Ero Copper Corp

Thank you for standing by. This is the conference operator. Welcome to the Eric Hopper Third 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 signal an operator by pressing star then zero. I would now like to turn the conference over to Fergal Komet, VP Investor Relations. Please go ahead.

Thank you, Operator. Good morning and welcome to AeroCopper's third quarter 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 nine months ended September 30th, 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 Marco DiFilippo, President and Chief Executive Officer, Wayne Dreyer, Executive Vice President and Chief Financial Officer, Jelson Batista, Executive Vice President and Chief Operating Officer, and Courtney Lin, 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 CDAR and EDGAR. Unless otherwise noted, all figures discussed today are in U.S. dollars. With that, I'll now turn the call over to Marco DiFilippo.

Thank you Farouk, and thank you all for taking the time to join us this morning. Speaking for everyone on this side of today's conference call, it is an exciting time over here at Arrow. During our last quarterly update and in conversations with many stakeholders since then, we have been speaking to the fundamental transformation that has been underway at Arrow this year. This work has continued to drive sequential improvements in quarterly performance and unlock new value drivers across our portfolio. These efforts are clearly evident in our Q3 results and in our Giavancina release yesterday. I will speak to both on today's call while ensuring we have sufficient time for questions. Yesterday, before market opened, we announced the results of a dedicated behind-the-scenes effort we initiated late last year to create value from within our portfolio, specifically at the Giavancina operations This work entailed sampling, metallurgical testing, characterization, and commercialization of stockpiled gold concentrates that had been produced in small but high-grade quantities since processing operations began over a decade ago. These efforts have culminated in the announcement of a maiden inferred resource of 24,000 tons, grading approximately 37 grams per ton containing 29,000 ounces of gold. The estimate was based on detailed sampling of approximately 20% of the concentrate stockpile volume. Late last month, just shy of one year since we laid out the initial work plan for this initiative with our teams, we commenced shipping gold concentrate, resulting in our first invoice this week, which Wayne will speak to in more detail. Looking ahead, we expect to sell between 10 and 15,000 tons of concentrate during Q4 2025 at an operating cost of approximately $300 to $500 per ounce of gold. At approximately 90 to 95% payability after deductions and treatment charges, this means, in practical terms, that we expect to significantly accelerate the deleveraging of our business, one of our core objectives for 2025. Sampling campaigns are ongoing to better quantify the remaining gold concentrate in stockpile, and we expect to sell the full volume over the next 12 to 18 months, resulting in what we expect to be a significant boost to gold sales and financial performance. Before I jump back into the quarter itself, I'll just address what is likely the first question many of you have. How did October go and how does that compare to underlying operational guidance ranges? While one month doesn't make a quarter and we have a considerable amount of daylight between now and December 31st, I am pleased to report that every single operation in our portfolio achieved not just 2025 calendar year monthly records for productivity and production, but they achieved all-time historic monthly records in October, beating some set many years ago. Starting at Cariba, we built on the momentum of a solid Q3, and during the month of October, achieved all-time record mine tonnages from each of the Pilar, Burmeos, and Surabine mines. New high watermarks across all of our mines at Cariba supported all-time record monthly mill throughput of just over 400,000 tons, implying an annualized run rate well beyond our installed capacity. We achieved this result on the back of a successful debottlenecking exercise that was initiated early this year and completed during the third quarter at effectively zero cost. Q4 at Cariba is off to a good start with over 3,500 tons of copper produced in October, on par with our best months so far this year. At Tucumã, sequential improvement in throughput volumes and grades following another sequential quarter of nearly 20% growth in copper production, drove a new monthly record in October of approximately 3,300 tons of copper produced. Last but not least, at Javanchina, we produced just shy of 7,000 ounces of gold in October, excluding any benefits from our new concentrate sales operation. This is a particularly noteworthy result, when you consider that our average quarterly production during the first half of the year was also 7,000 ounces. This result reflects the considerable effort we've put into successfully mechanizing Javanchina to make it safe and more productive. I'm very proud of what Rodrigo Fidel is and his team, and the whole broader team at Javanchina have been doing to