Nexa Resources S.A.

Good morning, ladies and gentlemen, and welcome to Nexa Resources' first quarter 2026 earnings conference call. Please note that today's event is being recorded and broadcast live via Zoom, with access also through Nexa's Investor Relations website. A slide presentation accompanying the webcast is available for download, as well as a replay of the conference call following its conclusion. As a reminder, all participants are currently in listen-only mode. Following today's presentation, we will open the floor for questions. To ask a question, if you are joining via Zoom, please click the raise hand button. If your question is answered, you can lower your hand by clicking put hand down button. You may also submit your question via the Q&A icon at the bottom of your screen. Please include your name and company when submitting your question. For participants joining by phone, press star, follow it by 9 to raise or lower your hand. Once announced, press star, follow it by 6 to mute or unmute your microphone. Written questions that are not addressed during this call will be answered afterwards by the investor relations team. Questions from 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.

Good morning, everyone, and welcome to Next Resources' first quarter 2026 earnings conference call. Thank you for joining us today. During the call, we will discuss Nexa's performance as detailed in the earnings release yesterday. We encourage you to follow along with the presentation available through the webcast. Before we begin, please turn to slide number two, which contains our forward-looking statement disclaimer. We ask that you review the information regarding these statements and the associated risk factors. Joining the call today are our CEO, Ignacio Rossado, our CFO, José Carlos Del Valle, and our Senior Vice President of Mining Operations, Leonardo Coelho. With that, I will turn it over to Inácio.

