Ero Copper Corp. (the “Company”)
(TSX:
ERO) today is pleased to announce
its financial results for the three and nine months ended September
30, 2020. Management will host a conference call tomorrow, Friday,
November 6, 2020, at 11:30 a.m. Eastern time to discuss the
results. Dial-in details for the call can be found near the end of
this press release.
HIGHLIGHTS
- Third quarter
copper production of 10,961 tonnes of copper;
- New record
quarterly C1 cash costs* of $0.63 per pound of copper produced
($0.65 per pound in Q2 2020) contributing to record quarterly cash
flow from operations of $44.4 million during the three month period
ended September 30, 2020;
- Increasing gold
and silver production at the NX Gold Mine totalling 9,436 ounces of
gold and 5,736 ounces of silver at new record quarterly C1 cash
costs* of $421 per ounce of gold produced during the period ($437
per ounce in Q2 2020);
- Generated a new
quarterly record $62.5 million in Adjusted EBITDA* during the three
month period ended September 30, 2020 – a $20.1 million improvement
over Q2 2020;
- Adjusted net
income attributable to owners of the Company* of $36.7 million
($0.40 per share on a diluted basis) during the three month period
ended September 30, 2020;
- Continued strong
liquidity position at September 30, 2020 of $54.3 million;
and,
- Reaffirm copper
production guidance for the full year. While previously revised C1
cash cost ranges remain unchanged, the Company expects to be near
or slightly below the low-end of the range for 2020.
Capital guidance has been revised to incorporate continuity
and expansions of the Company’s ongoing exploration programs into
the fourth quarter.
Commenting on the results, David Strang,
President & CEO, stated, “Firstly, I would like to congratulate
all of our colleagues at our MCSA operations for achieving a full
year without a lost-time-injury on September 30th. While we had to
celebrate this accomplishment virtually, I am extremely proud of
the team’s dedication and hard work that went into achieving this
milestone, made more difficult this year by the additional
challenges associated with mitigating the impact of COVID-19 on
their families, community and our operations. On top of this,
operations at MCSA have continued to perform well and we have
continued to execute on key objectives in preparation of our
updated life-of-mine plan, which remains on track for completion
during the fourth quarter. These initiatives and objectives include
near-mine exploration programs, our new HIG Mill installation and
commissioning, integration and development of Platinum Group Metal
(PGM) assay capability in-house and our recently completed
ore-sorting trial campaign. We continue to have no disruption to
our supply chains, sales channels or production to date as a result
of COVID-19.
At MCSA on the operational side, we continued to
see quarter-on-quarter increases in grades mined and processed, as
well as improved metallurgical recoveries, as expected. Our newly
commissioned HIG Mill was handed over to operations during the
month of September, contributing to our best average monthly
metallurgical recovery this year of 92.0% – a significant
improvement over base-line recoveries at the same grade profiles.
While a limited data set, and feed and control system work remain
ongoing, the performance gains post-commissioning are an
encouraging leading indicator, and we expect the HIG Mill to
deliver as advertised once this work is complete. The combination
of increased grades, metallurgical recoveries and continued
weakness in the BRL contributed to another record quarter of C1
cash costs, averaging $0.63 cents per pound during the period. As a
result of strong performance to date, we have reaffirmed our annual
copper production guidance and are now guiding towards or slightly
below the lower-end of our C1 cash cost guidance range of
approximately $0.70 per pound of copper produced.
At NX Gold this quarter, we saw steady
quarter-on-quarter increases in production volumes from the Santo
Antonio Vein as well as significant improvement in metallurgical
recoveries during the period, both contributing factors in our
increased gold production of 9,436 ounces at another record
quarterly C1 cash cost of $421 per ounce of gold produced. A
portion of the Santo Antonio orebody we expected to mine this year
has encountered sub-optimal ground conditions, and as a result, we
have only achieved limited production in this area due to inherited
constraints associated with the existing mining method and ground
support capabilities. While we have been able to offset some of
this decline in production by increasing production from other
areas within Santo Antonio, we now expect slightly lower full year
production and have revised our guidance accordingly. The team at
NX Gold has recently completed engineering studies for the
installation of a modular paste-fill plant to recover production
from this area as well as enhance overall resource conversion and
mine recovery in the future. While a modest investment of only US$2
million, we see this as a significant step towards securing long
term production stability and extending the life of mine for NX
Gold, which we expect to incorporate into our updated life-of-mine
plan, also on track for completion during the fourth quarter.
