Ero Copper Corp. (TSX: ERO, NYSE: ERO) (“Ero” or
the “Company”) is pleased to announce its operating and financial
results for the three months ended March 31, 2023. Management will
host a conference call tomorrow, Tuesday, May 9, 2023, at
11:30 a.m. eastern time to discuss the results. Dial-in details for
the call can be found near the end of this press release.
HIGHLIGHTS
- Copper
production of 9,327 tonnes at C1 cash costs(*) of $1.70 per pound
of copper produced
- Record gold
production of 12,443 ounces at C1 cash costs(*) and All-in
Sustaining Costs ("AISC")(*) of $436 and $946, respectively, per
ounce of gold produced
- Strong quarterly
financial results included:
- Net income
attributable to the owners of the Company of $24.2 million ($0.26
per share on a diluted basis)
- Adjusted net
income attributable to the owners of the Company(*) of $22.5
million ($0.24 per share on a diluted basis)
- Adjusted
EBITDA(*) of $48.2 million
- Available
liquidity at quarter-end of $386.6 million included cash and
cash equivalents of $209.9 million, short-term investments of
$26.7 million, and $150.0 million of undrawn availability
under the Company's senior secured revolving credit facility
- Execution of
strategic initiatives continues to position the Company for
significant near-term organic growth
- Construction of
the Tucumã Project reached nearly 30% physical completion as of
quarter-end with over 85% of planned capital expenditures under
contract
- At the Xavantina
Operations, development of the Matinha vein remains on schedule
with production expected to commence in H2 2023
- The Caraíba
Operations' Pilar 3.0 initiative on track with shaft pre-sink
activities commencing on schedule subsequent to quarter-end
- 2023
production, operating cost, and capital expenditure guidance
reaffirmed
*These are non-IFRS measures and do not have a
standardized meaning prescribed by IFRS and might not be comparable
to similar financial measures disclosed by other issuers. Please
refer to the Company’s discussion of Non-IFRS measures in its
Management’s Discussion and Analysis for the three months ended
March 31, 2023 and the Reconciliation of Non-IFRS Measures section
at the end of this press release.
“Our solid operating performance in the first
quarter was bolstered by a favorable metal price environment
reflective of the accelerating decarbonization movement,” said
David Strang, Chief Executive Officer. “During the quarter, we also
made strong progress on our key growth projects with the Tucumã
Project and the Pilar Mine's new external shaft reaching
approximately 30% and 20% physical completion, respectively, as of
quarter-end.
"Looking ahead to the remainder of the year, we
anticipate increased production levels driven by planned mine
sequencing and the completion of additional growth projects at our
operations. We expect commencement of mining from the Matinha vein
to result in higher gold production at our Xavantina Operations in
the second half of the year. At the Caraíba Operations, ramp up and
commissioning of the new ball mill during the fourth quarter is
expected to drive higher mill throughput levels and copper
production over the same period.
"We are proud to say that with each quarter, the
ongoing execution of our peer-leading organic growth strategy is
bringing our Company closer to doubling copper production to over
100,000 tonnes in 2025, and achieving higher sustained gold
production levels of 55,000 to 60,000 ounces per year beginning in
2024. As the outlook for both metals continues to strengthen, the
timing of our growth trajectory couldn't be better."
FIRST QUARTER REVIEW
- Mining
& Milling Operations
- The Caraíba
Operations processed 772,548 tonnes of ore grading 1.33% copper,
producing 9,327 tonnes of copper in concentrate during the quarter
after metallurgical recoveries of 90.8%
- Planned stope
sequencing drove lower mined copper grades from the Pilar and
Vermelhos Mines, resulting in lower processed copper grades during
the period
- The Xavantina
Operations processed 35,763 tonnes of ore grading 11.85 grams per
tonne, and set a new record for quarterly gold production of 12,443
ounces after metallurgical recoveries of 91.4%
- Processed gold
grades increased over 16% quarter-on-quarter and approximately 100%
year-on-year due to planned stope sequencing
- By-product
silver production for the period was 8,194 ounces
- Organic
Growth Projects
- The Company
maintained momentum on construction of its Tucumã Project during
the quarter with physical completion reaching nearly 30% as of
quarter-end
- Mine
pre-stripping remains ahead of schedule with 2.9 million tonnes, or
approximately 20% of total planned pre-strip volume, completed as
of quarter-end. Waste and tailings dump construction is progressing
on schedule with completion expected in Q3 2023
- Civil works
commenced during the quarter with first foundations poured in
February. Foundations for the primary crusher and ball mill are
scheduled for completion in Q2 2023, and electromechanical erection
for both areas is expected to commence in early Q3 2023
- Approximately
85% of planned capital expenditures were under contract as of
quarter-end, up from approximately 55% at the end of 2022. An
additional 5% of Feasibility Study capital expenditures were in the
final stages of contract negotiation as of quarter-end, bringing
visibility on total project capital to approximately 90%.
