Nexa Resources S.A.

Good morning, and welcome to the NEXA Resources fourth quarter and full year 2023 conference call. All participants will be in listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. This event is being recorded and is also being broadcast via webcast and may be accessed through NEXA's Investor Relations website, where the presentation is also available. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star, then 2. Remember that the participants of the webcast will be able to register via webcast questions. Simply type your question in the box and click send, and that will be answered soon. I would now like to turn the conference over to Mr. Rodrigo Camarasano, Head of Investor Relations, for opening remarks. Please go ahead.

Good morning, everyone, and welcome to Nexa Resources' fourth quarter and full year 2023 earnings conference call. Thanks for joining us today. During the call, we will be discussing the company's performance as per the earnings release that we issued yesterday. We encourage you to follow along with this on-screen presentation through the webcast. Before we begin, I would like to draw your attention to slide number two, as we will be making forward-looking statements about our business, and we just ask that you refer to the disclaimer and the conditions surrounding those statements. It is now my pleasure to introduce our speakers. Joining us today is our CEO, Ignacio Rosado, our CFO, Jose Carlos Del Valle, and our Senior Vice President of Mining, Leonardo Coelho. So now, I will turn the call over to Ignacio for his comments. Ignacio, please go ahead.

Thank you, Rodrigo, and good morning to everyone. Please, let's move now to slide number three, where we will begin our presentation. We appreciate you joining us today to discuss our fourth quarter and full year 2023 results, along with insights into our outlook for 2024. I am pleased to report that we achieved our guidance for the year with metal production at the high end of guidance and total smelting sales at the mid-range, while mining and smelting costs were in line with guidance. As many of you are aware, 2023 posed persistent challenges to our business, particularly due to rising prices and the delay in the ramp-up of Aripuana. Nonetheless, I would like to highlight the dedication and professionalism of our team, which supported us in improving efficiency across our organization, which enable us to deliver solid operational results and also to mitigate in part the negative impacts of lower SINC prices in our 2023 cashflow. For the full year, total consolidated net revenues amounted to 2,573,000,000 down by 15% year over year, mainly due to lower SINC prices and lower metal sales. Adjusted EBITDA in the fourth quarter of 2023 was $105 million compared to $120 million a year ago. This performance was mainly driven by lower smelting sales volumes and sink prices. Sink was down 17% year over year. Compared to last quarter, adjusted EBITDA rose 28% due to higher sink prices, which were partially offset by lower smelting sales volume. For the full year, adjusted EBITDA amounted to 391 million, down 49% year over year, primarily driven by lower LME metal prices in addition to lower smelting sales volume. I want to reaffirm that we remain focused on completing the ARIPONA ramp up and consequently reaching the nameplate capacity in the second quarter of this year, maintaining our operational and cost optimization discipline, aiming to generate positive cash flow throughout this year and advancing with a formal approval process for the Cerro de Pasco integration project. Now, I would like to go over the progress of our EAG initiatives. 2023 accurately portrays our efforts to strengthen our sustainable business model. NEXA registered its carbon emissions on the LME Passport, the London Metal Exchange Platform, which promotes sustainability and transparency across the base metal sector. NEXA SYNC production has one of the lowest carbon footprints recorded in the sector, with an emission intensity of 0.36 tons of CO2 equivalent, considered 1 and 2. This achievement positions NEXA as one of the global leaders in carbon reduction within the SYNC industry. Moreover, CDP Carbon Disclosure Project recently concluded its evaluation cycle for the year 2023 and announced that NEXA's rating in the Climate Change Questionnaire was upgraded, changing from C to B. This recognition is the result of our efforts, disclosure and transparency related to governance, strategy, risk management, metrics and targets. Now moving to slide number four. Regarding the operating performance of the mining segment, you can see that zinc production increased to 90,000 tons in the fourth quarter of 23, up 21% year over year, mainly explained by higher production at the Aripuana mine, combined with higher production from the Cerro Lindo mine. Compared to the third quarter of 23, zinc production was up 3%, explained by higher volumes from the Cerro Lindo, Atacocha and Morro Agudo mines, in addition to additional production from the Aripuana ramp-up. It is important to highlight that in 2023, production was up 12% compared to 2022. In relation to cash costs in the fourth quarter of 23, it increased to 45 cents per pound compared to the 20 cents per pound in the fourth quarter of 22, mainly explained by lower byproduct credits from our Peruvian mines, higher operational costs in El Porvenir and higher treatment