As you will note in our revised capital
guidance, we have increased our full year exploration spend as we
continue to uncover both near-mine and regional opportunities at
both MCSA and NX Gold. Exploration efforts during the fourth
quarter will continue to focus on (i) the newly discovered
mineralization between the Vermelhos Mine and the high-grade
massive sulphide zones of the Siriema deposit, where we see
continued evidence of “stacked” mineralized structures over a
strike length of approximately 700 meters, (ii) the Deepening
Extension which continues to remain wide open to depth and to the
north and (iii) advancing our regional exploration
programs.
*EBITDA, Adjusted EBITDA, Adjusted net income
(loss), C1 cash cost of copper produced (per lb) and C1 cash costs
of gold produced (per ounce) are non-IFRS measures – see the Notes
section of this press release for a discussion on non-IFRS
Measures
OPERATIONS & EXPLORATION HIGHLIGHTS
◾ Mining
& Milling Operations – tracking copper production
guidance, increasing grades and recoveries into Q4 2020, no
COVID-19 disruptions to date
• 553,148 tonnes
processed grading 2.18% copper producing 10,961 tonnes of copper in
concentrate after metallurgical recoveries that averaged 90.8% at
the Company’s Curaçá Valley operations; and
• The Company’s 97.6%
owned NX Gold Mine processed 41,749 tonnes of ore grading 7.64
grams per tonne gold, resulting in the production of 9,436 ounces
of gold and 5,736 ounces of silver as by-product after
metallurgical recoveries that averaged 92.0% during the third
quarter of 2020.
◾ Exploration Activities – Completion of
priority near-mine programs during the period for inclusion in
upcoming mine plan updates, continued to shift to more regional
focus
• Pilar District
➢ Exploration
activity within the Pilar District, where nine drill rigs are
currently operating, is focused on extending the limits of
high-grade ‘Superpod’ mineralization of the Deepening Extension
zone. The Company has now identified a mineralized target area that
extends over approximately 900 meters in strike length, over a
total depth of approximately 525 meters and over an average
thickness of ranging from 10 to 20 meters with localized thickening
throughout the zone. The zone remains open to the north and to
depth. Results during the period continue to support the potential
to meaningfully extend the mine life while maintaining an elevated
grade profile from the Pilar Mine and demonstrate that zone remains
open to the north and to depth.
• Vermelhos
District
➢ Exploration in the
Vermelhos District, where eleven drill rigs are currently
operating, is focused on further demonstrating continuity between
two newly discovered zones of mineralization between Vermelhos and
the Siriema deposit. These new zones, when viewed in context with
the previously announced high-grade massive sulphide Keel Zone of
Siriema and prior Siriema conduit drill results suggest that
multiple “stacked” mineralized structures may be present between
the Siriema deposit and the Vermelhos Mine, a distance of
approximately 700 meters in strike-length. Down-hole
electromagnetic (“EM”) work and further drilling is ongoing to
evaluate the full potential of these stacked structures. There are
currently seven drill rigs focused on this area.
• NX Gold Mine
➢ Exploration at the
NX Gold Mine is primarily focused on testing down-plunge extensions
of the Santo Antonio Vein. Drill results during the period
continued to extend the known extent of mineralization within the
Santo Antonio Vein down-plunge and are highlighted by the best
results drilled to date by the Company at NX Gold on a grade-meter
intercept basis as well as the deepest intercept within the Santo
Antonio Vein drilled to date.
• Regional
Exploration
➢ Regional work at
MCSA comprised of both exploration drilling and ground-based
geophysical work is focused on four new and recently interpreted
mineral systems within the portfolio of targets defined by the
Company’s comprehensive targeting work. Each of these new systems
has an average strike length of five kilometers and contain
multiple priority drill targets. The majority of the Company’s
drill meterage is expected to be allocated to regional exploration
during the fourth quarter.
➢ In addition,
the first regional exploration effort within the broader NX Gold
Mine property continued to progress during the period.
◾ Execution of Growth
Projects – HIG Mill commissioning
complete, ore-sorting project test-work complete, PGM assay
capability in-house near-completion and updated life-of-mine plans
on track for Q4 2020
• The Company’s
new HIG Mill installation was completed in July and hand-over to
operations was completed in the middle of September. While feed and
control system integration and optimization work remain ongoing,
monthly recoveries in September achieved a record for this year,
averaging 92.0%. This represents a significant improvement over the
Company’s baseline recoveries at similar grade profiles, and is a
positive, albeit preliminary, technical leading indicator. The
Company continues to expect that the HIG Mill will contribute to
improved metallurgical performance during the fourth quarter and in
the future.
