UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934

For the month of August 2023


Commission File Number 001-40459

ERO COPPER CORP.
(Translation of registrant's name into English)

625 Howe Street, Suite 1050
Vancouver, British Columbia V6C 2T6
Canada
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☐    Form 40-F ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).         

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).         










Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Ero Copper Corp.
By:/s/ Deepk Hundal
Name: Deepk Hundal
Title: SVP, General Counsel and Corporate Secretary
Date: August 3, 2023




















Exhibit Index
















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MANAGEMENT’S DISCUSSION
AND ANALYSIS


FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2023



1050 – 625 Howe Street, Vancouver, B.C., Canada V6C 2T6
Phone: 604-449-9244 | Website: www.erocopper.com | Email: info@erocopper.com


TABLE OF CONTENTS
BUSINESS OVERVIEW
HIGHLIGHTS
REVIEW OF OPERATIONS
The Caraíba Operations
The Xavantina Operations
2023 GUIDANCE
REVIEW OF FINANCIAL RESULTS
Review of quarterly results
Review of year to date results
Summary of quarterly results for most recent eight quarters
OTHER DISCLOSURES
Liquidity, Capital Resources, and Contractual Obligations
Management of Risks and Uncertainties
Other Financial Information
Accounting Policies, Judgments and Estimates
Capital Expenditures
Alternative Performance (NON-IFRS) Measures
Disclosure Controls and Procedures and Internal Control over Financial Reporting
Notes and Cautionary Statements
Ero Copper Corp. June 30, 2023 MD&A

MANAGEMENT’S DISCUSSION AND ANALYSIS

This Management’s Discussion and Analysis (“MD&A”) has been prepared as at August 3, 2023 and should be read in conjunction with the unaudited condensed consolidated interim financial statements of Ero Copper Corp. (“Ero”, the “Company”, or “we”) as at, and for the three and six months ended June 30, 2023, and related notes thereto, which are prepared in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting as permitted by the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (the “IASB”). All references in this MD&A to “Q2 2023” and “Q2 2022” are to the three months ended June 30, 2023 and June 30, 2022, respectively, and all references in this MD&A to “YTD 2023” and “YTD 2022” are to the six months ended June 30, 2023 and June 30, 2022, respectively. As well, this MD&A should be read in conjunction with the Company’s December 31, 2022 audited consolidated financial statements and MD&A. All dollar amounts are expressed in United States (“US”) dollars and tabular amounts are expressed in thousands of US dollars, unless otherwise indicated. References to “$”, “US$”, “dollars”, or “USD” are to US dollars, references to “C$” are to Canadian dollars, and references to “R$” or “BRL” are to Brazilian Reais.

This MD&A refers to various alternative performance (Non-IFRS) measures, including C1 cash cost of copper produced (per lb), realized copper price (per lb), C1 cash cost of gold produced (per ounce), all-in sustaining cost (“AISC”) of gold produced (per ounce), realized gold price (per ounce), EBITDA, Adjusted EBITDA, Adjusted net income attributable to owners of the Company, Adjusted net income per share attributable to owners of the Company, Net (Cash) Debt, Working Capital and Available Liquidity. Please refer to the section titled "Alternative Performance (Non-IFRS) Measures" for a discussion of non-IFRS measures.

This MD&A contains “forward‐looking statements” that are subject to risk factors set out in a cautionary note contained at the end of this MD&A. The Company cannot assure investors that such statements will prove to be accurate, and actual results and future events may differ materially from those anticipated in such statements. The results for the periods presented are not necessarily indicative of the results that may be expected for any future period. Investors are cautioned not to place undue reliance on such forward-looking statements. All information contained in this MD&A is current and has been approved by the Board of Directors of the Company (the “Board”) as of August 3, 2023, unless otherwise stated.

BUSINESS OVERVIEW

Ero is a high-margin, high-growth, low carbon-intensity copper producer with operations in Brazil and corporate headquarters in Vancouver, B.C. 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 Company's Caraíba Operations (formerly known as the MCSA Mining Complex), which are located in the Curaçá Valley, Bahia State, Brazil, and the Tucumã Project (formerly known as Boa Esperança), an IOCG-type copper project located in Pará, Brazil. The Company also owns 97.6% of NX Gold S.A. ("NX Gold") which owns the Xavantina Operations (formerly known as the NX Gold Mine), comprised of an operating gold and silver mine located in Mato Grosso, Brazil. Additional information on the Company and its operations, including technical reports on the Caraíba Operations, Xavantina Operations and Tucumã Project, can be found on the Company's website (www.erocopper.com), on SEDAR (www.sedar.com), and on EDGAR (www.sec.gov). The Company’s shares are publicly traded on the Toronto Stock Exchange and the New York Stock Exchange under the symbol “ERO”.
Ero Copper Corp. June 30, 2023 MD&A | Page 1

HIGHLIGHTS

2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Operating Information
Copper (Caraíba Operations)
Ore Processed (tonnes)840,821 772,548 801,425 1,613,369 1,397,655 
Grade (% Cu)1.55 1.33 1.74 1.45 1.76 
Cu Production (tonnes)12,004 9,327 12,734 21,331 22,518 
Cu Production (lbs)26,463,779 20,563,552 28,072,691 47,027,331 49,642,662 
Cu Sold in Concentrate (tonnes)11,612 9,464 12,948 21,076 22,993 
Cu Sold in Concentrate (lbs)25,599,840 20,865,486 28,546,045 46,465,326 50,690,999 
C1 Cash Cost of Cu Produced (per lb)(1)
$1.52 $1.70 $1.24 $1.60 $1.27 
Gold (Xavantina Operations)
Ore Processed (tonnes)34,377 35,763 57,291 70,140 107,281 
Au Production (oz)12,333 12,443 11,122 24,776 19,918 
C1 Cash Cost of Au Produced (per oz)(1)
$492 $436 $643 $464 $641 
AISC of Au produced (per oz)(1)
$1,081 $946 $1,169 $1,013 $1,135 
Financial information ($ in millions, except per share amounts)
Revenues$104.9 $101.0 $114.9 $205.9 $223.8 
Gross profit 39.4 40.1 50.7 79.5 111.7 
EBITDA(1)
61.9 52.2 53.9 114.1 132.0 
Adjusted EBITDA(1)
49.1 48.6 55.8 97.7 118.2 
Cash flow from operations
55.5 16.4 22.4 71.8 66.4 
Net income
29.9 24.5 24.1 54.4 76.6 
Net income attributable to owners of the Company
29.6 24.2 23.8 53.7 75.9 
- Per share (basic)0.32 0.26 0.26 0.58 0.84 
- Per share (diluted)0.32 0.26 0.26 0.58 0.83 
Adjusted net income attributable to owners of the Company(1)
22.3 22.5 24.4 44.7 57.3 
- Per share (basic)0.24 0.24 0.27 0.48 0.63 
- Per share (diluted)0.24 0.24 0.27 0.48 0.62 
Cash, cash equivalents and short-term investments180.4 236.6 429.9 180.4 429.9 
Working capital(1)
140.7 218.8 417.7 140.7 417.7 
Net debt (cash)(1)
246.5 174.2 (10.2)246.5 (10.2)

(1) Please refer to the section titled "Alternative Performance (Non-IFRS) Measures" within this MD&A.

Ero Copper Corp. June 30, 2023 MD&A | Page 2

Q2 2023 Highlights

Strong Q2 2023 operating and financial performance supports ongoing execution of strategic growth initiatives
•The Caraíba Operations produced 12,004 tonnes of copper in concentrate during the quarter at C1 cash costs(1) of $1.52 per pound of copper produced
◦Higher mined tonnage and copper grades due to planned stope sequencing drove an increase in copper production of nearly 30% quarter-on-quarter and improved C1 cash costs(1) during the period
•The Xavantina Operations delivered quarterly gold production of 12,333 ounces at C1 cash costs(1) and AISC(1) of $492 and $1,081, respectively, per ounce of gold produced
◦Processed gold grades of 13.20 grams per tonne ("gpt") reflect more than an 11% increase quarter-on-quarter and 100% year-on-year
•Financial results reflected meaningfully higher copper production compared to Q1 2023, offsetting lower copper prices and a stronger BRL over the same period
◦Net earnings of $29.9 million
◦Adjusted net income attributable to owners of the Company(1) of $22.3 million ($0.24 per share on a diluted basis)
◦Adjusted EBITDA(1) of $49.1 million
•The Company's strategic growth initiatives, including construction of the Tucumã Project as well as the new external shaft at the Caraíba Operations' Pilar Mine, advanced according to plan, resulting in $126.9 million of capital expenditures during the period, partially funded by cash flows from operations of $55.5 million
•Available liquidity at quarter-end was $330.4 million, including cash and cash equivalents of $124.4 million, short-term investments of $56.0 million, and $150.0 million of undrawn availability under the Company's senior secured revolving credit facility

Reaffirming production and cash cost guidance; increasing capital expenditure guidance by $15 to $20 million to reflect proactive investments at the Caraíba Operations
•The Company is reiterating its full-year copper production guidance of 44,000 to 47,000 tonnes. Copper production is expected to decrease slightly in Q3 2023 before increasing in the last quarter of the year due to planned stope sequencing and commissioning of the new ball mill late in the year
•The Company is reaffirming its 2023 gold production guidance of 50,000 to 53,000 ounces with slightly higher gold production expected in H2 2023 due to increased mill throughput volumes
•After conducting a detailed review of major projects and support infrastructure at the Caraíba Operations during the quarter, including infrastructure related to the Deepening, underground paste fill and tailings, the Company has elected to invest in various upgrades throughout H2 2023. These enhancements aim to bolster the Caraíba Operations' ongoing projects and support expanded life-of-mine operating plans at the Pilar Mine


(1) Please refer to the section titled "Alternative Performance (Non-IFRS) Measures" within this MD&A.

Ero Copper Corp. June 30, 2023 MD&A | Page 3

Continued execution of strategic growth initiatives
•The Company significantly advanced the construction of its Tucumã Project, which remains on schedule, achieving physical completion of approximately 45% as of quarter-end, up from approximately 30% at the end of Q1 2023
◦Mine pre-stripping is advancing as planned with over 5 million tonnes, or approximately 35% of total planned pre-strip volume, completed as of quarter-end. The mine remains on track to reach first sulphide ore in Q4 2023
◦Civil works are also tracking to schedule with foundations for the primary crusher and ball mill completed during the quarter. Electromechanical erection for both areas commenced just after quarter-end, as planned
◦Total project capital estimate remains unchanged at approximately $305 million based on over 95% visibility on planned capital expenditures
◦Workforce training programs, established in partnership with The National Service for Industrial Training, a Brazilian non-profit organization focused on improving the competitiveness of Brazil's manufacturing sector through technical and vocational education, are now well underway with nearly 100% of employees and contractors expected to come from within Brazil, including approximately two-thirds from communities surrounding the Tucumã Project
•At the Caraíba Operations, the Company is focused on advancing its Pilar 3.0 initiative, designed to support sustained annual ore production levels of 3.0 million tonnes. The components of Pilar 3.0 include (i) Project Honeypot, an engineering initiative focused on recovering higher-grade material in the upper levels of the Pilar Mine, (ii) an expansion of the Caraíba mill from 3.0 to 4.2 million tonnes of annual throughput capacity, and (iii) construction of a new external shaft to service the lower levels of the Pilar Mine, including the Deepening Extension Zone
◦Construction of the new external shaft remains on schedule. The 40-meter shaft pre-sink phase of development was completed during the quarter, and the main sinking stage was successfully hoisted into the shaft subsequent to quarter-end. Hoisting of the pre-assembled headframe is currently underway with main shaft sinking expected to commence prior to year-end. Planned capital expenditures under contract or in the final stages of negotiation were approximately 80% at quarter-end with current estimates remaining within 5% of budget
◦The Caraíba mill expansion also remains on schedule with commissioning on track to begin late in the year
Ero Copper Corp. June 30, 2023 MD&A | Page 4

REVIEW OF OPERATIONS

The Caraíba Operations

Copper
2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Ore processed (tonnes)840,821 772,548 801,425 1,613,369 1,397,655 
Grade (% Cu)1.55 1.33 1.74 1.45 1.76 
Recovery (%)92.0 90.8 91.2 91.4 91.6 
Cu Production (tonnes)12,004 9,327 12,734 21,331 22,518 
Cu Production (lbs)26,463,779 20,563,552 28,072,691 47,027,331 49,642,662 
Concentrate grade (% Cu)33.8 33.9 32.9 33.9 33.0 
Concentrate sales (tonnes)35,845 30,074 41,919 65,919 71,125 
Cu Sold in concentrate (tonnes)11,612 9,464 12,948 21,076 22,993 
Cu Sold in concentrate (lbs)25,599,840 20,865,486 28,546,045 46,465,326 50,690,999 
Realized copper price (per lb)$3.30 $3.69 $3.26 $3.48 $3.63 
C1 cash cost of copper produced (per lb)$1.52 $1.70 $1.24 $1.60 $1.27 

Higher mined tonnage and copper grades due to planned stope sequencing drove an increase in copper production at the Caraíba Operations of nearly 30% quarter-on-quarter. Production of 12,004 tonnes of copper in concentrate during the period brought H1 2023 copper production to 21,331 tonnes in concentrate. Higher mined and processed copper grades contributed to lower C1 cash costs of $1.52 per pound of copper produced during the quarter, resulting in weighted average C1 cash costs for H1 2023 of $1.60 per pound of copper produced.

Mined ore production in Q2 2023 included:
•Pilar: 491,632 tonnes grading 1.61% copper (vs. 450,559 tonnes at 1.35% copper in Q1 2023)
•Vermelhos: 226,229 tonnes grading 1.76% copper (vs. 205,963 tonnes at 1.61% copper in Q1 2023)
•Surubim: 183,288 tonnes at 0.79% copper (vs. 103,077 tonnes at 0.68% copper in Q1 2023)

Contributions from the three mines resulted in total ore mined during the period of 901,149 tonnes grading 1.48% copper (vs. 759,599 tonnes grading 1.33% copper in Q1 2023). During Q2 2023, 840,821 tonnes of ore grading 1.55% copper were processed, resulting in production of 12,004 tonnes of copper after average metallurgical recoveries of 92.0%.

The Caraíba Operations are expected to produce 44,000 to 47,000 tonnes of copper in concentrate in 2023. Mill throughput volumes are expected to be slightly lower in Q3 2023 compared to Q2 2023 and higher in Q4 2023 due to the anticipated commissioning of the new ball mill. Combined with expected copper grade variations related to planned stope sequencing, copper production is expected to decrease slightly in Q3 2023 before increasing in the last quarter of the year.

The Company is maintaining its full-year C1 cash cost guidance range for the Caraíba Operations of $1.40 to $1.60 per pound of copper produced. Unit operating costs are expected to be slightly higher in Q3 2023 compared to Q2 2023 and lowest in the last quarter of the year due to anticipated variations in quarterly mined and processed copper grades as well as total copper production.
Ero Copper Corp. June 30, 2023 MD&A | Page 5

Exploration activities during Q2 2023 at the Caraíba Operations continued to focus on advancing the Company's full-year exploration objectives of (i) delineating extensions of nickel mineralization identified within the Umburana system, (ii) drill testing additional regional nickel and copper targets throughout the Curaçá Valley, and (iii) extending high-grade mineralization within the upper levels of the Pilar Mine and at the Vermelhos Mine.

The Xavantina Operations
Gold
2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Ore mined (tonnes)34,525 35,763 57,291 70,288 107,281 
Ore processed (tonnes)34,377 35,763 57,291 70,140 107,281 
Head grade (grams per tonne Au)13.20 11.85 6.59 12.51 6.28 
Recovery (%)84.6 91.4 91.6 87.8 91.9 
Gold ounces produced (oz)12,333 12,443 11,122 24,776 19,918 
Silver ounces produced (oz)8,579 8,194 7,306 16,773 13,348 
Gold sold (oz)10,916 13,097 10,448 24,013 18,461 
Silver sold (oz)7,319 8,422 7,018 15,741 12,507 
Realized gold price (per oz)(1)
$1,945 $1,828 $1,865 $1,881 $1,888 
C1 cash cost of gold produced (per oz)$492 $436 $643 $464 $641 
AISC of gold produced (per oz)$1,081 $946 $1,169 $1,013 $1,135 
(1)    Realized Au price includes the effect of ounces sold under the stream arrangement with Royal Gold. See "Realized Gold Price" section of "Non-IFRS Measures" for detail.

The Xavantina Operations delivered strong quarterly gold production of 12,333 ounces, bringing H1 2023 gold production to 24,776 ounces. Processed gold grades during the quarter of 13.20 grams per tonne ("gpt") represented an increase of over 11% quarter-on-quarter and 100% year-on-year. Metallurgical recoveries were impacted by elevated in-process inventory at quarter-end as well as elevated carbon content in several high-grade stopes mined and processed during the period.

Q2 2023 C1 cash costs and AISC were $492 and $1,081, respectively, per ounce of gold produced, bringing H1 2023 C1 cash costs and AISC to $464 and $1,013, respectively, per ounce of gold produced.

The Company is reaffirming its 2023 gold production guidance range of 50,000 to 53,000 ounces with slightly higher gold production expected in H2 2023 due to increased mill throughput volumes following the expected commencement of production from the Matinha vein.

The Company is maintaining its full-year C1 cash cost guidance for the Xavantina Operations of $475 to $575 per ounce of gold produced and adjusting its AISC guidance range to $1,000 to $1,100 per ounce of gold produced to reflect the inclusion of sustaining lease payments and other miscellaneous sustaining expenses.

Ero Copper Corp. June 30, 2023 MD&A | Page 6

Exploration activities at the Xavantina Operations during the quarter were focused on testing extensions of the Matinha and Santo Antônio veins at depth as well as drill testing near-mine extensions of the shear zone hosting the Santo Antônio and Matinha veins along strike.