achieve these results. More broadly speaking, we have spent a lot of time this year changing the way we do things, challenging the status quo, incentivizing improvement and optimization across our organization, and focusing on health and safety in order to drive productivity and operational excellence. The build we saw from a challenging first half of the year across the group, the green shoots in July and August, momentum from August into September, and breaking all-time records in September and October has been energizing, and we expect many more production records to be broken over the coming months and years. I am deeply proud of the work we are doing to achieve these results, proud of our global leadership team for their commitment, and thankful to our operational leadership for achieving these results while consistently improving our consolidated safety performance. That was a long detour to our third quarter results, but hopefully that clears up the question queue. Getting back to the quarter itself, Q3 was another record for Arrow on consolidated copper production due to increased contributions from Tukama, up nearly 20% for the second consecutive quarter. As we look to Q4, and as evidenced by my commentary on October, we continue to build on our strengths here and are expecting Q4 to be the strongest production quarter of the year across all three of our operations. At Kariba, plant throughput levels reached a quarterly volume record supported by sequentially higher mining rates across all three mines in the complex. momentum we have carried so far into Q4. Grade declined as expected in the quarter as we switched our center of mass to the upper levels of the polar mine and received more ore from the Cerro Beam pit, a strategy shift that was discussed at length last quarter. We expect to continue to benefit from higher throughput levels going forward, the result of a multi-quarter debottlenecking effort in order to drive higher copper production. We expect strong production in Q4 to allow us to achieve the low end of our annual production guidance, and we expect cash costs to decline from Q3 levels during Q4, supporting our full-year C1 cash costs in the lower half of our range. At Tucumã, production in the third quarter increased 19%, driven by the continued ramp-up of throughput at the mill, up approximately 37% quarter-on-quarter, partially offset by lower planned grades. As we look to Q4, we expect continued progress and increasing throughput levels along with higher grades in the mine to drive the strongest production of the year. We're off to a good start in October and expect strong production in Q4 to allow us to achieve the low end of our annual production guidance. We have adjusted our full year of C1 cash cost guidance at Tukama to reflect higher than expected maintenance and freight costs incurred during Q3. which will be partially offset by the expected improvements and underlying costs in Q4. At Javanchina, production increased by approximately 17% quarter on quarter as the mine began to benefit from our investments in mechanization during the first half of the year. We mined over 50,000 tons of ore in Q3, a level we haven't achieved since 2022. Looking ahead into Q4, as I touched on in my October commentary, We expect higher mine tonnage, higher tons processed, and higher grade stopes to significantly drive higher gold production in Q4, which will allow us to achieve the lower end of gold production guidance and meet full year cost guidance ranges at Javanchina. At Frenas, a central part of our growth strategy, physical work streams onsite progressed well through the end of October. We have now completed approximately 50,000 meters of drilling, completing the drilling obligations set out in the agreement for both the Phase I and Phase II programs. The Phase I program, completed early this year, was drilled in support of an updated mineral resource estimate and preliminary economic analysis. Technical work streams to support the preliminary economic analysis remain ongoing, and we are on track to complete this study during the first half of next year. The drilling completed under phase two of the agreement will be used in time to support the development of a pre-feasibility study. We currently do not anticipate slowing the drill program at Furnas based on the success of these programs and early insights into potential project economics. We set out this year to turn around and stabilize our operations, achieve commercial production at Tukama, deliver our balance sheet aggressively advance long-term growth initiatives at Furnas, and in due course initiate returns to shareholders. Transformative work is nonlinear, but seeing the momentum we have carried and the results flow through to an incredible September and October makes me confident we are on the right path. Every area of our business is doing its part to achieve these goals and create additional value for all of our stakeholders out of what we believe is a truly remarkable asset portfolio. I am thankful as ever for the continued support and belief in our vision for Arrow. To ensure we have sufficient time for Q&A, I will leave it there and pass the call to Wayne, who will provide more detail on our financial results.

