Nexa Resources S.A.

And welcome to Nexa Resources first quarter 2024 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist 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 one on your telephone keypad. Again, star one. To withdraw your question, if needed, please press star then two. Remember that the participants on the webcast will be able to register your website questions. Simply type your question in the box and click send, and that will be answered soon. And now I'd like to turn the conference over to Mr. Rodrigo Camarosano, Head of Investor Relations, for opening remarks. Please go ahead.

Good morning, everyone, and welcome to Nexa Resources' first quarter 2024 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. where we will be making forward-looking statements about our business, and we ask you to refer to the disclaimer and conditions surrounding those statements. It is now my pleasure to introduce our speakers. Joining us today is our CEO, Ignacio Rosado, our CFO, José Carlos Del Valle, and our Senior Vice President of Mining Operations, Leonardo Coelho. So now I will turn the call over to Ignacio for his comments. Ignacio, please go ahead.

Thank you, Rodrigo. Good morning, everyone. Thanks for joining us today to discuss our results for the first quarter of 2024. Before starting our presentation, I regret to inform you that in early March, we had a fatal incident involving one of our employees in the El Porvenir mine. And earlier this week, another fatal incident involving one of our employees at the Basante mine. This is a very difficult time for NEXA, and it becomes clear that we need to work even harder on reinforcing our safety system. We extend our heartfelt condolences to the families of our two employees and reassure them and all of our stakeholders that the safety and well-being of every person who works at Nexa are our main values and remain our utmost priority. We are committed more than ever on enhancing employee safety and achieve zero fatalities. Please let's move to slide number three, where we will start our presentation with the main highlights of the quarter. Let me begin by saying that I am pleased to report that we had a positive start of the year. We have achieved another quarter of consistent operating performance, maintaining our focus on cost, discipline and capital allocation. Despite ongoing challenges in our industry at the beginning of the year, such as weak microeconomic conditions, commodity price volatility, and lower demand due to seasonality, we continue to make steady progress and remain focused on executing our priorities. In the first quarter of 2024, consolidated net revenues were $580 million, down by 13% year over year, mainly due to lower zinc prices, lower premiums, and lower metal sales. Adjusted EBITDA in the first quarter of 2024 was $123 million compared to $133 million a year ago. This performance was mainly driven by lower sink prices and lower metal sales. Despite the still low sink price scenario in the first quarter of this year, compared to last quarter, adjusted EBITDA rose 17% due to strong production, lower costs, and lower mineral exploration and project evaluation expenses. Our ERIPONA project continues to make good progress, and we expect to conclude the ramp-up process in mid-2024. Concerning mineral reserves, we had very positive outcomes, as evidenced by a 59% increase in mineral reserves at Cerro Epasco, as highlighted in our recently released technical report summary. overall mineral reserves for 2023 increased by 10% compared to 2022. I encourage you to review both the technical report and our Mineral Reserves and Mineral Resources report, which were published at the end of March and are available on our Investor Relations website. I would like to emphasize that we recently announced the divestiture of our Moragudo mine. making another step in our capital allocation strategy. Our team has done incredible work providing full support to the employees who work at Morro Agudo for many years. We estimate that around 25% of our employees will be reallocated to other operations by the completion of the transaction. I want to reaffirm that we remain focused on Completing the AREPO and ARAMPAP by mid-2024, we observe improved in metal recoveries and concentrate quality in the first quarter of this year, maintaining our operational and cost optimization discipline to achieve positive cash flow generation throughout this year, and advancing with a formal approval process for execution of the Cerro de Pasco integration project. Before we move to our next slide, I would like to share that we released our 2023 sustainability report on April 25th. This report highlights the collective efforts of our team in advancing our ESG initiatives meaningfully. Additionally, in April, we concluded important transactions in line with our liability management program. These transactions included extending our debt profile through the issuance of new debentures and bonds, making a significant milestone for NEXA. This strategy move allowed us to optimize our financial structure, diversify our funding sources, and enhance our liquidity position. José Carlos will provide more details on this topic in his presentation later on. Now moving to slide number four. Regarding the operating performance of