• The full-scale
testing of the Company’s ore-sorting plant was completed during the
period, and while confirmatory testing remains ongoing, excellent
upgrade ratios at minimal copper losses were achieved. The Company
expects that ore-sorting will be an integral component of the
Company’s upcoming life-of-mine update, currently expected during
the fourth quarter.
• Five drill
rigs continue to systematically drill the Deepening Extension zone
of the Pilar Mine, in continued support of ongoing engineering
studies for the inclusion of this zone into the Company’s updated
mine plan. Due to the limits of drilling underground infrastructure
to the north, additional surface and underground drill programs
utilizing directional drilling technology were introduced to better
evaluate the mineralized potential of the Deepening Project further
to the north than is currently possible using conventional drilling
methods.
• The Company’s
multi-element inductively coupled plasma mass spectrometry (“ICP”)
unit is operational and is in the process of ramping up daily
sample volumes and ensuring quality-assurance quality-control
(“QA/QC”) with third-party umpire assays, as scheduled. Once fully
integrated, the addition to the laboratory is expected to
significantly reduce cost and, more importantly, turn-around time
for PGM assay results.
• Updated
life-of-mine plans for both the Company’s Curaçá Valley Operations
and NX Gold Mine remain on track for completion during the fourth
quarter.
◾ Corporate Highlights – Continued capital
management and improved liquidity position
• Ended the
third quarter with strong liquidity position of approximately $54.3
million in cash and cash equivalents.
OPERATING AND FINANCIAL HIGHLIGHTS
|
|
3 months endedSep 30,
2020 |
|
3 months endedJune
30,
2020 |
|
9 months
endedSep 30,
2020 |
|
3 months endedSep 30,
2019 |
|
9 months
endedSep 30,
2019 |
Operating Highlights (MCSA
Operations) |
Ore
Processed (tonnes) |
|
553,148 |
|
627,071 |
|
1,788,178 |
|
587,915 |
|
1,835,527 |
Grade
(% Cu) |
|
2.18 |
|
1.98 |
|
2.03 |
|
1.84 |
|
1.86 |
Cu
Production (tonnes) |
|
10,961 |
|
11,178 |
|
32,796 |
|
9,674 |
|
30,792 |
Cu
Production (000 lbs) |
|
24,164 |
|
24,643 |
|
72,302 |
|
21,327 |
|
67,884 |
Cu Sold
in Concentrate (tonnes) |
|
11,530 |
|
10,586 |
|
32,549 |
|
10,200 |
|
31,164 |
Cu Sold
in Concentrate (000 lbs) |
|
25,420 |
|
23,339 |
|
71,758 |
|
22,487 |
|
68,705 |
|
|
|
|
|
|
|
|
|
|
|
C1 Cash
Cost of copper produced (per lb)(1) |
|
$0.63 |
|
$0.65 |
|
$0.66 |
|
$1.01 |
|
$0.99 |
|
|
|
|
|
|
|
|
|
|
|
Gold (NX Gold Operations) |
|
|
|
|
|
|
|
|
|
|
Au Production (oz) |
|
9,436 |
|
8,739 |
|
26,041 |
|
4,356 |
|
24,391 |
C1 Cash Cost of gold produced (per ounce)(1) |
|
$421 |
|
$437 |
|
$478 |
|
$1,169 |
|
$621 |
|
|
|
|
|
|
|
|
|
|
|
Financial Highlights ($millions, except per share
amounts) |
Revenues |
|
$94.3 |
|
$70.8 |
|
$232.8 |
|
$60.6 |
|
$209.2 |
Gross
profit |
|
$59.6 |
|
$39.5 |
|
$129.8 |
|
$21.3 |
|
$86.0 |
EBITDA(1) |
|
$52.1 |
|
$23.4 |
|
$24.9 |
|
$35.1 |
|
$107.2 |
Adjusted EBITDA(1) |
|
$62.5 |
|
$42.4 |
|
$138.4 |
|
$27.3 |
|
$102.9 |
Cash
flow from operations |
|
$44.4 |
|
$42.5 |
|
$124.2 |
|
$29.5 |
|
$91.9 |
Net
income (loss) |
|
$31.4 |
|
$7.7 |
|
($13.8) |
|
$16.3 |
|
$47.0 |
Net
income (loss) attributable to owners of the Company |
|
$31.1 |
|
$7.5 |
|
($14.2) |
|
$16.3 |
|
$46.7 |
Net income (loss) per share attributable to owners of the Company
(Basic) |
|
$0.36 |
|
$0.09 |
|
($0.16) |
|
$0.19 |
|
$0.55 |
Net income (loss) per share attributable to owners of the Company
(Diluted) |
|
$0.34 |
|
$0.08 |
|
