Nexa Resources S.A.

Good morning, ladies and gentlemen, and welcome to Nexa Resources' first quarter 2025 earnings conference call. Please note that today's event is being recorded and broadcast live via Zoom, with access also available through Nexa's investor relations website. A slide presentation is accompanying today's webcast and is also accessible on our Investor Relations website. A replay of the conference call will be available following its conclusion. As a reminder, all participants are currently in a listen-only mode. Following today's presentation, we will open the floor for questions. To ask a question, if you're joining via Zoom, please click the Raise Hand button. If your question is answered, you can lower your hand by clicking on Put Hand Down. You may also submit your questions via the Q&A icon at the bottom of your screen. Please include your name and company when submitting your questions. For participants joining by phone, press Start followed by 9 to raise or lower your hand. Once announced, press Start followed by 6 to mute or unmute your microphone. Written questions that are not addressed during the call will be answered afterward by the Investor Relations team. Questions from the media outlets will be handled separately by our Corporate Affairs team. Now, I would like to turn the conference over to Mr. Rodrigo Camarosano, Head of Investor Relations and Treasury, for his opening remarks. Please, go ahead, sir.

Good morning, everyone, and welcome to Nexa Resources' first quarter 2025 earnings conference call. Thank you for joining us today. During this call, we will discuss the company's performance as outlined in our earnings release issued yesterday. We encourage you to follow along with the on-screen presentation through the webcast. Before we begin, I would like to draw your attention to slide number two, where we outline our forward-looking statements about our business. Please refer to the disclaimer regarding these statements and their associated conditions. Now, it is my pleasure to introduce our speakers. Joining us today are our CEO, Ignacio Rosado, our CFO, Jose Carlos Del Valle, and our Senior Vice President of Mining Operations, Leonardo Coelho. I will turn the call over to Ignacio for his comment. Ignacio, please go ahead.