Thank you, Maka. Our third quarter financial results reflected a 24% increase in copper concentrate sales at Tukama, which together with stronger copper and gold prices during the period, drove revenue to $177 million or $14 million higher when compared to the second quarter. At the same time, operating costs increased due to expected lower mind and process grades at Cariba and a change in the accounting treatment at Tucuma following the declaration of commercial production on July 1st, 2025. As a reminder, ramp-up costs are no longer capitalized and depletion, depreciation, and amortization began to be recognized at the operation. As a result, adjusted EBITDA totaled $77.1 million in the third quarter and adjusted net income attributable to owners of the company was $27.9 million or 27 cents per share. Our liquidity position at quarter end stood at $111 million, including $66.3 million in cash and cash equivalents and $45 million of undrawn availability under our revolving credit facility. We continue to deleverage our balance sheet, paying down $9 million on our copper prepayment facility during the quarter. Combined with higher 12-month trailing EBITDA, this resulted in further improvement in our net debt leverage ratio, which decreased to 1.9 times at the end of Q3 from 2.1 times in Q2 and 2.5 times at the end of 2024. With performance expected to be strongest across all three of our operations in the fourth quarter and additional cash flow from Chaventina's gold concentrate sales, we expect to materially accelerate deleveraging in the couple of months. Since the beginning of Q4, we've already shipped 3,000 tons of gold concentrate at an invoiced value of approximately $10 million, providing early momentum toward that goal. As for our foreign exchange hedge program, Our total notional position at quarter end was $290 million, consisting of zero-cost collars with a weighted average floor and ceiling of 559 and 659 real per dollar, respectively. These extend through December 2026. The real trended stronger and below our corolla range during the quarter, resulting in a realized gain of $2 million on these hedges. I'll now pass the call back to Marco for some closing remarks.

Thank you, Wayne. Before we move into the Q&A session, I want to take a moment here to reiterate our commitment to delivering on our strategy at Arrow, the one that we set out in January of this year. Thank you for your continued support in our company. Look forward to speaking with you in the new year. With that, I'll now turn the call back to the operator to open the line for questions.

We will now begin the question and answer session. 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. The first question comes from Suhad Tariq with Jefferies. Please go ahead.

Hi, thanks for taking my questions. On Gervantina, on the gold concentrate, Maybe it's early to tell, but how should we be thinking about the remaining 80% that has not been sampled yet? Is the assumption, would it be a fair assumption to assume that the concentrates are homogeneous and that it could be maybe close to 144,000 ounces of contained gold? Yeah, thank you for the question.

You know, I think everyone in this call is capable of dividing the 29,000 ounces by 0.2. We're very excited about the opportunity and what it means for our company, but I think it's too early to say exactly what that remaining volume will be. We fundamentally just need to do the work. As we outlined in our prepared remarks and in the news release yesterday, we do expect to sell the full volume over the next 12 to 18 months, which should be a very significant boost to our financial performance. But in terms of outlining specific densities and grades for the volumes that have yet to be sampled, very difficult to do.

Okay, and then maybe just switching gears to just Brazil costs in general. One of your mining peers, but more on the gold side, has talked about significant labor and contractor inflation in Brazil specifically. Just curious if you've seen anything that's been popping up on that.