($0.16) |
|
$0.18 |
|
$0.51 |
Adjusted net income (loss) attributable to owners of the
Company(1) |
|
$36.7 |
|
$20.3 |
|
$77.8 |
|
$10.2 |
|
$41.2 |
Adjusted net income (loss) per share attributable to owners of the
Company(1) (Basic) |
|
$0.42 |
|
$0.24 |
|
$0.90 |
|
$0.12 |
|
$0.48 |
Adjusted net income (loss) per share attributable to owners of the
Company(1) (Diluted) |
|
$0.40 |
|
$0.22 |
|
$0.85 |
|
$0.11 |
|
$0.45 |
|
|
|
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents |
|
$54.3 |
|
$51.6 |
|
$54.3 |
|
$21.7 |
|
$21.7 |
Working
Capital (Deficit)(1) |
|
($9.4) |
|
($25.7) |
|
($9.4) |
|
$6.4 |
|
$6.4 |
Net
Debt(1) |
|
($118.4) |
|
($130.9) |
|
($118.4) |
|
($133.4) |
|
($133.4) |
Footnotes[1] EBITDA, Adjusted
EBITDA, Adjusted net income (loss) attributable to owners of the
Company, Adjusted earnings (loss) per share, Net Debt, Working
Capital, C1 Cash Cost of copper produced (per lb) and C1 Cash Cost
of gold produced (per ounce) are non-IFRS measures – see the Notes
section of this press release for a discussion on non-IFRS
Measures.
ADJUSTED EBITDA & NET INCOME (LOSS)
RECONCILIATION
|
|
2020–
Q3 |
|
|
|
Adjusted EBITDA |
|
$ |
62,537 |
Adjustments: |
|
|
Unrealized foreign exchange loss on USD denominated debt in
MCSA |
|
|
(2,034) |
Unrealized foreign exchange loss on derivative contracts |
|
|
(1,067) |
Realized foreign exchange loss on derivative contracts |
|
|
(5,974) |
Share based compensation and other |
|
|
(1,371) |
EBITDA |
|
$ |
52,091 |
|
|
|
Adjusted net
income |
|
$ |
36,702 |
Adjustments for non-cash items
(attributable to owners of the Company): |
|
|
Unrealized foreign exchange loss on USD denominated debt in
MCSA |
|
|
(2,026) |
Unrealized loss on foreign exchange derivative contracts, net of
tax |
|
|
(2,256) |
Share based compensation |
|
|
(1,743) |
Unrealized gain on interest rate derivative contracts |
|
|
386 |
Reported net income attributable to owners of the Company |
|
$ |
31,063 |
2020 OUTLOOK
While the Company’s copper production guidance
for 2020 remains unchanged, gold production outlook from the NX
Gold Mine has been reduced as a result of difficult ground
conditions encountered in the upper panel of the Santo Antonio
Vein. The Company expects to recover this production through the
installation of a modular paste-fill plant and associated
infrastructure that is expected to be operational during the second
half of 2021. While previously revised cash cost guidance for 2020
remains unchanged, the Company is guiding towards or slightly below
the lower-end of the range at its Curaçá Valley operations on
consideration of prevailing foreign exchange rates and by-product
metal prices. The Company has maintained its previously revised
non-exploration capital expenditure guidance range at its Curaçá
Valley operations and has increased exploration capital guidance to
reflect the continuity and expansion of these programs into the
fourth quarter. Additional information is outlined below and
further detailed in the Company’s press releases dated January 15,
2020 and May 7, 2020.
Production
Guidance
Production guidance for the Company’s Curaçá
Valley operations remains unchanged. Copper production is expected
to come from ore mined from the Pilar and Vermelhos underground
mines. While the Company expects total recovered copper production
to be within its guidance range, production is tracking to be
slightly above forecast tonnes processed and slightly below
forecast copper grades; however, these variances are expected to be
within the levels of accuracy intrinsic to the Company’s annual
operating guidance.