Thank you, Rodrigo, and good morning, everyone. Starting on slide number three, our main highlights. The first quarter of 2026 was a strong start to the year. Adjusted EBITDA more than double year over year to $283 million with a margin of nearly 32%. Net income was $118 million or $0.67 per share. And net leverage continued to come down, closing the quarter at 1.59 times, half a turn lower than where we were a year ago, benefited by a strong last 12 months adjusted EBITDA. Three things drove the results. a constructive price environment across our entire metal mix, most notably silver, where prices averaged 164% above the first quarter of 2025, higher sales volumes in both segments, and operating performance that continues to improve, particularly at Alipona, which delivered another quarterly production record. The quarter was not without challenges. heavy rainfall at Cerro Lindo, an illegal community blockade at Atacocha, and a shaft constraint at El Porvenir all impacted the Peruvian production sequentially. Those issues have been addressed, and the affected operations returned to normal run rates. In mining, zinc production reached 79,000 tons, up 18% year-over-year, with all five mines benefiting from improved ore grades. In smelting, zinc metal and oxide sales total 147,000 tons, up year-over-year and quarter-over-quarter, supported by ongoing operations and improvements at our Brazilian smelters and continued solid performance at Cajamarquilla. The negative free cash flow in the quarter is consistent with our typical first quarter seasonality, reflecting working capital buildup and tax payments. We expect this to unwind over the coming quarters, reinforcing expectations of strong free cash flow generation in 2026. Let me move to slide number four for a closer look at the mining segment. Year over year, the 18% increase in zinc production reflects better ore grades across all of our operations. Quarter over quarter, the decline was driven by the temporary constraints at the Peruvian mines. Cash cost net of byproducts came in at negative 76 cents per pound, well below our 2026 guidance range, driven by stronger byproduct grades following from higher zinc, copper, silver, and gold prices. Cost per run of mine was $57 per ton. In line with guidance, the year-over-year increase was driven by the appreciation of the Brazilian Real, higher maintenance costs, and higher variable costs in specific operations. The financial picture for the segment is strong. Net revenues of $460 million and adjusted EBITDA of $231 million, translating into a 50% EBITDA margin. The kind of operating leverage we expect when prices and volumes both move in the right direction. On slide number 5, I will talk about Adipo now. Adipona was the standout asset of that quarter. We produced 13,000 tons of zinc, a quarterly record since the operation reached commercial production, supported by higher grades, better plant utilization, and improved operational stability. On the fourth tailings filter, construction and installation were completed in late April. Commission is started now in early May and is expected to be concluded in the second quarter. Once fully operational, the filter materially reduces our exposure to weather-driven throughput disruptions during the rainy season. Exploration continues to deliver encouraging results in the quarters. At Masaranduba, we hit a 16.6-meter intercept, grading 9.6% sink and 3% lead, additional confirmation of the long-term potential of the district. Now to slide number six for the Cerro Pasco integration project. Phase one of the Cerro Pasco integration project remained firmly on schedule during the quarter. We completed slope stabilization at the construction site, started civil works and structural assembly of the pump building, and concluded the manufacturing, testing, and packaging of the main equipment, including the thickener and pumps, as you can see in the picture on the bottom of the slide. These are important technical milestones. Looking ahead, We expect civil works to be completed and electromechanical assembly to progress through the 2026. Construction is targeted for completion in the third quarter of this year, with full project finalization expected in the fourth quarter of this year. We then begin the operating authorization process, which positions the start of the pumping for the second quarter of 2027. On the broader regulatory front, the second MEA for El Porvenir and the third for Atacocha are under evaluation by SENACI, and we currently expect both approvals in the first quarter of 2027. Preparatory studies for phase two, including the Picasso shaft assessment, also continue to advance during the quarter. This is one of the most important strategic levers in our portfolio. The integration extends life of mine at the Cerro Pasco complex beyond 15 years, lifts the average NSR of the life of the operation, and consolidates our position in one of Peru's most prospective polymetallic districts. Now, on slide number 7, I will talk about our smelting segment. In smelting, zinc, metal, and oxide cells of 147,000 tons were up year over year and quarter over quarter. The Brazilian units are recovering their production pattern, with Juiz de Fora producing 56% more zinc than in the first quarter of last year, and Tres Marias 17%. Caja Marquilla continue to operate at solid levels. Cash cost net of byproducts was $1.40 per pound, slightly above the upper end of our annual guidance, reflecting higher zinc LME prices and lower disease-impacting concentrate purchases. We expect this to ease modestly over the next quarters as our Peruvian operations return to normal run rates, reducing third-party concentrate need. Conversion cost was 34 cents per pound in line with our 2026 guidance. Starting this quarter, we have expanded our earnings release to include by-product sales performance, sulfuric acid, silver content, and copper cement. As by-products become a more expressive part of segment economics, we want to make those drivers more transparent for the market. Net revenues for the segment were $609 million with adjusted EBITDA of $51 million, an 8% margin. The margin reflects the structural pressure on global smelter economics from very low PCs. With that, I will hand the call over to Jose Carlos del Valle, our CFO, for the financial review.

