaker 9: Thank you. To join the question queue, you may press Star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press Star then two. First question comes from Orest Wowkodaw with Scotiabank. Please go ahead. Thank you. thank you To join the question queue, you may press Star then one on your telephone keypad. to join the question queue you may press star then one on your telephone keypad You will hear a tone acknowledging your request. you will hear a tone acknowledging your request If you're using a speakerphone, please pick up your handset before pressing any keys. if you're using a speakerphone please pick up your handset before pressing any keys To withdraw your question, please press Star then two. to withdraw your question please press star then two First question comes from Orest Wowkodaw with Scotiabank. first question comes from orest wowkodaw with scotiabank Please go ahead. please go ahead

Speaker 10: Hi, good morning. A question around the gold concentrate stockpiles at Xavantina. You haven't issued any guidance for what those volumes could be this year, but with the 15,000 ounces you sold in the fourth quarter, is that a good guide for shipments in periods or quarters where there's no rainy season? Hi, good morning. hi good morning A question around the gold concentrate stockpiles at Xavantina. a question around the gold concentrate stockpiles at xavantina You haven't issued any guidance for what those volumes could be this year, but with the 15,000 ounces you sold in the fourth quarter, is that a good guide for shipments in periods or quarters where there's no rainy season? you haven't issued any guidance for what those volumes could be this year but with the 15,000 ounces you sold in the fourth quarter is that a good guide for shipments in periods or quarters where there's no rainy season

Speaker 8: Thank you for the question, Orest. Obviously, a bit of a tricky situation. Obviously, we came out with initial resource on the 20% of the volume that we're able to sample. It's difficult for us, as you can imagine, to give exact guidance. We certainly, you know, expect strong volumes in shipment. I would point to what we achieved in Q4. That was at the tail end of the rainy season. If you, just for context, the rainy season in Mato Grosso typically starts in November and goes through March, April, depending on the year. You know, part of those sales did occur when the rainy season was started. We're obviously advancing several initiatives on site to increase volumes from there. Thank you for the question, Orest. thank you for the question orest Obviously, a bit of a tricky situation. obviously a bit of a tricky situation Obviously, we came out with initial resource on the 20% of the volume that we're able to sample. obviously we came out with initial resource on the 20% of the volume that we're able to sample It's difficult for us, as you can imagine, to give exact guidance. it's difficult for us as you can imagine to give exact guidance We certainly, you know, expect strong volumes in shipment. we certainly you know expect strong volumes in shipment I would point to what we achieved in Q4. i would point to what we achieved in q4 That was at the tail end of the rainy season. that was at the tail end of the rainy season If you, just for context, the rainy season in Mato Grosso typically starts in November and goes through March, April, depending on the year. if you just for context the rainy season in mato grosso typically starts in november and goes through march april depending on the year You know, part of those sales did occur when the rainy season was started. you know part of those sales did occur when the rainy season was started We're obviously advancing several initiatives on site to increase volumes from there. we're obviously advancing several initiatives on site to increase volumes from there As I said on the outset of the call, you know, Q1 is the heart of the rainy season. This has been an exceptionally rainy year in Brazil, as you are probably aware from some of the news flow and flooding that's happened throughout the country. Therefore, we expect, you know, very modest sales in Q1, then ramp up pretty aggressively Q2, Q3. As I said on the outset of the call, you know, Q1 is the heart of the rainy season. as i said on the outset of the call you know q1 is the heart of the rainy season This has been an exceptionally rainy year in Brazil, as you are probably aware from some of the news flow and flooding that's happened throughout the country. this has been an exceptionally rainy year in brazil as you are probably aware from some of the news flow and flooding that's happened throughout the country Therefore, we expect, you know, very modest sales in Q1, then ramp up pretty aggressively Q2, Q3. therefore we expect you know very modest sales in q1 then ramp up pretty aggressively q2 q3

Speaker 10: In terms of the stockpile itself, have you seen anything that may suggest that the grade for the other 80% of the stockpile would be materially different than what you have sampled? In terms of the stockpile itself, have you seen anything that may suggest that the grade for the other 80% of the stockpile would be materially different than what you have sampled? in terms of the stockpile itself have you seen anything that may suggest that the grade for the other 80% of the stockpile would be materially different than what you have sampled

Speaker 8: Difficult to say, Orest. Obviously, as we go in the future, we don't have samples there, but to date, nothing that suggests otherwise. Difficult to say, Orest. difficult to say orest Obviously, as we go in the future, we don't have samples there, but to date, nothing that suggests otherwise. obviously as we go in the future we don't have samples there but to date nothing that suggests otherwise

Speaker 10: Okay. Thanks very much. Okay. okay Thanks very much. thanks very much

Speaker 9: The next question comes from Emerson Vieira with Goldman Sachs. Please go ahead. The next question comes from Emerson Vieira with Goldman Sachs. the next question comes from emerson vieira with goldman sachs Please go ahead. please go ahead

Speaker 4: Hello, good morning. Makko, Wowkodaw. Thanks for taking my questions. I'd like to listen a little bit more on Tucumã's filter press issue. Can you provide us an update here? Have you guys already ordered the mobile filter? Hello, good morning. hello good morning Makko, Wowkodaw. makko wowkodaw Thanks for taking my questions. thanks for taking my questions I'd like to listen a little bit more on Tucumã's filter press issue. i'd like to listen a little bit more on tucumã's filter press issue Can you provide us an update here? can you provide us an update here Have you guys already ordered the mobile filter? have you guys already ordered the mobile filter That it is expected to increase the future availability and any update on time could be very helpful. Also, how long should be the maintenance in the first quarter in order to check that with the new line's replacement? Just a third one on Tucumã. Can you please reconcile the production guidance for 2026? I mean, what are you guys expecting in terms of grades and surplus ramp-up throughout the year? Those are my questions. Thank you. That it is expected to increase the future availability and any update on time could be very helpful. that it is expected to increase the future availability and any update on time could be very helpful Also, how long should be the maintenance in the first quarter in order to check that with the new line's replacement? also how long should be the maintenance in the first quarter in order to check that with the new line's replacement Just a third one on Tucumã. just a third one on tucumã Can you please reconcile the production guidance for 2026? can you please reconcile the production guidance for 2026 I mean, what are you guys expecting in terms of grades and surplus ramp-up throughout the year? i mean what are you guys expecting in terms of grades and surplus ramp-up throughout the year Those are my questions. those are my questions Thank you. thank you