Consistent with Q3 and year-end 2022 estimates, total planned
capital expenditures remain unchanged at approximately $305
million, or within 4% of total Feasibility Study estimates
- In partnership
with The National Service for Industrial Training, a Brazilian
non-profit organization focused on improving the competitiveness of
Brazil's manufacturing sector through technical and vocational
education, the Company continued to ramp up labor training programs
within surrounding communities to further develop the local skills
and workforce that are expected to support the development and
operation of the Tucumã Project
- At the Caraíba
Operations, the Company continued to advance its Pilar 3.0
initiative, designed to support sustained annual ore production
levels of 3.0 million tonnes. The components of Pilar 3.0 include
(i) Project Honeypot, an engineering initiative focused on
recovering higher-grade material in the upper levels of the Pilar
Mine, (ii) an expansion of the Caraíba mill from 3.0 to 4.2 million
tonnes of annual throughput capacity, and (iii) construction of a
new external shaft to service the lower levels of the Pilar Mine,
including the Deepening Extension Zone
- Construction of
the new external shaft remains on schedule with the shaft sinking
contractor mobilized to site and the first blast of the pre-sink
conducted subsequent to quarter-end. Planned capital expenditures
under contract or in the final stages of negotiation increased from
approximately 35% at year-end to over 70% at the end of Q1 2023.
Importantly, construction of the new external shaft remains within
5% of budget
- The Caraíba mill
expansion also remains on schedule with commissioning expected to
begin in Q4 2023
- Please see
recent images from the Tucumã Project in Figures 1 through 3 and of
construction on the Caraíba Operations' new external shaft in
Figure 4 below
Figure 1: April 2023
aerial view of the Tucumã Project, including (A) administrative
offices, laboratories, fuel station, and equipment maintenance
area, (B) flotation and filtration, (C) ball mill, (D) crushed ore
stockpile, (E) main substation, (F) secondary and tertiary
crushers, and (G) primary crusher.
Figure 2: Civil works underway
at the Tucumã Project's primary crushing area (April 2023).
Figure 3: Ball mill components
upon arrival at the Tucumã Project (April 2023).
Figure 4: Surface
infrastructure as of April 2023 at the Caraíba Operations' new
external shaft, including (A) the stage winder foundation, (B)
shaft collar, (C) center tower steel erection, (D) foundation and
exterior steel frame for the permanent rock and personnel winders,
and (E) headgear steel erection.
Management Changes
Anthea Bath has ceased as Chief Operating
Officer by mutual agreement with the Company. The Company would
like to take this opportunity to express its gratitude for Ms.
Bath's contributions over the past five years. Her dedication and
hard work have been greatly appreciated, and the executive team
wishes her all the best in her future endeavors.
The Board has appointed Makko DeFilippo as
President and Chief Operating Officer of the Company. Mr.
DeFilippo, who has been with the Company since 2017, has served as
President of the Company since January 2021 and prior to that as
Vice President, Corporate Development.
OPERATING AND FINANCIAL HIGHLIGHTS
|
|
3 months endedMar. 31, 2023 |
|
3 months endedDec. 31, 2022 |
|
3 months endedMar. 31, 2022 |
Operating
Highlights |
|
|
|
|
|
|
Copper (Caraíba
Operations) |
|
|
|
|
|
|
Ore Processed (tonnes) |
|
|
772,548 |
|
|
745,850 |
|
|
596,230 |
|
Grade (% Cu) |
|
|
1.33 |
|
|
1.84 |
|
|
1.78 |
|
Cu Production (tonnes) |
|
|
9,327 |
|
|
12,664 |
|
|
9,784 |
|
Cu Production (000 lbs) |
|
|
20,564 |
|
|
27,918 |
|
|
21,570 |
|
Cu Sold in Concentrate (tonnes) |
|
|
9,464 |
|
|
13,301 |
|
|
10,045 |
|
Cu Sold in Concentrate (000 lbs) |
|
|
20,865 |
|
|
29,323 |
|
|
22,145 |
|
C1 cash cost of Cu produced (per lb)(1) |
|
$ |
1.70 |
|
$ |
1.41 |
|
$ |
1.31 |
|
Gold (Xavantina
Operations) |
|
|
|
|
|
|
Ore Processed (tonnes) |
|
|
35,763 |
|
|
39,715 |
|
|
49,990 |
|
Au Production (oz) |
|
|
12,443 |
|
|
11,786 |
|
|
8,796 |
|
C1 cash cost of Au Produced (per oz)(1) |
|
$ |
436 |