2023 Guidance

The Company is reaffirming its full-year production, cash cost and capital expenditure guidance as detailed in the tables below. The Caraíba Operations are expected to produce 44,000 to 47,000 tonnes of copper in concentrate in 2023. Mill throughput volumes are expected to be slightly lower in Q3 2023 compared to Q2 2023 and higher in Q4 2023 due to the anticipated commissioning of the new ball mill. Combined with expected copper grade variations related to planned stope sequencing, copper production is expected to decrease slightly in Q3 2023 before increasing in the last quarter of the year.

The Company is maintaining its full-year C1 cash cost guidance range for the Caraíba Operations of $1.40 to $1.60 per pound of copper produced. Unit operating costs are expected to be slightly higher in Q3 2023 compared to Q2 2023 and lowest in the last quarter of the year due to anticipated variations in quarterly mined and processed copper grades as well as total copper production.

At the Xavantina Operations, the Company is reaffirming its 2023 gold production guidance range of 50,000 to 53,000 ounces with slightly higher gold production expected in H2 2023 due to increased mill throughput volumes following the expected commencement of production from the Matinha vein.

The Company is maintaining its full-year C1 cash cost guidance for the Xavantina Operations of $475 to $575 per ounce of gold produced and adjusting its AISC guidance range to $1,000 to $1,100 per ounce of gold produced to reflect the inclusion of sustaining lease payments and other miscellaneous sustaining expenses.

2023 Production and Cost Guidance

The Company's cost guidance for 2023 assumes a USD:BRL foreign exchange rate of 5.30, a gold price of $1,725 per ounce and a silver price of $20.00 per ounce.

2023 Guidance
The Caraíba Operations
Copper Production (tonnes)
44,000 - 47,000
C1 Cash Cost Guidance (US$/lb)(1)
$1.40 - $1.60
The Xavantina Operations
Au Production (ounces)
50,000 - 53,000
C1 Cash Cost Guidance (US$/oz)(1)
$475 - $575
All-in Sustaining Cost (AISC) Guidance (US$/oz)(1)
$1,000 - $1,100

Note:    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 Annual Information Form for the year ended December 31, 2022 (the "AIF") and Management of Risks and Uncertainties in this MD&A for complete risk factors.
(1)     Please refer to the section titled "Alternative Performance (Non-IFRS) Measures" within this MD&A.
Ero Copper Corp. June 30, 2023 MD&A | Page 7

2023 Capital Expenditure Guidance

After conducting a detailed review of major projects and support infrastructure at the Caraíba Operations during the quarter, including infrastructure related to the Deepening, underground paste fill and tailings, the Company has elected to invest in various upgrades throughout H2 2023. These enhancements aim to bolster the Caraíba Operations' ongoing projects and support expanded life-of-mine operating plans at the Pilar Mine. As a result, the Company is increasing its full-year capital expenditure guidance by $15 to $20 million.

The Company's capital expenditure guidance for 2023 assumes a USD:BRL foreign exchange rate of 5.30 and has been presented below in USD millions.

2023 Guidance
Caraíba Operations
Growth
$90 - $105
Sustaining
$70 - $80
Exploration
$22 - $27
Total, Caraíba Operations
$182 - $212
Tucumã Project
Growth
$150 - $165
Sustaining
$0
Exploration
$0 - $1
Total, Tucumã Project
$150 - $166
Xavantina Operations
Growth
$4 - $5
Sustaining
$12 - $14
Exploration
$6 - $7
Total, Xavantina Operations
$22 - $26
Other Exploration Projects
$3 - $5
Company Total
Growth
$244 - $275
Sustaining
$82 - $94
Exploration
$31 - $40
Total, Company
$357 - $409

Ero Copper Corp. June 30, 2023 MD&A | Page 8

REVIEW OF FINANCIAL RESULTS

The following table provides a summary of the financial results of the Company for Q2 2023 and Q2 2022. Tabular amounts are in thousands of US dollars, except share and per share amounts.

Three months ended June 30,
Notes20232022
Revenue1$104,929 $114,903 
Cost of sales2(65,521)(64,251)
Gross profit39,408 50,652 
Expenses
General and administrative3(13,651)(12,471)
Share-based compensation(4,909)2,333 
Income before the undernoted
20,848 40,514 
Finance income3,362 1,544 
Finance expense4(5,995)(8,154)
Foreign exchange gain (loss)
515,057 (3,303)
Other income (expenses)
2,442 (1,208)
Income before income taxes
35,714 29,393 
Income tax expense
Current (3,742)(3,111)
Deferred (2,031)(2,172)
6(5,773)(5,283)
Net income for the period
$29,941 $24,110 
Other comprehensive gain (loss)
Foreign currency translation gain (loss)
737,987 (59,372)
Comprehensive income (loss)
$67,928 $(35,262)
Net income (loss) per share attributable to owners of the Company
Basic$0.32 $0.26 
Diluted$0.32 $0.26 
Weighted average number of common shares outstanding
Basic92,685,916 90,539,647 
Diluted93,643,447 91,850,321 



Ero Copper Corp. June 30, 2023 MD&A | Page 9

Notes:

1.    Revenues from copper sales in Q2 2023 was $83.9 million (Q2 2022 - $95.7 million) on sale of 25.6 million lbs of copper (Q2 2022 - 28.5 million lbs). The decrease in revenues was primarily attributed to lower copper prices and less copper sold. The decrease in copper production was attributed to lower head grades based on planned stope sequencing.

Revenues from gold sales in Q2 2023 was $21.0 million (Q2 2022 - $19.2 million) on sale of 10,916 ounces of gold (Q2 2022 - 10,448 ounces) at an average realized price of $1,945 per ounce (Q2 2022 - $1,865 per ounce). The increase in revenues was primarily attributable to both higher realized gold price and the increase in sales volume, as production and head grades increased significantly compared to the same quarter of the prior year.

2.    Cost of sales for Q2 2023 from copper sales was $56.2 million (Q2 2022 - $54.0 million) which primarily comprised of $18.0 million (Q2 2022 - $12.7 million) in depreciation and depletion, $12.7 million (Q2 2022 - $10.6 million) in salaries and benefits, $9.8 million (Q2 2022 - $9.4 million) in materials and consumables, $6.7 million (Q2 2022 - $6.3 million) in maintenance costs, $7.0 million (Q2 2022 - $6.6 million) in contracted services, $2.9 million (Q2 2022 - $2.7 million) in utilities, and $2.3 million (Q2 2022 - $2.6 million) in sales expenses, partially offset by $(3.4) million in change in inventory (Q2 2022 - $2.9 million). The increase in cost of sales in Q2 2023 as compared to Q2 2022 was primarily attributable to a 5% increase in tonnes milled and lower copper head grades, resulting in higher depreciation and depletion and labour costs compared to the same quarter of the prior year.

Cost of sales for Q2 2023 from gold sales was $9.3 million (Q2 2022 - $10.3 million) which primarily comprised of $4.1 million (Q2 2022 - $3.1 million) in depreciation and depletion, $2.2 million (Q2 2022 - $2.2 million) in salaries and benefits, $1.5 million (Q2 2022 - $1.7 million) in contracted services, $1.5 million (Q2 2022 - $2.0 million) in materials and consumables, $0.6 million (Q2 2022 - $0.7 million) in utilities, and $0.5 million (Q2 2022 - $0.7 million) in maintenance costs, partially offset by $(1.6) million in change in inventory (Q2 2022 - $(0.2) million). The increase in cost of sales in Q2 2023 as compared to Q2 2022 is primarily attributable to a 4% increase in gold ounces sold, as well as higher depreciation and depletion attributed to an increase in depreciable asset base.

3.    General and administrative expenses for Q2 2023 was primarily comprised of $8.3 million (Q2 2022 - $6.6 million) in salaries and consulting fees, $2.0 million (Q2 2022 - $2.6 million) in office and administration expenses, $1.4 million (Q2 2022 - $1.8 million) in incentive payments, $1.0 million (Q2 2022 - $0.7 million) in other costs, and $0.4 million (Q2 2022 - $0.7 million) in accounting and legal costs. The increase in general and administrative expenses was mainly attributed to an increase in salaries and consulting fees to support overall growth in operations, as well as consulting fees incurred on various operational excellence initiatives that are currently underway.

4.    Finance expense for Q2 2023 was $6.0 million (Q2 2022 - $8.2 million) and is primarily comprised of interest on loans and borrowings of $3.9 million (Q2 2022 - $6.0 million), accretion of deferred revenue of $0.8 million (Q2 2022 - $0.9 million), accretion of asset retirement obligations of $0.7 million (Q2 2022 - $0.6 million), lease interest of $0.3 million (Q2 2022 - $0.2 million), and other finance expense of $0.4 million (Q2 2022 - $0.5 million). In addition, $3.2 million (Q2 2022 - $1.2 million) in interest was capitalized to projects in progress. The overall decrease in finance expense was primarily attributable to higher interest capitalized as a result of higher capital expenditures on various projects as compared to the same quarter in the prior year.

5.    Foreign exchange gain for Q2 2023 was $15.1 million (Q2 2022 - $3.3 million loss). This amount is primarily comprised of foreign exchange gain on USD denominated debt of $12.1 million (Q2 2022 - $6.5 million loss) in MCSA for which the functional currency is the BRL, realized foreign exchange gain on derivative contracts of $2.8 million (Q2 2022 - $3.0 million loss), and unrealized foreign exchange gain on derivative contracts of $2.1 million (Q2 2022 - $1.4 million loss), partially offset by other foreign exchange losses of $1.9 million (Q2 2022 - $7.6 million gains). The foreign exchange gains were primarily a result of a strengthening of BRL against USD at the end of Q2 2023 as compared to the prior quarter. The foreign exchange gain on unrealized derivative contracts are a result of mark-to-market adjustments at period end.

6.    In Q2 2023, the Company recognized $5.8 million in income tax expense (Q2 2022 - $5.3 million). The increase was primarily a result of an increase in income before taxes as compared to the same quarter of the prior year.

7.    The foreign currency translation gain is a result of a strengthening of the BRL against the USD during Q2 2023, which strengthened from approximately 5.08 BRL per US dollar at the beginning of Q2 2023 to approximately 4.82 BRL per US dollar by the end of the quarter, when translating the net assets of the Company’s Brazilian subsidiaries to USD for presentation in the Company’s condensed consolidated interim financial statements.
Ero Copper Corp. June 30, 2023 MD&A | Page 10

The following table provides a summary of the financial results of the Company for YTD 2023 and 2022. Tabular amounts are in thousands of US dollars, except share and per share amounts.

Six months ended June 30,
Notes20232022
Revenue1$205,885 $223,814 
Cost of sales2(126,369)(112,163)
Gross profit79,516 111,651 
Expenses
General and administrative3(25,867)(23,684)
Share-based compensation(9,926)343 
Income before the undernoted
43,723 88,310 
Finance income7,500 2,257 
Finance expense4(12,521)(13,650)
Foreign exchange gain
523,678 15,406 
Other income (expenses)
2,500 (1,838)
Income before income taxes
64,880 90,485 
Income tax expense
Current (5,842)(6,170)
Deferred (4,597)(7,719)
6(10,439)(13,889)
Net income for the period
$54,441 $76,596 
Other comprehensive gain
Foreign currency translation gain
755,628 26,562 
Comprehensive income
$110,069 $103,158 
Net income per share attributable to owners of the Company
Basic$0.58 $0.84 
Diluted$0.58 $0.83 
Weighted average number of common shares outstanding
Basic92,491,063 90,389,661 
Diluted93,429,191 91,887,665 
Ero Copper Corp. June 30, 2023 MD&A | Page 11

Notes:

1.    Revenues from copper sales in YTD 2023 was $161.2 million (YTD 2022 - $189.4 million), which included the sale of 46.5 million lbs of copper compared to 50.7 million lbs of copper for YTD 2022. The decrease in revenues was primarily attributed to lower copper prices and lower copper sold.

Revenues from gold sales in YTD 2023 was $44.7 million (YTD 2022 - $34.5 million), which included the sale of 24,013 ounces of gold at a realized price of $1,881 per ounce, compared to 18,461 ounces of gold sold at a realized price of $1,888 per ounce in for YTD 2022. The increase in revenues was primarily attributable to higher sales volume compared to the prior year.

2.    Cost of sales for YTD 2023 from copper sales was $106.8 million (YTD 2022 - $94.5 million) which primarily consisted of $30.2 million (YTD 2022 - $22.5 million) in depreciation and depletion, $23.9 million (YTD 2022 - $19.8 million) in salaries and benefits, $18.3 million (YTD 2022 - $16.7 million) in materials and consumables, $13.0 million (YTD 2022 - $12.2 million) in contracted services, $13.2 million (YTD 2022 - $11.3 million) in maintenance costs, $5.6 million (YTD 2022 - $5.3 million) in utilities and $4.2 million (YTD 2022 - $4.4 million) in sales expenses. The increase in cost of sales was primarily attributed to a 15% increase in tonnes milled and lower head grades, resulting in higher depletion, depreciation and amortization, as well as an increase in labour and materials costs.

Cost of sales for YTD 2023 from gold sales was $19.5 million (YTD 2022- $17.6 million) which primarily comprised of $8.0 million (YTD 2022 - $5.3 million) in depreciation and depletion, $4.3 million (YTD 2022 - $4.4 million) in salaries and benefits, $2.8 million (YTD 2022 - $3.2 million) in contracted services, $3.0 million (YTD 2022 - $3.3 million) in materials and consumables, $1.1 million (YTD 2022 - $1.3 million) in utilities, and $0.9 million (YTD 2022 - $1.3 million) in maintenance costs. The increase in cost of sales was primarily attributed to overall inflationary pressure on costs.

3.    General and administrative expenses for YTD 2023 was primarily comprised of $15.4 million (YTD 2022 - $12.5 million) with respect to salaries and consulting fees, $4.2 million (YTD 2022 - $4.7 million) in office and administrative expenses, $2.8 million (YTD 2022 - $3.4 million) in incentive payments, $1.9 million (YTD 2022 - $1.7 million) in other general and administrative expenses, and $1.0 million (YTD 2022 - $1.1 million) in accounting and legal fees. The increase in general and administrative expenses in YTD 2023 was primarily attributable to increases in salaries, consulting fees and administrative activities to support overall growth in operations, as well as consulting fees incurred on various operational excellence initiatives that are currently underway.

4.    Finance expense for YTD 2023 was $12.5 million (YTD 2022 - $13.7 million) and was primarily comprised of interest on loans at the corporate head office of $8.4 million (YTD 2022 - $10.0 million), accretion of deferred revenue of $1.6 million (YTD 2022 - $1.7 million), accretion of the asset retirement obligations of $1.3 million (YTD 2022 - $1.1 million), lease interest of $0.6 million (YTD 2022 - $0.3 million), and other finance expense of $0.6 million (YTD 2022 - $0.5 million). In addition, $5.6 million (YTD 2022 - $2.3 million) in interest was capitalized to projects in progress. The overall decrease in finance expense was primarily attributable to higher interest capitalized as a result of higher capital expenditures on various projects as compared to the prior year.

5.    Foreign exchange gain for YTD 2023 was $23.7 million (YTD 2022 - $15.4 million gain). This amount was primarily comprised of a foreign exchange gain on USD denominated debt of $17.5 million (YTD 2022 - $4.8 million gain) in MCSA for which the functional currency is the BRL, a foreign exchange gain on unrealized derivative contracts of $5.3 million (YTD 2022 - $23.3 million), and realized foreign exchange gain on derivative contracts of $3.8 million (YTD 2022 - $7.6 million loss), partially offset by other foreign exchange losses of $2.8 million (YTD 2022 - $5.1 million losses). The fluctuation in foreign exchange gains/losses were primarily a result of increased volatility of the USD/BRL foreign exchange rates. During YTD 2023, the BRL strengthened 8.7% against the USD. The foreign exchange gains/losses on unrealized derivative contracts are a result of mark-to-market calculations at period end and may not represent the amount that will ultimately be realized, which will depend on future changes to the USD/BRL foreign exchange rates.

6.    In YTD 2023, the Company recognized a $10.4 million income tax expense (YTD 2022 - income tax expense of $13.9 million), The decrease was primarily as a result of a decrease in income before income taxes, partially offset by increase in non-deductible expenses and increase in withholding tax on intercompany interest and dividends.

7.    The foreign currency translation income is a result of the strengthening of the BRL against the USD during YTD 2023 when translating the net assets of the Company’s Brazilian subsidiaries to USD for presentation in the Company’s condensed consolidated interim financial statements.

Ero Copper Corp. June 30, 2023 MD&A | Page 12


SUMMARY OF QUARTERLY RESULTS

The following table presents selected financial information for each of the most recent eight quarters. Tabular amounts are in millions of US Dollars, except share and per share amounts.

Selected Financial Information
Jun. 30,(1)
Mar. 31,(2)
Dec. 31,(3)
Sep. 30,(4)
Jun. 30,(5)
Mar. 31,(6)
Dec. 31,(7)
Sep. 30,(8)
20232023202220222022202220212021
Revenue$104.9 $101.0 $116.7 $85.9 $114.9 $108.9 $134.9 $111.8 
Cost of sales
$(65.5)$(60.8)$(64.0)$(63.1)$(64.3)$(47.9)$(50.5)$(43.8)
Gross profit
$39.4 $40.1 $52.7 $22.8 $50.7 $61.0 $84.4 $68.0 
Net income for period
$29.9 $24.5 $22.5 $4.0 $24.1 $52.5 $60.2 $26.4 
Income per share attributable to the owners of the Company
- Basic$0.32 $0.26 $0.24 $0.04 $0.26 $0.58 $0.67 $0.29 
- Diluted$0.32 $0.26 $0.24 $0.04 $0.26 $0.57 $0.65 $0.28 
Weighted average number of common shares outstanding
- Basic92,685,916 92,294,045 91,522,358 90,845,229 90,539,647 90,238,008 89,637,768 88,449,567 
- Diluted93,643,447 93,218,281 92,551,916 91,797,437 91,850,321 92,050,104 91,727,452 93,255,615 

Notes:

1.During Q2 2023, the Company recognized net income of $29.9 million compared to $24.5 million in the preceding quarter. The increase was primarily attributable to an increase in foreign exchange gain and the recognition of an unrealized gain in copper derivative contracts.
2.During Q1 2023, the Company recognized net income of $24.5 million compared to $22.5 million in the preceding quarter. The increase was primarily attributable to an increase in foreign exchange gain, a reduction in general and administrative expenses, and a reduction in finance expense. In the prior quarter, the Company recognized a $3.3 million expected credit loss provision.