Speaker 8: Thank you. Quite a bit to unpack there. If I miss something, I apologize. Just ask it again. Thanks for the questions. First on the filter press capacity, yes, that equipment has been ordered. It's being manufactured, as I said, in the prepared remarks. That is a very important objective of ours. Given what we've outlined, it's not included in our guidance, first and foremost. We expect the payback on that investment to be very fast in this environment, and we expect it to be operational in Q4. As of both the quantum of the investment there, as well as the current prevailing copper price. Thank you. thank you Quite a bit to unpack there. quite a bit to unpack there If I miss something, I apologize. if i miss something i apologize Just ask it again. just ask it again Thanks for the questions. thanks for the questions First on the filter press capacity, yes, that equipment has been ordered. first on the filter press capacity yes that equipment has been ordered It's being manufactured, as I said, in the prepared remarks. it's being manufactured as i said in the prepared remarks That is a very important objective of ours. that is a very important objective of ours Given what we've outlined, it's not included in our guidance, first and foremost. given what we've outlined it's not included in our guidance first and foremost We expect the payback on that investment to be very fast in this environment, and we expect it to be operational in Q4. we expect the payback on that investment to be very fast in this environment and we expect it to be operational in q4 As of both the quantum of the investment there, as well as the current prevailing copper price. as of both the quantum of the investment there as well as the current prevailing copper price That investment, and completion of that project has very little influence on how we think about our business for 2026. As I said, it was not included in our guidance. That's first and foremost on that point. The second part of your question was related to the maintenance that happened related to the mill lining. To be clear there, we expected that maintenance to occur in Q1. We had to pull that into Q4. It's already been completed effectively for the year. That was approximately a 10-day period of downtime that happened in Q4 and impacted our- That investment, and completion of that project has very little influence on how we think about our business for 2026. that investment and completion of that project has very little influence on how we think about our business for 2026 As I said, it was not included in our guidance. as i said it was not included in our guidance That's first and foremost on that point. that's first and foremost on that point The second part of your question was related to the maintenance that happened related to the mill lining. the second part of your question was related to the maintenance that happened related to the mill lining To be clear there, we expected that maintenance to occur in Q1. to be clear there we expected that maintenance to occur in q1 We had to pull that into Q4. we had to pull that into q4 It's already been completed effectively for the year. it's already been completed effectively for the year That was approximately a 10-day period of downtime that happened in Q4 and impacted our- that was approximately a 10-day period of downtime that happened in q4 and impacted our-

Speaker 4: All right. All right. all right

Speaker 8: Our Q4 results. Our Q4 results. our q4 results

Speaker 4: All right, no, no more maintenance downtime for Q. That's really sad. All right, no, no more maintenance downtime for Q. all right no no more maintenance downtime for q That's really sad. that's really sad

Speaker 8: Well, we have planned downtime every month. That is still part of our team, but we have no extended period of downtime that we're planning in Q1 of this year. Well, we have planned downtime every month. well we have planned downtime every month That is still part of our team, but we have no extended period of downtime that we're planning in Q1 of this year. that is still part of our team but we have no extended period of downtime that we're planning in q1 of this year

Speaker 4: All right. Thank you. Then the last one, on the reconciliation on grade and throughput, comparing to the guidance, please. All right. all right Thank you. thank you Then the last one, on the reconciliation on grade and throughput, comparing to the guidance, please. then the last one on the reconciliation on grade and throughput comparing to the guidance please

Speaker 8: Yeah. Great, great question. Thank you. You know, when we obviously came out, had a strong result last year in terms of grade, we do expect grades to come down. We are currently looking at, you know, throughout our guidance, just below 3 million tons of processed throughput. I would say somewhere between 1.3% and 1.4% copper for the full year. Yeah. yeah Great, great question. great great question Thank you. thank you You know, when we obviously came out, had a strong result last year in terms of grade, we do expect grades to come down. you know when we obviously came out had a strong result last year in terms of grade we do expect grades to come down We are currently looking at, you know, throughout our guidance, just below 3 million tons of processed throughput. we are currently looking at you know throughout our guidance just below 3 million tons of processed throughput I would say somewhere between 1.3% and 1.4% copper for the full year. i would say somewhere between 1.3% and 1.4% copper for the full year

Speaker 4: All right. Thank you. All right. all right Thank you. thank you

Speaker 9: The next question comes from Guilherme Rosito with Bank of America. Please go ahead. The next question comes from Guilherme Rosito with Bank of America. the next question comes from guilherme rosito with bank of america Please go ahead. please go ahead

Speaker 7: Hi. Hello, everyone. Thank you for taking my questions. I have two. The first is on Tucumã. I wanted to dive a bit deeper into the C1 cash cost guidance. I just wanted to understand how we could explain the cost increasing throughout the year versus what we're earning for QF. I appreciate that there is lower grade and you're also not including the future, so with the future, there could be a change to guidance. I'm just trying to understand, as you have more fixed cost evolution, as you increase processing and also TCRCs are higher than what you guys are currently doing at Caraíba. I'm just trying to understand all these moving parts and what's driving costs higher this year. Hi. hi Hello, everyone. hello everyone Thank you for taking my questions. thank you for taking my questions I have two. i have two The first is on Tucumã. the first is on tucumã I wanted to dive a bit deeper into the C1 cash cost guidance. i wanted to dive a bit deeper into the c1 cash cost guidance I just wanted to understand how we could explain the cost increasing throughout the year versus what we're earning for QF. i just wanted to understand how we could explain the cost increasing throughout the year versus what we're earning for qf I appreciate that there is lower grade and you're also not including the future, so with the future, there could be a change to guidance. i appreciate that there is lower grade and you're also not including the future so with the future there could be a change to guidance I'm just trying to understand, as you have more fixed cost evolution, as you increase processing and also TCRCs are higher than what you guys are currently doing at Caraíba. i'm just trying to understand as you have more fixed cost evolution as you increase processing and also tcrcs are higher than what you guys are currently doing at caraíba I'm just trying to understand all these moving parts and what's driving costs higher this year. i'm just trying to understand all these moving parts and what's driving costs higher this year Second, on Xavantina, just wanted to explore a bit, if you could talk about the benefits from the mechanization investments you guys did last year. How should we expect that to translate into the results this year? What do you guys expect in terms of grades throughout the year? How they should fluctuate? What sort of volatility we should see throughout the year? That's it. Thank you. Second, on Xavantina, just wanted to explore a bit, if you could talk about the benefits from the mechanization investments you guys did last year. second on xavantina just wanted to explore a bit if you could talk about the benefits from the mechanization investments you guys did last year How should we expect that to translate into the results this year? how should we expect that to translate into the results this year What do you guys expect in terms of grades throughout the year? what do you guys expect in terms of grades throughout the year How they should fluctuate? how they should fluctuate What sort of volatility we should see throughout the year? what sort of volatility we should see throughout the year That's it. that's it Thank you. thank you