the mining segment, zinc production reached 87,000 tons in the first quarter of this year, up 17% year over year, mainly explained by an increase in treated ore volume and higher zinc average grades, particularly at the Cerro de Pasco, Basante and Aripuana mines. Compared to the fourth quarter of 23, zinc production was down 3%, explained by lower volumes from the Peruvian mines and Morro Agudo. Concerning cash costs in the first quarter of 24, it decreased to 27 cents per pound compared to the 43 cents per pound in the first quarter of 23, mainly explained by lower treatment charges and higher volumes. Compared to the fourth quarter of 23, mining cash costs decreased by 18 cents per pound, mainly explained by lower treatment charges and lower operating costs at the Cerro Lindo and the El Porvenir mines. The cost per run of mine in the quarter was $45 per tonne, relatively flat of year over year and down 6% quarter over quarter, mainly explained by lower operating costs. Now moving to slide number five. Regarding the operating performance of the smelting segment, metal sales total 139,000 tons in the first quarter, down 4% from the first quarter of 2023 and 3% compared to the fourth quarter of last year, mainly impacted by lower production volumes and the typical seasonality of demand in the period. Smelting cash costs in the first quarter of this year decreased to 98 cents per pound, 22% lower compared to the $1.25 per pound in the first quarter of 2023. This decrease was mainly explained by lower costs of raw materials attributed to lower sink prices. Compared to the fourth quarter of last year, cash cost was down 3%. Our conversion cost was 30 cents per pound compared to 31 cents per pound in the first quarter of last year due to lower variable costs and lower energy costs. Compared to the fourth quarter of last year, conversion cost was 4% due to higher variable costs and lower smelting sales. Now moving to slide number six, where we will talk about Aripuana. In the first quarter, activities in Aripuana have progressed as planned, with our efforts concentrated on the replacement of some critical equipment and on improving the metallurgical process. Those were important steps to keep improving plant stabilization and reliability. As a consequence, in the quarter, we saw significant advances in recoveries and concentrate quality. Although capacity utilization during the first quarter of 2024 was 57%, we saw an important increase in utilization in March and April, with levels reaching more than 80% on certain days of both months, and stabilizing at around 70% in the second week of April. In the following months, we expect this positive trend to continue. In the first quarter of this year, we saw an increase in copper, lead and silver production compared to the previous quarter, while zinc was flat. Our current focus continues on planned stabilization and on adjusting some critical processes, such as improving the performance of the tailing-spheretailing circuit, which will allow us to further increase capacity utilization, paving the way for the completion of the ramp-up which is expected by mid-2024. Our exploration plan in Alipuana in the first quarter also progressed as expected, and the results confirm the continuity of mineralization with high polymetallic contents, reaffirming that we have a robust mining asset with the potential to operate for many years. I would like to highlight the important results we obtained in the 2023 exploration campaign, which contributed to NEXA's overall 10% increase in mineral reserves. In the next two slides, we will see more details on the operational performance of Aripuana in the quarter. Now moving to slide number seven. Starting with the plant downtime in the upper left side, we noted a decrease of 14% quarter over quarter, indicating improvement in the stabilization of the plant. Average capacity utilization averaged 57% in the quarter, but increased to 70% during April. In the lower left side, we can see the progress of the zinc recovery, which reached 73% in March versus 66% in December. Copper and lead recoveries also improved significantly in March, indicating a strong positive trend. Now moving to slide number eight. On slide eight, compared to the fourth quarter of 2023, zinc production was relatively flat. Copper production increased by 9%, while lead and silver production increased by 14% and 11% respectively. These improvements indicate that we are moving in the right direction to complete the ramp-up in mid-2024. Now, moving to slide number 9. On this slide, I would like to highlight that we continue progressing with our exploration program. We have reached important results with an overall 10% increase in our mineral reserves in 2023, net of depletion. This was mainly driven by the infill and brownfield positive results from drilling activities in Aripuana and the inclusion of the Atacocha mineral reserves driven by the positive results from the Cerro Pasco integration project. The 2023 results reinforce NEXA's successful track record in not only replenishing, but also increasing our mineral reserves and mineral resources base, as well as showing the potential of our assets. Now, I will turn over the call to José Carlos del Valle, our CFO, who will present our financial results. José, please go ahead.