The Company is lowering its full year production
guidance for its NX Gold operations as a result of difficult ground
conditions encountered in the upper panel of the Santo Antonio
Vein. The Company expects to recover this production later in the
mine’s life through the installation of a modular paste-fill plant
and associated infrastructure expected to be operational during the
second half of 2021.
|
2020 Original Guidance |
Revised 2020 Guidance[1] |
Curaçá Valley Operations |
|
|
Tonnes Processed |
2,150,000 |
(no change) |
Copper Grade (% Cu) |
2.15% |
(no change) |
Copper Recovery (%) |
91.0% |
(no change) |
Cu Production Guidance (000 tonnes) |
41.0 – 43.0 |
(no change) |
|
|
|
NX Gold Operations |
|
|
Tonnes Processed |
150,000 |
165,000 |
Gold Grade (gpt) |
9.00 |
7.70 |
Gold Recovery (%) |
90.0% |
90.0% |
Au Production Guidance (000 ounces) |
38.0 – 40.0 |
36.0 – 37.0 |
Footnotes:[1] Guidance is based
on certain estimates and assumptions, including but not limited to,
mineral reserve estimates, grade and continuity of interpreted
geological formations and metallurgical performance. Please refer
to the Company’s SEDAR filings for complete risk factors, including
the AIF (defined below).
Operating Cost
Guidance
The Company is maintaining its previously
revised operating cost guidance ranges, and expects C1 cash costs
for the full year to be near or slightly below the low-end of the
range at its Curaçá Valley operations due to strong operational
performance to date, prevailing foreign exchange rates and elevated
gold and silver prices.
|
|
2020 Guidance |
|
2020 Revised Guidance |
Curaçá Valley C1 Cash Cost Guidance
(US$/lb)[1] |
|
$0.85 -
$0.95 |
|
$0.70 - $0.85 |
NX Gold Mine C1 Cash Cost Guidance
(US$/oz)[1] |
|
$475 - $575 |
|
$425 -
$525 |
Footnotes:[1] C1 Cash Costs of
copper produced (per lb.) and C1 Cash Costs of gold produced (per
oz.) are non-IFRS measures – see the Notes section of this press
release for a discussion of non-IFRS measures.
Capital Expenditure
Guidance
The Company is further revising its 2020 capital
guidance to reflect the continuity and expansion of its ongoing
exploration campaigns both at MCSA and at the NX Gold Mine during
the fourth quarter. Non-exploration capital expenditures are
expected to be at the high-end of the Company’s previously revised
guidance ranges as the Company prepares for meaningful extensions
of the Company’s life-of-mine operating plans at both MCSA and NX
Gold as well as initiation of several growth projects, such as the
installation of a modular paste-fill plant at NX Gold, which are
expected to be included in these plans. Capital expenditure
guidance is presented below in USD millions.
Curaçá Valley Operations |
Original 2020 Guidance |
|
Previously Revised 2020 Guidance |
|
Newly Revised
2020 Guidance |
Pilar Mine and Caraíba Mill Complex[1] |
58.0 |
|
45.0 – 55.0 |
|
(no change) |
Vermelhos Mine |
16.0 |
|
11.0 – 13.0 |
|
(no change) |
Boa Esperanҫa Project |
0.2 |
|
0.2 – 0.2 |
|
(no change) |
Capital Expenditure Guidance |
74.2 |
|
56.2 – 68.2 |
|
(no change) |
Curaçá Valley Exploration[2] |
28.0 |
|
20.0 – 25.0 |
|
25.0 – 30.0 |
|
|
|
|
|
|
NX Gold Operations |
Original 2020 Guidance |
|
Previously Revised 2020 Guidance |
|
Newly Revised 2020
Guidance |
Capital Expenditure Guidance |
5.7 |
|
7.0 – 9.0 |
|
9.0 – 11.0 |
Exploration[2] |
3.5 |
|
2.0 – 3.0 |
|
3.0 – 5.0 |
Total, NX Gold |
9.2 |
|
9.0 – 12.0 |
|
12.0 –
16.0 |
Footnotes:[1] Pilar Mine and
Caraíba Mill Complex capital expenditure guidance for 2020 includes
completion of the high-intensity grinding mill and operation of the
ore-sorting pilot plant.[2] Exploration capital expenditure
guidance for 2020 in the original and previously revised guidance
was only forecast through September of 2020, whereas the Company’s
newly revised 2020 exploration guidance includes expected
exploration expenditures through the entirety of the year.
NOTES
Non-IFRS
measures
Financial results of
the Company are prepared in accordance with IFRS. The Company
utilizes certain non-IFRS measures, including C1 cash cost of
copper produced (per lb), C1 cash costs of gold produced (per
ounce), EBITDA, Adjusted EBITDA, Adjusted net income (loss)
attributable to owners of the Company, Adjusted earnings (loss) per
share, net debt and working capital, which are not measures
recognized under IFRS. The Company believes that these measures,
together with measures determined in accordance with IFRS, provide
investors with an improved ability to evaluate the underlying
performance of the Company. Non-IFRS measures do not have any
standardized meaning prescribed under IFRS, and therefore they may
not be comparable to similar measures employed by other companies.