Speaker 8: Thank you for the questions. Yeah, starting with Tucumã. Really, really good question there. Main drivers for guidance, as you mentioned, is grade. Obviously we're coming off of a year of significantly higher grades. That has a direct influence on our Q1 or our C1 costs. We also are putting in additional maintenance efforts there to stabilize the operations. Those are. I would refer to those additional costs as non-structural. On the TCRC and shipment side, you know, we've been getting some questions about differences from Caraíba to Tucumã. I would point to two major influencing factors there. Number one, the grade of the concentrate is lower, so therefore, there's more costs associated on a per pound copper basis, number one. Thank you for the questions. thank you for the questions Yeah, starting with Tucumã. yeah starting with tucumã Really, really good question there. really really good question there Main drivers for guidance, as you mentioned, is grade. main drivers for guidance as you mentioned is grade Obviously we're coming off of a year of significantly higher grades. obviously we're coming off of a year of significantly higher grades That has a direct influence on our Q1 or our C1 costs. that has a direct influence on our q1 or our c1 costs We also are putting in additional maintenance efforts there to stabilize the operations. we also are putting in additional maintenance efforts there to stabilize the operations Those are. those are I would refer to those additional costs as non-structural. i would refer to those additional costs as non-structural On the TCRC and shipment side, you know, we've been getting some questions about differences from Caraíba to Tucumã. on the tcrc and shipment side you know we've been getting some questions about differences from caraíba to tucumã I would point to two major influencing factors there. i would point to two major influencing factors there Number one, the grade of the concentrate is lower, so therefore, there's more costs associated on a per pound copper basis, number one. number one the grade of the concentrate is lower so therefore there's more costs associated on a per pound copper basis number one Number two, we have quite a bit further to transport that material. When you take those two together, we do see higher TCRCs. We're seeing a market now in the TCRC across our business that looks favorable relative to where we expected it to be for the budget. That said, those are mostly longer term contracts that we have in place, so we are not getting the full benefit of the benchmark pricing. More fundamentally, as you'll probably appreciate more, better than most people, we are seeing a very strong BRL headwind across our business. That's true across all of our operations, and that's been reflected in our guidance. I would say big moving factors there on Tucumã cost drivers would be, the grade that we're mining, the additional maintenance costs that we're incurring. Number two, we have quite a bit further to transport that material. number two we have quite a bit further to transport that material When you take those two together, we do see higher TCRCs. when you take those two together we do see higher tcrcs We're seeing a market now in the TCRC across our business that looks favorable relative to where we expected it to be for the budget. we're seeing a market now in the tcrc across our business that looks favorable relative to where we expected it to be for the budget That said, those are mostly longer term contracts that we have in place, so we are not getting the full benefit of the benchmark pricing. that said those are mostly longer term contracts that we have in place so we are not getting the full benefit of the benchmark pricing More fundamentally, as you'll probably appreciate more, better than most people, we are seeing a very strong BRL headwind across our business. more fundamentally as you'll probably appreciate more better than most people we are seeing a very strong brl headwind across our business That's true across all of our operations, and that's been reflected in our guidance. that's true across all of our operations and that's been reflected in our guidance I would say big moving factors there on Tucumã cost drivers would be, the grade that we're mining, the additional maintenance costs that we're incurring. i would say big moving factors there on tucumã cost drivers would be the grade that we're mining the additional maintenance costs that we're incurring We do expect to see a benefit in Q4 from those costs. The TCRCs and shipments, related costs in part because the grade of concentrate is lower than Caraíba. Your second question on the benefits of mechanization really points to two things. You know, as you've heard me talk about on a number of calls here over the year, reducing exposure of our workforce is one of the top benefits of that investment, and it was one of the key driving factors in making that investment. Getting our workforce away from the work phase to the maximum extent possible. That's number one. Number two, if you just take a step back and hope to have the opportunity to show you what the team's been doing at Xavantina later this year. We do expect to see a benefit in Q4 from those costs. we do expect to see a benefit in q4 from those costs The TCRCs and shipments, related costs in part because the grade of concentrate is lower than Caraíba. the tcrcs and shipments related costs in part because the grade of concentrate is lower than caraíba Your second question on the benefits of mechanization really points to two things. your second question on the benefits of mechanization really points to two things You know, as you've heard me talk about on a number of calls here over the year, reducing exposure of our workforce is one of the top benefits of that investment, and it was one of the key driving factors in making that investment. you know as you've heard me talk about on a number of calls here over the year reducing exposure of our workforce is one of the top benefits of that investment and it was one of the key driving factors in making that investment Getting our workforce away from the work phase to the maximum extent possible. getting our workforce away from the work phase to the maximum extent possible That's number one. that's number one Number two, if you just take a step back and hope to have the opportunity to show you what the team's been doing at Xavantina later this year. number two if you just take a step back and hope to have the opportunity to show you what the team's been doing at xavantina later this year You know, that mill only operates between, you know, 15 and 20 days per month. That's a function of the asset being mine constraint. As we look ahead to the future, and notwithstanding the cadence of production that we just talked about this year, given the tie in as a ventilation circuit improvements that we're making, we expect over time here to be able to better match mine output with mill capacity. Again, not reflected in our long term guidance, but it's one of the key low hanging value drivers that we see in our business. You know, Gelson and the team here are working diligently, and we hope to be in a position to talk about what that might look like later in the year. You know, that mill only operates between, you know, 15 and 20 days per month. you know that mill only operates between you know 15 and 20 days per month That's a function of the asset being mine constraint. that's a function of the asset being mine constraint As we look ahead to the future, and notwithstanding the cadence of production that we just talked about this year, given the tie in as a ventilation circuit improvements that we're making, we expect over time here to be able to better match mine output with mill capacity. as we look ahead to the future and notwithstanding the cadence of production that we just talked about this year given the tie in as a ventilation circuit improvements that we're making we expect over time here to be able to better match mine output with mill capacity Again, not reflected in our long term guidance, but it's one of the key low hanging value drivers that we see in our business. again not reflected in our long term guidance but it's one of the key low hanging value drivers that we see in our business You know, Gelson and the team here are working diligently, and we hope to be in a position to talk about what that might look like later in the year. you know gelson and the team here are working diligently and we hope to be in a position to talk about what that might look like later in the year