Thank you, Rodrigo, and good morning, everyone. Thank you for joining us today as we review our first quarter 2025 results. Let's move to slide number three where we highlight our results for that quarter. Before discussing our quarterly performance, I want to briefly acknowledge the current macro environment. The past few months have been marked by significant volatility with concerns over global economic slowdown, geopolitical tensions, inflation, and supply chain disruptions. While the environment remains challenging, we continue to see a strong medium and long-term fundamentals for zinc, copper, and other key metals, supported by demand drivers like infrastructure, development, and industrial revitalization. Supply constraints and historically low sink treatment charges persist, but we believe new demand opportunities will continue to emerge. NEXA is well positioned to navigate this environment, focus on improving margins through disciplined operational performance and cost control. In the first quarter of 2025, we faced some operational challenges at certain sites, which led to production volumes slightly below our initial estimates. In the mine segment, this was mainly due to a typically heavy rainfall in the Pasco region, impacting El Porvenir and Atacocha's performance, as well as Aripoaná, where precipitation levels were approximately 30% above historical averages. Although our smelters also operated slightly below our budget, we remain in line with our 2025 guidance, which anticipates a year-over-year reduction of approximately 15,000 tons to reflect a more volatile market environment and lower disease. Despite these challenges, we deliver an adjusted EBITDA of $125 million, with margins remaining within historical ranges. Our consolidated net revenues totaled $627 million, up 8% compared to the first quarter of last year, even with lower smelting sales volumes. Net leverage stood at 2.1 times at the end of the first quarter, temporarily impacted by seasonal working capital intensity, which is higher early in the year. We expect to normalize these variations over the coming quarters. Turning to Aripuana, the heavy rains affected the performance of our tainting filters. I would like to confirm the acquisition of the fourth filter has been completed. It is currently under construction. We are confident that this filter will pave the way to utilization capacity increase and better support the operation during the rainy season. In line with our gross strategy and commitment to extend the life of our assets, Phase one of the Cerro El Pasco integration project focused on the tailings pumping and piping system is progressing well. I will share more details later in this presentation. Now let's move to slide number four to discuss our operating performance. Turning to the operating performance of our mining segment, zinc production in the first quarter of 2025 reached 67 000 tons down 23 percent year over year and eight percent quarter over quarter the year-over-year comparison was also impacted by the cessation of operations at moragudo in addition lower output at el porvenir atacocha daripona mainly due to heavy rainfall contributed to the decrease while basante experienced restricted access to higher grade areas during this period Looking at cash costs, our mining cash costs significantly dropped to 11 cents per pound compared to 26 cents per pound in the same period last year. This reduction was mainly driven by higher byproduct contributions, lower treatment charges, and foreign exchange gains, partially offset by lower sink volumes. Compared to the previous quarter, the mining cash costs increased by 12 cents per pound due to lower sink volumes, which was partially offset by higher byproduct prices and lower treatment charges. Our cost per run of mine in the quarter was $48 per ton, up 7% year over year and 8% quarter over quarter. mainly due to lower treated ore volumes and the inclusion of aripuana in the consolidated run of mine from the quarter. Excluding aripuana, run of mine costs remain flat in both comparisons. Now let's move to slide number five. Turning to our smelting segment, the total sales in the first quarter reached 130,000 tons, decreased by 6% year over year and 14% quarter over quarter. This reduction was primarily driven by lower production at Tres Marias and Ruiz de Fora. The year-over-year decline was partially offset by better operational performance at Cajamarquilla. Our 2025 guidance has already anticipated a reduction in smelter volume to accommodate a more volatile market environment and overall lower treatment charges. Looking at costs, consolidated smelting cash cost in the quarter was $1.17 per pound up from $0.98 per pound in the same period last year. This was mainly due to higher raw material costs driven by increased sink prices and lower TCs. These impacts were partially offset by higher byproduct contribution and positive foreign exchange variations. Compared to the previous quarter, cash costs decreased by 7%, mainly reflecting lower sink prices and reduced operational costs. However, these effects were partially offset by lower volumes and continued pressures from low TCs. Our conversion cost for the first quarter was 33 cents per pound compared to the 30 cents per pound in the same period last year. This slightly increase was mainly due to higher variable costs and maintenance expenses partially offset by foreign exchange gains. Compared to the previous quarter, conversion costs rose by 11%, driven by lower volumes and higher variable costs. Let's move to slide number six, where we will begin discussing Aripuana. In the first quarter, Aripuana's production volume declined due to intense rainfall in the region, with precipitation volumes 30% higher than in previous years. This led to a temporary reduction in production to stabilize operations and prevent overloading the dry stacking process. Treated ore volumes also decreased quarter over quarter as plant downtime increased due to preventive and corrective stoppages carried out during this period. Concentrate quality remained stable and within commercial specifications, while metallurgical recoveries improved performing at target levels. Regarding costs, reported for the first time since the start of the operations, they stayed within the 2025 guidance range. We anticipate a reduction in unitary costs in the upcoming quarters as we enhance plant capacity and increase sales volume, thereby improving operational efficiency and cost effectiveness. As previously announced, Aripuaná mine life increased to 15 years, compared to 13 years in 2023. This reflects our successful efforts to replace and expand mineral reserves year over year, reinforcing the assets' strengths and sustainability. This year's exploration strategy for Eripuana includes drilling programs to validate the continuity of mineralization and enhance geological confidence at the Masaranduba target, located in the southeast area of the mine. As disclosed last quarter, we approved the acquisition of a fourth tailing filter. This investment will improve operational efficiency by enhancing our filtering capacity and supporting full production. We expect the filter to be delivered and installed in 2025 with commissioning planned for the first quarter of 2026. We expect to deliver higher adjusted EBITDA and operating cash flow in 2025, supported by our ongoing efforts to reduce costs and improve margins. Let's move to slide number seven to discuss the latest advancements in the Cerro El Pasco integration project. On this slide, I would like to highlight our progress with the Cerro El Pasco integration project. During the quarter, we advanced on phase one which comprises the tailings pumping and piping system. Engineering activities for the tailings infrastructure at El Porvenir and Atacocha proceeded on schedule and major equipment manufacturing is underway with construction scheduled to commence during the second quarter of this year. Preparatory work for the phase two including technical assessments of the Picasso shaft and the underground integration is also progressing as planned. As mentioned before, phase one involves the construction of a tailings treatment plant at El Porvenir along with a six-kilometer tailings piping connecting the El Porvenir processing plant to the Atacocha tailings storage facilities. The primary goal is to significantly extend the operational capacity of the tailings storage infrastructure, ensuring long-term sustainability at the Cerro Pasco complex. This phase also lays the groundwork for subsequent stages of the project, which includes integrating the underground mines and upgrading the ore shaft at El Porvenir. Now let's move to slide number eight, where we will discuss some of the key value drivers of the project. A key value driver is access to high quality mineral resources in the underground section of Atacoche. unlocking its economic potential through a highly attractive net smelter return. Tapping into these resources will boost mineral resources and reserves, improve average head grades, and provide greater operational flexibility for the asset. Moreover, our exploration focus remains on the integration target, a region with exceptional geological potential and a highly promising upside for the project. Ultimately, the combination of these levers adds substantial value and paves the way for long-term success at the Cerro Pasco complex. We remain confident in the project's progress and, most importantly, in its potential value addition. I will turn the call over to José Carlos del Valle, our CFO, who will walk us through our financial results. José, please go ahead.