|
$ |
445 |
|
$ |
638 |
|
AISC of Au produced (per oz)(1) |
|
$ |
946 |
|
$ |
1,096 |
|
$ |
1,092 |
|
|
|
|
|
|
|
|
Financial
Highlights ($ in millions, except per share amounts) |
|
|
Revenues |
|
$ |
101.0 |
|
$ |
116.7 |
|
$ |
108.9 |
|
Gross profit |
|
|
40.1 |
|
|
52.7 |
|
|
61.0 |
|
EBITDA(1) |
|
|
51.8 |
|
|
58.7 |
|
|
78.1 |
|
Adjusted EBITDA(1) |
|
|
48.2 |
|
|
58.2 |
|
|
62.4 |
|
Cash flow from operations |
|
|
16.4 |
|
|
34.0 |
|
|
44.0 |
|
Net income |
|
|
24.5 |
|
|
22.5 |
|
|
52.5 |
|
Net income attributable to
owners of the Company |
|
|
24.2 |
|
|
22.2 |
|
|
52.1 |
|
Per share (basic) |
|
|
0.26 |
|
|
0.24 |
|
|
0.58 |
|
Per share (diluted) |
|
|
0.26 |
|
|
0.24 |
|
|
0.57 |
|
Adjusted net income
attributable to owners of the Company(1) |
|
|
22.5 |
|
|
22.2 |
|
|
33.0 |
|
Per share (basic) |
|
|
0.24 |
|
|
0.24 |
|
|
0.37 |
|
Per share (diluted) |
|
|
0.24 |
|
|
0.24 |
|
|
0.36 |
|
Cash, cash equivalents, and
short-term investments |
|
|
236.6 |
|
|
317.4 |
|
|
465.5 |
|
Working capital(1) |
|
|
218.8 |
|
|
263.3 |
|
|
443.7 |
|
Net (cash) debt(1) |
|
|
174.2 |
|
|
100.7 |
|
|
(54.4 |
) |
(1) EBITDA, Adjusted EBITDA, Adjusted net income
(loss) attributable to owners of the Company, Adjusted net income
(loss) per share attributable to owners of the Company, Net (Cash)
Debt, Working Capital, C1 cash cost of copper produced (per lb), C1
cash cost of gold produced (per ounce) and AISC of gold produced
(per ounce) are non-IFRS measures. These measures do not have a
standardized meaning prescribed by IFRS and might not be comparable
to similar financial measures disclosed by other issuers. Please
refer to the Company’s discussion of Non-IFRS measures in its
Management’s Discussion and Analysis for the three months ended
March 31, 2023 and the Reconciliation of Non-IFRS Measures section
at the end of this press release.
2023 PRODUCTION AND COST
GUIDANCE(*)
The Caraíba Operations are expected to produce
44,000 to 47,000 tonnes of copper in concentrate in 2023 with Q1
2023 expected to be the lowest production quarter of the year, as
previously noted. Production from the Caraíba Operations is
expected to be slightly weighted towards H2 2023 due to higher
anticipated mill throughput volumes during ramp up and
commissioning of the new ball mill installation in Q4 2023. Higher
mined and processed copper grades are also expected through the
remainder of the year based on planned stope sequencing.
C1 cash costs at the Caraíba Operations are
expected to be between $1.40 and $1.60 per pound of copper produced
in 2023 with higher anticipated copper grades and production
expected to result in lower unit operating costs in the remaining
quarters of the year. While the Company has resumed shipments to
its domestic smelter on a limited and prepaid basis, the associated
reduction in concentrate sales costs has been offset to date by a
stronger BRL to U.S. dollar exchange rate.
At the Xavantina Operations, the Company is
reaffirming its 2023 gold production guidance range of 50,000 to
53,000 ounces with slightly higher gold production expected in H2
2023 due to increased mill throughput volumes following the
expected commencement of production from the Matinha vein.
The Company is also reaffirming its full-year
cost guidance for the Xavantina Operations with C1 cash costs
expected to be between $475 and $575 per ounce of gold produced and
AISC expected to be $725 to $825 per ounce of gold produced.
The Company's cost guidance for 2023 assumes a
USD:BRL foreign exchange rate of 5.30, a gold price of $1,725 per
ounce and a silver price of $20.00 per ounce.
|
|
2023 Guidance |
Caraíba
Operations |
|
|
Copper Production (tonnes) |
|
44,000 - 47,000 |
C1 Cash Cost (US$/lb)(1) |
|
$1.40 - $1.60 |
|
|
|
Xavantina
Operations |
|
|
Gold Production (ounces) |
|
50,000 - 53,000 |
C1 Cash Cost (US$/oz)(1) |
|
$475 - $575 |
All-in Sustaining Cost (AISC) (US$/oz)(1) |
|
$725 - $825 |
(1) These are non-IFRS measures and do not have
a standardized meaning prescribed by IFRS and might not be
comparable to similar financial measures disclosed by other
issuers. See the Reconciliation of Non-IFRS Measures section at the
end of this press release for additional information.