Thank you, Ignacio, and good morning, everyone. Let's turn to slide number eight for an overview of our financial performance. We started the year carrying momentum from our fourth quarter of 2025, a favorable price environment combined with stronger operational execution. Net revenues totaled $888 million, up 42% year over year and down 2% sequentially. The year-over-year increase was driven by higher metal prices across our portfolio, evidencing a $158 million larger by-product contribution and improved performance in both the mining and smelting segments. The sequential decline reflects lower mining sales volumes, partially offset by higher smelting sales and stronger by-product pricing. Adjusted EBITDA came in at $283 million, up 126% year-over-year, with a margin of 31.8%. The year-over-year improvement reflects price realization, operational leverage from higher volumes in both segments, and stronger by-product trades. Sequentially, EBITDA was 6% lower, driven mainly by higher unit costs, from increased third-party concentrate consumption required to compensate for the temporarily lower output at our own Peruvian mines this quarter. We expect this to normalize as those operations return to full run rates. Now to investments on slide number nine. We invested $72 million in CAPEX during the first quarter, about 19% of our full-year guidance. in line with the typical 20 to 25 percent first quarter pace. The bulk went into sustaining activities, mine development, and tailing storage facilities. Phase one of the Cerro El Pasco integration project accounted for eight million dollars in the quarter versus a 31 million guidance for the full year. We reaffirm our total 2026 CAPEX guidance of 381 million dollars with disbursements weighted toward the back of the year as project execution intensifies, particularly for Cerro de Pasto Phase 1. On exploration and project evaluation, we invested $16 million in the quarter, mainly in exploration, drilling, and mine development. We also reaffirmed our full year guidance of $86 million. With that, let's turn to slide number 10 to review our cash flow for the quarter. Starting with our adjusted EBIT of $283 million and adjusting for non-operational items, our operating cash flow before working capital was strong, $308 million. From there, $72 million went to CAPEX and $81 million went to pay interest and taxes. Working capital and other variations were negative, $283 million in the quarter, in line with what we typically see in the first quarter of every year. Furthermore, this quarter we made significant tax payments related to the stronger results we had in 2025, paid out annual bonuses and settled year-end confirming payables across our jurisdictions. As before, we expect this to reverse substantially over the coming quarters, both as part of the natural intra-year seasonality and as we push initiatives to continue to improve our cash conversion cycle. Moving along, we also see that foreign exchange added a positive $6 million. And on the financing side in Brazil, we drew a new $40 million six-month loan at a very competitive interest rate. This was partially offset by regular debt service and lease payments, resulting in a net cash inflow of $21 million. In addition, we distributed $25 million in dividends to non-controlling interests. With that, free cash flow for the quarter closed at negative $126 million. Let's move to slide number 11 to discuss liquidity, indebtedness, and credit rating. Our liquidity position remains healthy. We ended the quarter with $716 million in total liquidity, including the undrawn $320 million sustainability link revolving credit facility. As you can see, our cash on hand alone is enough to cover pretty much all financial commitments over the next four years. Average debt maturity stood at 7.2 years at quarter end, with an average cost of debt of 6.27%, an improvement from the 6.49% at the end of 2025. Net leverage continued to come down at 1.59 times versus 1.69 times in the prior quarter and 2.09 times a year ago. The improvement was driven primarily by stronger last 12-month EBITDA of $929 million. Looking ahead, we remain committed to discipline the leveraging, focusing on reducing gross debt over time lowering interest expense, and maintaining net leverage below 1.7 times throughout 2026, while preserving our investment rating and competitive cost of capital. With that, I'll hand it back to Rodrigo for the market fundamentals section.