Speaker 7: Super clear, Michael. Thank you. Super clear, Michael. super clear michael Thank you. thank you

Speaker 9: The next question comes from Fahad Tariq with Jefferies. Please go ahead. The next question comes from Fahad Tariq with Jefferies. the next question comes from fahad tariq with jefferies Please go ahead. please go ahead

Speaker 5: Hi. Thanks for taking my questions. There was a comment made earlier on the call about potential capital return once the net debt to EBITDA gets to the targeted levels below one times. Maybe just any additional color on that, what form that would be in timing, et cetera? Hi. hi Thanks for taking my questions. thanks for taking my questions There was a comment made earlier on the call about potential capital return once the net debt to EBITDA gets to the targeted levels below one times. there was a comment made earlier on the call about potential capital return once the net debt to ebitda gets to the targeted levels below one times Maybe just any additional color on that, what form that would be in timing, et cetera? maybe just any additional color on that what form that would be in timing et cetera

Speaker 8: Wayne can piggyback if I missed anything or has anything to add. I would say, really there's three steps here that we see as being critically important to driving that decision and timing. First and foremost, as we mentioned, we want to see our net debt leverage ratio below 1 times. As you can see from our Q4 results, we're given where we were in Q3 to Q4, we're rapidly approaching that metric. Obviously the world is a volatile place, we'll see what happens over the next few quarters. We're pretty close to that metric at 1.2x right now. Secondly, as we mentioned, we want to pay down a revolver. As at year-end, we had $155 million drawn. Wayne can piggyback if I missed anything or has anything to add. wayne can piggyback if i missed anything or has anything to add I would say, really there's three steps here that we see as being critically important to driving that decision and timing. i would say really there's three steps here that we see as being critically important to driving that decision and timing First and foremost, as we mentioned, we want to see our net debt leverage ratio below 1 times. first and foremost as we mentioned we want to see our net debt leverage ratio below 1 times As you can see from our Q4 results, we're given where we were in Q3 to Q4, we're rapidly approaching that metric. as you can see from our q4 results we're given where we were in q3 to q4 we're rapidly approaching that metric Obviously the world is a volatile place, we'll see what happens over the next few quarters. obviously the world is a volatile place we'll see what happens over the next few quarters We're pretty close to that metric at 1.2 x right now. we're pretty close to that metric at 1.2 x right now Secondly, as we mentioned, we want to pay down a revolver. secondly as we mentioned we want to pay down a revolver As at year-end, we had $155 million drawn. as at year-end we had $155 million drawn That's just a logical place to pay down our debt. Again, we are cognizant that paying down debt, including a revolver is a de facto return to shareholders. That's an important component of that strategy. Number three, we're having a lot of discussions with our top shareholders about what that might look like and timing. I would say stay tuned. Let's get through steps oneand 2 before we get too excited about step three. That's just a logical place to pay down our debt. that's just a logical place to pay down our debt Again, we are cognizant that paying down debt, including a revolver is a de facto return to shareholders. again we are cognizant that paying down debt including a revolver is a de facto return to shareholders That's an important component of that strategy. that's an important component of that strategy Number three, we're having a lot of discussions with our top shareholders about what that might look like and timing. number three we're having a lot of discussions with our top shareholders about what that might look like and timing I would say stay tuned. i would say stay tuned Let's get through steps one and 2 before we get too excited about step three. let's get through steps one and 2 before we get too excited about step three

Speaker 5: Sounds good. Then maybe on Furnas, there, you know, the idea of you're entering a period where some of your peers are getting into a build cycle, and Furnas is, I guess, much longer dated. Any opportunity to or any appetite to try to accelerate that? Or is that even possible given, like, where's the stage it's at right now in terms of the earning agreement and what needs to be done? Sounds good. sounds good Then maybe on Furnas, there, you know, the idea of you're entering a period where some of your peers are getting into a build cycle, and Furnas is, I guess, much longer dated. then maybe on furnas there you know the idea of you're entering a period where some of your peers are getting into a build cycle and furnas is i guess much longer dated Any opportunity to or any appetite to try to accelerate that? any opportunity to or any appetite to try to accelerate that Or is that even possible given, like, where's the stage it's at right now in terms of the earning agreement and what needs to be done? or is that even possible given like where's the stage it's at right now in terms of the earning agreement and what needs to be done

Speaker 8: Yeah. We're very excited about Furnas, as you probably heard in our prepared remarks and saw in our webcast materials. The reality is, you know, it's a few years out. We like that positioning. We need to do work to advance through a pre-feasibility study, execute on some of those value drivers that we see as low hanging fruit, to increase the value of the project, increase by-product revenue. Then we still need to do advance several permitting work streams. The reality, I think, is we do have the appetite to advance that project as fast as possible. I would say that we're already doing that. We still expect modest capital spend over the next few years as a result of the acceleration there. Yeah. yeah We're very excited about Furnas, as you probably heard in our prepared remarks and saw in our webcast materials. we're very excited about furnas as you probably heard in our prepared remarks and saw in our webcast materials The reality is, you know, it's a few years out. the reality is you know it's a few years out We like that positioning. we like that positioning We need to do work to advance through a pre-feasibility study, execute on some of those value drivers that we see as low hanging fruit, to increase the value of the project, increase by-product revenue. we need to do work to advance through a pre-feasibility study execute on some of those value drivers that we see as low hanging fruit to increase the value of the project increase by-product revenue Then we still need to do advance several permitting work streams. then we still need to do advance several permitting work streams The reality, I think, is we do have the appetite to advance that project as fast as possible. the reality i think is we do have the appetite to advance that project as fast as possible I would say that we're already doing that. i would say that we're already doing that We still expect modest capital spend over the next few years as a result of the acceleration there. we still expect modest capital spend over the next few years as a result of the acceleration there