2023 CAPITAL EXPENDITURE
GUIDANCE(*)
The Company's capital expenditure guidance for 2023 assumes a
USD:BRL foreign exchange rate of 5.30 and has been presented below
in USD millions.
|
|
2023 Guidance |
Caraíba Operations |
|
|
Growth |
|
$80 - $90 |
Sustaining |
|
$65 - $75 |
Exploration |
|
$22 - $27 |
Total, Caraíba Operations |
|
$167 - $192 |
|
|
|
Tucumã Project |
|
|
Growth |
|
$150 - $165 |
Exploration |
|
$0 - $1 |
Total, Tucumã Project |
|
$150 - $166 |
|
|
|
Xavantina Operations |
|
|
Growth |
|
$4 - $5 |
Sustaining |
|
$12 - $14 |
Exploration |
|
$6 - $7 |
Total, Xavantina Operations |
|
$22 - $26 |
|
|
|
Company Total |
|
|
Growth |
|
$234 - $260 |
Sustaining |
|
$77 - $89 |
Exploration |
|
$31 - $40 |
Total, Company |
|
$342 - $389 |
(*) Guidance is based on certain estimates and
assumptions, including but not limited to, mineral reserve
estimates, grade and continuity of interpreted geological
formations and metallurgical performance. Please refer to the
Company’s SEDAR and EDGAR filings, including the recent Annual
Information Form for the year ended December 31, 2022 and dated
March 7, 2023 (the "AIF"), for complete risk factors.
CONFERENCE CALL DETAILS
The Company will hold a conference call on
Tuesday, May 9, 2023 at 11:30 am Eastern time (8:30 am Pacific
time) to discuss these results.
Date: |
Tuesday, May 9, 2023 |
Time: |
11:30 am Eastern time (8:30 am
Pacific time) |
Dial in: |
North America: 1-800-319-4610,
International: +1-604-638-5340please dial in 5-10 minutes prior and
ask to join the call |
|
|
Replay: |
North America: 1-800-319-6413,
International: +1-604-638-9010 |
Replay Passcode: |
0068 |
|
|
Reconciliation of Non-IFRS Measures
Financial results of the Company are presented
in accordance with IFRS. The Company utilizes certain alternative
performance (non-IFRS) measures to monitor its performance,
including C1 cash cost of copper produced (per lb), C1 cash cost of
gold produced (per ounce), AISC of gold produced (per ounce),
EBITDA, adjusted EBITDA, adjusted net income attributable to owners
of the Company, adjusted net income per share, net (cash) debt,
working capital and available liquidity. These performance measures
have no standardized meaning prescribed within generally accepted
accounting principles under IFRS and, therefore, amounts presented
may not be comparable to similar measures presented by other mining
companies. These non-IFRS measures are intended to provide
supplemental information and should not be considered in isolation
or as a substitute for measures of performance prepared in
accordance with IFRS.
For additional details please refer to the
Company’s discussion of non-IFRS and other performance measures in
its Management’s Discussion and Analysis for the three months ended
March 31, 2023 which is available on SEDAR at www.sedar.com and on
EDGAR at www.sec.gov.
C1 cash cost of copper produced (per lb)
The following table provides a reconciliation of
C1 cash cost of copper produced per pound to cost of production,
its most directly comparable IFRS measure.
Reconciliation: |
|
2023 - Q1 |
|
2022 - Q4 |
|
2022 - Q1 |
Cost of production |
|
$ |
36,285 |
|
|
$ |
40,067 |
|
|
$ |
29,163 |
|
Add (less): |
|
|
|
|
|
|
Transportation costs & other |
|
|
1,339 |
|
|
|
2,362 |
|
|
|
1,869 |
|
Treatment, refining, and other |
|
|
2,527 |
|
|
|
4,949 |
|
|
|
2,046 |
|
By-product credits |
|
|
(2,810 |
) |
|
|
(6,103 |
) |
|
|
(4,812 |
) |
Incentive payments |
|
|
(1,237 |
) |
|
|
(1,092 |
) |
|
|
(904 |
) |
Net change in inventory |
|
|
(1,185 |
) |
|
|
(861 |
) |
|
|
577 |
|
Foreign exchange translation and other |
|
|
15 |
|
|
|
(47 |
) |
|
|
386 |
|
C1 cash
costs |
|
$ |
34,934 |
|
|
$ |
39,275 |
|
|
$ |
28,325 |
|
Mining |
|
$ |
23,210 |
|
|
$ |
26,433 |
|
|
$ |
20,126 |
|
Processing |
|
|
6,554 |
|
|
|
8,033 |
|
|
|
6,447 |
|
Indirect |
|
|
5,453 |
|
|
|
5,963 |
|
|
|
4,518 |
|
Production costs |
|
|
35,217 |
|
|
|
40,429 |
|
|
|
31,091 |
|
By-product credits |
|
|
(2,810 |
) |
|
|
(6,103 |
) |
|
|
(4,812 |
) |
Treatment, refining and
other |
|
|
2,527 |
|
|
|
4,949 |
|
|
|
2,046 |
|
C1 cash
costs |
|
$ |
34,934 |
|
|
$ |
39,275 |
|
|
$ |
28,325 |
|
|
|
|
|
|
|
|
Payable copper produced (lb,
000) |
|
|
20,564 |
|
|
|
27,918 |
|
|
|
21,570 |
|
|
|
|
|
|
|
|
Mining |
|
$ |
1.13 |
|
|
$ |
0.95 |
|
|
$ |
0.93 |
|
Processing |
|
$ |
0.32 |
|
|
$ |
0.29 |
|
|
$ |
0.30 |
|
Indirect |
|
$ |
0.27 |
|
|
$ |
0.21 |
|
|
$ |
0.21 |
|
By-product credits |
|
$ |
(0.14 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.22 |
) |
Treatment, refining and
other |
|
$ |
0.12 |
|
|
$ |
0.18 |
|
|
$ |
0.09 |
|
C1 cash costs of
copper produced (per lb) |
|
$ |
1.70 |
|
|
$ |
1.41 |
|
|
$ |
1.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C1 cash cost of gold produced and All-in
Sustaining Cost of gold produced (per ounce)
The following table provides a reconciliation of
C1 cash cost of gold produced per ounce and AISC of gold produced
per ounce to cost of production, its most directly comparable IFRS
measure.