Thank you, Jose Carlos. Turning now to zinc and copper markets on slide number 12. Zinc prices remain supported by persistent concentrate tightness and low LME refined inventories. The LME zinc price was up 4% during the period, closing at $3,185 per ton. At the same time, smelter margins remain compressed. Spot treatment charges in China, both domestic and imported, continue at historically low levels. which highlights how acute the concentrate shortage is. While keys melting byproducts such as sulfuric acid have provided some partial relief to margins, they have not been sufficient to fully offset the impact of lower TCs. Looking into 2026, we do not expect a material recovery in TCs, particularly given that the annual benchmark has been settled at $85 per tonne. As a result, smelter margins are likely to remain under pressure. On the price front, zinc should continue to find support from solid fundamentals, including tight concentrate availability, low exchange inventories, and resilient demand from galvanizing and infrastructure-related end uses. On copper, supply fundamentals remain tight, with an ongoing demand. concentrates scarcity and negatives for PC and RCs. Copper price presented some short-term volatility in the quarter, linked to trade policies and inventory dynamics, but the structural setup remains constructive over the medium to long term, supported by bullish demand expectations. Now, let's turn to slide number 13 for a look at precious metals. Silver prices reached multi-year highs during the quarter, briefly trading above $120 per ounce before retracting. The fundamentals continue to be supportive. A sixth consecutive year of structural deficit combined with strong industrial demand from solar PV, electric vehicles, AI infrastructure, and data centers built out. This carries greater significance for NASA. as we produce roughly 11 million ounces of silver per year, making us a meaningful player in the global silver market. Furthermore, in April, we reached a delivery threshold under our Cerro Lindo silver streaming agreement. As a result, the streamed share of Cerro Lindo's production stepped down from 65% to 25%, with the remaining 75% now to be sold at prevailing market prices. At currency silver levels, this represents an important recurring additional contribution to our cash generation from the second cart onward. Gold prices also remain well supported through the quarter, driven by safe haven flows, sustained central bank purchases, a weaker U.S. dollar, and elevated geopolitical uncertainty. Looking ahead, both metals should continue to contribute strongly to our cash generation and to provide diversification and counter-cyclical support to our polymetallic portfolio. Now, on slide 14, on ESG, we have made progress across our main priorities on the part. We expanded community and inclusion programs in Brazil and Peru, advanced education and infrastructure projects with local communities near Cajamarquilla and Aripuanã, and continued our operational efficiency and low-carbon initiatives across the operations, including a backfill optimization project at Cerro Lindo that delivered meaningful reductions in cement and water consumption. We also strengthened HFNE and ESG governance, including leadership-level engagement, and continued progress on environmental permitting of our Peruvian assets. Finally, in late April, we published our 2025 Annual Sustainability Report, our most comprehensive disclosure to date on environmental, social, and governance performance. It is available on our investors-related website. With that, I will hand it back to Inácio for the closing remarks.

Thank you, Rodrigo. Before we open for questions, Let me close on slide number 15 with a quick recap of our priorities and key business drivers. First, Aripuana. The fourth filter commissioning is being completed this month, with positions as to reach full production capacity in the second half of 2026. Combined with our long reserve life, the asset is one of the central pillars of our long-term cash flow generation. Second, Cerro Pasco integration. Phase 1 is on schedule for project finalization in the fourth quarter, setting up the start of pumping in the second quarter of 2027. The project extends the life of the mine beyond 15 years and improves the profitability of the complex. Third, exploration. The 2025 reserves update extended life of mine across all of our operations. We are not just replacing depletion, we are growing the reserve and resource base. And this year, on back of strong drilling results, we have revised our 2026 program upwards to nearly 67,000 meters, about 12% above the original plan. with the increase concentrated at the Cerro Pasco complex and other exploration projects. Fourth, growth. We continue to evaluate value-accretive opportunities in mining-friendly jurisdictions. Underlying all of this is a consistent set of priorities. Financial and operational discipline, a stronger balance sheet, balanced capital allocation that includes shareholders' returns, and an active ESG strategy. And most importantly, our absolute commitment to safety for our people and our communities. Before we move to questions, I would like to take a moment to recognize Mauro Boleta, our Senior Vice President of Smelting and Commercial, who is retiring at the end of this month after more than 40 years with the Botoratin Group. Mauro has been instrumental in shaping our smelting and commercial operations, and on behalf of the entire NEXA team, I want to thank him for his contribution and wish him the very best. With the first quarter Peruvian constraints behind us, the Aripuana Filter Commission in underway, and the Cerro Lindo Silver Stream in transition now in effect, we are entering the rest of the year with strong momentum and a clear set of priorities. With that, let's open the line for questions.

Thank you. We will now begin the question and answer session. To ask a question, if you are joining via Zoom, please click the raise hand button. You may also submit your question using the Q&A icon at the bottom of the screen. Please include your name and company when typing your question. For participants joining by phone, Press star followed by 9 to raise or lower your hand. Once announced, press star followed by 6 to mute or unmute your microphone. The first question comes from Pedro Melo with City. Please go ahead.

My dreams?

Good morning.

Good morning. We can hear you Pedro.

