Ero Copper (ERO) Q3 2024 earnings summary

Executive summary

• Leadership transition: David Strang as Executive Chairman, Makko DeFilippo as President and CEO, and Gelson Batista as COO.

• Achieved first saleable copper concentrate at Tucumã in July 2024, contributing 839 tonnes to consolidated Q3 copper production of 10,759 tonnes.

• Caraíba produced 9,920 tonnes of copper at C1 cash costs of $1.63/lb, and Xavantina produced 13,485 oz gold at C1 cash costs of $539/oz and AISC of $1,034/oz.

• Net income attributable to owners was $40.9M ($0.39/share diluted); adjusted net income was $27.6M ($0.27/share diluted); adjusted EBITDA was $62.2M.

• Available liquidity at quarter-end was $125.2M, including $20.2M in cash, $80M undrawn on the credit facility, and $25M undrawn on the copper prepayment facility.

Financial highlights

• Q3 2024 revenue was $124.8M, up from $117.1M in Q2 2024 and $105.2M in Q3 2023.

• Gross profit reached $53.7M, adjusted EBITDA $62.2M, and cash flow from operations $52.7M.

• Adjusted net income attributable to owners was $27.6M, or $0.27 per diluted share.

• Net debt increased to $518.7M from $482.0M in Q2 2024 and $331.8M in Q3 2023.

• Working capital deficit at quarter-end: $(60.9)M.

Outlook and guidance

• 2024 consolidated copper production guidance updated to 43,000–48,000 tonnes due to Tucumã ramp-up delays and slower Pilar Mine development.

• Caraíba 2024 copper production guidance revised to 35,000–37,000 tonnes; Tucumã guidance revised to 8,000–11,000 tonnes.

• Xavantina gold production guidance reaffirmed at 60,000–65,000 ounces, with C1 cash cost guidance of $450–$550/oz and AISC of $900–$1,000/oz.

• Maintained consolidated 2024 capital expenditure guidance of $303–$348M.

• Entered zero-cost gold collar contracts for 2,500 oz/month in 2025, floor at $2,200/oz, cap at $3,425/oz.