3.During Q4 2022, the Company recognized net income of $22.5 million compared to $4.0 million in the preceding quarter. The increase was primarily attributable to a $29.9 million increase in gross profit as a result of 13% increase in copper production, partially offset by higher share-based payment expenses and a $3.3 million expected credit loss provision recognized in relation to payment arrangement with one of the Company's customers in Brazil, Paranapanema S/A ("PMA").

4.During Q3 2022, the Company recognized net income of $4.0 million compared to $24.1 million in the preceding quarter. The decrease was primarily attributable to a $27.9 million decrease in gross profit as a result of 12% lower production, reduced copper and gold realized prices, and provisional pricing adjustments on copper concentrate sold in the prior quarter.

5.During Q2 2022, the Company recognized net income of $24.1 million compared to $52.5 million in the preceding quarter. The decrease was primarily attributable to volatility in foreign exchange gains or losses driven by the strengthening of the BRL against the USD in the quarter, which resulted in $3.3 million of foreign exchange losses compared to $18.7 million of foreign exchange gains in the preceding quarter and a $10.3 million decrease in gross profit as a result of reduced copper and gold realized prices and overall inflationary pressure on cost of sales. The increase in copper produced and sold was mostly offset by a provisional pricing adjustment.

Ero Copper Corp. June 30, 2023 MD&A | Page 13

6.During Q1 2022, the Company recognized net income of $52.5 million compared to $60.2 million in the preceding quarter. The decrease was primarily attributable to a $23.4 million decrease in gross profit as a result of reduced copper and gold sales volume, and overall inflationary pressure on cost of sales. Production and throughput for the quarter was adversely impacted by employee absenteeism due to COVID-19 and the seasonal influenza virus. The decrease in gross profit was partially offset by foreign exchange gains driven by the strengthening of the BRL against the USD in the quarter, which resulted in $18.7 million of foreign exchange gains compared to $4.4 million of foreign exchange losses in the preceding quarter.

7.During Q4 2021, the Company recognized net income of $60.2 million compared to $26.4 million in the preceding quarter. The increase was primarily attributable to a $16.4 million increase in gross profit as a result of increased copper sales volume, as well as a $15.2 million decrease in foreign exchange losses as the BRL depreciation against the USD was relatively less than the preceding quarter.

8.During Q3 2021, the Company recognized net income of $26.4 million compared to $84.0 million in the preceding quarter, a decrease of $57.6 million primarily due to volatility in foreign exchange gains or losses driven by the weakening of the BRL against the USD in the quarter, resulting in $19.6 million of foreign exchange losses compared to foreign exchange gains of $30.7 million in the preceding quarter.

LIQUIDITY, CAPITAL RESOURCES, AND CONTRACTUAL OBLIGATIONS

Liquidity

As at June 30, 2023, the Company held cash and cash equivalents of $124.4 million which were primarily comprised of cash held with reputable financial institutions and are invested in highly liquid short-term investments with maturities of three months or less. In addition, the Company held short-term investments of $56.0 million with reputable financial institutions with maturities greater than three months and less than one year. The funds are not exposed to liquidity risk and there are no restrictions on the ability of the Company to use these funds to meet its obligations.

Cash and cash equivalents have decreased by $53.3 million since December 31, 2022. The Company’s cash flows from operating, investing, and financing activities during 2023 are summarized as follows:

•Cash used in investing activities of $121.1 million, including:
◦$204.2 million of additions to mineral property, plant and equipment;
◦$9.0 million of additions to exploration and evaluation assets; and
◦$40.0 million of short-term investment purchases;
net of:
◦$132.1 million in proceeds from short-term investments and interest received;

•Cash used in financing activities of $5.6 million, primarily consists of:
◦$13.5 million of interest paid on loans and borrowings;
◦$5.5 million of lease payments; and
◦$3.8 million of principal repayments on loans and borrowings;
net of:
◦$11.8 million of new loans and borrowings, net of finance costs; and
◦$8.3 million of proceeds from exercise of stock options.

Partially offset by:

•Cash from operating activities of $71.8 million, primarily consists of:
Ero Copper Corp. June 30, 2023 MD&A | Page 14

◦$114.1 million of EBITDA (see Non-IFRS Measures);
◦$2.4 million of additional advances from the NX Gold Precious Metal Purchase Agreement; and
◦$2.0 million of derivative contract settlements;
net of:
◦$13.3 million of net change in non-cash working capital items;
◦$5.3 million of unrealized gain on foreign exchange hedges; and
◦$1.5 million of income taxes paid.

As at June 30, 2023, the Company had working capital of $140.7 million and available liquidity of $330.4 million.


Capital Resources

The Company’s primary sources of capital are comprised of cash from operations, cash and cash equivalents on hand and short-term investments. The Company continuously monitors its liquidity position and capital structure and, based on changes in operations and economic conditions, may adjust such structure by issuing new common shares or new debt as necessary. Taking into consideration cash flow from existing operations, management believes that the Company has sufficient working capital and financial resources to maintain its planned operations and activities for the foreseeable future.

At June 30, 2023, the Company had available liquidity of $330.4 million, including $124.4 million in cash and cash equivalents, $56.0 million in short-term investments and $150.0 million of undrawn availability under its senior secured revolving credit facility.

In January 2023, the senior credit facility was amended to increase its limit from $75.0 million to $150.0 million with maturity extended from March 2025 to December 2026 ("Amended Senior Credit Facility"). The Amended Senior Credit Facility bears interest on a sliding scale of SOFR plus an applicable margin of 2.00% to 4.00% depending on the Company's consolidated leverage ratio. Commitment fees for the undrawn portion of the Amended Senior Credit Facility is also based on a sliding scale ranging from 0.45% to 0.90%.

In relation to its loans and borrowings, the Company is required to comply with certain financial covenants. As of the date of the condensed consolidated interim financial statements, the Company is in compliance with these covenants. The loan agreements also contain covenants that could restrict the ability of the Company and its subsidiaries, MCSA, Ero Gold, and NX Gold, to, among other things, incur additional indebtedness needed to fund its respective operations, pay dividends or make other distributions, make investments, create liens, sell or transfer assets or enter into transactions with affiliates. There are no other restrictions or externally imposed capital requirements of the Company.

Contractual Obligations and Commitments

The Company has a precious metals purchase agreement with RGLD Gold AG ("Royal Gold"), a wholly-owned subsidiary of Royal Gold, Inc., whereby the Company is obligated to sell a portion of its gold production from the Xavantina Operations at contract prices.

Ero Copper Corp. June 30, 2023 MD&A | Page 15

Refer to the "Liquidity Risk" section for further information on the Company's contractual obligations and commitments.

MANAGEMENT OF RISKS AND UNCERTAINTIES

The Company thoroughly examines the various financial instruments and risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk, currency risk, commodity price risk and interest rate risk. Where material, these risks are reviewed and monitored by the Board.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s receivables from customers. The carrying amount of the financial assets below represents the maximum credit risk exposure as at June 30, 2023 and December 31, 2022:

June 30, 2023December 31, 2022
Cash and cash equivalents$124,382 $177,702 
Short-term investments56,011 139,700 
Accounts receivable12,779 10,289 
Note receivable18,756 20,630 
Deposits and other non-current assets7,276 3,985 
$219,204 $352,306 

The Company invests cash and cash equivalents and short-term investments with financial institutions that are financially sound based on their credit rating.

The Company’s exposure to credit risk associated with accounts receivable is influenced mainly by the individual characteristics of each customer. On November 30, 2022, one of the Company's customers in Brazil, Paranapanema S/A ("PMA"), filed for bankruptcy protection due to working capital difficulties after an operational incident in June which resulted in one of their plants being shutdown for 38 days. Preceding the announcement, the Company agreed to restructure PMA's outstanding accounts receivable balance of $23.9 million into a note receivable, guaranteed by certain assets of PMA, with payment terms of 24 monthly installments beginning in February 2023. The loan bears an annual interest rate equivalent to Brazil's CDI rate of approx. 13%. At June 30, 2023, the gross carrying amount of accounts and note receivable has been reduced by a credit loss provision of $2.7 million (December 31, 2022 - $3.3 million.

Liquidity risk

Liquidity risk is the risk associated with the difficulties that the Company may have meeting the obligations associated with financial liabilities that are settled with cash payments or with another financial asset. The Company's approach to liquidity management is to ensure as much as possible that sufficient liquidity exists to meet their maturity obligations on the expiration dates, under normal and stressful conditions, without causing unacceptable losses or with risk of undermining the normal operation of the Company.
Ero Copper Corp. June 30, 2023 MD&A | Page 16


The table below shows the Company's maturity of non-derivative financial liabilities on June 30, 2023:

Non-derivative financial liabilitiesCarrying
value		Contractual cash flowsUp to
12 months		1 - 2
years		3 - 5
years		More than
5 years
Loans and borrowings (including interest)$426,923 $608,972 $34,699 $35,690 $86,583 $452,000 
Accounts payable and accrued liabilities94,221 94,221 94,221 — — — 
Other non-current liabilities9,755 22,199 — 10,580 10,951 668 
Leases14,875 14,855 9,123 3,809 1,729 193 
Total$545,774 $740,247 $138,043 $50,079 $99,263 $452,861 

As at June 30, 2023, the Company has made commitments for capital expenditures through contracts and purchase orders amounting to $197.1 million, which are expected to be incurred over a six-year period. In the normal course of operations, the Company may also enter into long-term contracts which can be cancelled with certain agreed customary notice periods without material penalties.

The Company also has derivative financial asset for foreign exchange collar contracts and copper derivative contracts whose notional amounts and maturity information are disclosed below under foreign exchange currency risk, interest rate risk, and price risk.


Foreign exchange currency risk

The Company’s subsidiaries in Brazil are exposed to exchange risks primarily related to the US dollar. In order to minimize currency mismatches, the Company monitors its cash flow projections considering future sales expectations indexed to US dollar variation in relation to the cash requirement to settle the existing financings.

The Company's exposure to foreign exchange currency risk at June 30, 2023 relates to $19.9 million (December 31, 2022 – $11.7 million) in loans and borrowings of MCSA denominated in US dollars and Euros. In addition, the Company is also exposed to foreign exchange currency risk at June 30, 2023 on $210.1 million of intercompany loan balances (December 31, 2022 - $148.2 million) which have contractual repayment terms. Strengthening (weakening) in the Brazilian Real against the US dollar at June 30, 2023 by 10% and 20%, would have increased (decreased) pre-tax net income by $22.9 million and $45.8 million, respectively (June 30, 2022 – $6.5 million and $13.0 million. This analysis is based on the foreign currency exchange variation rate that the Company considered to be reasonably possible at the end of the period. The analysis assumes that all other variables, especially interest rates, are held constant.

The Company may use derivatives, including forward contracts, collars and swap contracts, to manage market risks. At June 30, 2023, the Company has entered into foreign exchange collar contracts at zero cost for notional amounts of $90.0 million (December 31, 2022 - notional amount of $270.0 million) with an average floor rate of 5.30 BRL to US Dollar and an average cap rate of 6.31 BRL to US Dollar. The maturity dates of these contracts are from July 2023 to December 2023 and are financially settled on a net basis. As of June 30, 2023 the Company had contracts with three different
Ero Copper Corp. June 30, 2023 MD&A | Page 17

counterparties and the fair value of these contracts was a net asset of $9.0 million (December 31, 2022 - asset of $3.2 million), included in other current assets in the statement of financial position. The fair value of foreign exchange contracts was determined based on option pricing models, forward foreign exchange rates and information provided by the counter party.

The change in fair value of foreign exchange collar contracts was a gain of $5.3 million for the three and six months ended June 30, 2023 (a gain of $23.3 million for the three and six months ended June 30, 2022) and has been recognized in foreign exchange gain (loss). In addition, during the three and six months ended June 30, 2023, the Company recognized a realized gain of $3.8 million (realized loss of $7.6 million for the three and six months ended June 30, 2022) related to the settlement of foreign currency forward collar contracts.

Interest rate risk

The Company is principally exposed to the variation in interest rates on loans and borrowings with variable rates of interest. Management reduces interest rate risk exposure by entering into loans and borrowings with fixed rates of interest or by entering into derivative instruments that fix the ultimate interest rate paid.

The Company is principally exposed to interest rate risk through Brazilian Real denominated bank loans of $2.8 million. Based on the Company’s net exposure at June 30, 2023, a 1% change in the variable rates would not materially impact its pre-tax annual net income.

Price risk

The Company may use derivatives, including forward contracts, collars and swap contracts, to manage commodity price risks.

At June 30, 2023, the Company has provisionally priced sales that are exposed to commodity price changes. Based on the Company’s net exposure at June 30, 2023, a 10% change in the price of copper would have changed $2.4 million. At June 30, 2023, the Company has entered into copper derivative contracts at zero-cost on 3,000 tonnes of copper per month from July 2023 to January 2024. These copper derivative contracts establish a floor price of $3.50 per pound of copper and a cap price of $4.76 per pound on total hedged volumes of 18,000 tonnes of copper, representing approximately 75% of estimated production volumes over the period. As of June 30, 2023, the fair value of these contracts was a net asset of $2.2 million (December 31, 2022 - liability of $0.6 million). The fair value of copper collar contracts was determined based on option pricing models, forward copper price and information provided by the counter party.

During the three and six months ended June 30, 2023, the Company recognized an unrealized gain of $2.7 million (2022 - $nil) and a realized loss of $1.8 million in relation to its copper hedge derivatives in other income or loss.

For a discussion of additional risks applicable to the Company and its business and operations, including risks related to the Company’s foreign operations, the environment and legal proceedings, see “Risk Factors” in the Company’s AIF.


OTHER FINANCIAL INFORMATION

Ero Copper Corp. June 30, 2023 MD&A | Page 18

Off-Balance Sheet Arrangements

As at June 30, 2023, the Company had no material off-balance sheet arrangements.

Outstanding Share Data

As of August 3, 2023, the Company had 93,211,871 common shares issued and outstanding.

ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES

Critical Accounting Judgments and Estimates

The preparation of condensed consolidated interim financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions about future events that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s best knowledge of the amount, events or actions, actual results may differ from these estimates.

The Company’s significant accounting policies and accounting estimates are contained in the Company’s consolidated financial statements for the year ended December 31, 2022. Certain of these policies, such as derivative instruments, deferred revenue, depreciation of property, plant and equipment and mining interests, provision for rehabilitation and closure costs, and income tax estimates including tax uncertainties involve critical accounting estimates. Certain of these estimates are dependent on mineral reserves and resource estimates and require management of the Company to make subjective or complex judgments about matters that are inherently uncertain, and because of the likelihood that materially different amounts could be reported under different conditions or using different assumptions. Actual results may differ from these estimates.

Management continuously reviews its estimates, judgments and assumptions on an ongoing basis using the most current information available. Revisions to estimates are recognized prospectively.

Ero Copper Corp. June 30, 2023 MD&A | Page 19

Capital Expenditures

The following table presents capital expenditures at the Company’s operations.
2023 - Q22023 - Q12023 - YTD
Caraíba Operations
Growth$35,450 $24,702 $60,152 
Sustaining28,788 20,862 49,650 
Exploration8,580 5,196 13,776 
Deposit on Projects6,962 3,659 10,621 
Total, Caraíba Operations
$79,780 $54,419 $134,199 
Tucumã Project
Growth23,870 11,782 35,652 
Exploration48 638 686 
Deposit on Projects15,430 14,100 29,530 
Total, Tucumã Project
$39,348 $26,520 $65,868 
Xavantina Operations
Growth1,490 987 2,477 
Sustaining3,366 3,013 6,379 
Exploration2,449 1,905 4,354 
Total, Xavantina Operations
$7,305 $5,905 $13,210 
Corporate and Other
Sustaining222 178 400 
Exploration1,800 1,837 3,637 
Deposit on Projects81 — 81 
Total, Corporate and Other$2,103 $2,015 $4,118 
Consolidated
Growth60,810 37,471 $98,281 
Sustaining32,376 24,053 56,429 
Exploration12,877 9,576 22,453 
Deposit on Projects22,473 17,759 40,232 
Total, Consolidated$128,536 $88,859 $217,395 
Ero Copper Corp. June 30, 2023 MD&A | Page 20

ALTERNATIVE PERFORMANCE (NON-IFRS) MEASURES

The Company utilizes certain alternative performance (non-IFRS) measures to monitor its performance, including C1 cash cost of copper produced (per lb), realized copper price (per lb), C1 cash cost of gold produced (per ounce), AISC of gold produced (per ounce), realized gold price (per ounce), EBITDA, adjusted EBITDA, adjusted net income attributable to owners of the Company, adjusted net income per share, net (cash) debt, working capital and available liquidity. These performance measures have no standardized meaning prescribed within generally accepted accounting principles under IFRS and, therefore, amounts presented may not be comparable to similar measures presented by other mining companies. These non-IFRS measures are intended to provide supplemental information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The tables below provide reconciliations of these non-IFRS measures to the most directly comparable IFRS measures as contained in the Company’s financial statements.

Unless otherwise noted, the non-IFRS measures presented below have been calculated on a consistent basis for the periods presented.