Yeah, also a great question. Let's take a step back and look over the last eight years because I think context is important. What we saw from effectively 2017 until last year is that the rate of inflation in Brazil was outpaced by the depreciation of the currency. I don't know what commentary or what company that came from, but it's fair to say that in US dollar terms, inflation is still running high in Brazil. We do see that in our labor agreements. We see that in our contractor pricing. And over the last two years, we have not benefited as much from a depreciating BRL as we did in prior years, right, from 2017 to 2022. As Wayne outlined, you know, one of our strategies to help mitigate that is to put in costless callers on the foreign exchange, which we have put in place for a portion of our spend next year with a floor that's higher than this year. or at a weaker level than this year to help offset some of the inflation that we're seeing. But again, I think, you know, whenever we talk about inflation cost in Brazil, it's important to overlay what's happening in the currency and our efforts to help mitigate that. We have a number of initiatives that we spoke to in the past that we call our full potential exercise. It's a combined effort from operations and procurement to continually seek, as our business has grown over the past two years with integrating Tukama, And now the mechanization of Javanchina to enter into longer dated contracts across the group. And we have seen cost reductions on a, you know, I don't want to say at a significant level, but at least enough to offset the inflation that we're seeing in our business. So we're going to continue that work. Again, it's fundamental to the long-term protection of our operating margins. And we're continuing that work in the future. Great, thank you.

The next question comes from Guilherme Rosito with Bank of America. Please go ahead.

Hey, hello, guys. Thank you for taking my question. So my first one is on the value creation strategy in Shavantina. I just want to understand, like, Regarding the timing, why have you guys announced it now and not before? Just given when you look at the cash OPEX of these concentrates, this looks super creative even under lower gold prices. Of course, it is even more now that prices are close to $4,000. So maybe just if you could expand on why doing it now and not before, if it was a matter of time of having the capability to take a look at that. And also, if you guys see potential for doing that into your other operations, especially Caraiba, which has been running for some time and maybe has something in terms of concentrated stockpile or maybe the waste and the dams. And then finally, on Tucumã, just a quick question. How are you guys seeing the operating rates throughout 2026 between quarters? When are you expecting to reach nameplate capacity throughput? Thank you.

Perfect. Thank you. We'll go through those one by one. Thank you very much. So the value creation opportunity at Javanchina, it's worth stressing, this is not an initiative that began in earnest when gold price hit $4,000 an ounce. This is something that we've known about for a few years. I was involved in my prior role in an engineering exercise to recover value from this material. We did quite a bit of engineering work a few years ago. And we had mixed results during that time. And so we, as you'll probably appreciate, we were fairly busy over the last few years building Tucumac. And so this sat on the back burner. With the change in leadership that we had this year, both on site and throughout our technical group, there was a few key initiatives that we outlined in late last year that were chased down in earnest. This was one of those initiatives. Again, the work that to unlock the value wasn't simply a matter of selling concentrate. It involved a significant effort in sampling, material characterization, metallurgical testing, and a big effort from our commercial team to arrive at the point that we did just a few weeks ago. So I would say that the, you know, as a value creation initiative. It looked great when we started this and gold price was at $3,000 an ounce. It looks obviously fantastic at $4,000 an ounce, but the run-up in gold price was circumstantial with respect to the timing. As I said, we started this in earnest late last year. So hopefully that answers your first question. With respect to other opportunities across our portfolio in terms of creating value, I'd say we have a number of opportunities. in terms of creating value from our operations. We're looking at a few things, one of which I'll talk about in a minute, which is at Tukama. At Kariba, we need to do the work. It's hard for me to say what other opportunities we have there. We need to do the work to determine if there's residual value at that operation. Obviously, we've spent the first half of this year focused on health and safety, operational excellence, detailed planning, health and safety across all of our assets and some of the value initiatives that we're working on. We're pretty excited about including some activities at CARIBA, but too early to say if that will be something similar. I don't expect the same level of opportunity, but for sure we're chasing a few other high value opportunities across the group. Chicama at 2026. The last question that you asked there, look, we are seeing a continued ramp up in our production rates and throughput levels at Tucumah. We're really encouraged by the progress coming out of September and October. We have a lot more work to do, as I outlined, you know, until December 31st at midnight. It's fair to say that the improvements that we've been able to make since January, February, March to now are significant. But we see those improvements as reaching terminal velocity on throughput volume because of our filtration system. So we are looking right now at adding additional filtration capacity to help alleviate that bottleneck or at least take the step up in the rate of improvement. That work is happening right now. Wouldn't expect there to be a, you know, reaching design capacity until the second half of next year at this stage, but we'll talk about that more in January when we come out with our guide for the year. We are working on a lot of initiatives. In fact, last week we had a mobile filter press arrive on site, and so we're pretty excited about getting that operating to help us break through some of this last challenges. It's important to note we're not talking about large dollar investment projects. Uh, number one, number two, silver lining here is that when you look across the rest of the asset, our crushing circuit, our grinding circuit, our flotation circuit is performing exceptionally well. And so with Jelson here and the whole team, you know, we're looking well beyond the 4 million tons a year, uh, and how we can maximize the installed asset that we have as part of a de-bottleneck exercise. That is an important factor when you think about the longer-term production profile at Tucumaw coming off later in the mine life. If we can increase throughput levels with a relatively modest investment, that will obviously go a long ways to stabilizing production volumes over the long term. So stay tuned. More information on that to come. Hopefully that answers your question on Tucumaw.