Speaker 5: Okay. Great. Thank you. Okay. okay Great. great Thank you. thank you

Speaker 9: The next question comes from Stefan Ioannou with ATB Cormark. Please go ahead. The next question comes from Stefan Ioannou with ATB Cormark. the next question comes from stefan ioannou with atb cormark Please go ahead. please go ahead

Speaker 11: Thanks very much, guys. Just kind of curious back on the gold concentrate sales. I think originally it was suggested that you were anticipating selling down the entire stockpile over, say, 12-18 months. Just given our better understanding of the rainy season and whatnot now, is that an sort of a number we should think is probably going to be stretched out over a bit more time? Thanks very much, guys. thanks very much guys Just kind of curious back on the gold concentrate sales. just kind of curious back on the gold concentrate sales I think originally it was suggested that you were anticipating selling down the entire stockpile over, say, 12-18 months. i think originally it was suggested that you were anticipating selling down the entire stockpile over say 12-18 months Just given our better understanding of the rainy season and whatnot now, is that an sort of a number we should think is probably going to be stretched out over a bit more time? just given our better understanding of the rainy season and whatnot now is that an sort of a number we should think is probably going to be stretched out over a bit more time

Speaker 8: Yeah. Look, let's see, right? 12-18 months, right? We talked about that timeline in November. If you put out, if you look at what we talked about in our guidance came out this year, we said through mid-2027, those timelines are- Yeah. yeah Look, let's see, right? 12-18 months, right? look let's see right 12-18 months right We talked about that timeline in November. we talked about that timeline in november If you put out, if you look at what we talked about in our guidance came out this year, we said through mid-2027, those timelines are- if you put out if you look at what we talked about in our guidance came out this year we said through mid-2027 those timelines are-

Speaker 11: Yeah. Yeah. yeah

Speaker 8: You know, give or take a month, are pretty well aligned from our perspective. You know, give or take a month, are pretty well aligned from our perspective. you know give or take a month are pretty well aligned from our perspective

Speaker 11: Okay. Still mid-2027-ish. Okay. Maybe switching gears just on the, you mentioned an exploration spend of $30 million-$40 million. Is that really the lion's share at Furnas or is there any other sort of notable projects we should be thinking about from an exploration point of view this year? Okay. okay Still mid-2027-ish. still mid-2027-ish Okay. okay Maybe switching gears just on the, you mentioned an exploration spend of $30 million-$40 million. maybe switching gears just on the you mentioned an exploration spend of $30 million-$40 million Is that really the lion's share at Furnas or is there any other sort of notable projects we should be thinking about from an exploration point of view this year? is that really the lion's share at furnas or is there any other sort of notable projects we should be thinking about from an exploration point of view this year

Speaker 8: It is. Great question. Yes, the lion's share of that is at Furnas. I would say that, yeah, we're still advancing some opportunities throughout the portfolio, both at Tucumã, and at Tucumã, Xavantina and Caraíba at various stages of development. Again, I think the best guidance I can give you at this point is that we're excited about what we're doing there. We expect to give an update at our investor day later in the year. It is. it is Great question. great question Yes, the lion's share of that is at Furnas. yes the lion's share of that is at furnas I would say that, yeah, we're still advancing some opportunities throughout the portfolio, both at Tucumã, and at Tucumã, Xavantina and Caraíba at various stages of development. i would say that yeah we're still advancing some opportunities throughout the portfolio both at tucumã and at tucumã xavantina and caraíba at various stages of development Again, I think the best guidance I can give you at this point is that we're excited about what we're doing there. again i think the best guidance i can give you at this point is that we're excited about what we're doing there We expect to give an update at our investor day later in the year. we expect to give an update at our investor day later in the year

Speaker 11: Okay. Okay, great. Thanks very much, Michael. Okay. okay Okay, great. okay great Thanks very much, Michael. thanks very much michael

Speaker 9: The next question comes from Craig Hutchison with TD Cowen. Please go ahead. The next question comes from Craig Hutchison with TD Cowen. the next question comes from craig hutchison with td cowen Please go ahead. please go ahead

Speaker 2: Hi. Good morning, guys. I was just wondering if the heavy rainfalls, will that have any impacts on concentrated shipments or timing of shipments from Tucumã as well? Is it just isolated to Xavantina? Hi. hi Good morning, guys. good morning guys I was just wondering if the heavy rainfalls, will that have any impacts on concentrated shipments or timing of shipments from Tucumã as well? i was just wondering if the heavy rainfalls will that have any impacts on concentrated shipments or timing of shipments from tucumã as well Is it just isolated to Xavantina? is it just isolated to xavantina

Speaker 8: Great question. We plan for cadence across our operations for a normal amount of operational disruption. I would say that what we've seen to date at our other operations is in line with what we expected and built into our budget and guidance for the year. We're not seeing anything out of the ordinary in terms of operational disruption. There is operational disruption across all our operations due to the rain season that's been reflected in our guidance and how we think about cadence for the full year. Great question. great question We plan for cadence across our operations for a normal amount of operational disruption. we plan for cadence across our operations for a normal amount of operational disruption I would say that what we've seen to date at our other operations is in line with what we expected and built into our budget and guidance for the year. i would say that what we've seen to date at our other operations is in line with what we expected and built into our budget and guidance for the year We're not seeing anything out of the ordinary in terms of operational disruption. we're not seeing anything out of the ordinary in terms of operational disruption There is operational disruption across all our operations due to the rain season that's been reflected in our guidance and how we think about cadence for the full year. there is operational disruption across all our operations due to the rain season that's been reflected in our guidance and how we think about cadence for the full year