C1 Cash Cost of Copper Produced (per lb)

C1 cash cost of copper produced (per lb) is a non-IFRS performance measure used by the Company to manage and evaluate the operating performance of its copper mining segment and is calculated as C1 cash costs divided by total pounds of copper produced during the period. C1 cash costs includes total cost of production, transportation, treatment and refining charges, and certain tax credits relating to sales invoiced to the Company's Brazilian customer on sales, net of by-product credits and incentive payments. C1 cash cost of copper produced per pound is widely reported in the mining industry as benchmarks for performance but does not have a standardized meaning and is disclosed in supplement to IFRS measures.

The following table provides a reconciliation of C1 cash cost of copper produced per pound to cost of production, its most directly comparable IFRS measure.

Reconciliation:2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Cost of production
$37,767 $36,285 $38,015 $74,052 $67,178 
Add (less):
Transportation costs & other1,733 1,339 2,579 3,072 4,448 
Treatment, refining, and other4,248 2,527 3,893 6,775 5,939 
By-product credits(3,704)(2,810)(6,438)(6,514)(11,250)
Incentive payments(1,129)(1,237)(1,016)(2,366)(1,920)
Net change in inventory
1,323 (1,185)(1,907)138 (1,330)
Foreign exchange translation and other
(13)15 (178)2 208 
C1 cash costs$40,225 $34,934 $34,948 $75,159 $63,273 


Ero Copper Corp. June 30, 2023 MD&A | Page 21

2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Costs
Mining
$25,794 $23,210 $23,933 $49,004 $44,059 
Processing7,643 6,554 7,988 14,197 14,435 
Indirect6,244 5,453 5,572 11,697 10,090 
Production costs39,681 35,217 37,493 74,898 68,584 
By-product credits(3,704)(2,810)(6,438)(6,514)(11,250)
Treatment, refining and other4,248 2,527 3,893 6,775 5,939 
C1 cash costs$40,225 $34,934 $34,948 $75,159 $63,273 
Costs per pound
Payable copper produced (lb, 000)26,464 20,564 28,073 47,027 49,643 
Mining$0.97 $1.13 $0.85 $1.04 $0.89 
Processing$0.29 $0.32 $0.28 $0.30 $0.29 
Indirect$0.24 $0.27 $0.20 $0.25 $0.20 
By-product credits$(0.14)$(0.14)$(0.23)$(0.14)$(0.23)
Treatment, refining and other$0.16 $0.12 $0.14 $0.15 $0.12 
C1 cash costs of copper produced (per lb)$1.52 $1.70 $1.24 $1.60 $1.27 

Realized Copper Price (per lb)

Realized Copper Price (per lb) is a non-IFRS ratio that is calculated as gross copper revenue divided by pounds of copper sold during the period. Management believes measuring Realized Copper Price (per lb) enables investors to better understand performance based on the realized copper sales in each reporting period. The following table provides a calculation of Realized Copper Price (per lb) and a reconciliation to copper segment .

Reconciliation:2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Copper revenue ($000s)$83,929 $77,301 $95,654 $161,230 $189,350 
less: by-product credits(3,704)(2,810)(6,438)(6,514)(11,250)
Net copper revenue80,225 74,491 89,216 154,716 178,100 
add: treatment, refining and other4,248 2,527 3,893 6,775 5,939 
Gross copper revenue84,473 77,018 93,109 161,491 184,039 
Cu Sold in concentrate (lbs)25,600 20,865 28,546 46,465 50,691 
Realized copper price (per lb)$3.30 $3.69 $3.26 $3.48 $3.63 

Ero Copper Corp. June 30, 2023 MD&A | Page 22

C1 Cash Cost of Gold produced (per ounce) and AISC of Gold produced (per ounce)

C1 cash cost of gold produced (per ounce) is a non-IFRS performance measure used by the Company to manage and evaluate the operating performance of its gold mining segment and is calculated as C1 cash costs divided by total ounces of gold produced during the period. C1 cash cost includes total cost of production, net of by-product credits and incentive payments. C1 cash cost of gold produced per ounce is widely reported in the mining industry as benchmarks for performance but does not have a standardized meaning and is disclosed in supplemental to IFRS measures.

AISC of gold produced (per ounce) is an extension of C1 cash cost of gold produced (per ounce) discussed above and is also a key performance measure used by management to evaluate operating performance of its gold mining segment. AISC of gold produced (per ounce) is calculated as AISC divided by total ounces of gold produced during the period. AISC includes C1 cash costs, site general and administrative costs, accretion of mine closure and rehabilitation provision, sustaining capital expenditures, sustaining leases, and royalties and production taxes. AISC of gold produced (per ounce) is widely reported in the mining industry as benchmarks for performance but does not have a standardized meaning and is disclosed in supplement to IFRS measures.

The following table provides a reconciliation of C1 cash cost of gold produced per ounce and AISC of gold produced per ounce to cost of production, its most directly comparable IFRS measure.

Reconciliation:
2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Cost of production
$5,657 $6,107 $7,225 $11,764 $12,617 
Add (less):
Incentive payments(311)(407)(188)(718)(773)
Net change in inventory936 (352)(73)584 654 
By-product credits(163)(176)(145)(339)(269)
Smelting and refining
63 76 62 139 104 
Foreign exchange translation and other
(119)176 265 57 429 
C1 cash costs$6,063 $5,424 $7,146 $11,487 $12,762 
Site general and administrative1,338 1,232 882 2,570 1,441 
Accretion of mine closure and rehabilitation provision111 105 112 216 224 
Sustaining capital expenditure3,530 3,013 3,690 6,543 5,986 
Sustaining lease payments1,740 1,660 894 3,400 1,716 
Royalties and production taxes556 338 277 894 481 
AISC$13,338 $11,772 $13,001 $25,110 $22,610 

Ero Copper Corp. June 30, 2023 MD&A | Page 23

2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Costs
Mining
$3,017 $2,567 $3,929 $5,584 $7,147 
Processing2,048 1,905 2,285 3,953 3,983 
Indirect1,098 1,052 1,015 2,150 1,797 
Production costs6,163 5,524 7,229 11,687 12,927 
Smelting and refining costs
63 76 62 139 104 
By-product credits(163)(176)(145)(339)(269)
C1 cash costs$6,063 $5,424 $7,146 $11,487 $12,762 
Site general and administrative1,338 1,232 882 2,570 1,441 
Accretion of mine closure and rehabilitation provision111 105 112 216 224 
Sustaining capital expenditure3,530 3,013 3,690 6,543 5,986 
Sustaining leases1,740 1,660 894 3,400 1,716 
Royalties and production taxes556 338 277 894 481 
AISC$13,338 $11,772 $13,001 $25,110 $22,610 
Costs per ounce
Payable gold produced (ounces)12,333 12,443 11,122 24,776 19,918 
Mining$245 $206 $353 $225 $359 
Processing$166 $153 $205 $160 $200 
Indirect$89 $85 $91 $87 $90 
Smelting and refining$5 $6 $6 $6 $5 
By-product credits$(13)$(14)$(12)$(14)$(13)
C1 cash costs of gold produced (per ounce)$492 $436 $643 $464 $641 
AISC of gold produced (per ounce)$1,081 $946 $1,169 $1,013 $1,135 

Ero Copper Corp. June 30, 2023 MD&A | Page 24

Realized Gold Price (per ounce)

Realized Gold Price (per ounce) is a non-IFRS ratio that is calculated as gross gold revenue divided by ounces of gold sold during the period. Management believes measuring Realized Gold Price (per ounce) enables investors to better understand performance based on the realized gold sales in each reporting period. The following table provides a calculation of Realized Gold Price (per ounce) and a reconciliation to gold segment revenues, its most directly comparable IFRS measure.

(in '000s except for ounces and price per ounce)2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
NX Gold revenue
$21,000 $23,655 $19,249 $44,655 $34,464 
less: by-product credits (163)(176)(145)(339)(269)
Gold revenue, net $20,837 $23,479 $19,104 $44,316 $34,195 
add: smelting, refining, and other charges396 468 383 864 662 
Gold revenue, gross$21,232 $23,947 $19,487 $45,179 $34,857 
- spot (cash)$15,839 $18,677 $15,244 $34,516 $26,453 
- stream (cash)$1,182 $1,231 $864 $2,413 $1,667 
- stream (amortization of deferred revenue)$4,211 $4,039 $3,379 $8,250 $6,737 
Total gold ounces sold10,916 13,097 10,448 24,013 18,461 
- spot7,958 9,787 8,153 17,745 14,016 
- stream2,958 3,310 2,295 6,268 4,445 
Realized gold price (per ounce)$1,945 $1,828 $1,865 $1,881 $1,888 
- spot$1,990 $1,908 $1,870 $1,945 $1,887 
- stream (cash + amortization of deferred revenue)$1,823 $1,592 $1,849 $1,701 $1,891 
- cash (spot cash + stream cash)$1,559 $1,520 $1,542 $1,538 $1,523 

Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and Adjusted EBITDA

EBITDA and adjusted EBITDA are non-IFRS performance measures used by management to evaluate its debt service capacity and performance of its operations. EBITDA represents earnings before finance expense, income taxes, depreciation and amortization. Adjusted EBITDA is EBITDA before the pre-tax effect of adjustments for non-cash and/or non-recurring items required in determination of EBITDA for covenant calculation purposes.

The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net income, its most directly comparable IFRS measure.

Ero Copper Corp. June 30, 2023 MD&A | Page 25

Reconciliation:
2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Net Income
$29,941 $24,500 $24,110 $54,441 $76,596 
Adjustments:
Finance expense
5,995 6,526 8,154 12,521 13,650 
Income tax expense
5,773 4,666 5,283 10,439 13,889 
Amortization and depreciation
20,239 16,506 16,361 36,745 27,865 
EBITDA$61,948 $52,198 $53,908 $114,146 $132,000 
Foreign exchange (gain) loss
(15,057)(8,621)3,303 (23,678)(15,406)
Share based compensation4,909 5,017 (2,333)9,926 (343)
Unrealized gain on copper derivative contracts
(2,654)— — (2,654)— 
Incremental COVID-19 costs— — 952 — 1,956 
Adjusted EBITDA$49,146 $48,594 $55,830 $97,740 $118,207 

Adjusted net income attributable to owners of the Company and Adjusted net income per share attributable to owners of the Company

“Adjusted net income attributable to owners of the Company” is net income attributed to shareholders as reported, adjusted for certain types of transactions that, in management's judgment, are not indicative of our normal operating activities or do not necessarily occur on a recurring basis. “Adjusted net income per share attributable to owners of the Company” (“Adjusted EPS”) is calculated as "adjusted net income attributable to owners of the Company" divided by weighted average number of outstanding common shares in the period. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, the Company and certain investor and analysts use these supplemental non-IFRS performance measures to evaluate the normalized performance of the Company. The presentation of Adjusted EPS is not meant to substitute the net income (loss) per share attributable to owners of the Company (“EPS”) presented in accordance with IFRS, but rather it should be evaluated in conjunction with such IFRS measures.
The following table provides a reconciliation of Adjusted net income attributable to owners of the Company and Adjusted EPS to net income attributable to the owners of the Company, its most directly comparable IFRS measure.

Ero Copper Corp. June 30, 2023 MD&A | Page 26

Reconciliation:
2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Net income as reported attributable to the owners of the Company
$29,576 $24,154 $23,820 $53,730 $75,927 
Adjustments:
Share based compensation4,909 5,017 (2,333)9,926 (343)
Unrealized foreign exchange (gain) loss on USD denominated balances in MCSA
(9,716)(4,753)1,038 (14,469)(299)
Unrealized foreign exchange (gain) loss on foreign exchange derivative contracts
(2,078)(3,152)1,405 (5,230)(23,210)
Unrealized gain on copper derivative contracts
(2,644)— — (2,644)— 
Incremental COVID-19 costs— — 946 — 1,944 
Tax effect on the above adjustments2,205 1,208 (519)3,413 3,289 
Adjusted net income attributable to owners of the Company$22,252 $22,474 $24,357 $44,726 $57,308 
Weighted average number of common shares
Basic92,685,916 92,294,045 90,539,647 92,491,063 90,389,661 
Diluted93,643,447 93,218,281 91,850,321 93,429,191 91,887,665 
Adjusted EPS
Basic$0.24 $0.24 $0.27 $0.48 $0.63 
Diluted$0.24 $0.24 $0.27 $0.48 $0.62 

Net (Cash) Debt

Net (cash) debt is a performance measure used by the Company to assess its financial position and ability to pay down its debt. Net (cash) debt is determined based on cash and cash equivalents, short-term investments, net of loans and borrowings as reported in the Company’s condensed consolidated interim financial statements. The following table provides a calculation of net (cash) debt based on amounts presented in the Company’s condensed consolidated interim financial statements as at the periods presented.

June 30, 2023March 31, 2023December 31, 2022June 30, 2022
Current portion of loans and borrowings$17,105 $9,221 $15,703 $16,219 
Long-term portion of loans and borrowings409,818401,595402,354403,492
Less:
Cash and cash equivalents(124,382)(209,908)(177,702)(329,292)
Short-term investments(56,011)(26,739)(139,700)(100,589)
Net debt (cash) $246,530 $174,169 $100,655 $(10,170)


Ero Copper Corp. June 30, 2023 MD&A | Page 27


Working Capital and Available Liquidity

Working capital is calculated as current assets less current liabilities as reported in the Company’s condensed consolidated interim financial statements. The Company uses working capital as a measure of the Company’s short-term financial health and ability to meet its current obligations using its current assets. Available liquidity is calculated as the sum of cash and cash equivalents, short-term investments and the undrawn amount available on its revolving credit facilities. The Company uses this information to evaluate the liquid assets available. The following table provides a calculation for these based on amounts presented in the Company’s condensed consolidated interim financial statements as at the periods presented.

June 30, 2023March 31, 2023December 31, 2022June 30, 2022
Current assets$280,783 $331,241 $392,427 $523,201 
Less: Current liabilities(140,090)(112,448)(129,121)(105,527)
Working capital
$140,693 $218,793 $263,306 $417,674 
Cash and cash equivalents124,382 209,908 177,702 329,292 
Short-term investments56,011 26,739 139,700 100,589 
Available undrawn revolving credit facilities(1)
150,000 150,000 75,000 75,000 
Available liquidity$330,393 $386,647 $392,402 $504,881 

(1) In January 2023, the Company amended its Senior Credit Facility to increase its limit from $75.0 million to $150.0 million and extended the maturity from March 2025 to December 2026.

Disclosure Controls and Procedures and Internal Control over Financial Reporting

The Company’s management, with the participation of the CEO and CFO, is responsible for establishing and maintaining adequate disclosure controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”) using Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") as its internal control framework.

The Company’s DC&P are designed to provide reasonable assurance that material information related to the Company is identified and communicated on a timely basis.

The Company’s ICFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Any system of ICFR, no matter how well designed, has inherent limitations and cannot provide absolute assurance that all misstatements and instances of fraud, if any, within the Company have been prevented or detected. The Company’s ICFR is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

Ero Copper Corp. June 30, 2023 MD&A | Page 28

There were no changes in the Company’s DC&P and ICFR that materially affected, or are reasonably likely to materially affect, ICFR during the three and six months ended June 30, 2023.

NOTE REGARDING SCIENTIFIC AND TECHNICAL INFORMATION

Unless otherwise indicated, scientific and technical information in this MD&A relating to Ero’s properties (“Technical Information”) is based on information contained in the following:

The report prepared in accordance with National Instrument 43-101, Standards of Disclosure for Mineral Projects (“NI 43-101”) and entitled “2022 Mineral Resources and Mineral Reserves of the Caraíba Operations, Curaçá Valley, Bahia, Brazil”, dated December 22, 2022 with an effective date of September 30, 2022, prepared by Porfirio Cabaleiro Rodrigues, FAIG, Bernardo Horta de Cerqueira Viana, FAIG, Fábio Valério Câmara Xavier, MAIG and Ednie Rafael Moreira de Carvalho Fernandes, MAIG all of GE21 Consultoria Mineral Ltda. (“GE21”), Dr. Beck Nader, FAIG of BNA Mining Solutions (“BNA”) and Alejandro Sepulveda, Registered Member (#0293) (Chilean Mining Commission) of NCL Ingeniería y Construcción SpA (“NCL”) (the “Caraíba Operations Technical Report”). Each a “qualified person” and “independent” of the Company within the meanings of NI 43-101.

The press release dated March 28, 2023, and where applicable, the report prepared in accordance with NI 43-101 and entitled “Mineral Resource and Mineral Reserve Estimate of the NX Gold Mine, Nova Xavantina”, dated January 8, 2021 with an effective date of September 30, 2020, prepared by Porfirio Cabaleiro Rodrigues, FAIG, Leonardo de Moraes Soares, MAIG, Bernardo Horta de Cerqueira Viana, FAIG, and Paulo Roberto Bergmann, FAusIMM, each of GE21 and a “qualified person” and “independent” of the Company within the meanings of NI 43-101 (the “Xavantina Operations Technical Report”).

The report prepared in accordance with NI 43-101 and entitled “Boa Esperança Project NI 43-101 Technical Report on Feasibility Study Update”, dated November 12, 2021 with an effective date of August 31, 2021, prepared by Kevin Murray, P. Eng., Erin L. Patterson, P.E. and Scott C. Elfen, P.E. all of Ausenco Engineering Canada Inc. (or its affiliate Ausenco Engineering USA South Inc. in the case of Ms. Patterson), Carlos Guzmán, FAusIMM RM CMC of NCL and Emerson Ricardo Re, MSc, MBA, MAusIMM (CP) (No. 305892), Registered Member (No. 0138) (Chilean Mining Commission) and Resource Manager of the Company on the date of the report (now of HCM Consultoria Geologica Eireli (“HCM”)) (the “Tucumã Project Technical Report”). Each of Kevin Murray, P. Eng., Erin L. Patterson, P.E. and Scott C. Elfen, P.E., Carlos Guzmán, FAusIMM RM CMC and Emerson Ricardo Re, MAusIMM (CP), is a “qualified person” of the Company within the meanings of NI 43-101. Each of Kevin Murray, P. Eng., Erin L. Patterson, P.E. and Scott C. Elfen, P.E., and Carlos Guzmán, FAusIMM RM CMC are “independent” of the Company within the meaning of NI 43-101. Emerson Ricardo Re, MAusIMM (CP), as Resource Manager of the Company (on the date of the report and now of HCM), was not “independent” of the Company on the date of the report, within the meaning of NI 43-101.

