Ero Copper (ERO) Q2 2024 earnings summary

Executive summary

• Achieved first salable copper concentrate at Tucumã in June/early Q3, with ramp-up on track for commercial production by end of Q3 2024.

• Q2 copper production reached 8,867 tonnes at C1 cash costs of $2.16/lb; gold production was 16,555 oz at C1 cash costs of $428/oz and AISC of $842/oz.

• Adjusted EBITDA was $51.5M and adjusted net income was $18.6M ($0.18 per diluted share), both up from Q1 2024.

• Signed definitive earn-in agreement with Vale Base Metals for the Furnas Copper Project, with exploration and resource estimate work underway.

• Net loss attributable to owners was $53.2M ($0.52/share diluted); available liquidity at quarter-end was $169.8M.

Financial highlights

• Q2 revenue was $117.1M, up from $105.8M in Q1 2024; gross profit for Q2 was $43.3M, up from $31.2M in Q1 2024.

• Operating cash flow for the quarter was $14.7M.

• Net debt rose to $482.0M at June 30, 2024, from $415.1M at March 31, 2024.

• Copper C1 cash costs dropped to $2.16/lb, driven by lower treatment charges and favorable FX.

• Working capital deficit at quarter-end was $57.6M; available liquidity was $169.8M.

Outlook and guidance

• Tucumã ramp-up expected to reach commercial production (80% of design capacity and recovery) by end of Q3.

• Reaffirmed full-year copper production guidance of 59,000–72,000 tonnes, with H2 2024 weighted due to Tucumã ramp-up.

• Full-year copper C1 cash cost guidance maintained at $1.50–$1.75/lb; gold C1 cash cost guidance reduced to $450–$550/oz.

• Gold AISC guidance lowered to $900–$1,000/oz; full-year gold production guidance increased to 60,000–65,000 oz.

• Capital expenditure guidance narrowed to $303–$348M for 2024.