Speaker 2: Okay, great. just TCRCs in terms of your C1 cash costs, are you able to provide what you're assuming for TCRCs for the year? Okay, great. just TCRCs in terms of your C1 cash costs, are you able to provide what you're assuming for TCRCs for the year? okay great just tcrcs in terms of your c1 cash costs are you able to provide what you're assuming for tcrcs for the year

Speaker 8: Those are based on long-term contracts that are commercially sensitive. I would say. Those are based on long-term contracts that are commercially sensitive. those are based on long-term contracts that are commercially sensitive I would say. i would say

Speaker 2: Okay. Okay. okay

Speaker 8: The what we've heard in the market is well below zero. We're not reflecting that at either of our operations. And as I said, they're long-term contracts that are commercially sensitive. Still very low in a historical context. As I mentioned, when I think about what are the big headwinds and tailwinds for our business, you know, at Caraíba we have a big tailwind from byproduct gold prices. That was probably pretty clear. And if you look at how that byproduct line item has tracked over the last several years, but we're seeing headwinds on seaborne shipping freight given what's happening in the world today. And then also on the BRL, which has been a big. The what we've heard in the market is well below zero. the what we've heard in the market is well below zero We're not reflecting that at either of our operations. we're not reflecting that at either of our operations And as I said, they're long-term contracts that are commercially sensitive. and as i said they're long-term contracts that are commercially sensitive Still very low in a historical context. still very low in a historical context As I mentioned, when I think about what are the big headwinds and tailwinds for our business, you know, at Caraíba we have a big tailwind from byproduct gold prices. as i mentioned when i think about what are the big headwinds and tailwinds for our business you know at caraíba we have a big tailwind from byproduct gold prices That was probably pretty clear. that was probably pretty clear And if you look at how that byproduct line item has tracked over the last several years, but we're seeing headwinds on seaborne shipping freight given what's happening in the world today. and if you look at how that byproduct line item has tracked over the last several years but we're seeing headwinds on seaborne shipping freight given what's happening in the world today And then also on the BRL, which has been a big. and then also on the brl which has been a big I think last year the BRL was one of the top performing currencies against the US dollar, and so that's a bit of a headwind. Definitely some gives and takes. We feel pretty happy with where our guidance is at this point in time, given some of the gives and takes that we're seeing there. Obviously we'll, you know, keep everyone updated if we, if we see things moving significantly one way or another. I think last year the BRL was one of the top performing currencies against the US dollar, and so that's a bit of a headwind. i think last year the brl was one of the top performing currencies against the us dollar and so that's a bit of a headwind Definitely some gives and takes. definitely some gives and takes We feel pretty happy with where our guidance is at this point in time, given some of the gives and takes that we're seeing there. we feel pretty happy with where our guidance is at this point in time given some of the gives and takes that we're seeing there Obviously we'll, you know, keep everyone updated if we, if we see things moving significantly one way or another. obviously we'll you know keep everyone updated if we if we see things moving significantly one way or another

Speaker 2: All right, great. Thanks, guys. All right, great. all right great Thanks, guys. thanks guys

Speaker 9: Once again, if you have a question, please press Star then One. The next question comes from Anita Soni with CIBC World Markets. Please go ahead. Once again, if you have a question, please press Star then One. once again if you have a question please press star then one The next question comes from Anita Soni with CIBC World Markets. the next question comes from anita soni with cibc world markets Please go ahead. please go ahead

Speaker 1: Hi. Good morning, guys. Thanks for taking my questions. I just wanted to follow up a little bit on Furnas. I was wondering in terms of, I wanted to tie in the exploration drilling that you've done with the PEA. Can you just talk about how much of the drilling that you've done, how much was included in this PEA, and is there still, like, some that was outlined that didn't get included? Hi. hi Good morning, guys. good morning guys Thanks for taking my questions. thanks for taking my questions I just wanted to follow up a little bit on Furnas. i just wanted to follow up a little bit on furnas I was wondering in terms of, I wanted to tie in the exploration drilling that you've done with the PEA. i was wondering in terms of i wanted to tie in the exploration drilling that you've done with the pea Can you just talk about how much of the drilling that you've done, how much was included in this PEA, and is there still, like, some that was outlined that didn't get included? can you just talk about how much of the drilling that you've done how much was included in this pea and is there still like some that was outlined that didn't get included

Speaker 8: Yeah, perfect. Thank you for asking the question. You're absolutely right. The PEA, we started drilling at the tail end of 2024. The PEA includes 28,000 m of drilling of the 50,000 m that we drilled last year. We expect to complete another 50,000 m this year. If you're looking for, you know, there's several stages under the earn-in agreement. We'll have effectively, we expect to complete all phases of drilling, all drilling requirements by the end of 2026. As I mentioned, that PEA only includes 28,000 m of drilling. Our objectives with the drill program that we completed in the second half of last year and the first part of this year are twofold. Yeah, perfect. yeah perfect Thank you for asking the question. thank you for asking the question You're absolutely right. you're absolutely right The PEA, we started drilling at the tail end of 2024. the pea we started drilling at the tail end of 2024 The PEA includes 28,000 m of drilling of the 50,000 m that we drilled last year. the pea includes 28,000 m of drilling of the 50,000 m that we drilled last year We expect to complete another 50,000 m this year. we expect to complete another 50,000 m this year If you're looking for, you know, there's several stages under the earn-in agreement. if you're looking for you know there's several stages under the earn-in agreement We'll have effectively, we expect to complete all phases of drilling, all drilling requirements by the end of 2026. we'll have effectively we expect to complete all phases of drilling all drilling requirements by the end of 2026 As I mentioned, that PEA only includes 28,000 m of drilling. as i mentioned that pea only includes 28,000 m of drilling Our objectives with the drill program that we completed in the second half of last year and the first part of this year are twofold. our objectives with the drill program that we completed in the second half of last year and the first part of this year are twofold Number one, as we move to pre-feasibility study, we need to convert that inferred mineralization that's included in the PEA into measured and indicated resources, so we can include it in the mine plan. Number two, we, as you can see in the production profile, you know, really years 2016 through 2024, we see a drop off and that's related to the really to the extent of drilling we've been able to do. We've targeted as part of our drill program some key step outs around some of the planned underground infrastructure that that is successful. We expect to improve the production profile later in the mine life. Number one, as we move to pre-feasibility study, we need to convert that inferred mineralization that's included in the PEA into measured and indicated resources, so we can include it in the mine plan. number one as we move to pre-feasibility study we need to convert that inferred mineralization that's included in the pea into measured and indicated resources so we can include it in the mine plan Number two, we, as you can see in the production profile, you know, really years 2016 through 2024, we see a drop off and that's related to the really to the extent of drilling we've been able to do. number two we as you can see in the production profile you know really years 2016 through 2024 we see a drop off and that's related to the really to the extent of drilling we've been able to do We've targeted as part of our drill program some key step outs around some of the planned underground infrastructure that that is successful. we've targeted as part of our drill program some key step outs around some of the planned underground infrastructure that that is successful We expect to improve the production profile later in the mine life. we expect to improve the production profile later in the mine life Obviously, we still need to do the drilling and the mine planning to support what I just said there, but we're looking forward to advancing that work stream and getting it included into the pre-feasibility study. Obviously, we still need to do the drilling and the mine planning to support what I just said there, but we're looking forward to advancing that work stream and getting it included into the pre-feasibility study. obviously we still need to do the drilling and the mine planning to support what i just said there but we're looking forward to advancing that work stream and getting it included into the pre-feasibility study