Reference should be made to the full text of the Caraíba Operations Technical Report, the Xavantina Operations Technical Report and the Tucumã Project Technical Report, each of which is available for review on the Company's website at www.erocopper.com and under the Company’s profile on SEDAR at www.sedar.com, and EDGAR at www.sec.gov.

The disclosure of Technical Information in this MD&A has been reviewed and approved by Cid Gonçalves Monteiro Filho, SME RM (04317974), MAIG (No. 8444), MAusIMM (No. 3219148) and Resource Manager of the Company who is a “qualified person” within the meanings of NI 43-101.

Ero Copper Corp. June 30, 2023 MD&A | Page 29

Cautionary Note Regarding Forward-Looking Statements

This MD&A contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation (collectively, “forward-looking statements”). Forward-looking statements include 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. Forward-looking statements may include, but are not limited to, statements with respect to the Company’s production, operating cost and capital expenditure guidance, mineral reserve and mineral resource estimates; targeting additional mineral resources and expansion of deposits; capital and operating cost estimates and economic analyses (including cash flow projections), including those from the Caraíba Operations Technical Report, the Xavantina Operations Technical Report and the Tucumã Project Technical Report; the Company’s expectations, strategies and plans for the Caraíba Operations, the Xavantina Operations and the Tucumã Project, including the Company’s planned exploration, development, construction and production activities; the results of future exploration and drilling; estimated completion dates for certain milestones; successfully adding or upgrading mineral resources and successfully developing new deposits; the costs and timing of future exploration, development and construction including but not limited to the Deepening Extension Project at the Caraíba Operations and the Tucumã Project; the timing and amount of future production at the Caraíba Operations, the Xavantina Operations and the Tucumã Project; the Company's expectations regarding planned capital expenditures for the Tucumã Project, the Deepening Extension Project and/or the Caraíba Mill expansion project falling within contingency levels; expectations regarding the Company's ability to manage risks related to future copper price fluctuations and volatility; future financial or operating performance and condition of the Company and its business, operations and properties, including expectations regarding liquidity, capital structure, competitive position and payment of dividends; expectations regarding future currency exchange rates; and any other statement that may predict, forecast, indicate or imply future plans, intentions, levels of activity, results, performance or achievements.

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual results, actions, events, conditions, performance or achievements to materially differ from those expressed or implied by the forward-looking statements, including, without limitation, risks discussed in this MD&A and in the AIF under the heading “Risk Factors”. The risks discussed in this MD&A and in the AIF are not exhaustive of the factors that may affect any of the Company’s forward-looking statements. Although the Company has attempted to identify important factors that could cause actual results, actions, events, conditions, performance or achievements to differ materially from those contained in forward-looking statements, there may be other factors that cause results, actions, events, conditions, performance or achievements to differ from those anticipated, estimated or intended.

Forward-looking statements are not a guarantee of future performance. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements involve statements about the future and are inherently uncertain, and the Company’s actual results, achievements or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to herein and in the AIF under the heading “Risk Factors”.

Ero Copper Corp. June 30, 2023 MD&A | Page 30

The Company’s forward-looking statements are based on the assumptions, beliefs, expectations and opinions of management on the date the statements are made, many of which may be difficult to predict and beyond the Company’s control. In connection with the forward-looking statements contained in this MD&A and in the AIF, the Company has made certain assumptions about, among other things: 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, gold 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 Caraíba Operations, the Xavantina Operations and the Tucumã Project being as described in the respective technical report for each property; production costs; the accuracy of budgeted exploration, development and construction 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 continuing to remain healthy in the face of prevailing epidemics, pandemics or other health risks (including COVID-19), 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; 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. Although the Company believes that the assumptions inherent in forward-looking statements are reasonable as of the date of this MD&A, these assumptions are 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 statements. The Company cautions that the foregoing list of assumptions is 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 statements contained in this MD&A.

Forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws.

Cautionary Notes Regarding Mineral Resource and Reserve Estimates

Unless otherwise indicated, all reserve and resource estimates included in this MD&A and the documents incorporated by reference herein have been prepared in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) — CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended (the “CIM Standards”). NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Canadian standards, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission (the “SEC”), and reserve and resource information included herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, this MD&A and the documents incorporated by reference herein use the terms “measured resources,” “indicated resources” and “inferred resources” as defined in accordance with NI 43-101 and the CIM Standards.

Ero Copper Corp. June 30, 2023 MD&A | Page 31

Further to recent amendments, mineral property disclosure requirements in the United States (the “U.S. Rules”) are governed by subpart 1300 of Regulation S-K of the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) which differ from the CIM Standards. As a foreign private issuer that is eligible to file reports with the SEC pursuant to the multi-jurisdictional disclosure system (the “MJDS”), Ero is not required to provide disclosure on its mineral properties under the U.S. Rules and will continue to provide disclosure under NI 43-101 and the CIM Standards. If Ero ceases to be a foreign private issuer or loses its eligibility to file its annual report on Form 40-F pursuant to the MJDS, then Ero will be subject to the U.S. Rules, which differ from the requirements of NI 43-101 and the CIM Standards.

Pursuant to the new U.S. Rules, the SEC recognizes estimates of “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources.” In addition, the definitions of “proven mineral reserves” and “probable mineral reserves” under the U.S. Rules are now “substantially similar” to the corresponding standards under NI 43-101. Mineralization described using these terms has a greater amount of uncertainty as to its existence and feasibility than mineralization that has been characterized as reserves. Accordingly, U.S. investors are cautioned not to assume that any measured mineral resources, indicated mineral resources, or inferred mineral resources that Ero reports are or will be economically or legally mineable. Further, “inferred mineral resources” have a greater amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Under Canadian securities laws, estimates of “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies, except in rare cases. While the above terms under the U.S. Rules are “substantially similar” to the standards under NI 43-101 and CIM Standards, there are differences in the definitions under the U.S. Rules and CIM Standards. Accordingly, there is no assurance any mineral reserves or mineral resources that Ero may report as “proven mineral reserves”, “probable mineral reserves”, “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” under NI 43-101 would be the same had Ero prepared the reserve or resource estimates under the standards adopted under the U.S. Rules.


ADDITIONAL INFORMATION

Additional information about Ero and its business activities, including the AIF, is available under the Company’s profile at www.sedar.com and www.sec.gov.
Ero Copper Corp. June 30, 2023 MD&A | Page 32

    









logo_cmyk-copper1a.jpg

CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS


FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2023 AND 2022













    


Ero Copper Corp.
Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Statements of Financial Position
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
Condensed Consolidated Statements of Cash Flow
Condensed Consolidated Statements of Changes in Shareholders' Equity
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
General
Note 1. Nature of Operations
Note 2. Basis of Preparation
Note 3. Segment Disclosure
Statements of Financial Position
Note 4. Inventories
Note 5. Other Current Assets
Note 6. Mineral Properties, Plant and Equipment
Note 7. Exploration and Evaluation Assets
Note 8. Deposits and Other Non-current Assets
Note 9. Accounts Payable and Accrued Liabilities
Note 10. Loans and Borrowings
Note 11. Deferred Revenue
Note 12. Other Non-current Liabilities
Note 13. Share Capital
Statements of Earnings
Note 14. Revenue
Note 15. Cost of Sales
Note 16. General and Administrative Expenses
Note 17. Finance Expense
Note 18. Foreign Exchange Gain (Loss)
Other Items
Note 19. Financial Instruments
Note 20. Supplemental Cash Flow Information




Ero Copper Corp.
Condensed Consolidated Statements of Financial Position
(Unaudited, Amounts in thousands of US Dollars)
    
Notes
June 30, 2023
December 31, 2022
ASSETS
Current
Cash and cash equivalents$124,382 $177,702 
Short-term investments56,011 139,700 
Accounts receivable12,779 10,289 
Inventories441,410 30,955 
Other current assets546,201 33,781 
280,783 392,427 
Non-Current
Mineral properties, plant and equipment61,006,500 755,274 
Exploration and evaluation assets725,992 15,686 
Deposits and other non-current assets822,407 24,689 
1,054,899 795,649 
Total Assets$1,335,682 $1,188,076 
LIABILITIES
Current
Accounts payable and accrued liabilities9$94,221 $84,603 
Current portion of loans and borrowings1017,105 15,703 
Current portion of deferred revenue1116,826 16,580 
Income taxes payable2,743 5,435 
Current portion of derivatives19— 577 
Current portion of lease liabilities9,195 6,223 
140,090 129,121 
Non-Current
Loans and borrowings10409,818 402,354 
Deferred revenue1164,988 69,476 
Provision for rehabilitation and closure costs 23,224 22,172 
Deferred income tax liabilities12,253 6,229 
Lease liabilities5,680 4,740 
Other non-current liabilities1217,755 11,819 
533,718 516,790 
Total Liabilities673,808 645,911 
SHAREHOLDERS’ EQUITY
Share capital13159,873 148,055 
Equity reserves(12,998)(66,189)
Retained earnings510,456 456,726 
Equity attributable to owners of the Company657,331 538,592 
Non-controlling interests4,543 3,573 
661,874 542,165 
Total Liabilities and Equity$1,335,682 $1,188,076 

Commitments (Notes 7 and 11)
APPROVED ON BEHALF OF THE BOARD:
"David Strang", CEO and Director"Matthew Wubs", Director
The accompanying notes are an integral part of these condensed consolidated interim financial statements               Page 1
Ero Copper Corp.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited, Amounts in thousands of US Dollars, except share and per share amounts)
Three months ended June 30,Six months ended June 30,
Notes2023202220232022
Revenue14$104,929 $114,903 $205,885 $223,814 
Cost of sales15(65,521)(64,251)(126,369)(112,163)
Gross profit
39,408 50,652 79,516 111,651 
Expenses
General and administrative16(13,651)(12,471)(25,867)(23,684)
Share-based compensation
13 (e)
(4,909)2,333 (9,926)343 
Income before the undernoted
20,848 40,514 43,723 88,310 
Finance income3,362 1,544 7,500 2,257 
Finance expense17(5,995)(8,154)(12,521)(13,650)
Foreign exchange gain (loss)
1815,057 (3,303)23,678 15,406 
Other income (expenses)
2,442 (1,208)2,500 (1,838)
Income before income taxes
35,714 29,393 64,880 90,485 
Current income tax expense(3,742)(3,111)(5,842)(6,170)
Deferred income tax expense(2,031)(2,172)(4,597)(7,719)
Income tax expense
 (5,773)(5,283)(10,439)(13,889)
Net income for the period
$29,941 $24,110 $54,441 $76,596 
Other comprehensive gain (loss)
Foreign currency translation gain (loss)
37,987 (59,372)55,628 26,562 
Comprehensive income (loss)
$67,928 $(35,262)$110,069 $103,158 
Net income attributable to:
Owners of the Company29,576 23,820 53,730 75,927 
Non-controlling interests365 290 711 669 
$29,941 $24,110 $54,441 $76,596 
Comprehensive income (loss) attributable to:
Owners of the Company67,282 (35,167)108,949 102,322 
Non-controlling interests646 (95)1,120 836 
$67,928 $(35,262)$110,069 $103,158 
Net income per share attributable to owners of the Company
Basic
13 (f)
$0.32 $0.26 $0.58 $0.84 
Diluted
13 (f)
$0.32 $0.26 $0.58 $0.83 
Weighted average number of common shares outstanding
Basic
13 (f)
92,685,916 90,539,647 92,491,063 90,389,661 
Diluted
13 (f)
93,643,447 91,850,321 93,429,191 91,887,665 
The accompanying notes are an integral part of these condensed consolidated interim financial statements               Page 2
Ero Copper Corp.
Condensed Consolidated Statements of Cash Flow
(Unaudited, Amounts in thousands of US Dollars)



Three months ended June 30,Six months ended June 30,
Notes2023202220232022
Cash Flows from Operating Activities
Net income for the period
$29,941 $24,110 $54,441 $76,596 
Adjustments for:
Amortization and depreciation20,239 16,361 36,745 27,865 
Income tax expense
5,773 5,283 10,439 13,889 
Amortization of deferred revenue
14
(4,211)(3,379)(8,250)(6,737)
Share-based compensation
13 (e)
4,909 (2,333)9,926 (343)
Finance income(3,362)(1,544)(7,500)(2,257)
Finance expenses
17
5,995 8,154 12,521 13,650 
Foreign exchange (gain) loss
(16,031)735 (24,479)(18,271)
Other(2,975)136 (89)1,182 
Changes in non-cash working capital items2014,415 (20,383)(13,336)(30,070)
54,693 27,140 70,418 75,504 
Advance from NX Gold PMPA
11
— — 2,439 3,207 
Derivative contract settlements2,842 (3,015)1,989 (7,582)
Provision settlements(903)(607)(1,457)(1,023)
Income taxes paid(1,181)(1,089)(1,545)(3,691)
55,451 22,429 71,844 66,415 
Cash Flows from Investing Activities
Additions to mineral properties, plant and equipment(120,896)(57,773)(204,213)(103,336)
Additions to exploration and evaluation assets(5,964)(608)(9,009)(10,109)
Proceeds from short-term investments and interest received14,652 710 132,091 526 
Purchase of short-term investments(40,000)— (40,000)(100,000)
(152,208)(57,671)(121,131)(212,919)
Cash Flows used in Financing Activities
Lease liability payments(2,913)(1,706)(5,519)(3,390)
New loans and borrowings, net of finance costs10,688 3,448 11,808 399,569 
Loans and borrowings repaid(1,633)(1,248)(3,792)(52,438)
Interest paid on loans and borrowings(235)(29)(13,534)(635)
Other finance expenses paid(922)(488)(2,832)(1,386)
Proceeds from exercise of stock options5,324 1,007 8,276 1,411 
10,309 984 (5,593)343,131 
Effect of exchange rate changes on cash and cash equivalents922 (1,915)1,560 2,536 
Net (decrease) increase in cash and cash equivalents
(85,526)(36,173)(53,320)199,163 
Cash and cash equivalents - beginning of period
209,908 365,465 177,702 130,129 
Cash and cash equivalents - end of period
$124,382 $329,292 $124,382 $329,292 
Supplemental cash flow information (note 20)
The accompanying notes are an integral part of these condensed consolidated interim financial statements              Page 3
Ero Copper Corp.
Condensed Consolidated Statements of Changes in Shareholders' Equity
(Unaudited, Amounts in thousands of US Dollars, except share and per share amounts)
Share CapitalEquity Reserves
NotesNumber of
shares		AmountContributed
Surplus		Foreign
Exchange 		Retained
Earnings		TotalNon-controlling
interest		Total equity
Balance, December 31, 2021
90,204,378 $133,072 $12,173 $(107,083)$354,895 $393,057 $2,433 $395,490 
Income for the period
— — — — 75,927 75,927 669 76,596 
Other comprehensive income for the period
— — — 26,395 — 26,395 167 26,562 
Total comprehensive income for the period
— — — 26,395 75,927 102,322 836 103,158 
Shares issued for:
Exercise of options and warrants447,668 2,168 (757)— — 1,411 — 1,411 
Share-based compensation
13 (e)
— — 1,594 — — 1,594 — 1,594 
Dividends to non-controlling interest— — — — — — (87)(87)
Balance, June 30, 2022
90,652,046 $135,240 $13,010 $(80,688)$430,822 $498,384 $3,182 $501,566 
Balance, December 31, 2022
92,182,633 $148,055 $11,185 $(77,374)$456,726 $538,592 $3,573 $542,165 
Income for the period
— — — — 53,730 53,730 711 54,441 
Other comprehensive income for the period
— — — 55,219 — 55,219 409 55,628 
Total comprehensive income for the period
— — — 55,219 53,730 108,949 1,120 110,069 
Shares issued for:
Exercise of options1,029,238 11,818 (3,542)— — 8,276 — 8,276 
Share-based compensation
13 (e)
— — 1,514 — — 1,514 — 1,514 
Dividends to non-controlling interest— — — — — — (150)(150)
Balance, June 30, 2023
93,211,871 $159,873 $9,157 $(22,155)$510,456 $657,331 $4,543 $661,874 





The accompanying notes are an integral part of these condensed consolidated interim financial statements                                 Page 4
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)


1.    Nature of Operations

Ero Copper Corp. (“Ero" or the "Company") was incorporated on May 16, 2016 under the Business Corporations Act (British Columbia) and maintains its head office at Suite 1050, 625 Howe Street, Vancouver, BC, V6C 2T6. The Company’s shares are publicly traded on the Toronto Stock Exchange and the New York Stock Exchange under the symbol “ERO”.

The Company’s principal asset is its 99.6% ownership interest in Mineração Caraíba S.A. (“MCSA”). The Company also currently owns a 97.6% ownership interest in NX Gold S.A. (“NX Gold”) indirectly through its wholly-owned subsidiary, Ero Gold Corp. (“Ero Gold”).

MCSA is a Brazilian copper company which holds a 100% interest in the Caraíba Operations (formerly known as the MCSA Mining Complex) and the Tucumã Project (formerly known as the Boa Esperança Project). MCSA’s predominant activity is the production and sale of copper concentrate from the Caraíba Operations, located in Bahia, Brazil, with gold and silver produced and sold as by-products. The Tucumã Project is located within the municipality of Tucumã in the southeastern part of the state of Pará, Brazil. In February 2022, the Board of Directors of the Company approved the construction of the Tucumã Project.

NX Gold is a Brazilian gold mining company which holds a 100% interest in the Xavantina Operations (formerly known as the NX Gold Mine) and is focused on the production and sale of gold as its main product and silver as its by-product. The Xavantina Operations are located approximately 18 kilometers west of the town of Nova Xavantina, in southeastern Mato Grosso State, Brazil.

