Nexa Resources S.A.

Good morning, ladies and gentlemen, and welcome to Nexa Resources' second quarter 2025 earnings conference call. Please note that today's event is being recorded and broadcasted live via Zoom, with access also available through Nexa's Investor Relations website. A slide presentation is accompanying today's webcast and is also available for download on our Investor Relations website. A replay of the conference call will be available following its conclusion. As a reminder, all participants are in listen-only mode. Following today's presentation, we'll open the floor for questions. To ask a question, if you are joining via Zoom, please click on the raise hand button. If your question has a red bit answered, you can lower your hand by clicking on put your hand down button. You may also submit your question via the Q&A icon located in the bottom of your screen. Please include your name and company when submitting your question. For participants joining by phone, press star followed by 9 to raise or lower your hand and once you are announced, press star followed by 6 to mute or unmute your microphone. Written questions that are not either said during the call will be answered afterwards by the Investor Relations team. Questions from media outlets will be handled separately by our company affairs team. Now, I would like to turn the conference over to Mr. Rodrigo Cama Rosano, Head of Investor Relations and Treasury, for his opening remarks. Please, go ahead, sir.

Good morning, everyone, and welcome to Nexa Resources' second 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, José Carlos del Valle, and our Senior Vice President of Mining Operations, Leonardo Coelho. I will turn the call over to Ignacio for his comments. Ignacio, please go ahead.