Speaker 1: Yeah, that was the second question. Just I'm wanting to drill a little bit into the Inferred category. What kind of drill density do you have now, and what do you need to get it into for the M&I? Yeah, that was the second question. yeah that was the second question Just I'm wanting to drill a little bit into the Inferred category. just i'm wanting to drill a little bit into the inferred category What kind of drill density do you have now, and what do you need to get it into for the M&I? what kind of drill density do you have now and what do you need to get it into for the m&i

Speaker 8: I don't have that right off the top of my head. We can circle back on that one. I, what I can tell you is that about 60% of the material that we have included in the PEA is inferred. Yeah, I will follow up with you just after this call on drill spacing. Obviously, that'll be outlined in the technical report that'll be filed here shortly. I just don't have that information right at my fingertips. I don't have that right off the top of my head. i don't have that right off the top of my head We can circle back on that one. we can circle back on that one I, what I can tell you is that about 60% of the material that we have included in the PEA is inferred. i what i can tell you is that about 60% of the material that we have included in the pea is inferred Yeah, I will follow up with you just after this call on drill spacing. yeah i will follow up with you just after this call on drill spacing Obviously, that'll be outlined in the technical report that'll be filed here shortly. obviously that'll be outlined in the technical report that'll be filed here shortly I just don't have that information right at my fingertips. i just don't have that information right at my fingertips

Speaker 1: Oh, that's fine. If you're going to file the technical report, that's, that was my third question when you're going to file that, because I'd like to get into the weeds on that. I would also then want to figure out some of the dilution questions as well, because I noticed your M&I and Inferred does not have any dilution at all in the Canaccord. That's it for my questions. Thank you. Oh, that's fine. oh that's fine If you're going to file the technical report, that's, that was my third question when you're going to file that, because I'd like to get into the weeds on that. if you're going to file the technical report that's that was my third question when you're going to file that because i'd like to get into the weeds on that I would also then want to figure out some of the dilution questions as well, because I noticed your M&I and Inferred does not have any dilution at all in the Canaccord. i would also then want to figure out some of the dilution questions as well because i noticed your m&i and inferred does not have any dilution at all in the canaccord That's it for my questions. that's it for my questions Thank you. thank you

Speaker 8: Yeah. Yeah. Just to clarify there, it's an important point on dilution. You're correct. The resource statement doesn't include dilution. The mine plan's been fully diluted. You'll see that reflected around the assumptions that they're outlined in the technical report. Yeah. yeah Yeah. yeah Just to clarify there, it's an important point on dilution. just to clarify there it's an important point on dilution You're correct. you're correct The resource statement doesn't include dilution. the resource statement doesn't include dilution The mine plan's been fully diluted. the mine plan's been fully diluted You'll see that reflected around the assumptions that they're outlined in the technical report. you'll see that reflected around the assumptions that they're outlined in the technical report

Speaker 1: Okay. All right. Thanks. Thanks for that. Okay. okay All right. all right Thanks. thanks Thanks for that. thanks for that

Speaker 9: The next question comes from Dalton Baretto with Canaccord Genuity. Please go ahead. The next question comes from Dalton Baretto with Canaccord Genuity. the next question comes from dalton baretto with canaccord genuity Please go ahead. please go ahead

Speaker 3: Yeah, thanks for squeezing me in, guys. Morning, Makko and team. I just want to follow up on some of that pronounced drilling there, but from a different perspective. Makko, you talked about all the drilling that was done last year that was not included, a lot of the drilling this year. My understanding was that, sort of the high grade cores of the deposit, they extend down deeper and possibly deeper than Vale had anticipated. I'm just trying to understand how much of your drilling is chasing that higher grade material and whether we could see some sort of a grade bump on the next resource update. Thanks. Yeah, thanks for squeezing me in, guys. yeah thanks for squeezing me in guys Morning, Makko and team. morning makko and team I just want to follow up on some of that pronounced drilling there, but from a different perspective. i just want to follow up on some of that pronounced drilling there but from a different perspective Makko, you talked about all the drilling that was done last year that was not included, a lot of the drilling this year. makko you talked about all the drilling that was done last year that was not included a lot of the drilling this year My understanding was that, sort of the high grade cores of the deposit, they extend down deeper and possibly deeper than Vale had anticipated. my understanding was that sort of the high grade cores of the deposit they extend down deeper and possibly deeper than vale had anticipated I'm just trying to understand how much of your drilling is chasing that higher grade material and whether we could see some sort of a grade bump on the next resource update. i'm just trying to understand how much of your drilling is chasing that higher grade material and whether we could see some sort of a grade bump on the next resource update Thanks. thanks