Reconciliation: |
|
2023 - Q1 |
|
2022 - Q4 |
|
2022 - Q1 |
Cost of production |
|
$ |
6,107 |
|
|
$ |
4,834 |
|
|
$ |
5,392 |
|
Add (less): |
|
|
|
|
|
|
Incentive payments |
|
|
(407 |
) |
|
|
(167 |
) |
|
|
(585 |
) |
Net change in inventory |
|
|
(352 |
) |
|
|
258 |
|
|
|
727 |
|
By-product credits |
|
|
(176 |
) |
|
|
(199 |
) |
|
|
(124 |
) |
Smelting and refining costs |
|
|
76 |
|
|
|
61 |
|
|
|
42 |
|
Foreign exchange translation and other |
|
|
176 |
|
|
|
462 |
|
|
|
164 |
|
C1 cash
costs |
|
$ |
5,424 |
|
|
$ |
5,249 |
|
|
$ |
5,616 |
|
Site general and
administrative |
|
|
1,232 |
|
|
|
1,196 |
|
|
|
559 |
|
Accretion of mine closure and
rehabilitation provision |
|
|
105 |
|
|
|
106 |
|
|
|
112 |
|
Sustaining capital
expenditure |
|
|
3,013 |
|
|
|
4,547 |
|
|
|
2,296 |
|
Sustaining leases |
|
|
1,660 |
|
|
|
1,559 |
|
|
|
822 |
|
Royalties and production
taxes |
|
|
338 |
|
|
|
262 |
|
|
|
204 |
|
AISC |
|
$ |
11,772 |
|
|
$ |
12,919 |
|
|
$ |
9,609 |
|
Costs |
|
|
|
|
|
|
Mining |
|
$ |
2,567 |
|
|
$ |
2,311 |
|
|
$ |
3,218 |
|
Processing |
|
|
1,905 |
|
|
|
2,067 |
|
|
|
1,698 |
|
Indirect |
|
|
1,052 |
|
|
|
1,009 |
|
|
|
782 |
|
Production costs |
|
|
5,524 |
|
|
|
5,387 |
|
|
|
5,698 |
|
Smelting and refining
costs |
|
|
76 |
|
|
|
61 |
|
|
|
42 |
|
By-product credits |
|
|
(176 |
) |
|
|
(199 |
) |
|
|
(124 |
) |
C1 cash
costs |
|
$ |
5,424 |
|
|
$ |
5,249 |
|
|
$ |
5,616 |
|
Site general and
administrative |
|
|
1,232 |
|
|
|
1,196 |
|
|
|
559 |
|
Accretion of mine closure and
rehabilitation provision |
|
|
105 |
|
|
|
106 |
|
|
|
112 |
|
Sustaining capital
expenditure |
|
|
3,013 |
|
|
|
4,547 |
|
|
|
2,296 |
|
Sustaining leases |
|
|
1,660 |
|
|
|
1,559 |
|
|
|
822 |
|
Royalties and production
taxes |
|
|
338 |
|
|
|
262 |
|
|
|
204 |
|
AISC |
|
$ |
11,772 |
|
|
$ |
12,919 |
|
|
$ |
9,609 |
|
|
|
|
|
|
|
|
Costs per
ounce |
|
|
|
|
|
|
Payable gold produced
(ounces) |
|
|
12,443 |
|
|
|
11,786 |
|
|
|
8,796 |
|
|
|
|
|
|
|
|
Mining |
|
$ |
206 |
|
|
$ |
196 |
|
|
$ |
366 |
|
Processing |
|
$ |
153 |
|
|
$ |
175 |
|
|
$ |
193 |
|
Indirect |
|
$ |
85 |
|
|
$ |
86 |
|
|
$ |
89 |
|
Smelting and refining |
|
$ |
6 |
|
|
$ |
6 |
|
|
$ |
5 |
|
By-product credits |
|
$ |
(14 |
) |
|
$ |
(17 |
) |
|
$ |
(15 |
) |
C1 cash costs of gold
produced (per ounce) |
|
$ |
436 |
|
|
$ |
445 |
|
|
$ |
638 |
|
AISC of gold produced
(per ounce) |
|
$ |
946 |
|
|
$ |
1,096 |
|
|
$ |
1,092 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before interest, taxes,
depreciation and amortization (EBITDA) and Adjusted
EBITDA
The following table provides a reconciliation of
EBITDA and Adjusted EBITDA to net income, its most directly
comparable IFRS measure.