The data is intended to provide additional information and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS.
C1
cash
cost of
copper
produced
(per lb.)
C1 cash cost of
copper produced (per lb) is the sum of production costs, net of
capital expenditure development costs and by-product credits,
divided by the copper pounds produced. C1 cash costs reported by
the Company include treatment, refining charges, offsite costs, and
certain tax credits relating to sales invoiced to the Company’s
Brazilian customer on sales. By-product credits are calculated
based on actual precious metal sales (net of treatment costs)
during the period divided by the total pounds of copper produced
during the period. C1 cash cost of copper produced per pound is a
non-IFRS measure used by the Company to manage and evaluate
operating performance of the Company’s operating mining unit, and
is widely reported in the mining industry as benchmarks for
performance, but does not have a standardized meaning and is
disclosed in addition to IFRS measures.
C1 cash cost of gold produced (per
ounce)
C1 cash cost of gold
produced (per ounce) is the sum of production costs, net of capital
expenditure development costs and silver by-product credits,
divided by the gold ounces produced. By-product credits are
calculated based on actual precious metal sales during the period
divided by the total ounces of gold produced during the period. C1
cash cost of gold produced per pound is a non-IFRS measure used by
the Company to manage and evaluate operating performance of the
Company’s operating mining unit and is widely reported in the
mining industry as benchmarks for performance but does not have a
standardized meaning and is disclosed in addition to IFRS
measures.
Earnings before interest,
taxes, depreciation and
amortization (EBITDA) and Adjusted
EBITDA
EBITDA represents
earnings before interest expense, income taxes, depreciation, and
amortization. Adjusted EBITDA includes further adjustments for
non-recurring items and items not indicative to the future
operating performance of the Company. The Company believes EBITDA
and adjusted EBITDA are appropriate supplemental measures of debt
service capacity and performance of its operations.
Adjusted EBITDA is
calculated by removing the following income statement items:
• Recovery of value
added taxes• Foreign exchange loss• Share based compensation• Loss
on debt settlement
Adjusted Net Income (Loss) attributable
to owners of the Company and Adjusted Earnings (Loss) Per Share
attributable to owners of the Company
The Company uses the
financial measure “Adjusted net income (loss) attributable to
owners of the Company” and “Adjusted earnings (loss) per share
attributable to owners of the Company” to supplement information in
its consolidated financial statements. The Company believes that,
in addition to conventional measures prepared in accordance with
IFRS, the Company and certain investors and analysts use this
information to evaluate the Company’s performance. The Company
excludes non-cash and unusual items from net earnings to provide a
measure which allows the Company and investors to evaluate the
operating results of the underlying core operations.
During the period,
the following non-cash or unusual adjustments to calculated
adjusted net income (loss):
• Share based
compensation• Unrealized foreign exchange loss on USD
denominated debt in MCSA• Unrealized loss on foreign exchange
derivative contracts, net of tax• Unrealized loss (gain) on
interest rate derivative contracts
Net Debt
Net debt is
determined based on cash and cash equivalents, restricted cash and
loans and borrowings as reported in the Company’s consolidated
financial statements. The Company uses net debt as a measure of the
Company’s ability to pay down its debt.
Working capital
Working capital is
determined based on current assets and current liabilities as
reported in the Company’s consolidated financial statements. The
Company uses working capital as a measure of the Company’s
short-term financial health and operating efficiency.
CONFERENCE CALL DETAILS
The Company will hold a conference call on
Friday, November 6, 2020 at 11:30 am Eastern time (8:30 am Pacific
time) to discuss these results.
Date: |
Friday, November 6, 2020 |
Time: |
11:30 am Eastern time (8:30 am Pacific time) |
Dial in: |
North America: 1-800-319-4610, International: +1-604-638-5340 |
|
please dial in 5-10 minutes prior and ask to join the call |
|
|
Replay: |
North America: 1-800-319-6413, International: +1-604-638-9010 |
Replay Passcode: |
5339 |
This press release should be read in conjunction
with the unaudited condensed consolidated interim financial
statements and management’s discussion and analysis (“MD&A”)
for the three and nine month period ended September 30, 2020
available on the Company’s website www.erocopper.com and on SEDAR
(www.sedar.com).
ABOUT ERO COPPER CORP.