2.    Basis of Preparation

(a)     Statement of Compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting and follow the same accounting policies and methods of application as the Company’s most recent annual consolidated financial statements for the year ended December 31, 2022.

These condensed consolidated interim financial statements do not include all of the information required for full consolidated annual financial statements and should be read in conjunction with the consolidated financial statements of the Company as at and for the year ended December 31, 2022, prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

These condensed consolidated interim financial statements were authorized for issue by the Board of Directors of the Company (the “Board”) on August 3, 2023.

(b)     Use of Estimates and Judgments

In preparing these condensed consolidated interim financial statements, management has made judgments, estimates and assumptions that affect the application of the Company’s accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ. Significant judgments made by management in applying the Company’s accounting policies and key sources of estimation uncertainty were the same as those applied in the most recent annual audited consolidated financial statements for the year ended December 31, 2022.




    Notes to Financial Statements | Page 5
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)

(c) New Accounting Policies, Standards and Interpretations

Deferred Tax related to Assets and Liabilities Arising from a Single Transaction

On January 1, 2023, the Company adopted the amendment to IAS 12, Income Taxes in relation to Deferred Tax related to Assets and Liabilities Arising from a Single Transaction. The amendments narrowed the scope of the recognition exemption in IAS 12, relating to the recognition of deferred tax assets and liabilities, so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences such as leases and reclamation and closure cost provisions. The adoption of this amendment did not have an impact on the Company's consolidated financial statements.


(d)    Future Changes in Accounting Policies Not Yet Effective as of June 30, 2023

The following amendment to accounting standards has been issued but not yet adopted in the financial statements:

•In January 2020, the IASB issued Classification of Liabilities as Current or Non-current (Amendments to IAS 1) which amended IAS 1, Presentation of Financial Statements (“IAS 1”), to clarify the requirements for presenting liabilities in the statement of financial position. The amendments specify that the Company must have the right to defer settlement of a liability for at least 12 months after the reporting period for the liability to be classified as non-current. In addition, the amendments clarify that: (a) the Company’s right to defer settlement must exist at the end of the reporting period; (b) classification is unaffected by management’s intentions or expectations about whether the Company will exercise its right to defer settlement; (c) if the Company’s right to defer settlement is subject to the Company complying with specified conditions, the right exists at the end of the reporting period only if the Company complies with those conditions at the end of the reporting period, even if the lender does not test compliance until a later date; and (d) the term settlement includes the transfer of the Company’s own equity instruments to the counterparty that results in the extinguishment of the liability, except when the settlement of the liability with the Company transferring its own equity instruments is at the option of the counterparty and such option has been classified as an equity instrument, separate from the host liability.

•In October 2022, the IASB issued amendment Non-current Liabilities with Covenants to IAS 1 to clarify that covenants of loan arrangements which the Company must comply with only after the reporting date would not affect classification of a liability as current or non-current at the reporting date. The amendment also introduces additional disclosure requirements related to such covenants to include: (i) the nature of the covenants and the date by which the Company must comply with the covenants; (ii) whether the Company would comply with the covenants based on its circumstances at the reporting date; and (iii) whether and how the Company expects to comply with the covenant by the date on which they are contractually required to be tested.

Both of these amendments are effective January 1, 2024 with early adoption permitted. The Company has not yet determined the effect of adoption of this amendment on its consolidated financial statements.


3.    Segment Disclosure

Operating segments are determined by the way information is reported and used by the Company's Chief Operating Decision Maker ("CODM") to review operating performance. The Company monitors the operating results of its operating segments independently for the purpose of making decisions about resource allocation and performance assessment.


    Notes to Financial Statements | Page 6
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)

For the three and six months ended June 30, 2023, the Company’s reporting segments include its two operating mines in Brazil, the Caraíba Operations and the Xavantina Operations, its development project, the Tucumã Project in Brazil, and its corporate head office in Canada. Significant information relating to the Company's reportable segments is summarized in the tables below:


Three months ended June 30, 2023
Caraíba
(Brazil)		Xavantina
(Brazil)
Tucumã
(Brazil)
Corporate and OtherConsolidated
Revenue$83,929 $21,000 $— $— $104,929 
Cost of production(37,767)(5,657)— — (43,424)
Depreciation and depletion(16,149)(3,509)— — (19,658)
Sales expense(2,288)(151)— — (2,439)
Cost of sales(56,204)(9,317)— — (65,521)
Gross profit27,725 11,683 — — 39,408 
Expenses
General and administrative(8,378)(1,611)— (3,662)(13,651)
Share-based compensation— — — (4,909)(4,909)
Finance income1,539 66 — 1,757 3,362 
Finance expenses(1,079)(1,086)— (3,830)(5,995)
Foreign exchange gain (loss)15,118 (1)— (60)15,057 
Other income (expenses)1,484 1,012 — (54)2,442 
Income (loss) before taxes36,409 10,063 — (10,758)35,714 
Current tax expense(672)(1,058)— (2,012)(3,742)
Deferred tax (expense) recovery(2,089)58 — — (2,031)
Net income (loss)$33,648 $9,063 $— $(12,770)$29,941 
Capital expenditures(1)
79,780 7,305 39,348 2,103 128,536 
(1)     Capital expenditures include additions to mineral properties, plant and equipment and additions to exploration and evaluation asset, net of non-cash additions such as change in estimates to mine closure costs, capitalized depreciation expense and additions of right-of-use assets.











    Notes to Financial Statements | Page 7
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)



Three months ended June 30, 2022
Caraíba
(Brazil)		Xavantina
(Brazil)		Tucumã (Brazil)Corporate and OtherConsolidated
Revenue$95,654 $19,249 $— $114,903 
Cost of production(38,015)(7,225)— (45,240)
Depreciation and depletion(13,396)(2,897)— (16,293)
Sales expense(2,575)(143)— (2,718)
Cost of sales(53,986)(10,265)— — (64,251)
Gross profit41,668 8,984 — — 50,652 
Expenses
General and administrative(6,764)(1,259)(4,448)(12,471)
Share-based compensation— — 2,333 2,333 
Finance income277 270 997 1,544 
Finance expenses(1,188)(1,067)— (5,899)(8,154)
Foreign exchange (loss) gain(3,198)1 (106)(3,303)
Other expenses(973)(235)— — (1,208)
Income (loss) before taxes29,822 6,694 — (7,123)29,393 
Current tax expense(1,072)(678)(1,361)(3,111)
Deferred tax (expense) recovery(2,235)63 — (2,172)
Net income (loss)$26,515 $6,079 $— $(8,484)$24,110 
Capital expenditures42,114 8,053 6,837 32 57,036 


















    Notes to Financial Statements | Page 8
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)



Six months ended June 30, 2023
Caraíba
(Brazil)		Xavantina
(Brazil)
Tucumã
(Brazil)
Corporate and OtherConsolidated
Revenue$161,230 $44,655 $— $— $205,885 
Cost of production(74,052)(11,764)— — (85,816)
Depreciation and depletion(28,617)(7,445)— — (36,062)
Sales expense(4,163)(328)— — (4,491)
Cost of sales(106,832)(19,537)— — (126,369)
Gross profit54,398 25,118 — — 79,516 
Expenses
General and administrative(14,926)(2,920)— (8,021)(25,867)
Share-based compensation— — — (9,926)(9,926)
Finance income3,544 351 — 3,605 7,500 
Finance expenses(1,905)(2,195)— (8,421)(12,521)
Foreign exchange gain (loss)
23,710 (1)— (31)23,678 
Other income (expenses)
1,550 1,006 — (56)2,500 
Income (loss) before taxes
66,371 21,359 — (22,850)64,880 
Current tax expense
(1,057)(2,253)— (2,532)(5,842)
Deferred tax expense
(4,556)(41)— — (4,597)
Net income (loss)
$60,758 $19,065 $— $(25,382)$54,441 
Capital expenditures(1)
134,199 13,210 65,868 4,118 217,395 
Assets
Current $111,937 $20,336 $1,286 $147,224 280,783 
Non-current777,857 89,226 173,601 14,215 1,054,899 
Total Assets$889,794 $109,562 $174,887 $161,439 $1,335,682 
Total Liabilities$126,970 $101,583 $11,460 $433,795 673,808 

(1)     Capital expenditures include additions to mineral properties, plant and equipment and additions to exploration and evaluation asset, net of non-cash additions such as change in estimates to mine closure costs, capitalized depreciation expense, and additions of right-of-use assets.

During the six months ended June 30, 2023, Caraíba earned revenues from three customers (June 30, 2022 - four) while Xavantina earned revenues from two customers (June 30, 2022 - two).




    Notes to Financial Statements | Page 9
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)




Six months ended June 30, 2022
Caraíba
(Brazil)		Xavantina
(Brazil)		Tucumã (Brazil)Corporate and OtherConsolidated
Revenue$189,350 $34,464 $— $— $223,814 
Cost of production(67,178)(12,617)— — (79,795)
Depreciation and depletion(22,928)(4,776)— — (27,704)
Sales expenses(4,426)(238)— — (4,664)
Cost of sales(94,532)(17,631)— — (112,163)
Gross profit94,818 16,833 — — 111,651 
Expenses
General and administrative(12,965)(2,101)— (8,618)(23,684)
Share-based compensation— — — 343 343 
Finance income429 728 — 1,100 2,257 
Finance expenses(3,120)(2,090)— (8,440)(13,650)
Foreign exchange gain (loss)
15,292 229 — (115)15,406 
Other expenses
(1,731)(107)— — (1,838)
Income (loss) before taxes
92,723 13,492 — (15,730)90,485 
Current tax expense
(3,401)(1,092)— (1,677)(6,170)
Deferred tax expense
(7,662)(57)— — (7,719)
Net income (loss)
$81,660 $12,343 $— $(17,407)$76,596 
Capital expenditures84,553 14,048 14,021 2,782 115,404 
Assets
Current $132,754 $38,522 $972 $350,953 523,201 
Non-current502,534 57,872 40,011 3,425 603,842 
Total Assets$635,288 $96,394 $40,983 $354,378 $1,127,043 
Total Liabilities$92,847 $106,126 $2,508 $423,996 625,477 



    Notes to Financial Statements | Page 10
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)


4.    Inventories

June 30, 2023December 31, 2022
Supplies and consumables$29,897 $23,043 
Stockpiles3,651 2,125 
Work in progress1,046 1,234 
Finished goods6,816 4,553 
$41,410 $30,955 

5.    Other Current Assets

June 30, 2023December 31, 2022
Advances to suppliers$1,202 $715 
Prepaid expenses and other6,773 6,673 
Derivatives (Note 19)
11,211 3,237 
Note receivable (Note 19)
12,618 10,243 
Advances to employees1,439 667 
Value added taxes recoverable12,958 12,246 
$46,201 $33,781 

    Notes to Financial Statements | Page 11
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)

6.    Mineral Properties, Plant and Equipment

BuildingsMining Equipment
Mineral
Properties(1)
Projects in
Progress		Equipment & Other AssetsDeposit on ProjectsMine Closure CostsRight-of-Use AssetsTotal
Cost:
Balance, December 31, 2022
22,038 194,455 553,687 111,821 19,262 39,274 14,188 28,449 983,174 
Additions2,630 13,366 17,065 105,061 1,647 69,005 — 8,875 217,649 
Capitalized borrowing costs— — — 5,641 — — — — 5,641 
Change in estimates— — — — — — (332)— (332)
Disposals— (342)(735)(280)(57)(36)— (1,609)(3,059)
Transfers947 6,096 28,621 (8,616)1,874 (28,922)— — — 
Foreign exchange2,005 17,036 47,778 11,995 1,642 5,276 1,152 2,617 89,501 
Balance, June 30, 2023
$27,620 $230,611 $646,416 $225,622 $24,368 $84,597 $15,008 $38,332 $1,292,574 
Accumulated depreciation:
Balance, December 31, 2022
(5,047)(42,310)(150,559)— (6,990)— (5,227)(17,767)(227,900)
Depreciation expense(680)(11,254)(20,334)— (867)— (320)(5,773)(39,228)
Disposals— 231 — — 52 — — 1,252 1,535 
Foreign exchange(452)(4,069)(13,198)— (550)— (537)(1,675)(20,481)
Balance, June 30, 2023
$(6,179)$(57,402)$(184,091)$— $(8,355)$— $(6,084)$(23,963)$(286,074)
Net book value, December 31, 2022
$16,991 $152,145 $403,128 $111,821 $12,272 $39,274 $8,961 $10,682 $755,274 
Net book value, June 30, 2023
$21,441 $173,209 $462,325 $225,622 $16,013 $84,597 $8,924 $14,369 $1,006,500 

(1)     Mineral properties include $67.7 million (2022 - $69.4 million) of development costs which are not currently being depreciated.







     Page 12
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)

7.    Exploration and Evaluation Assets

In 2022, the Company paid $3.1 million in relation to two property option agreements. In order for the Company to acquire 100% of these properties, the Company will be required to complete certain drill programs, including a minimum of $8.9 million in exploration costs before the end of 2023 and, depending on results of these exploration programs, further option payments to complete the acquisitions is required. As at June 30, 2023, the Company has expended a cumulative of $8.9 million in exploration costs related to these projects. In the event that the Company exercises its option to acquire 100% interest in these properties, the optioners are expected to retain net smelter royalties of up to 1.5%.

8.     Deposits and Other Non-current Assets

June 30, 2023December 31, 2022
Value added taxes recoverable$8,993 $10,317 
Note receivable (Note 19)
6,138 10,387 
Deposits and others7,276 3,985 
$22,407 $24,689 

9.    Accounts Payable and Accrued Liabilities

June 30, 2023
December 31, 2022
Trade suppliers$49,298 $47,868 
Payroll and labour related liabilities23,832 21,008 
Value added tax and other tax payable9,244 8,040 
Cash-settled equity awards (Note 13(b) and (c))
11,072 6,684 
Other accrued liabilities775 1,003 
$94,221 $84,603 
















    Notes to Financial Statements | Page 13
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)

10.    Loans and Borrowings

Carrying value,
including accrued interest
DescriptionCurrencySecurityMaturity
(Months)		Coupon ratePrincipal to be repaidJune 30,
2023		December 31,
2022
Senior NotesUSDUnsecured
79
6.50%
$400,000 $402,857 $402,453 
Equipment finance loansUSDSecured
2 - 46
4.90% - 8.12%
18,528 18,716 10,322 
Equipment finance loansEUROSecured
32 - 36
5.25%
1,193 1,195 1,372 
Equipment finance loansBRL R$Unsecured
20 - 35
13.89% - 16.63%
1,248 1,357 947 
Bank loanBRL R$Unsecured
41
CDI + 0.50%
2,783 2,798 2,963 
Total$423,752 $426,923 $418,057 
Current portion$17,105 $15,703 
Non-current portion$409,818 $402,354 

The movements in loans and borrowings are comprised of the following:

Six months ended June 30, 2023
Year ended December 31, 2022
Balance, beginning of period
$418,057 $59,250 
Proceeds from issuance of Senior Notes, net— 392,006 
Proceeds from new equipment finance loans11,808 9,489 
Principal and interest payments(17,326)(71,033)
Interest costs, including interest capitalized14,064 26,666 
Loss on debt modification— 1,351 
Foreign exchange320 328 
Balance, end of period
$426,923 $418,057 

(a)     Senior Notes

In February 2022, the Company issued $400 million aggregate principal amount of senior unsecured notes (the “Senior Notes”). The Company received net proceeds of $392.0 million after transaction costs of $8.0 million. The Senior Notes mature on February 15, 2030 and bear annual interest at 6.5%, payable semi-annually in February and August of each year.

MCSA has provided a guarantee of the Senior Notes on a senior unsecured basis. The Senior Notes are direct, senior obligations of the Company and MCSA, and are not secured by any mortgage, pledge or charge.

The Senior Notes are subject to the following early redemption options by the Company:
•On or after February 15, 2025, the Company has the option, in whole or in part, to redeem the Senior Notes at a price ranging from 103.25% to 100% of the principal amount together with accrued and unpaid interest, if any, to the date of redemption, with the rate decreasing based on the length of time the Senior Notes are outstanding;

    Notes to Financial Statements | Page 14
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)
•Before February 15, 2025, the Company may redeem some or all of the Senior Notes at 100% of the principal amount plus a “make whole” premium, plus accrued and unpaid interest, if any, to the date of redemption; and
•At any time before February 15, 2025, the Company may redeem up to 40% of the original principal amount of the Senior Notes with the proceeds of certain equity offerings at a redemption price of 106.50% of the principal amount of the Senior Notes, together with accrued and unpaid interest, if any, to the date of redemption.

Upon the occurrence of specific kinds of changes of control triggering events, each holder of the Senior Notes will have the right to cause the Company to repurchase some or all of its Senior Notes at 101% of their principal amount, plus accrued and unpaid interest to, but not including, the repurchase date.

The Senior Notes are recognized as financial liabilities, net of unamortized transaction costs, and measured at amortized cost using an effective interest rate of 6.7%.

(b)    Senior Credit Facility

In January 2023, the Company amended its senior credit facility ("Amended Senior Credit Facility") to increase its limit from $75.0 million to $150.0 million and extended the maturity from March 2025 to December 2026. Amounts drawn on the Amended Senior Credit Facility bear interest on a sliding scale at a rate of LIBOR plus 2.00% to 4.00% depending on the Company’s consolidated leverage ratio. Commitment fees for any undrawn portion of the Amended Senior Credit Facility are based on a sliding scale between 0.45% to 0.90%.

The Amended Senior Credit Facility is secured by the shares of MCSA, NX Gold and Ero Gold. The Company is required to comply with certain financial covenants. As June 30, 2023, the Amended Senior Credit Facility remains undrawn and the Company is in compliance with the financial covenants therein.