Reconciliation: |
|
2023 - Q1 |
|
2022 - Q4 |
|
2022 - Q1 |
Net Income |
|
$ |
24,500 |
|
|
$ |
22,472 |
|
|
$ |
52,486 |
|
Adjustments: |
|
|
|
|
|
|
Finance expense |
|
|
6,526 |
|
|
|
12,290 |
|
|
|
5,496 |
|
Income tax expense |
|
|
4,666 |
|
|
|
7,540 |
|
|
|
8,606 |
|
Amortization and depreciation |
|
|
16,083 |
|
|
|
16,361 |
|
|
|
11,504 |
|
EBITDA |
|
$ |
51,775 |
|
|
$ |
58,663 |
|
|
$ |
78,092 |
|
Foreign exchange gain |
|
|
(8,621 |
) |
|
|
(4,569 |
) |
|
|
(18,709 |
) |
Share based compensation |
|
|
5,017 |
|
|
|
4,123 |
|
|
|
1,990 |
|
Incremental COVID-19 costs |
|
|
— |
|
|
|
— |
|
|
|
1,004 |
|
Adjusted
EBITDA |
|
$ |
48,171 |
|
|
$ |
58,217 |
|
|
$ |
62,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income attributable to
owners of the Company and Adjusted net income per share
attributable to owners of the Company
The following table provides a reconciliation of
Adjusted net income attributable to owners of the Company and
Adjusted EPS to net income attributable to the owners of the
Company, its most directly comparable IFRS measure.
Reconciliation: |
|
2023 - Q1 |
|
2022 - Q4 |
|
2022 - Q1 |
Net income as reported attributable to the owners of the
Company |
|
$ |
24,154 |
|
|
$ |
22,159 |
|
|
$ |
52,107 |
|
Adjustments: |
|
|
|
|
|
|
Share based compensation |
|
|
5,017 |
|
|
|
4,123 |
|
|
|
1,990 |
|
Unrealized foreign exchange gain on USD denominated balances in
MCSA |
|
|
(4,753 |
) |
|
|
(1,782 |
) |
|
|
(1,337 |
) |
Unrealized foreign exchange gain on foreign exchange derivative
contracts |
|
|
(3,152 |
) |
|
|
(3,017 |
) |
|
|
(24,615 |
) |
Incremental COVID-19 costs |
|
|
— |
|
|
|
— |
|
|
|
998 |
|
Tax effect on the above adjustments |
|
|
1,208 |
|
|
|
731 |
|
|
|
3,808 |
|
Adjusted net income attributable to owners of the
Company |
|
$ |
22,474 |
|
|
$ |
22,214 |
|
|
$ |
32,951 |
|
|
|
|
|
|
|
|
Weighted average number of common shares |
|
|
|
|
|
|
Basic |
|
|
92,294,045 |
|
|
|
91,522,358 |
|
|
|
90,238,008 |
|
Diluted |
|
|
93,218,281 |
|
|
|
92,551,916 |
|
|
|
92,050,104 |
|
|
|
|
|
|
|
|
Adjusted EPS |
|
|
|
|
|
|
Basic |
|
$ |
0.24 |
|
|
$ |
0.24 |
|
|
$ |
0.37 |
|
Diluted |
|
$ |
0.24 |
|
|
$ |
0.24 |
|
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Cash) Debt
The following table provides a calculation of
net (cash) debt based on amounts presented in the Company’s
condensed consolidated interim financial statements as at the
periods presented.
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
Current portion of loans and borrowings |
$ |
9,221 |
|
|
$ |
15,703 |
|
|
$ |
8,740 |
|
Long-term portion of loans and
borrowings |
|
401,595 |
|
|
|
402,354 |
|
|
|
402,345 |
|
Less: |
|
|
|
|
|
Cash and cash equivalents |
|
(209,908 |
) |
|
|
(177,702 |
) |
|
|
(365,465 |
) |
Short-term investments |
|
(26,739 |
) |
|
|
(139,700 |
) |
|
|
(100,018 |
) |
Net (cash)
debt |
$ |
174,169 |
|
|
$ |
100,655 |
|
|
$ |
(54,398 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital and
Available Liquidity
The following table provides a calculation for
these based on amounts presented in the Company’s condensed
consolidated interim financial statements as at the periods
presented.
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
Current assets |
$ |
331,241 |
|
|
$ |
392,427 |
|
|
$ |
546,439 |
|
Less: Current liabilities |
|
(112,448 |
) |
|
|
(129,121 |
) |
|
|
(102,743 |
) |
Working
capital |
$ |
218,793 |
|
|
$ |
263,306 |
|
|
$ |
443,696 |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
209,908 |
|
|
|
177,702 |
|
|
|
365,465 |
|
Short-term investments |
|
26,739 |
|
|
|
139,700 |
|
|
|
100,018 |
|
Available undrawn revolving
credit facilities |
|
150,000 |
|
|
|
75,000 |
|
|
|
75,000 |
|
Available
liquidity |
$ |
386,647 |
|
|
$ |
392,402 |
|
|
$ |
540,483 |
|
|
|
|
|
|
|
|
|
|
|
|
|
ABOUT ERO COPPER CORP
Ero is a high-margin, high-growth, clean copper
producer with operations in Brazil and corporate headquarters in
Vancouver, B.C. The Company's primary asset is a 99.6% interest in
the Brazilian copper mining company, Mineração Caraíba S.A.