Ero, headquartered in Vancouver, B.C., is
focused on copper production growth from the Vale do Curaçá
Property, located in Bahia, Brazil. The Company’s primary asset is
a 99.6% interest in the Brazilian copper mining company, Mineração
Caraíba S.A. (“MCSA”), 100% owner of the Vale do Curaçá Property
with over 40 years of operating history in the region. The Company
currently mines copper ore from the Pilar and Vermelhos underground
mines. In addition to the Vale do Curaçá Property, MCSA owns 100%
of the Boa Esperança development project, an IOCG-type copper
project located in Pará, Brazil and the Company owns 97.6% of the
NX Gold Mine, an operating gold and silver mine located in Mato
Grosso, Brazil. Additional information on the Company and its
operations, including technical reports on the Vale do Curaçá, Boa
Esperança and NX Gold properties, can be found on the Company’s
website (www.erocopper.com) and on SEDAR (www.sedar.com).
The disclosure of scientific or technical
information in this press release was reviewed and approved by
Emerson Ricardo Re, MSc, MBA, MAusIMM (CP) (No. 305892), Registered
Member (No. 0138) (Chilean Mining Commission) and Resource Manager
of the Company who is a “qualified person” within the meanings of
National Instrument 43-101, Standards of Disclosure for Mineral
Projects (“NI 43-101”).
ERO COPPER CORP. |
|
Signed: “David Strang” |
For further information contact: |
David Strang, President &
CEO |
Makko DeFilippo, Vice President, Corporate Development |
|
(604) 429-9244 |
|
info@erocopper.com |
|
|
CAUTION REGARDING FORWARD LOOKING INFORMATION AND STATEMENTS: This
Press Release contains “forward-looking information” within the
meaning of applicable Canadian securities laws. Forward-looking
information includes statements that use forward-looking
terminology such as “may”, “could”, “would”, “will”, “should”,
“intend”, “target”, “plan”, “expect”, “budget”, “estimate”,
“forecast”, “schedule”, “anticipate”, “believe”, “continue”,
“potential”, “view” or the negative or grammatical variation
thereof or other variations thereof or comparable terminology. Such
forward-looking information includes, without limitation,
statements with respect to the Company's expected operations at the
Vermelhos and Pilar Mines as well as at the NX Gold Property, the
estimation of mineral reserves and mineral resources, the
significance of any particular exploration program or result and
the Company’s expectations for current and future exploration plans
including, but not limited to, planned areas of additional
exploration, the significance of any drill results or new
discoveries and targets, including without limitation extensions of
defined mineralized zones, possibilities for mine life extensions
or continuity of high-grade mineralization, the recoverable value
of any metals other than copper, further extensions and expansion
of mineralization near the Company’s existing operations and
throughout the Curaçá Valley or the NX Gold Mine, the timeline for
issuance of updated mineral resource, mineral reserves, mine plans
and associated technical reports for the Vale do Curaçá Property
and the NX Gold Mine, the representativeness of the material tested
in the Company’s ore sorting trial campaign to actual results of
each of the mines tested during the campaign, the timing and
expected outcome of the Company's updated life-of-mine plan
including the potential implementation of ore sorting in those
plans at any of the Company's operations which may or may not occur
in any capacity at the Company's operations or life-of-mine plans
now or in the future, the Company's ability to service its ongoing
obligations, the Company's future production outlook, cash costs,
capital resources, expenditures, the impact of new accounting
standards and amendments on the Company's financial statements, and
current global macroeconomic uncertainty stemming from the Covid-19
pandemic and its impact on the Company’s business, financial
condition, planned drill programs, results of operations, cash
flows and prospects.Forward-looking information is not a guarantee
of future performance and is based upon a number of estimates and
assumptions of management in light of management’s experience and
perception of trends, current conditions and expected developments,
as well as other factors that management believes to be relevant
and reasonable in the circumstances, as of the date of this Press
Release including, without limitation, assumptions about:
favourable equity and debt capital markets; the ability to raise
any necessary additional capital on reasonable terms to advance the
production, development and exploration of the Company’s properties
and assets; future prices of copper and other metal prices; the
timing and results of exploration and drilling programs; the
accuracy of any mineral reserve and mineral resource estimates; the
geology of the Vale do Curaçá Property, NX Gold Mine and the Boa
Esperança Property being as described in the technical reports for
these properties; production costs; the accuracy of budgeted
exploration and development costs and expenditures; the price of
other commodities such as fuel; future currency exchange rates and
interest rates; operating conditions being favourable such that the
Company is able to operate in a safe, efficient and effective
manner; work force continues to remain healthy in the face of
prevailing epidemics, pandemics or other health risks, political
and regulatory stability; the receipt of governmental, regulatory