11. Deferred Revenue

In August 2021, the Company entered into a precious metals purchase agreement (the “NX Gold PMPA”) with RGLD Gold AG ("Royal Gold"), a wholly-owned subsidiary of Royal Gold, Inc., in relation to gold production from the Xavantina Operations. The Company received upfront cash consideration of $100.0 million for the purchase of 25% of an equivalent amount of gold to be produced from the Xavantina mine until 93,000 ounces of gold have been delivered and thereafter decreasing to 10% of gold produced over the remaining life of the mine. The contract will be settled by the Company delivering gold to Royal Gold. Royal Gold will make ongoing payments equal to 20% of the then prevailing spot gold price for each ounce of gold delivered until 49,000 ounces of gold have been delivered and 40% of the prevailing spot gold price for each ounce of gold delivered thereafter. Additional advances may be made by Royal Gold based on the Company achieving certain milestones as set out in the NX Gold PMPA.

    Notes to Financial Statements | Page 15
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)
The movements in deferred revenue during the six months ended June 30, 2023 are comprised of the following:

June 30, 2023December 31,
2022
Gold ounces delivered(1)
6,268 10,082 
Balance, beginning of period
$86,055 $94,222 
Advances received(2)
2,439 3,207 
Accretion expense1,570 3,407 
Amortization of deferred revenue(3)
(8,250)(14,781)
Balance, end of period
$81,814 $86,055 
Current portion$16,826 $16,580 
Non-current portion64,988 69,476 
(1)        During the six months ended June 30, 2023, the Company delivered 6,268 ounces of gold to Royal Gold for average consideration of $385 per ounce. At June 30, 2023, a cumulative 21,523 ounces of gold have been delivered under the PMPA.
(2)    During the six months ended June 30, 2023, the Company recorded additional deferred revenue of $2.4 million related to Resource Growth Advance.
(3)     Amortization of deferred revenue during the six months ended June 30, 2023 is net of $0.7 million for change in estimate in relation to additional advances received and the related change in life-of-mine production ounces.

As part of the NX Gold PMPA, the Company pledged its equity interest in Ero Gold and NX Gold to Royal Gold as collateral and provided unsecured limited recourse guarantees from Ero and NX Gold.


12. Other Non-current Liabilities

June 30, 2023
December 31, 2022
Cash-settled equity awards (Note 13(b))
$6,368 $2,256 
Value added tax and other taxes payable1,103 1,352 
Withholding and taxes payable5,164 3,902 
Provision for legal and tax matters1,733 1,578 
Other liabilities3,387 2,731 
$17,755 $11,819 

13.     Share Capital

As at June 30, 2023, the Company’s authorized share capital consists of an unlimited number of common shares without par value. As at June 30, 2023, 93,211,871 common shares were outstanding.

(a)     Options

During the six months ended June 30, 2023, the Company did not grant any options to employees of the Company (six months ended June 30, 2022 - 21,562 options granted at weighted average exercise price of $15.79 CAD per share with a term to expiry of five years and a grant date fair value of $0.1 million).

    Notes to Financial Statements | Page 16
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)

A continuity of the issued and outstanding options is as follows:

Six Months Ended June 30,
20232022
Number of
Stock Options		Weighted Average Exercise Price (CAD)Number of
Stock Options		Weighted Average Exercise Price (CAD)
Outstanding stock options, beginning of period
2,781,074 $15.49 4,202,389 $11.36 
Issued — — 21,562 15.79 
Exercised(1,029,238)10.82 (447,668)3.77 
Cancelled(24,614)18.48 (36,257)19.29 
Outstanding stock options, end of period
1,727,222 $18.24 3,740,026 $12.22 

The weighted average share price on the date of exercise for options exercised during the six months ended June 30, 2023 was $18.52 CAD (six months ended June 30, 2022 - $13.75 CAD).


As at June 30, 2023, the following stock options were outstanding:

Weighted Average Exercise PricesNumber of
Stock Options		Vested and Exercisable Number of Stock OptionsWeighted Average Remaining Life in Years
$9.01 to $10.00 CAD
210,217 210,217 0.50 
$10.01 to $20.00 CAD
986,732 366,861 3.55 
$20.01 to $24.45 CAD
530,273 505,822 1.60 
$18.24 CAD ($13.78 USD)
1,727,222 1,082,900 2.58 

The fair value of options was determined using the Black-Scholes option pricing model. The weighted average inputs used in the measurement of fair values at grant date of the options are the following:

Six Months Ended June 30,
2022
Expected term (years)3.0 
Forfeiture rate— %
Volatility55 %
Dividend yield— %
Risk-free interest rate1.55 %
Weighted-average fair value per option$5.08 


    Notes to Financial Statements | Page 17
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)

(b)     Performance Share Unit Plan

The Company has a performance share unit ("PSU") plan pursuant to which the Compensation Committee may grant PSUs to any director, officer, employee, or consultant of the Company or its subsidiaries. Each PSU entitles the holder thereof to receive one common share, or its equivalent cash value, on the redemption date selected by the Compensation Committee.

The continuity of PSUs issued and outstanding is as follows:

Six Months Ended June 30,
20232022
Outstanding balance, beginning of period
881,788 793,043 
Issued — 23,911 
Cancelled(33,424)(43,039)
Outstanding balance, end of period
848,364 773,915 

For PSUs with non-market performance conditions, the fair value of the share units granted was initially recognized at the fair value using the share price at the date of grant, and subsequently remeasured at fair value on each balance sheet date. For PSUs with market performance conditions, the fair value was determined using a Geometric Brownian Motion model. As at June 30, 2023, the fair value of the PSU liability was $12.8 million (December 31, 2022 - $5.9 million) of which $6.4 million was recognized in accounts payable and accrued liabilities and the remainder in other non-current liabilities.

(c) Deferred Share Unit Plan

The Deferred Share Unit ("DSU") plan was established by the Board as a component of compensation for the Company's independent directors. Pursuant to the DSU Plan, DSUs may only be settled by way of cash payment. A participant is not entitled to payment in respect of the DSUs until his or her death, retirement or removal from the Board.  The settlement amount of each DSU is based on the fair market value of a common share on the DSU redemption date multiplied by the number of DSUs being redeemed.

The continuity of DSUs issued and outstanding is as follows:

Six months ended June 30,
20232022
Outstanding balance, beginning of period
219,961 131,085
Issued 8,867 12,049 
Outstanding balance, end of period
228,828 143,134 

At June 30, 2023, DSU liabilities had a fair value of $4.6 million (December 31, 2022 - $3.0 million) which has been recognized in accounts payable and accrued liabilities.



    Notes to Financial Statements | Page 18
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)

(d) Restricted Share Unit Plan

The Company has a restricted share unit ("RSU") plan pursuant to which the Compensation Committee may grant share units to any officer, employee, or consultant of the Company or its subsidiaries. The fair value of these restricted share units is determined on the date of grant using the market price of the Company’s shares. Each RSU entitles the holder thereof to receive one common share, or its equivalent cash value, on the redemption date selected by the Compensation Committee.

During the six months ended June 30, 2023, the Company did not grant any RSUs to employees of the Company (six months ended June 30, 2022 - 16,737 RSUs granted at weighted average fair value of $12.91 per share for a total fair value of $0.2 million).

The continuity of RSUs issued and outstanding is as follows:

Six months ended June 30,
20232022
Outstanding balance, beginning of period
263,202 171,106
Issued — 16,737 
Cancelled(7,642)(8,429)
Outstanding balance, end of period
255,560 179,414 

(e)     Share-based compensation

Three months ended June 30,Six months ended June 30,
2023202220232022
Stock options$332 $347 $594 $828 
Performance share unit plan3,541 (2,304)6,899 (1,157)
Deferred share unit plan574 (752)1,513 (780)
Restricted share unit plan462 376 920 766 
Share-based compensation(1)
$4,909 $(2,333)$9,926 $(343)

(1)    For the three and six months ended June 30, 2023, the Company recorded $0.8 million and $1.5 million (three and six months ended June 30, 2022 - $0.7 million and $1.6 million), respectively, of share-based compensation in contributed surplus, and the remaining share-based compensation was recorded in liabilities.


    Notes to Financial Statements | Page 19
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)
(f)     Net Income per Share

Three months ended June 30,Six months ended June 30,
2023202220232022
Weighted average number of common shares outstanding92,685,916 90,539,647 92,491,063 90,389,661 
Dilutive effects of:
Stock options701,971 1,244,235 682,568 1,439,622 
Share units255,560 66,439 255,560 58,382 
Weighted average number of diluted common shares outstanding(1)
93,643,447 91,850,321 93,429,191 91,887,665 
Net income attributable to owners of the Company
$29,576 $23,820 $53,730 $75,927 
Basic net income per share
$0.32 $0.26 $0.58 $0.84 
Diluted net income per share
$0.32 $0.26 $0.58 $0.83 

(1)     Weighted average number of diluted common shares outstanding for the three and six months ended June 30, 2023 excluded nil and 417,107 (three and six months ended June 30, 2022 - 1,778,288 and 1,278,288) stock options, respectively, that were anti-dilutive.


14. Revenue

Three months ended June 30,Six months ended June 30,
2023202220232022
Copper
Sales within Brazil$8,052 $28,484 $24,303 $50,176 
Export sales78,081 80,185 139,730 151,997 
Adjustments on provisional sales(1)
(2,204)(13,015)(2,803)(12,823)
83,929 95,654 161,230 189,350 
Gold
Sales16,789 15,870 36,405 27,727 
Amortization of deferred revenue(2)
4,211 3,379 8,250 6,737 
$21,000 $19,249 $44,655 $34,464 
$104,929 $114,903 $205,885 $223,814 

(1)    Adjustments on provisional sales include both pricing and quantity adjustments. Under the terms of the Company’s contract with its Brazilian domestic customer, sales are provisionally priced on the date of sale based on the previous month’s average copper price and subsequently settled based on the average copper price in the month of shipment. Provisionally priced sales to the Company's international customers are settled with a final sales price between zero to four months after shipment takes place and, therefore, are exposed to commodity price changes.

(2)    During the three and six months ended June 30, 2023, the Company delivered 2,958 and 6,268 ounces of gold, respectively (three and six months ended June 30, 2022 - 2,295 and 4,445 ounces of gold), under a precious metals purchase agreement with Royal Gold (note 11) for average cash consideration of $400 and $385 per ounce (three and six months ended June 30, 2022 - $377 and $375).

    Notes to Financial Statements | Page 20
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)

15.     Cost of Sales

Three months ended June 30,Six months ended June 30,
2023202220232022
Materials$11,277 $11,384 $21,260 $20,082 
Salaries and benefits14,854 12,735 28,235 24,140 
Contracted services8,498 8,290 15,812 15,355 
Maintenance costs7,226 7,021 14,051 12,604 
Utilities3,508 3,346 6,668 6,591 
Other costs594 255 786 445 
Change in inventory (excluding depreciation and depletion)(2,533)2,209 (996)578 
Cost of production43,424 45,240 85,816 79,795 
Sales expense2,439 2,718 4,491 4,664 
Depreciation and depletion22,176 15,764 38,157 27,822 
Change in inventory (depreciation and depletion)(2,518)529 (2,095)(118)
$65,521 $64,251 $126,369 $112,163 

16.     General and Administrative Expenses

Three months ended June 30,Six months ended June 30,
2023202220232022
Accounting and legal$444 $670 $983 $1,142 
Amortization and depreciation581 68 683 161 
Office and administration1,993 2,609 4,166 4,726 
Salaries and consulting fees8,258 6,624 15,365 12,507 
Incentive payments1,373 1,801 2,771 3,413 
Other1,002 699 1,899 1,735 
$13,651 $12,471 $25,867 $23,684 


    Notes to Financial Statements | Page 21
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)

17.    Finance Expense

Three months ended June 30,Six months ended June 30,
2023202220232022
Interest on loans and borrowings(1)
$3,875 $6,002 $8,423 $9,953 
Accretion of deferred revenue782 876 1,570 1,745 
Accretion of mine closures and rehabilitation provisions682 573 1,331 1,115 
Interest on lease liabilities295 161 591 315 
Other finance expenses361 542 606 522 
$5,995 $8,154 $12,521 $13,650 

(1)    During the three and six months ended June 30, 2023, the Company capitalized $3.2 million and $5.6 million, respectively (three and six months ended June 30, 2022 -$1.2 million and $2.3 million) of borrowing costs to projects in progress.

18.    Foreign Exchange Gain (Loss)

The following foreign exchange gains (losses) arise as a result of balances and transactions in the Company’s Brazilian subsidiaries that are denominated in currencies other than the Brazilian Reals (BRL$), which is their functional currency.

Three months ended June 30,Six months ended June 30,
2023202220232022
Foreign exchange gain (loss) on USD denominated debt in Brazil$12,061 $(6,458)$17,466 $4,821 
Realized foreign exchange gain (loss) on derivative contracts (note 19)
2,842 (3,015)3,774 (7,582)
Unrealized foreign exchange gain on derivative contracts (note 19)
2,086 (1,411)5,251 23,303 
Foreign exchange (loss) gain on other financial assets and liabilities(1,932)7,581 (2,813)(5,136)
$15,057 $(3,303)$23,678 $15,406 

19.    Financial Instruments

Fair value

Fair values of financial assets and liabilities are determined based on available market information and valuation methodologies appropriate to each situation.

As at June 30, 2023, derivatives were measured at fair value based on Level 2 inputs.


    Notes to Financial Statements | Page 22
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)

The carrying values of cash and cash equivalents, short-term investments, accounts receivable, deposits, and accounts payable and accrued liabilities approximate their fair values due to their short terms to maturity or market rates of interest used to discount amounts. At June 30, 2023, the carrying value of loans and borrowings, including accrued interest, was $426.9 million while the fair value is approximately $369.1 million. At June 30, 2023, the carrying value of notes receivable, including accrued interest, was $18.8 million which approximates its fair value.

Credit risk
    
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s receivables from customers. The carrying amount of the financial assets below represents the maximum credit risk exposure as at June 30, 2023 and December 31, 2022:

June 30, 2023December 31, 2022
Cash and cash equivalents$124,382 $177,702 
Short-term investments56,011 139,700 
Accounts receivable12,779 10,289 
Note receivable18,756 20,630 
Deposits and other non-current assets7,276 3,985 
$219,204 $352,306 

The Company invests cash and cash equivalents and short-term investments with financial institutions that are financially sound based on their credit rating.

The Company’s exposure to credit risk associated with accounts receivable is influenced mainly by the individual characteristics of each customer. On November 30, 2022, one of the Company's customers in Brazil, Paranapanema S/A ("PMA"), filed for bankruptcy protection due to working capital difficulties after an operational incident in June which resulted in one of their plants being shutdown for 38 days. Preceding the announcement, the Company agreed to restructure PMA's outstanding accounts receivable balance of $23.9 million into a note receivable, guaranteed by certain assets of PMA, with payment terms of 24 monthly installments beginning in February 2023. The loan bears an annual interest rate equivalent to Brazil's CDI rate of approx. 13%. At June 30, 2023, the gross carrying amount of accounts and note receivable has been reduced by a credit loss provision of $2.7 million (December 31, 2022 - $3.3 million).

The amortized cost of the note receivable, net of the expected credit loss, at June 30, 2023 was $18.8 million (December 31, 2022 - $20.6 million), of which $12.6 million (December 31, 2022 - $10.2 million) was classified as current and $6.1 million (December 31, 2022 - $10.4 million) as non-current.

Liquidity risk

Liquidity risk is the risk associated with the difficulties that the Company may have meeting the obligations associated with financial liabilities that are settled with cash payments or with another financial asset. The Company's approach to liquidity management is to ensure as much as possible that sufficient liquidity exists to meet their maturity obligations on the expiration dates, under normal and stressful conditions, without causing unacceptable losses or with risk of undermining the normal operation of the Company.


    Notes to Financial Statements | Page 23
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)
The table below shows the Company's maturity of non-derivative financial liabilities on June 30, 2023:

Non-derivative financial liabilitiesCarrying
value		Contractual cash flowsUp to
12 months		1 - 2
years		3 - 5
years		More than
5 years
Loans and borrowings (including interest)$426,923 $608,972 $34,699 $35,690 $86,583 $452,000 
Accounts payable and accrued liabilities94,221 94,221 94,221 — — — 
Other non-current liabilities9,755 22,199 — 10,580 10,951 668 
Leases14,875 14,855 9,123 3,809 1,729 193 
Total$545,774 $740,247 $138,043 $50,079 $99,263 $452,861 

As at June 30, 2023, the Company has made commitments for capital expenditures through contracts and purchase orders amounting to $197.1 million, which are expected to be incurred over a six-year period. In the normal course of operations, the Company may also enter into long-term contracts which can be cancelled with certain agreed customary notice periods without material penalties.

The Company also has derivative financial asset for foreign exchange collar contracts and copper derivative contracts whose notional amounts and maturity information are disclosed below under foreign exchange currency risk, interest rate risk, and price risk.

Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity prices. The purpose of market risk management is to manage and control exposures to market risks, within acceptable parameters, while optimizing return.

The Company may use derivatives, including forward contracts and swap contracts, to manage market risks.


(i) Foreign exchange currency risk

The Company’s subsidiaries in Brazil are exposed to exchange risks primarily related to the US dollar. In order to minimize currency mismatches, the Company monitors its cash flow projections considering future sales expectations indexed to US dollar variation in relation to the cash requirement to settle the existing financings.

The Company's exposure to foreign exchange currency risk at June 30, 2023 relates to $19.9 million (December 31, 2022 – $11.7 million) in loans and borrowings of MCSA denominated in US dollars and Euros. In addition, the Company is also exposed to foreign exchange currency risk at June 30, 2023 on $210.1 million of intercompany loan balances (December 31, 2022 - $148.2 million) which have contractual repayment terms. Strengthening (weakening) in the Brazilian Real against the US dollar at June 30, 2023 by 10% and 20%, would have increased (decreased) pre-tax net income by $22.9 million and $45.8 million, respectively (December 31, 2022 – $15.8 million and $31.7 million). This analysis is based on the foreign currency exchange variation rate that the Company considered to be reasonably possible at the end of the period and excluding the impact of the derivatives below. The analysis assumes that all other variables, especially interest rates, are held constant.