("MCSA"), 100% owner of the Company's Caraíba Operations (formerly
known as the MCSA Mining Complex), which are located in the Curaçá
Valley, Bahia State, Brazil and include the Pilar and Vermelhos
underground mines and the Surubim open pit mine, and the Tucumã
Project (formerly known as Boa Esperança), an IOCG-type copper
project located in Pará, Brazil. The Company also owns 97.6% of NX
Gold S.A. ("NX Gold") which owns the Xavantina Operations (formerly
known as the NX Gold Mine), comprised of an operating gold and
silver mine located in Mato Grosso, Brazil. Additional information
on the Company and its operations, including technical reports on
the Caraíba Operations, Xavantina Operations and Tucumã Project,
can be found on the Company's website (www.erocopper.com), on SEDAR
(www.sedar.com), and on EDGAR (www.sec.gov). The Company’s shares
are publicly traded on the Toronto Stock Exchange and the New York
Stock Exchange under the symbol “ERO”.
FOR MORE INFORMATION, PLEASE CONTACT
Courtney Lynn, VP, Corporate Development &
Investor Relations(604) 335-7504info@erocopper.com
CAUTION REGARDING FORWARD LOOKING INFORMATION
AND STATEMENTS
This press release contains “forward-looking
statements” within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and “forward-looking
information” within the meaning of applicable Canadian securities
legislation (collectively, “forward-looking statements”).
Forward-looking statements include statements that use
forward-looking terminology such as “may”, “could”, “would”,
“will”, “should”, “intend”, “target”, “plan”, “expect”, “budget”,
“estimate”, “forecast”, “schedule”, “anticipate”, “believe”,
“continue”, “potential”, “view” or the negative or grammatical
variation thereof or other variations thereof or comparable
terminology. Forward-looking statements may include, but are not
limited to, statements with respect to the Company's expected
production, operating costs and capital expenditures at the Caraíba
Operations, the Tucumã Project and the Xavantina Operations; the
ability of the Company to execute on its growth initiatives
according to the timeline and budget currently envisioned;
estimated completion dates for certain milestones, including
construction of the Tucumã Project, completion of the projects that
comprise the Pilar 3.0 initiative, including the Caraíba mill
expansion and construction of the new external shaft to access the
Deepening Extension Zone, and commencement of mining from the
Matinha vein at the Xavantina Operations; the ability of the
Company to sell future copper concentrate production to its
domestic customer; and any other statement that may predict,
forecast, indicate or imply future plans, intentions, levels of
activity, results, performance or achievements.
Forward-looking statements are subject to a
variety of known and unknown risks, uncertainties and other factors
that could cause actual results, actions, events, conditions,
performance or achievements to materially differ from those
expressed or implied by the forward-looking statements, including,
without limitation, risks discussed in this press release and in
the AIF under the heading “Risk Factors”. The risks discussed in
this press release and in the AIF are not exhaustive of the factors
that may affect any of the Company’s forward-looking statements.
Although the Company has attempted to identify important factors
that could cause actual results, actions, events, conditions,
performance or achievements to differ materially from those
contained in forward-looking statements, there may be other factors
that cause results, actions, events, conditions, performance or
achievements to differ from those anticipated, estimated or
intended.
Forward-looking statements are not a guarantee
of future performance. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Forward-looking statements involve
statements about the future and are inherently uncertain, and the
Company’s actual results, achievements or other future events or
conditions may differ materially from those reflected in the
forward-looking statements due to a variety of risks, uncertainties
and other factors, including, without limitation, those referred to
herein and in the AIF under the heading “Risk Factors”.
The Company’s forward-looking statements are
based on the assumptions, beliefs, expectations and opinions of
management on the date the statements are made, many of which may
be difficult to predict and beyond the Company’s control. In
connection with the forward-looking statements contained in this
press release and in the AIF, the Company has made certain
assumptions about, among other things: continued effectiveness of
the measures taken by the Company to mitigate the possible impact
of COVID-19 on its workforce and operations; favourable equity and
debt capital markets; the ability to raise any necessary additional
capital on reasonable terms to advance the production, development
and exploration of the Company’s properties and assets; future
prices of copper, gold and other metal prices; the timing and
results of exploration and drilling programs; the accuracy of any
mineral reserve and mineral resource estimates; the geology of the
Caraíba Operations, the Xavantina Operations and the Tucumã Project
being as described in the respective technical report for each
property; production costs; the accuracy of budgeted exploration,
development and construction costs and expenditures; the price of
other commodities such as fuel; future currency exchange rates and
interest rates; operating conditions being favourable such that the
Company is able to operate in a safe, efficient and effective
manner; work force continuing to remain healthy in the face of
prevailing epidemics, pandemics or other health risks (including
COVID-19), political and regulatory stability; the receipt of
governmental, regulatory and third party approvals, licenses and
permits on favourable terms; obtaining required renewals for
existing approvals, licenses and permits on favourable terms;
requirements under applicable laws; sustained labour stability;
stability in financial and capital goods markets; availability of
equipment; positive relations with local groups and the Company’s
ability to meet its obligations under its agreements with such
groups; and satisfying the terms and conditions of the Company’s
current loan arrangements. Although the Company believes that the
assumptions inherent in forward-looking statements are reasonable
as of the date of this press release, these assumptions are subject
to significant business, social, economic, political, regulatory,
competitive and other risks and uncertainties, contingencies and
other factors that could cause actual actions, events, conditions,
results, performance or achievements to be materially different
from those projected in the forward-looking statements. The Company
cautions that the foregoing list of assumptions is not exhaustive.