Thank you, Rodrigo. Good morning, everyone, and thank you for joining us today. Before we dive into our second quarter and first half of 2025 financial results, I would like to begin by highlighting the key business catalysts driving Nexus long-term growth and performance. Let's move to slide number three. As we continue to execute our strategy, four major business catalysts are shaping the path towards sustainable cash generation and long-term value creation. Starting with Aripuana, which remains our top priority, the installation of the fourth tailings filter is progressing on a scale. Once operational, this will unlock the operation's full production capacity and improve both efficiency and cash flow. Aripuana is a cornerstone asset in our portfolio, with a mine life of 15 years based on reserves and over 25 years when including resources. It is a highly competitive asset and well positioned in the cash cost curve. The Cerro de Pasco integration project is a key component of our strategy in Peru. With more than 15 years of life of mine and potential upside in net smelting return, it leverages the area's rich mineral endowment. In mineral exploration, in addition to the potential at Aripuana, we continue to achieve promising results. At Cerro Lindo, with extensions near its current infrastructure. At Pasco, drilling in the integration area reinforces our confidence in the mineral potential with attractive sink rates. And at Basanti, Sucuru Norte is also delivering promising results. Lastly, the integrated mine smelter business model continues to be a core competitive advantage. It reduces exposure to market volatility and enhances margins in positive pricing environments. With Ariponan, Cerro Pasco and their development, we are further strengthening our platform for sustainable cash flow. With that, let's now turn to slide number four, where we will review our performance this quarter. Market conditions remain dynamic, with metal prices showing mixed trends. Zinc and lead came under pressure, while copper and silver prices strengthened, supporting a sequential improvement in our financial results. Nexa delivered solid quarterly performance driven by disciplined execution and continued progress across our strategic priorities. We reported net revenues of $708 million, up 13% compared to the first quarter of 2025, and adjusted EBITDA of $161 million, a 28% sequential increase. This performance reflects higher sales volumes, especially in our smelting segment, and the benefit of stronger by-product prices. Our free cash flow was $17 million, an improvement over the previous quarter, supported by better working capital management. On the operating front, our mining segment produced 74,000 tons of zinc up 9% quarter over quarter as Aripuana and Basante are recovering from disruptions in the first quarter of this year. Our smelting segment also delivered solid results with total zinc sales reaching 145,000 tons, a 12% increase versus the first quarter. Looking ahead, we are revising our full year production and cost guidance to reflect our operational challenges in the first quarter in Iripuaná and Basante, which also impacted our smelters in Brazil. We continue to strengthen our financial position through proactive liability management initiatives completed early in the quarter, successfully extending debt maturities at competitive rates. These efforts, along with improved working capital, reinforce our investment grade profile and enhance our financial flexibility amid ongoing market volatility. On the strategic front, phase one of the Cerro Pasco integration project is progressing well. Key milestones, including final engineering, permitting, and contractor mobilization have been achieved. As I mentioned a moment ago, we remain on track with the acquisition and installation of the fourth tailings filter at Aripuana in the coming months, and commissioning is expected in the first half of 2026. This is a crucial step to unlock full capacity and support long-term operational stability in this important asset. With that, let's move to slide number five to discuss our operating performance in more detail. Turning to our operating mining segments performance, zinc production in the second quarter totaled 74,000 tons up, 9% quarter over quarter, mainly driven by higher treated ore volumes and better grades at our Peruvian operations. Compared to the first half of last year, zinc production was down 14%, mainly due to lower output at Basante and Aripona, partially offset by stronger production at Atacocha and El Porvenir. During the second quarter, Basante continued to face limited access to higher grade zones, while Aripuana was still impacted by operational constraints in the tailings filter capacity related to excessive rainfall and maintenance challenges. Both mines are projecting better performance for the remaining of the year. Looking at costs, our consolidated mining cash cost net of byproducts decreased to minus 11 cents per pound in the second quarter of this year, a significant improvement from 11 cents per pound in the first quarter of this year and two cents per pound in the second quarter of 2024. The sequential improvement was driven by higher byproducts contribution and increased sales volumes. Year-over-year decrease also reflects lower operational costs at our Peruvian mines and lower treatment charges. For the first half of 2025, cash costs were in line with our full-year guidance. Our cost per run of mine stood at $50 per ton, up 4% in year-over-year and quarter-over-quarter. mainly reflecting higher costs associated with stabilization efforts at Aripuana. Excluding Aripuana, run-of-mine costs were 8% lower than in the second quarter of last year and remained broadly stable versus the first quarter of this year. Overall, the first half of 2025 costs per run-of-mine came in slightly below our revised guidance. Now let's move to slide number six. Turning to our smelting segment, total sales reached 145,000 tons in the second quarter of this year, up 12% quarter over quarter, driven by higher production at Cajamarquilla and Luis de Fora, along with stronger zinc oxide sales in Tres Marias. Year over year, sales volumes declined 2% and was down 4% in the first half, in line with our sales guidance for the year. On the cost side, our consolidated smelting conversion cost stood at $0.39 per pound, up 19%, quarter over quarter, and 30% year over year, mainly due to higher maintenance expenses, third-party services, and input costs. Our cash cost in the second quarter of this year was $1.23 per pound, compared to $1.17 per pound in the first quarter of this year, and $1.19 per pound in the second quarter of last year. The increase versus the previous quarter reflects higher operational costs, while the year-over-year increase was driven by higher costs at our Brazilian smelters and lower treatment charges partially offset by lower LME sink prices. For the first half of 2025, our conversion cost was $0.36 per pound and our cash cost was $1.20 per pound, both within our revised full year guidance. Let's move to slide number seven, where we will begin discussing Aripona. During the second quarter of 2025, our plant faced increased downtime due to corrective stoppages caused by heavy rainfall in the first quarter, which impacted our tailings filter capacity. Our three tailing filters were refurbished and went through general maintenance during the months of May and June, which limited plant capacity. With the three filters fully operational, we are seeing more stable production in July, which should extend for the rest of the year. Recovery rates across all metals were at target levels, demonstrating operational consistency. We also saw a strong contribution from bright products, mainly copper, driven by higher volumes and prices, as well as improved silver and gold prices compared to the first quarter. In response to the disruptions experienced in the first half of 2025, we revised our 2025 production and costs per run of mine guidance. However, it's worth noting that our C1 cash cost guidance remains unchanged, reaffirming ARIPONA's competitive cost position. Despite all of these operational challenges, the asset continues to sit in the second quartile of the all-in sustaining cash cost curve, reflecting its long-term value potential. On the exploration front, our results from the first half of the year continue to highlight the strong geological potential of our asset. We are seeing ongoing confirmation of new mineralized zones, which increases our confidence in the future expansion of the life of our operation. Looking ahead, we expect continued improvement in plant performance, with monthly feed rates surpassing 130,000 tons, a level already achieved in July. Our efforts remain focused on addressing the current limitations in the tailings filter circuit. For the second half of 2025, We expect to deliver higher adjusted EBITDA supported by higher production, ongoing cost reduction initiatives and margin improvements. As previously announced, we have procured the fourth tailings filter, which is currently in the manufacturing phase. We anticipate delivery and installation in the second half of 2025 with commissioning scheduled for the first half of 2026. This investment will enhance utilization capacity and operational stability further. In summary, despite early year challenges, we remain confident in the strong fundamentals of Aripuana. It's a strong geological potential combined with efficiency improvements reinforces our ability to deliver long term value for our shareholders. Let's now move to slide number eight to walk you through the most recent developments in the Cerro Pasco integration project. On this slide, I would like to highlight our progress in our Cerro Pasco integration project. This quarter marked significant progress in phase one, which focuses on the tailings pumping and piping system. Key achievements include the completion of detailed engineering for the tailings infrastructure at both El Porvenir and Atacocha, construction license secured for both sides, procurement of major equipment packages, with manufacturing currently on schedule, and the start of construction activities following full site mobilization with airworks and civil works, which began in July. Preparatory work for Phase 2 is also progressing, including technical assessment of the Picasso shaft and the planned underground integration. As mentioned before, Phase 1 is a critical enabler for the long-term sustainability of Cerro Pasco, as it will significantly expand tailings storage capacity and support future production plants. Let's move to slide number nine, where we will highlight our exploration program achievements during the first half of this year. On this slide, I would like to highlight the ongoing progress of our exploration program, which delivered positive results in the first half of this year. At Cerro Lindo, the program remained focused on expanding known ore bodies in the southeast region with drilling activities targeting the extensions of mineralized zones in ore bodies 8B and 8C. In Aripuana, our activities were centered on the Mazaran Duva target, where we continue to confirm new mineralized areas, reinforcing the long-term potential of the district. At Basante, our program Brownfield exploration efforts continue to advance, focusing on the expansion of mineralized zones in closing proximity to the existing mine infrastructure, where mineralization at target was confirmed. Finally, at Cerro de Pasco, the exploration program delivered positive results mainly around the integration target, which remains a key focus area for future development. With that, I will turn the call over to Jose Carlos del Valle, our CFO, who will walk us through the financial results. Jose, please go ahead.