Yes, it does. Thank you, Michael. Thanks, everyone. Bye.

The next question comes from Emerson Vera with Goldman Sachs. Please go ahead.

Hello, everyone. Good morning. Thank you for the opportunity. I have two sets of questions. The first one on the gold-construed sales. Can you guys please share with us what is the expected timeline to sample the remaining 80% of the total stockpile volume, please? And the second one on the gold side, I just want to understand if this concentrated sales is also subject to the extreme conditions that the company has with Royal Gold. By that, I mean, should we assume that 25% of those 24,000 ounces shall be delivered at 40% of spot prices? And moving on to Tucumã, can you guys share with us uh what has been done and what are the next steps on the ongoing improvement of the tailings filtration circuit and also following on tucuma looking at the guidance and taking recoveries and grades from three kills as a reference The company's throughput, I mean, Tucuma's throughput, actually, should almost double in the 4Q, so you can get 30,000 tons of guidance. But I understand that grade should improve, and throughput has been ramping up through the quarter. So can you share with us what was the throughput figure for September, maybe, or any latest update on throughput figures, please? That's it. Thank you.

One second, I'm just writing down your last question so I get them all. Yeah, thanks for the question, Emerson. So starting to go through here, first question, gold concentrate sales, what's the timing on the remaining volumes on sampling? The practical reality here is that we did a large amount of work on the volume that was available to be sampled. We need to sell that volume before we continue sampling, and that's obviously what we're doing, as Wayne alluded to. Our objective is to do that as fast as possible. The reality is that we have a planned resource and reserve schedule. We believe at this point that our sales of concentrate volumes will supersede the rate of our resource update timing. And so what that means from a practical perspective is that we'll provide clarity on a quarterly basis in arrears for the concentrate volumes that we've sold next year. And we'll talk about that more next year in our guidance with respect to giving some more directional levels on the quarterly cadence of concentrate sales, as Wayne said. And I mentioned the first sale occurred this week. So we'd like to get a few more weeks and months of sales here going before we talk about the cadence for next year. So stay tuned on that side. But as I said, the practical reality is that we're going to ship and sell as much and as quickly as we can and do that safely. And That means that we'll be providing updates quarterly in arrears as we go forward. But again, provide some additional forward-looking information or guidance for next year in January. Are the second question, are concentrate sales subject to the stream? Yes, they are. That's a pretty conventional term across all streaming agreements, so nothing unusual there. But the stream gold from concentrate sales or the gold from concentrate sales will be subject to the streaming agreement. We have a great relationship with Royal Gold. They've been an incredible partner for the growth and vision of Giavancino over the years, all the way from their first investment. And so we're really pleased that these deliveries will help to accelerate the effectively pay down to the stage three, which is an effective 6% stream tail. And if you want more information on that, you can look at the streaming agreements that we have filed on CEEDAR. But effectively, it'll help accelerate to the next phase, which is a step down from the 25% goal deliveries. And then two comma filtration capacity, what is planned, what's been done, what's ongoing, and throughput level clarity. So as I mentioned early on, we do see this continued rate of improvements. It is slowing down, as I said, reaching terminal velocity on the rate of change, and that's just a function of requiring – it looks like it will require some additional filtration capacity. As I mentioned, a few months ago, we mobilized a mobile filter press on site, so that's being ramped up and operating now. It should help relieve a little bit of additional capacity. Jelson and the team are doing additional engineering work. and looking at alternative sources for incremental tailings capacity to help break through that rate of change and get throughput volumes up. As you mentioned, we're still looking ahead on the back of a solid October, as I mentioned. We see that grades and recoveries are performing well. We expect that continuing to Q4, helping us to achieve the low end of our guidance range at 30,000 tons of copper for the year. On the throughput level itself, As I said, we are seeing continued improvements. We saw improvement in September, October. We expect to have a good month in November and December as well. I think on the last conference call, I mentioned exit velocity around 80% of our design throughput. We might undershoot that by a little bit, but we've been able to continue to have high-grade feed from the mine that'll help support production levels in Q4. Jelson, I don't know if there's anything you want to add on the specific work strengths for the filtration capacity.