Other events or circumstances could cause actual results to differ
materially from those estimated or projected and expressed in, or
implied by, the forward-looking statements contained in this press
release. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements.
Forward-looking statements contained herein are
made as of the date of this press release and the Company disclaims
any obligation to update or revise any forward-looking statement,
whether as a result of new information, future events or results or
otherwise, except as and to the extent required by applicable
securities laws.
CAUTIONARY NOTES REGARDING MINERAL RESOURCE AND
MINERAL RESERVE ESTIMATES
Unless otherwise indicated, all reserve and
resource estimates included in this press release and the documents
incorporated by reference herein have been prepared in accordance
with National Instrument 43-101, Standards of Disclosure for
Mineral Projects (“NI 43-101") and the Canadian Institute of
Mining, Metallurgy and Petroleum (the “CIM”) — CIM Definition
Standards on Mineral Resources and Mineral Reserves, adopted by the
CIM Council, as amended (the “CIM Standards”). NI 43-101 is a rule
developed by the Canadian Securities Administrators that
establishes standards for all public disclosure an issuer makes of
scientific and technical information concerning mineral projects.
Canadian standards, including NI 43-101, differ significantly from
the requirements of the United States Securities and Exchange
Commission (the “SEC”), and reserve and resource information
included herein may not be comparable to similar information
disclosed by U.S. companies. In particular, and without limiting
the generality of the foregoing, this press release and the
documents incorporated by reference herein use the terms “measured
resources,” “indicated resources” and “inferred resources” as
defined in accordance with NI 43-101 and the CIM Standards.
Further to recent amendments, mineral property
disclosure requirements in the United States (the “U.S. Rules”) are
governed by subpart 1300 of Regulation S-K of the U.S. Securities
Act of 1933, as amended (the “U.S. Securities Act”) which differ
from the CIM Standards. As a foreign private issuer that is
eligible to file reports with the SEC pursuant to the
multi-jurisdictional disclosure system (the “MJDS”), Ero is not
required to provide disclosure on its mineral properties under the
U.S. Rules and will continue to provide disclosure under NI 43-101
and the CIM Standards. If Ero ceases to be a foreign private issuer
or loses its eligibility to file its annual report on Form 40-F
pursuant to the MJDS, then Ero will be subject to the U.S. Rules,
which differ from the requirements of NI 43-101 and the CIM
Standards.
Pursuant to the new U.S. Rules, the SEC
recognizes estimates of “measured mineral resources”, “indicated
mineral resources” and “inferred mineral resources.” In addition,
the definitions of “proven mineral reserves” and “probable mineral
reserves” under the U.S. Rules are now “substantially similar” to
the corresponding standards under NI 43-101. Mineralization
described using these terms has a greater amount of uncertainty as
to its existence and feasibility than mineralization that has been
characterized as reserves. Accordingly, U.S. investors are
cautioned not to assume that any measured mineral resources,
indicated mineral resources, or inferred mineral resources that Ero
reports are or will be economically or legally mineable. Further,
“inferred mineral resources” have a greater amount of uncertainty
as to their existence and as to whether they can be mined legally
or economically. Under Canadian securities laws, estimates of
“inferred mineral resources” may not form the basis of feasibility
or pre-feasibility studies, except in rare cases. While the above
terms under the U.S. Rules are “substantially similar” to the
standards under NI 43-101 and CIM Standards, there are differences
in the definitions under the U.S. Rules and CIM Standards.
Accordingly, there is no assurance any mineral reserves or mineral
resources that Ero may report as “proven mineral reserves”,
“probable mineral reserves”, “measured mineral resources”,
“indicated mineral resources” and “inferred mineral resources”
under NI 43-101 would be the same had Ero prepared the reserve or
resource estimates under the standards adopted under the U.S.
Rules.
Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/bf546d70-500d-4aff-98bc-1cef8a44fd8d
https://www.globenewswire.com/NewsRoom/AttachmentNg/75adc062-0a10-4eb3-bd69-c2c506d5c710
https://www.globenewswire.com/NewsRoom/AttachmentNg/1c415786-193f-48b2-9c6d-61788c5643ff
https://www.globenewswire.com/NewsRoom/AttachmentNg/7b132096-2a88-4188-9827-8d8852d32537
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