Okay, thank you. My first question is regarding Cerro Páscoa integration project. So, Phase 1 of the project remains on shadow with tail pumping studded studs. It's mated for 2Q27. However, the two environmental approvals for El Povinir and Atacocha are only expected for next year's first Q, leaving a very tight window. So my question is, what are the key execution and permitting risks that could delay the two Q27 start? And regarding phase two, when do you expect to have a clear investment decision on the Picasso checks and underground integration alternatives? So this is the first one. And the second one relates to melting segments, where we saw a great improvement of results. So, could you give us more follow-up in what respect in terms of for the segment results in the next quarters, and why? And if we should expect this level to 50 million per quarter, go ahead. Thank you.

Okay. No, thank you for your questions. Regarding Cerro de Pasco, what we said is the pumping system is going to finish this year. So December this year, that pumping will be up and operational. And the permits, the modification on the environmental impact studies for Atacocha and El Porvenir will be ready in the first half of next year, okay? So there is going to be an overlap. And what is key here is that we have more than a year of life of mine of our tailings capacity. So we keep track of the permits permanently, and we are very confident that the permits are going to come in the first quarter of next year. And given that we finished the construction and we have this cushion on capacity, it shouldn't be a problem for us to continue operating El Porvenir and Atacocha. Okay? So we don't see any issues in that regard. Regarding smelting, it's a very important question because what happened last year is that we have some problems with the operational problems in the fora and in Tres Marias, in Brazil, that impacted their production. We started an assessment and a fast track improvement on operations during the last quarter of last year. And now we are producing more because recoveries are high, because we're making sure that all these bottlenecks in the operation are being taken care of. So the operation is going to evolve in the next three quarters. probably a little bit better than what we had in the first quarter. So we believe that this is a continuous improvement to come back to KPIs, operational KPIs that we had in 2024 and 2023. Having said that, it's important to mention that all the smelters, Cajamarquilla is performing really, really well. But, as we were saying in the call, and I think in our press release, all of our smelters are facing profitability problems in terms of the TCs. China is demanding a lot of concentrates, and even if we are improving operations, negative TCs or very low TCs are affecting all of our operations. and this is very important for us as well, is being compensated by products. The sulfuric acid market is very tight today. We are in a very good position for our production, especially for 27, because 26 is already being sold at high parts, and we close our spot sale in very, very important terms. and silver and copper, no? So these byproducts more than upset the problem that we have in the TC front. It's difficult to see how the smelting market is gonna perform in 2027 or in the next few months, because I believe that profitability drivers are gonna change. But in any case, what we can be focused is only on operational improvements that are happening. And as I was saying, the second quarter is going to be better than the first one. And we will come back to normal levels, the ones that you have been seeing in 2024. Okay?

Thank you.

Our next question comes from Satish Kazinathan with Bank of America. Please go ahead.

Hi, Satish. We cannot hear you.

We still cannot hear you Satish. I saw that you unmute your microphone, but we are not able to hear you.

It seems that Satish is having some technical problems. Once again, if you would like to ask a question, please click Raise Hand button at the bottom of the screen. If you are joining via Zoom, click the Raise button. If you may also submit your question using the Q&A icon at the bottom of the screen, please include your name and company when typing your question. For participants joining by phone, press star, followed by 9 to raise or lower your hand. Once announced, press star, followed by 6 to mute or unmute your microphone. Our next question comes from Adam Smierowski. Please go ahead.

Hi.

With the silver stream at Cerro Lindo – sorry, can you hear me now? Yes. Perfect.

Yeah, perfect.

Okay. Perfect. Thank you. Okay. The lower silver stream at Cerro Lindo, I was just going to see maybe how some of that extra revenue is going to be reinvested, whether you're looking at capital returns or M&A or other sort of changes in capital allocation. Are you able to comment on that?