Speaker 8: Good questions. Look, I think the way that I would think about this is, the project as it stands today, it stands on its own two feet, right? We're working on some additional value drivers to smooth out the production profile to further enhance the economics. As you see from the numbers, it absolutely stands on its own two feet. If you look at the last drill hole that we drilled as part of the PEA, I'm going to quote some numbers here, so take this with a little bit of grain of salt, but it was about around 115 m at 0.8% copper and a half gram gold, more or less. Good questions. good questions Look, I think the way that I would think about this is, the project as it stands today, it stands on its own two feet, right? look i think the way that i would think about this is the project as it stands today it stands on its own two feet right We're working on some additional value drivers to smooth out the production profile to further enhance the economics. we're working on some additional value drivers to smooth out the production profile to further enhance the economics As you see from the numbers, it absolutely stands on its own two feet. as you see from the numbers it absolutely stands on its own two feet If you look at the last drill hole that we drilled as part of the PEA, I'm going to quote some numbers here, so take this with a little bit of grain of salt, but it was about around 115 m at 0.8% copper and a half gram gold, more or less. if you look at the last drill hole that we drilled as part of the pea i'm going to quote some numbers here so take this with a little bit of grain of salt but it was about around 115 m at 0.8% copper and a half gram gold more or less That was the last hole that we drilled that was included in the PEA of that 28,000 m program. That intercept was 600 m below surface. We clearly see opportunity to extend the deposit both to depth and laterally along strike. We expect to include those in future studies. As I said, we'll be advancing those drill programs here. In terms of grade, a grade bump, look, we still need to do the infill drilling that will be included in the pre-feasibility study, so there are several stages of technical studies to go here. That was the last hole that we drilled that was included in the PEA of that 28,000 m program. that was the last hole that we drilled that was included in the pea of that 28,000 m program That intercept was 600 m below surface. that intercept was 600 m below surface We clearly see opportunity to extend the deposit both to depth and laterally along strike. we clearly see opportunity to extend the deposit both to depth and laterally along strike We expect to include those in future studies. we expect to include those in future studies As I said, we'll be advancing those drill programs here. as i said we'll be advancing those drill programs here In terms of grade, a grade bump, look, we still need to do the infill drilling that will be included in the pre-feasibility study, so there are several stages of technical studies to go here. in terms of grade a grade bump look we still need to do the infill drilling that will be included in the pre-feasibility study so there are several stages of technical studies to go here I would say the work that, you know, not only we did, but also the very, very strong technical work that Vale has done over the years, to build an incredible foundation that we're able to build on, I think really speaks to the quality of the project. You know, we work with our technical team regularly. We have an excellent relationship and we're really moving this forward together to create the best value possible. When I think about what we've done collectively to drive, you know, not only production substantial underground, but also, you know, the mine calls for about 30% of its tailings, expected tailings production to go back underground as paste backfill. I would say the work that, you know, not only we did, but also the very, very strong technical work that Vale has done over the years, to build an incredible foundation that we're able to build on, I think really speaks to the quality of the project. i would say the work that you know not only we did but also the very very strong technical work that vale has done over the years to build an incredible foundation that we're able to build on i think really speaks to the quality of the project You know, we work with our technical team regularly. you know we work with our technical team regularly We have an excellent relationship and we're really moving this forward together to create the best value possible. we have an excellent relationship and we're really moving this forward together to create the best value possible When I think about what we've done collectively to drive, you know, not only production substantial underground, but also, you know, the mine calls for about 30% of its tailings, expected tailings production to go back underground as paste backfill. when i think about what we've done collectively to drive you know not only production substantial underground but also you know the mine calls for about 30% of its tailings expected tailings production to go back underground as paste backfill We've really worked jointly to reduce the environmental footprint, and hopefully set ourselves up for a excellent fast-track project. We've really worked jointly to reduce the environmental footprint, and hopefully set ourselves up for a excellent fast-track project. we've really worked jointly to reduce the environmental footprint and hopefully set ourselves up for a excellent fast-track project

Speaker 3: Thanks, Makko. Can you remind me, is there some sort of a mechanism in your agreement with Vale that gives you the option to buy the piece that you currently won't earn into? Thanks, Makko. thanks makko Can you remind me, is there some sort of a mechanism in your agreement with Vale that gives you the option to buy the piece that you currently won't earn into? can you remind me is there some sort of a mechanism in your agreement with vale that gives you the option to buy the piece that you currently won't earn into

Speaker 8: No, we're very happy to be pursuing this project in partnership with Vale Base Metals. No, we're very happy to be pursuing this project in partnership with Vale Base Metals. no we're very happy to be pursuing this project in partnership with vale base metals

Speaker 3: Great. Thanks. Great. great Thanks. thanks

Speaker 9: This concludes the question and answer session. I would like to turn the conference back over to Makko DeFilippo for any closing remarks. Please go ahead. This concludes the question and answer session. this concludes the question and answer session I would like to turn the conference back over to Makko DeFilippo for any closing remarks. i would like to turn the conference back over to makko defilippo for any closing remarks Please go ahead. please go ahead

Speaker 8: Yes. Thank you everyone for joining us today. Obviously we're always available for follow-up questions. Appreciate the robust discussion on the Q&A side as usual. I think one last bit of housekeeping here. Shortly on our website, for those of you who are interested, we will be hosting a Capital Markets Day in mid-September. That will be physically in person in São Paulo and obviously virtually. As I said, that information will be on our website shortly. Thank you all very much. Have a great weekend. Thank you. Bye-bye. Yes. yes Thank you everyone for joining us today. thank you everyone for joining us today Obviously we're always available for follow-up questions. obviously we're always available for follow-up questions Appreciate the robust discussion on the Q&A side as usual. appreciate the robust discussion on the q&a side as usual I think one last bit of housekeeping here. i think one last bit of housekeeping here Shortly on our website, for those of you who are interested, we will be hosting a Capital Markets Day in mid-September. shortly on our website for those of you who are interested we will be hosting a capital markets day in mid-september That will be physically in person in São Paulo and obviously virtually. that will be physically in person in são paulo and obviously virtually As I said, that information will be on our website shortly. as i said that information will be on our website shortly Thank you all very much. thank you all very much Have a great weekend. have a great weekend Thank you. thank you Bye-bye. bye-bye

Speaker 9: This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day. This brings to a close today's conference call. this brings to a close today's conference call You may disconnect your lines. you may disconnect your lines Thank you for participating and have a pleasant day. thank you for participating and have a pleasant day