Ero Copper Corp.

Thank you for standing by. This is the conference operator. Welcome to the AeroCopper Second Quarter 2024 Operating and Financial Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. If you're participating through the webcast, you can submit a question in writing by using the form in the lower section of the webcast screen. I would now like to turn the conference over to Courtney Lee, Senior Vice President of Corporate Development, Investor Relations and Sustainability. Please go ahead.

Thank you, operator. Good morning and welcome to Arrow Copper's second quarter earnings call. Our operating and financial results were released yesterday afternoon and are available on our website, as are our financial statements in MD&A for the three and six months ended June 30th, 2024. On the call with me today are David Strang, Arrow's co-founder and chief executive officer, Marco DiFilippo, president and chief operating officer, and Wayne Dreyer, chief financial officer. We will be making forward-looking statements that involve risks and uncertainties from which actual results may differ materially. We would refer you to our most recent annual information form available on our website, CDAR and EDGAR, for a discussion of the risk factors of our business and their potential impact on future performance. As a reminder, and unless otherwise noted, all amounts are in U.S. dollars. I will now pass the call over to David Strang.

Thank you, Courtney, and thank you everyone for joining us today. Before we discuss our second quarter results, I want to acknowledge what a challenging week this has been for our organization. As announced earlier this week, one of our colleagues at the Cariiba operations was fatally injured in an incident involving a light duty pickup truck on surface, and another of our colleagues remains in critical condition. We are providing our full support to the families and coworkers of the individuals involved during this incredibly difficult time. Out of respect for those affected, we do not plan to discuss the incident further. Safety is a non-negotiable aspect of our operating philosophy, and we remain unwavering in our commitment to this mission. With that said, we will now turn our focus to discussing updates from our second quarter. During the quarter, the Tucumac project was awarded its operational license and achieved first concentrate production at the end of June. In mid-July, we achieved production of first saleable copper concentrate at above-designed target concentrate grades. While Mako will discuss our ramp-up schedule in greater detail, I can share that the Tucumac plant continues to perform well, and we remain on track to reach commercial production levels by the end of the third quarter. As we advance towards doubling copper production next year, we continue to execute on our longer-term growth strategy. These efforts were highlighted by the announcement last week that we signed a definitive earning agreement with Vale Base Metals on the Furnas Copper Project in the Carayas Mineral Province. This agreement aligns with the terms outlined in our previously signed binding term sheet, detailed in our press release on October 30th, 2023. Earlier this year, we commenced baseline environmental studies, core re-logging, and validation programs at Furness in support of an inaugural NI43-101 resource estimate, which we expect to publish later this year. In parallel, we have continued to compile and update the extensive work previously completed on the project by Vale, which includes significant metallurgical, geotechnical, environmental, process design, and site planning studies. With the definitive agreement now in place, we expect to initial our first exploration campaign later this year. Before I turn the call over to Mako and Wayne, I will touch briefly on our operating results at Caraiba and Gervantina, as well as financial results for the quarter. At Caraiba, we continue to see the benefit of our mill expansion completed late last year reflected in quarterly throughput with tons processed up 12.2%, quarter on quarter, and 17.9% compared to Q4 2023. This higher throughput volume offset slightly lower processed copper grades compared to the first quarter, resulting in a 9.6% increase in copper production of 8,867 tons in concentrate. While we had success in catching up on development of high-grade stoves at the Pilar Mine in April and May, Mining from these high-grade stoves came later in the quarter than planned, and one high-grade stope in particular experienced higher-than-planned dilution. When combined with lower milled grades of Vermeers due to mine sequencing and a higher proportion of mill feed from the Surabim open pit, process copper grades averaging 1.03% for the quarter. With respect to our C1 cost, We are starting to see the impact of persistent tightness in the copper concentrate market, which has led to some of the most favorable treatment and refining terms we have ever seen. Over the last several months, we capitalized on these dynamics by entering into longer term contracts with our copper concentrate customers. We secured a blending treatment charge of just over $5 per ton and a $0.05 refining charge on 100% of our consolidated copper production including both Caribe and Tucumã, from May through the end of the year. By comparison, our copper concentrate treatment and refining charges averaged nearly $80 per tonne and $0.08 per pound from January through April of this year. The significant reduction in our treatment charges, as well as the strengthening of the dollar against the Brazilian reaction, contributed to lower copper C1 cash costs of $2.16 per pound of copper produced during the second quarter. This decrease in unit operating costs coupled with copper prices that hit all-time highs during the period drove increased gross profit margins at Cariiba compared to the first quarter. Our Gervantino operations also saw another exceptional quarter with an expansion in gross profit margins during the second quarter, reflecting a continuation of elevated grades and record gold prices, which have rallied even higher in the third quarter. Gold production is Gervantino worth 16,555 ounces, with tons processed up 6.9% quarter-on-quarter, and gold grades continuing to trend above long-term block model grades. As a result, unit operating costs remain below budget, with C1 cash costs and oil and sustaining costs coming in at $428 and $842, respectively, per ounce of gold produced. The combination of solid production across our operations and strong market tailwinds resulted in second quarter operating cash flow of $14.7 million and adjusted EBITDA of $51.5 million. As we look to the second half of the year, we expect consolidated copper production to increase sequentially each quarter, driven largely by the ramp-up that took a month. We also expect higher mined and processed grades at Carahiba to result in higher production and contribute to lower unit operating costs in the second half of the year. While we are reaffirming all of our copper production cash cost guidance ranges, we are now guiding to the lower end of our copper production guidance range for Carahiba. At Gervantina, we expect mined and processed gold grades to remain above budget in the second half of the year based on channel sampling from development drives. While grades should remain elevated, they are projected to decrease relative to the second quarter, leading to slightly lower production and higher unit costs in the second half compared to the first half of 2024. However, due to strong year-to-date operating cost performance, full-year unit operating costs are now projected to be lower than we had originally budgeted. and we are reducing our full year gold C1 cash cost guidance by $100 to a range of $450 to $550 per ounce of gold produced. We are also lowering our oil and sustaining cost guidance by $150 to a range of $900 to $1,000 per ounce of gold produced. I'll now pass the call to Mako after which Wayne will provide more detail on our financial results.