Well, thanks, Marco. Thanks for the question as well. I mean, you've mentioned before about sequential improvement in Tucumã. I think this is the progress for the entire year. There are various things in the bottlenecking. We engage experts. They've been helping us for some time now. And also optimization in the plant, but it varies from mostly on the filtration plant, but small things in the mill as well, in the cryo system, and also the thickener. So this is ongoing, and we'll see the results in 2026. All right.

Thank you for the interview, guys. Have a good one.

The next question comes from Craig Hutchinson with TD Cohen. Please go ahead.

Hi, guys. Thanks for taking my question. Um, just on 17, that sounds like it's a good start to Q4, but can you give us some guidelines in terms of what the mining rates are maybe on a quarterly basis? And as you kind of move into next year, what is your capability now that you have the mechanized equipment? And maybe it's just a sort of follow up question. Um, you know, what should we think about in terms of the grades as we kind of move into next year, given the updated reserves you guys have, which I think it's just under seven grams of time. Thanks.

Yeah. Thanks. Thank you, Craig. When it comes to Giavancina, there's a few things to note there. Maybe step back just a minute before we talk about specific rates. One of our objectives for the strategy at Giavancina this year, obviously, unlock value from gold concentrate sales, so check that off the list. The second was to really extend the known limits of mineralization in the mines. And I think that was reflected really well in our resource update, specifically with the very significant increase in measured indicated resources and incurred resources. Our target was to uncover a million ounces. That was our objective. And when you look at what we put out yesterday, I think it's fair to say that we achieved that objective of a million ounces. Some of the last drill holes in the underground mine, You know, we're looking at a recent intercept this morning that came out a few weeks ago, you know, 15 meters at 11 to 12 grams per ton. So we're seeing a significant increase in the potential for Javanchina, and that makes us very excited. So, again, coming back to the strategy for the year, mechanize the mine, make it safer, extend the no limits of mineralization. Obviously, over the next few years, we've started this work now. We need to do additional infill drilling to confirm those resources, which are not yet mineral reserves. But we've been really happy with the effort on mechanization and what that means for Javanchina. We talked a little bit about mining rates in Q3. Obviously, you can see that from an ore process perspective, big increase, right? So going up to 50,000 tons mined and processed during Q3. That implies a rate just over 15,000 tons. We've been able to at least match that in October, much higher grades, just a function of where we are in the ore body, coming in at about 17 grams per ton in October, so very high grade. When we think about the variability in that deposit still exists, The mechanization has allowed us to increase the mining rate substantially and do it at a lower cost while making it more productive and safer at the same time.