Thank you for the question. To give some context, as you rightly mentioned, starting in the second quarter, we will begin to see the impact of the step-down in the silver stream, which is going from 65% to 25% of Cerro Lindo production. And to give you a sense of the impact, Assuming Cerro Lindo produces, I would say, 3.6 million ounces per year, at current prices, that's about $100 million more per year of cash generation, just to give you a sense of the magnitude of the impact. Having said that, this does not change our capital allocation strategy. As we have mentioned a number of times, our key goal is to reduce our gross debt, So this will help us to accelerate that process. And the idea is that any excess cash that we generate in this favorable price scenario will allow us to do this in a faster timeframe. So this is consistent with our overall strategy that we have been communicating to the market in the past, and there's no change to that.

No changes there. Okay. Thank you very much.

Our next question comes from Peter Varga. with AAM. Please go ahead.

Hello, can you hear me? Yeah, we can hear you.

Yeah, okay, hi. Thank you very much for the presentation. A couple of questions. Do you have an explicit leverage target you want to reach and over what time frame? And also would like to ask your CapEx land and maintenance and extension complex in details for the coming quarters and how that can be influenced by cementing margins and sink prices and metal prices.

Yes, our capital allocation strategy has not changed despite the silver streaming step down. In terms of capex, we are reaffirming our guidance. So, you know, the fact that we are generating higher cash flow in this favorable price scenario is not going to change that. So that's something to keep in mind. And in terms of leverage, as we have mentioned before, what we want is to have the flexibility so that we can go through different cycles. So part of the strategy of reducing the debt on one hand is to reduce interest expense, which is high for a company of the size of Nexa, but we want to have this financial flexibility because prices can change and we want to have that additional buffer. We don't know how fast we will be able to do this because we don't control prices, but we are certainly optimistic in this price scenario that we will be able to achieve this faster. I would say that reaching an overall net leverage of one time would give us a lot of comfort so that we would have that buffer to go through the different cycles. So it will depend again on prices, but we are confident that we will also accelerate this with this stable production performance that we're having and with the supportive prices that we're seeing.

Okay, thank you very much. And also, probably one question. We have seen some market rumors that your parent is looking to divest the company, and there were rumors that some European buyers are around. Can you comment on this, please?

Yeah, I mean, we have rumors all the weeks, every week, and actually we don't comment on rumors. What I can emphasize is that we are very active on looking for opportunities to grow Nexa. And we have a very dedicated team to make sure that we grow the company, not only in reserves and resources, that we are being very successful, but also on opportunities that are in the market, especially in corporate.

So that means that you're looking for M&A, but I mean, you already mentioned your net leverage goal. I mean, there's one time to reach over time, you mentioned, but how can... fit that M&D goal into the deleveraging goal? I mean, do you want to finance that probably issuing new shares or what kind of financing can be expected if there is an M&D?

Well, with this price environment, as José Carlos was saying, and some internal actions that are happening, which is the Zerolindo Stream, we might expedite reducing the debt at the level that we are comfortable. And in the interim, the strategy is going to be looking for these accretive opportunities in the market. The timing depends on how much we reduce the debt and how fast and what opportunities we find in the market. We keep track. We have in our radar a lot of opportunities. It's a difficult market today because it's very expensive. So I would say it would be a combination of reducing the debt and making sure that we can use our balance sheet, mainly our balance sheet, to start looking for these opportunities. And given that it could be an overlap, we have to be creative. And we have been doing that. So I believe that it could be done, and we'll see what happens in the coming months.

Okay. Thank you. And probably the last question. uh what do you expect from uh from the new peruvian government i mean he has heard uh some i mean it depends depends uh which party uh or which president will uh we will be at the end uh but how do you expect uh um the the licensing uh and especially the environmental licensing uh for for for the operations um going forward i mean um do you have any any any any view how a left-wing presidency can affect their operation, and do you have any plans for that scenario?