charges. Compared to the third quarter of 23, mining cash costs increased by 10 cents per pound, mainly affected by lower byproduct rates from Cerro Lindo and higher operational costs in El Porvenir due to the increase in mine development. The cost per run of mine in the quarter was $48 per ton, up 3% year-over-year, explained by higher variable costs, and up 10% quarter-over-quarter, also affected by high variable costs. Now moving to slide number five. Regarding the operating performance of this melting segment, metal sales total 143,000 tons in the winter of last year, down 14% from the fourth quarter of 2022 and 7% compared to the third quarter of 2023, mainly impacted by lower volumes in Cajamarquilla and Tres Marias. In 2023, total sales were down 4% compared to 2022. The smelting cash cost in the fourth quarter of 2023 decreased to $1 per pound compared to the $1.20 in the fourth quarter of 2022. This decrease was mainly explained by lower sink prices, reducing the cost of raw materials purchase, which was partially offset by lower byproducts contribution. Compared to the third quarter of 23, cash cost was down 1 cents per pound. Our conversion cost was 29 cents per pound compared to the 25 cents per pound in the fourth quarter of 23. due to higher maintenance and energy costs, compared to the third quarter of 23, conversion cost was relatively flat. Now moving to slide number six, where we will talk about Aripuana. In the fourth quarter, activities in Aripuana have progressed as planned with our efforts concentrated on further improving plant stabilization and reliability, as well as increasing metallurgical performance. In December, we had five days of downtime in the plant to address the replacement of equipment together with the execution of important de-bottlenecking task force activities. Considering this downtime, the average plant capacity utilization in the quarter was 61%, 5% higher compared to the previous quarter. In the last quarter, we also saw improvements in zinc recovery while concentrate rates and quality were stable. As a result, there was an increase in production compared to the previous quarter. Our exploration plan in Aripuana in the fourth quarter also progressed as expected, and the results confirmed the continuity of mineralization with high polymetallic contents, showing that we have a robust mining asset with the potential to operate for many years. We started 2024 with positive progress that keep us confident in estimating the completion of the ramp-up in the second quarter of this year. In the next two slides, we will see more details on the operational performance of Aripuana. Now moving to slide number seven. Starting with a plant downtime in the upper left side, we noted a decrease of 6% quarter over quarter, considering the five days planned downtime, which shows improvements in the stabilization of the plant. Average plant capacity utilization increased to 61% versus 56% in the third quarter. In the lower left side, we can see the progress of the zinc recovery, which reached 66% in December versus 59% in September. When compared looking at the January 2024 number, we see that the recovery ratio improved even further, reaching 73%. Copper and lead recoveries also improved significantly in January, showing a strong positive trend. Now moving to slide number eight. On the slide number eight, you can see that due to all the improvements mentioned above, compared to the third quarter of 2023, zinc production was 27% higher, reaching 7.4 thousand tons in the fourth quarter. Copper production increased 31% while lead and silver production grew up 49% and 42% respectively. These improvements show that we are in the right direction to achieve name plate capacity in the second quarter of this year. Now moving to slide number nine. On this slide, I would like to highlight that we continue progressing with our exploration program. The 2023 plan shows indications of positive results for both brownfield and greenfield activities. In Cerro Lindo, the exploratory drilling program focused on extending the mineralization of the OB8 and OB9 mineralized bodies, as well as identifying new mineralized zones at the Pucasaya target and its extensions. For Basante, the focus was on expanding existing mineralized zones in the northern and southern parts of the mine. In Aripuana, the program was directed at increasing mineral resources at the Babassu mineralized body and started drilling at the Masaranduba target. Both targets have solid indications of potential resource addition with attractive content. Finally, at the Cerro Pasco complex, the exploration program also showed relevant results. The program focused mainly on the integration target, which I will describe in detail in the next slide. In slide number 10, you can see some of the exploration program results in the Pasco complex, especially in the target integration that keep suggesting potential resource extensions. The target integration is an exploration area located between the El Porvenir and Atacocha underground mines. The results of this exploration confirm the continuity of mineralization at deeper levels with high metal content. We will continue to explore this area with the aim of not only increasing the mineral inventory, but also increasing the geological potential. Now I will turn over the call to Jose Carlos del Valle, our CFO, who will present our financial results. Jose, please go ahead.