and third party approvals, licenses and permits on favourable
terms; obtaining required renewals for existing approvals, licenses
and permits on favourable terms; requirements under applicable
laws; sustained labour stability; stability in financial and
capital goods markets; availability of equipment and critical
supplies, spare parts and consumables; positive relations with
local groups and the Company’s ability to meet its obligations
under its agreements with such groups; and satisfying the terms and
conditions of the Company’s current loan arrangements. While the
Company considers these assumptions to be reasonable, the
assumptions are inherently subject to significant business, social,
economic, political, regulatory, competitive and other risks and
uncertainties, contingencies and other factors that could cause
actual actions, events, conditions, results, performance or
achievements to be materially different from those projected in the
forward-looking information. Many assumptions are based on factors
and events that are not within the control of the Company and there
is no assurance they will prove to be correct. Furthermore, such
forward-looking information involves a variety of known and unknown
risks, uncertainties and other factors which may cause the actual
plans, intentions, activities, results, performance or achievements
of the Company to be materially different from any future plans,
intentions, activities, results, performance or achievements
expressed or implied by such forward-looking information. Such
risks include, without limitation the risk factors listed under the
heading “Risk Factors” in the Annual Information Form of the
Company for the year ended December 31, 2019, dated March 12, 2020
(the “AIF”). Although the Company has attempted to identify
important factors that could cause actual actions, events,
conditions, results, performance or achievements to differ
materially from those described in forward-looking information,
there may be other factors that cause actions, events, conditions,
results, performance or achievements to differ from those
anticipated, estimated or intended. The Company cautions that the
foregoing lists of important assumptions and factors are not
exhaustive. Other events or circumstances could cause actual
results to differ materially from those estimated or projected and
expressed in, or implied by, the forward-looking information
contained herein. There can be no assurance that forward-looking
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance
on forward-looking information. Forward-looking information
contained herein is made as of the date of this press release and
the Company disclaims any obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or results or otherwise, except as and
to the extent required by applicable securities laws. Unless
otherwise stated, information of a scientific or technical nature
in respect of the Vale do Curaçá Property included in this press
release is based upon the Vale do Curaçá technical report entitled
“2019 Updated Mineral Resources and Mineral Reserves Statements of
Mineração Caraíba’s Vale do Curaçá Mineral Assets, Curaçá Valley”,
dated November 25, 2019 with an effective date of September 18,
2019, prepared by Rubens Jose De Mendonça, MAusIMM, of Planminas –
Projectos e Consultoria em Mineração Ltd. (“Planminas”), Porfirio
Cabaleiro Rodrigues, MAIG, Leonardo de Moraes Soares, MAIG, and
Bernardo Horta de Cerqueira Viana, MAIG, all of GE21 Consultoria
Mineral Ltda. (“GE21”), and each a “qualified person” and
“independent” of the Company within the meanings of NI 43-101.
Information of a scientific or technical nature in respect of the
NX Gold Mine included in this press release is based upon the NX
Gold technical report entitled “Mineral Resource and Mineral
Reserve Estimate of the NX Gold Mine, Nova Xavantina”, dated
February 3, 2020 with an effective date of September 30, 2019,
prepared by Porfirio Cabaleiro Rodrigues, MAIG, Leonardo de Moraes
Soares, MAIG, and Paulo Roberto Bergmann, FAusIMM, each of GE21 and
a “qualified person” and “independent” of the Company within the
meanings of NI 43-101.Cautionary Notes Regarding Mineral Resource
and Reserve Estimates In accordance with applicable Canadian
securities regulatory requirements, all mineral reserve and mineral
resource estimates of the Company disclosed or incorporated by
reference in this press release have been prepared in accordance
with NI 43-101 and are classified in accordance with the CIM
Standards.Mineral resources which are not mineral reserves do not
have demonstrated economic viability. Pursuant to the CIM
Standards, mineral resources have a higher degree of uncertainty
than mineral reserves as to their existence as well as their
economic and legal feasibility. Inferred mineral resources, when
compared with Measured or Indicated mineral resources, have the
least certainty as to their existence, and it cannot be assumed
that all or any part of an Inferred mineral resource will be
upgraded to an Indicated or Measured mineral resource as a result
of continued exploration. Pursuant to NI 43-101, Inferred mineral
resources may not form the basis of any economic analysis.
Accordingly, readers are cautioned not to assume that all or any
part of a mineral resource exists, will ever be converted into a
mineral reserve, or is or will ever be economically or legally
mineable or recovered. |
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