Yeah, I guess it's early days. We're not even in the second round today, and they're still debating who is going to go with the Fujimori party to the second round. But in any case, the way we see it is that we were already exposed to President Castillo, and I think they realize two things. One is that the central bank is independent, and changing that, you will need to change the Constitution, and to change the Constitution, you will have to go to the to the diputados' camera and senadores' camera, and it's going to be very difficult for them to approve any change. So this is a lock-up that we have. So the economy, and you see that the political noise is very difficult to affect the economy. That's one thing. The second one that is very important is that any president, regardless of their position, views on how they manage the country, start to know that most of the income that comes through taxes are from the mining sector. So if they really want to finance some, let's say, projects or activities or actions that are against the mining sector, they will start losing this income, and they cannot afford to do that. This happened to Castile. So the Ministry of Finance or the Ministry of Economy is very robust in that regard, and it's very clear that if income comes out, they won't have anything to do different actions that differ from making sure that the country is growing. Okay? So that's the second one. And the last one is that we mining companies are used to these sort of situations. And the most important part here is that you have good relations with your communities. So having good relations with them means that you have good agreements that benefit them, that benefit you, that are long-term, and that create an economic scenario for the two of us that is not affected by that political environment. So we don't see This has been the case for the last years. Many presidents have been impeached, which is a shame for Peruvians, for we Peruvians. But if you can see that, And you can see there is no link to the economic performance of the country. You can see that the mining sector managing communities effectively won't be affected that much by this noise in the political arena, okay? So that's more or less where we are. We'll see what happens. And we have to be prepared to any scenario, and this has been the case for many years.

okay thank you now i would like to turn the call over to the company for the written questions please go ahead thank you operator uh we have one question from the audience um the question is is there any estimated date for a construction decision for the stage two or phase two of the civil department integration project And will this Phase 2 require additional permitting?

Yeah. Very important question. I think there was a question that was asked before. I apologize for not answering that. Very important question. The Phase 2 part of the project is integrating the two mines and making sure that we produce more ore. As we were saying in the presentation, we have a very dedicated team in the exploration that started a strategy some years ago to start drilling heavily our mines. So we said many times that we are finding a lot of resources that have higher NSR and very important opportunities in the intersection and in Atacocha and El Porvenir in the underground parts. The reason why we decided to delay the phase two is because we are trying to make sure that we build a life of mine plan that is more effective and is more profitable for these two mines. And this is going to take some time. So I would say... We might be able to tell the market, I would say, in the second half of this year, how are we going to manage that. Our board is also waiting for that, and this is a priority. And the good thing is that the permits that we will have for Benino and Atacocha that will be approved in the first half of next year also apply for this integration. So we won't have a borderline problem in these approvals. So I think we are right on track. And we have a very good problem because the endowment that we used to approve the second phase has been increased significantly. That's why we are saying that we have more than 15 years. And today is a matter of how are we going to build this new life of man plants to make sure that profitability or NAV drives this evaluation, okay? So we'll keep you posted in what are we going to do in the following months.

This concludes our question and answer session. I would now like to hand the call over to Mr. Ignacio Rosado for his closing remarks. Mr. Rosado, please go ahead.

Thank you. I would like to emphasize that the closing of last year, we had very strong results and we were exposed to prices, to very good prices. This has been the case for the first quarter of this year. Unfortunately, we have some problems in our Peruvian operations that already have been resolved. But the message I would like to convey is that for the rest of the year, we are very committed to have very stable operations. We are very committed to offset some problems that we have in costs regarding oil, regarding inflation in the market, regarding the effects in Brazil. try to make sure that we sort of offset those with productivity measures, so we build a very robust operating profit from our mines and smelters in the rest of the year. Not only because we have these very good prices, because we take care of the main variables of the mines and smelters. So we look forward to speaking to you towards the end of the second quarter, And we are confident that we're going to deliver on our commitments and our guidance. So thank you very much for attending the call. And again, we look forward to speak to you in a few months.

Thank you. This concludes today's conference call. We appreciate your participation and interest in Nexen. You may now disconnect.