Okay. 17 grams per ton in October. Wow, okay. And then, I mean, obviously, probably not sustainable at those grades, but next year, I guess, we'll look for updates with respect to those grades as well, I suppose. Thanks, guys.

Yeah, look, Craig, I mean, I think if you go back in history and you look at what we're able to do, again, we do get volatility month-to-month. That tends to smooth out over a quarterly basis. So we're still expecting high grades in Q4, just in particular as a result of the excellent performance in October. Some of the areas that we have available to mine, again, we're doing at a lower cost today. We're doing it safer. And so I'm incredibly proud of the team at Javentina for what they did this year.

Great. Thanks, guys.

The next question comes from Anita Soni with TIBC World Market. Please go ahead.

Hi. Thanks for taking my question. Just a couple of follow-ups to Craig's questions on Javentina. So in terms of the – I guess I was just looking for a split in the new reserve estimate. How much of it is sub-level doping and how much of it is your typical room and pillar as a percentage?

Yeah. Yeah, thank you. There is very little remaining room and pillar mining. It's going to be immaterial in the context of our total reserves. We're 100% focused on sub-level doping. There's a little bit of residual room and pillar, but the overall majority is going to be sub-level stoking.

Okay. So then when we look at the cutoff, I guess in the cutoff analysis on resources, which is generally a little less conservative than what you would have on reserves, I think you used a consolidated mining and processing number of 107 U.S. Is that a I mean, what should we be thinking about in terms of mining costs and processing? I mean, processing costs, I guess, will be the same, but the mining costs, what kind of savings would we get versus the mining costs that you're delivering right now?

Yeah, thanks. Good question. You know, we looked at this in detail. I'd say that we, you know, we're early days on mechanization. So we are coming back to the original plan was to complete the mechanization of the mine by June of next year. It was such a resounding success. We accelerated that timeline our last uh jack flag mining crew left site in september and so we're 100 mechanized i think to to give a a specific cost reduction number is probably a bit immature given that we're still optimizing but what we've seen so far again i wouldn't i wouldn't peg this for the long term but something in the order of 30 to 35 reduction in mining cost is what we've seen so far um in terms of brl per ton obviously it's going to impact by fx and a few other variables there, but so far about a 30% reduction in mining unit cost.

Okay, and so can you just tell me what the processing costs are right now?

I don't have that right in front of me. We can certainly follow up on the call, yeah, after the call. Thank you.

Okay, and then just one last question. A bit on the Matina vein, as I look at how the resource went to reserve, it's it's more than the 23% dilution that you were, that I think you guys were using in the estimate. Can someone provide some color on what happened with that specific vein? I think the other vein looks, the San Antonio vein looks, you know, kind of in line with the 23% dilution that you were talking about. But this one went from 11 gram per ton in resources down to 6.65. So that's kind of close to half or 40% down. So is there anything in particular there that I should be thinking about?

Yeah, obviously the 23% is average across. I think when you get to specifics, and we can address this offline too. I think it's probably a better forum. But when you look at the planned stopes that we have with sub-level stoping, they're obviously larger than room and pillar. And so that tends to increase planned dilution when you look at any kind of variability in your body in terms of its orientation, dip, any contours. You tend to pull in more planned dilution when you're using larger stopes. And so, again, that 23% is the average across the ore bodies. So we can talk more specifically about the Matinia vein and some of the impacts there in the update offline. But hopefully that gives you kind of a rough sense of what we're looking at.

Yeah, and then just a last question. Are you going to file a 43-101 on this one, or did you do it already? Sorry, I'm on the road right now.

Yeah, no worries. No, we will within 45 days of when the news release went out yesterday. So expect that before year end.

Okay, thank you. That's it for my questions.

The next question comes from Roald Ross with Clarkson Securities. Please go ahead.

Good afternoon, guys. Thank you for taking my question. Congrats also on the record production. I wanted to ask about the costs this quarter and maybe some commentary if there are any cost pressures in the business right now. So on Caraiba, it appears to be an 8% increase in mining costs and 28% increase in processing costs. While at Chavantina, there seems to be a jump in sustaining capex. So is there a trend of increasing costs or any color to add to that increase?

No, none other than what we outlined in the call. Obviously, you know, we did increase production volumes a lot at Cariba, which had, you know, an impact to you. But if you normalize that for volume, I think you see that it's pretty comparable quarter on quarter. Obviously, we had a higher grade in Q2. So Q3 was a bump up. We expect that to come down in Q4, as I outlined on the call at Cariba. Javanchina, there's some timing differences there on capital, so I wouldn't read too much into that in terms of increasing costs. I think I commented on one of the earlier questions about inflation in Brazil. That's a reality of all operations, I think not just in Brazil but globally, quite frankly, and we're working hard to make sure that we offset those inflationary pressures with hedges on the BRL so we can protect our operating margins going into next year.

Okay, great second and final question also appears that the company is in a phase now that where everything is sort of centered on getting to come out. At the nameplate capacity, but after. sort of achieving that later next year. How would you describe the vision of the company and sort of the next phase of the company? I expect that the furnace growth leg is a bit further into the future. How would you describe sort of that next phase for Aero?

No, that's exactly right. I mean, I know we don't get asked about it a lot anymore, but when you look across our portfolio, we still have a number of value-generative projects that are ongoing or in process. Gels and I were on-site at Currieville over the weekend, you know, and reviewing the progress on our shaft project to access a higher-grade zone in the Pilar Mine, which we think will transform the productivity of and obviously margins for that offset when that comes online in 2027. That's a big investment that we've committed to. We've been working that over a number of years. The shaft right now is by 870 meters below surface. And right now it takes about five minutes to get down to that level in the kibble compared to almost an hour driving down the ramp. So that will make a very significant improvement in our company later on in 2027. to that part of the portfolio. Obviously, big value creation exercise. Incredibly proud of what we've been able to do there, not just in terms of unlocking value from gold concentrates, but also the mechanization of the mine. If you look at the planning and effort and execution of those investments and that project, it's been a big success this year. And again, very proud of the work that we're doing there. We do see with keeping that million ounce target in mind. We see opportunities there to eventually increase production. Obviously that needs additional studies. There's ventilation, there's drilling, there's development involved in that and some infrastructure. And so we're working on studies to help support that for the future. But clearly with a million ounce potential, And growing, again, I mentioned some of those deeper drill holes and the very strong mineralization we continue to see in San Antonio. We for sure see opportunity to expand that operation. That's something we'll be working on for the next year. And then you hit it on the head for now. It looks like a very compelling opportunity. Obviously, we're working hard right now on the preliminary economic analysis and the drilling, which remains on track for the first half of next year. So if I take a big step back, you know, I've I've had the distinct privilege of being the first employee at AeroCopper nine years ago. And to watch what's happened this year and see our teams firing on all cylinders here at the end of Q3 and early into Q4, it's been an incredible year of transformation and pretty exciting to see the results that we've been able to produce. As I said, nothing's a guarantee or a layup for sure. We have a lot of daylight between now and December 31st. But when I look at beyond December 31st and this year, I'm incredibly excited about the legwork that we've done and where we're heading.

All right. That's great. Thank you.

Once again, if you have a question, please press star, then 1. Since there are no more questions, this concludes the question and answer session. I would like to turn the conference back over to Marco DeFilippo for any closing remarks. Please go ahead.

Yeah, thank you, everyone. Thank you for participating. For those of you that are traveling back from various site visits, safe travels, I look forward to following up over the coming days and weeks and giving an update on our outlook for 2026 early in the new year. Thank you very much.

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