The Company may use derivatives, including forward contracts, collars and swap contracts, to manage market risks. At June 30, 2023, the Company has entered into foreign exchange collar contracts at zero cost for notional amounts of $90.0 million (December 31, 2022 - notional amount of $270.0 million) with an average floor rate of 5.30 BRL to US Dollar and an average cap rate of 6.31 BRL to US Dollar. The maturity dates of these contracts

    Notes to Financial Statements | Page 24
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)
are from July 2023 to December 2023 and are financially settled on a net basis. As of June 30, 2023, the Company had contracts with three different counterparties and the fair value of these contracts was a net asset of $9.0 million (December 31, 2022 - asset of $3.2 million) included in other current assets in the statement of financial position. The fair value of foreign exchange contracts was determined based on option pricing models, forward foreign exchange rates and information provided by the counter party.

The change in fair value of foreign exchange collar contracts was a gain of $2.1 million and a gain of $5.3 million for the three and six months ended June 30, 2023 (a loss of $1.4 million and a gain of $23.3 million for the three and six months ended June 30, 2022), respectively, which have been recognized in foreign exchange gain (loss).

In addition, during the three and six months ended June 30, 2023, the Company recognized a realized gain of $2.8 million and $3.8 million (realized loss of $3.0 million and $7.6 million for the three and six months ended June 30, 2022), respectively, related to the settlement of foreign currency forward collar contracts.

(ii) Interest rate risk

The Company is principally exposed to the variation in interest rates on loans and borrowings with variable rates of interest. Management reduces interest rate risk exposure by entering into loans and borrowings with fixed rates of interest or by entering into derivative instruments that fix the ultimate interest rate paid.

The Company is principally exposed to interest rate risk through Brazilian Real denominated bank loans of $2.8 million. Based on the Company’s net exposure at June 30, 2023, a 1% change in the variable rates would not materially impact its pre-tax annual net income.

(iii) Price risk

The Company may use derivatives, including forward contracts, collars and swap contracts, to manage commodity price risks.

At June 30, 2023, the Company has provisionally priced sales that are exposed to commodity price changes (note 14). Based on the Company’s net exposure at June 30, 2023, a 10% change in the price of copper would have changed pre-tax net income by $2.4 million.
At June 30, 2023, the Company has entered into copper derivative contracts at zero-cost on 3,000 tonnes of copper per month from July 2023 to January 2024. These copper derivative contracts establish a floor price of $3.50 per pound of copper and a cap price of $4.76 per pound on total hedged volumes of 18,000 tonnes of copper, representing approximately 75% of estimated production volumes over the period. As of June 30, 2023, the fair value of these contracts was a net asset of $2.2 million (December 31, 2022 - liability of $0.6 million). The fair value of copper collar contracts was determined based on option pricing models, forward copper price and information provided by the counter party.

During the three and six months ended June 30, 2023, the Company recognized an unrealized gain of $2.4 million and an unrealized gain of $2.7 million, respectively and a realized loss of nil and $1.8 million, respectively, in relation to its copper hedge derivatives in other income or loss.










    Notes to Financial Statements | Page 25
Ero Copper Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited, Tabular amounts in thousands of US Dollars, except share and per share amounts)
20. Supplemental Cash Flow Information

Three months ended June 30,Six months ended June 30,
Net change in non-cash working capital items:2023202220232022
Accounts receivable$12,636 $(18,934)$4,093 $(11,132)
Inventories(4,579)390 (5,800)(2,005)
Other assets(3,417)(2,206)(6,350)(4,571)
Accounts payable and accrued liabilities9,775 367 (5,279)(12,362)
$14,415 $(20,383)$(13,336)$(30,070)
Non-cash investing and financing activities:
Additions to property, plant and equipment by leases4,790 1,712 $8,875 $3,067 
Non-cash increase (decrease) in accounts payable in relation to capital expenditures
1,675 (753)4,173 2,358 
Change in mineral properties, plant and equipment from change in estimates for provision for rehabilitation and closure costs74 — (332)— 



    Notes to Financial Statements | Page 26
                

logo_cmyk-coppera.jpg
 TSX: ERO
NYSE: ERO





August 3, 2023


Ero Copper Reports Second Quarter 2023 Operating and Financial Results

(all amounts in US dollars, unless otherwise noted)

Vancouver, British Columbia – Ero Copper Corp. (TSX: ERO, NYSE: ERO) (“Ero” or the “Company”) is pleased to announce its operating and financial results for the three and six months ended June 30, 2023. Management will host a conference call tomorrow, Friday, August 4, 2023, 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

•Copper production of 12,004 tonnes at C1 cash costs(*) of $1.52 per pound of copper produced

•Gold production of 12,333 ounces at C1 cash costs(*) and All-in Sustaining Costs ("AISC")(*) of $492 and $1,081, respectively, per ounce of gold produced

•Meaningful quarter-on-quarter increase in copper production offset lower realized copper prices and a stronger Brazilian Real (“BRL”) during the period
◦Net income attributable to the owners of the Company of $29.6 million ($0.32 per share on a diluted basis)
◦Adjusted net income attributable to the owners of the Company(*) of $22.3 million ($0.24 per share on a diluted basis)
◦Adjusted EBITDA(*) of $49.1 million
•Available liquidity at quarter-end of $330.4 million included cash and cash equivalents of $124.4 million, short-term investments of $56.0 million, and $150.0 million of undrawn availability under the Company's senior secured revolving credit facility

•Major strategic initiatives continue to progress on schedule, positioning the Company for significant near-term growth
◦Construction of the Tucumã Project reached approximately 45% physical completion as of quarter-end. Total project capital estimate remains unchanged at approximately $305 million
◦At the Caraíba Operations, the pre-sink phase of development at the new external shaft was completed during the quarter with the headgear and winder installation on track to commence main sinking prior to year-end. Approximately 80% of planned capital expenditures were under contract or in the final stages of negotiation at quarter-end and remain within 5% of budget
1
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
◦At the Xavantina Operations, horizontal development into the new Matinha vein was completed during the quarter with first production expected in H2 2023

•Reaffirming 2023 production and C1 cash cost(*) guidance; increasing full-year capital expenditure guidance by $15 to $20 million to reflect proactive investments at the Caraíba Operations
◦After conducting a detailed review of major projects and support infrastructure at the Caraíba Operations during the quarter, including infrastructure related to the Deepening, underground paste fill and tailings, the Company has elected to invest in various upgrades throughout H2 2023. These enhancements aim to bolster the Caraíba Operations' ongoing projects and support expanded life-of-mine operating plans at the Pilar Mine

*These are non-IFRS measures and do not have a standardized meaning prescribed by IFRS and might not be comparable to similar financial measures disclosed by other issuers. Please refer to the Company’s discussion of Non-IFRS measures in its Management’s Discussion and Analysis for the three and six months ended June 30, 2023 and the Reconciliation of Non-IFRS Measures section at the end of this press release.


“We continued to deliver on our full-year operating plan during the second quarter while making significant progress on our organic growth initiatives,” said David Strang, Chief Executive Officer. “Despite softer copper prices and a significant strengthening of the BRL, excellent performance at our operations translated into solid operating margins and financial results for the quarter.

"Looking ahead, we anticipate a stronger second half of 2023 as we target commissioning of the new ball mill for our plant expansion project at the Caraíba Operations during the fourth quarter, and produce first ore from the recently developed Matinha vein at the Xavantina Operations.

"Construction of the Tucumã Project continues to advance on schedule and is nearing the halfway mark at approximately 45% physical completion. Electromechanical assembly of the process plant is now underway, and mine pre-strip remains on track to reach first sulphide ore in the fourth quarter of this year, as planned. At the Caraíba Operations, we completed the pre-sink phase of development at the new external shaft, achieving approximately 25% physical completion as of quarter-end. We are now in the process of hoisting the pre-assembled headframe to commence main shaft sinking activities prior to year-end.

"As the world's focus on security of critical minerals supply chains grows more urgent, the timing of our growth trajectory appears increasingly favorable. We are proud to produce some of the lowest carbon-intensity metals in the world and remain on track to double copper production to over 100,000 tonnes in 2025 and achieve higher sustained gold production levels of 55,000 to 60,000 ounces per year beginning in 2024."
2
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
SECOND QUARTER REVIEW

•Mining & Milling Operations
◦The Caraíba Operations processed 840,821 tonnes of ore grading 1.55% copper, producing 12,004 tonnes of copper in concentrate during the quarter after metallurgical recoveries of 92.0%
–Higher mined tonnage and copper grades due to planned stope sequencing drove an increase in copper production of nearly 30% quarter-on-quarter
◦The Xavantina Operations processed 34,377 tonnes of ore grading 13.20 grams per tonne, delivering 12,333 ounces of gold production after metallurgical recoveries of 84.6%
–Processed gold grades increased over 11% quarter-on-quarter and 100% year-on-year
–Metallurgical recoveries were impacted by elevated in-process inventory at quarter-end as well as elevated carbon content in several high-grade stopes mined and processed during the period
–By-product silver production for the period was 8,579 ounces

•Organic Growth Projects
◦The Company significantly advanced the construction of its Tucumã Project, which remains on schedule, achieving physical completion of approximately 45% as of quarter-end, up from approximately 30% at the end of Q1 2023
–Mine pre-stripping is advancing as planned with over 5 million tonnes, or approximately 35% of total planned pre-strip volume, completed as of quarter-end. The mine remains on track to reach first sulphide ore in Q4 2023
–Civil works are also tracking to schedule with foundations for the primary crusher, ball mill and flotation areas completed during the quarter. Electromechanical assembly commenced just after quarter-end, as planned
–Total project capital estimate remains unchanged at approximately $305 million based on over 95% visibility of planned capital expenditures
–Workforce training programs, established in partnership with The National Service for Industrial Training, a Brazilian non-profit organization focused on improving the competitiveness of Brazil's manufacturing sector through technical and vocational education, are now well underway with nearly 100% of employees and contractors expected to come from within Brazil, including approximately two-thirds from communities surrounding the Tucumã Project
3
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
◦At the Caraíba Operations, the Company is focused on advancing its Pilar 3.0 initiative, designed to support sustained annual ore production levels of 3.0 million tonnes. The components of Pilar 3.0 include (i) Project Honeypot, an engineering initiative focused on recovering higher-grade material in the upper levels of the Pilar Mine, (ii) an expansion of the Caraíba mill from 3.0 to 4.2 million tonnes of annual throughput capacity, and (iii) construction of a new external shaft to service the lower levels of the Pilar Mine, including the Deepening Extension Zone
–Construction of the new external shaft remains on schedule. The 40-meter pre-sink phase of shaft development was completed during the quarter, and the main sinking stage was successfully hoisted into the shaft subsequent to quarter-end. Hoisting of the pre-assembled headframe is currently underway with main shaft sinking expected to commence prior to year-end. Planned capital expenditures under contract or in the final stages of negotiation were approximately 80% at quarter-end and remains within 5% of budget
–The Caraíba mill expansion remains on schedule with commissioning of the new ball mill on track to begin late in the year
◦Please see recent images from the Tucumã Project in Figures 1 through 4 and of construction on the Caraíba Operations' new external shaft in Figures 5 and 6 below


annotatedtucumaaerial-july.jpg
Figure 1: July 2023 aerial view of the Tucumã Project, including (A) main substation, (B) crushed ore stockpile and belt feeder, (C) process plant, including ball mill, flotation and filtration, and (D) administrative offices, laboratories, fuel station, and equipment maintenance area.

4
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
annotatedtucumaprocessplant.jpg
Figure 2: Civil works underway on the Tucumã Project's future process plant, including (A) rougher and cleaner flotation cells, (B) Jameson cells, (C) pyrite flotation, and (D) ball mill (July 2023).



tucumaballmill2edited.jpg
Figure 3: Preparation for electromechanical assembly of the ball mill at the Tucumã Project (July 2023).
5
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
primarycrusherretainingwal.jpg
Figure 4: Construction of primary crusher retaining wall at the Tucumã Project (July 2023).


shaftheadframeerectionedit.jpg manmaterialwinderbuildinge.jpg
Figure 5: Hoisting of pre-assembled headframe at the Caraíba Operations' new external shaft in July 2023 (left).
Figure 6: Construction and assembly of the personnel and material winder building as of July 2023 (right).



6
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
OPERATING AND FINANCIAL HIGHLIGHTS
3 months ended
June 30, 2023
3 months ended
Mar. 31, 2023
3 months ended
June 30, 2022
6 months
ended
June 30, 2023		6 months
ended
June 30, 2022
Operating Highlights
Copper (Caraíba Operations)
Ore Processed (tonnes)840,821 772,548 801,425 1,613,369 1,397,655 
Grade (% Cu)1.55 1.33 1.74 1.45 1.76 
Cu Production (tonnes)12,004 9,327 12,734 21,331 22,518 
Cu Production (000 lbs)26,464 20,564 28,073 47,027 49,643 
Cu Sold in Concentrate (tonnes)11,612 9,464 12,948 21,076 22,993 
Cu Sold in Concentrate (000 lbs)25,600 20,865 28,546 46,465 50,691 
C1 cash cost of Cu produced (per lb)(1)
$1.52 $1.70 $1.24 $1.60 $1.27 
Gold (Xavantina Operations)
Ore Processed (tonnes)
34,377 35,763 57,291 70,140 107,281 
Au Production (oz)12,333 12,443 11,122 24,776 19,918 
C1 cash cost of Au Produced (per oz)(1)
$492 $436 $643 $464 $641 
AISC of Au produced (per oz)(1)
$1,081 $946 $1,169 $1,013 $1,135 
Financial Highlights ($ in millions, except per share amounts)
Revenues$104.9 $101.0 $114.9 $205.9 $223.8 
Gross profit 39.4 40.1 50.7 79.5 111.7 
EBITDA(1)
61.9 52.2 53.9 114.1 132.0 
Adjusted EBITDA(1)
49.1 48.6 55.8 97.7 118.2 
Cash flow from operations
55.5 16.4 22.4 71.8 66.4 
Net income
29.9 24.5 24.1 54.4 76.6 
Net income attributable to owners of the Company
29.6 24.2 23.8 53.7 75.9 
Per share (basic)0.32 0.26 0.26 0.58 0.84 
Per share (diluted)0.32 0.26 0.26 0.58 0.83 
Adjusted net income attributable to owners of the Company(1)
22.3 22.5 24.4 44.7 57.3 
Per share (basic)0.24 0.24 0.27 0.48 0.63 
Per share (diluted)0.24 0.24 0.27 0.48 0.62 
Cash, cash equivalents, and short-term investments180.4 236.6 429.9 180.4 429.9 
Working capital(1)
140.7 218.8 417.7 140.7 417.7 
Net (cash) debt(1)
246.5 174.2 (10.2)246.5 (10.2)

(1) EBITDA, Adjusted EBITDA, Adjusted net income (loss) attributable to owners of the Company, Adjusted net income (loss) per share attributable to owners of the Company, Net (Cash) Debt, Working Capital, C1 cash cost of copper produced (per lb), C1 cash cost of gold produced (per ounce) and AISC of gold produced (per ounce) are non-IFRS measures. These measures do not have a standardized meaning prescribed by IFRS and might not be comparable to similar financial measures disclosed by other issuers. Please refer to the Company’s discussion of Non-IFRS measures in its Management’s Discussion and Analysis for the three and six months ended June 30, 2023 and the Reconciliation of Non-IFRS Measures section at the end of this press release.
7
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
2023 PRODUCTION AND COST GUIDANCE(*)

The Company is reaffirming its 2023 copper production guidance for the Caraíba Operations of 44,000 to 47,000 tonnes of copper in concentrate. Mill throughput volumes are expected to be slightly lower in Q3 2023 compared to Q2 2023 and higher in Q4 2023 due to the anticipated commissioning of the new ball mill. Combined with expected copper grade variations related to planned stope sequencing, copper production is expected to decrease slightly in Q3 2023 before increasing in the last quarter of the year.

The Company is also maintaining its full-year C1 cash cost guidance for the Caraíba Operations of $1.40 and $1.60 per pound of copper produced. Unit operating costs are expected to be slightly higher in Q3 2023 compared to Q2 2023 and lowest in the last quarter of the year due to anticipated variations in quarterly mined and processed copper grades as well as total copper production.

At the Xavantina Operations, the Company is reaffirming its 2023 gold production guidance range of 50,000 to 53,000 ounces with slightly higher gold production expected in H2 2023 due to increased mill throughput volumes following the expected commencement of production from the Matinha vein.

The Company is also maintaining its full-year C1 cash cost guidance for the Xavantina Operations of $475 and $575 per ounce of gold produced and adjusting its AISC guidance range to $1,000 to $1,100 per ounce of gold produced to reflect the inclusion of sustaining lease payments and other miscellaneous sustaining expenses.

The Company's cost guidance for 2023 assumes a USD:BRL foreign exchange rate of 5.30, a gold price of $1,725 per ounce and a silver price of $20.00 per ounce.

2023 Guidance
Caraíba Operations
Copper Production (tonnes)
44,000 - 47,000
C1 Cash Cost (US$/lb)(1)
$1.40 - $1.60
Xavantina Operations
Gold Production (ounces)
50,000 - 53,000
C1 Cash Cost (US$/oz)(1)
$475 - $575
All-in Sustaining Cost (AISC) (US$/oz)(1)
$1,000 - $1,100
(1) These are non-IFRS measures and do not have a standardized meaning prescribed by IFRS and might not be comparable to similar financial measures disclosed by other issuers. See the Reconciliation of Non-IFRS Measures section at the end of this press release for additional information.
8
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
2023 CAPITAL EXPENDITURE GUIDANCE(*)

After conducting a detailed review of major projects and support infrastructure at the Caraíba Operations during the quarter, including infrastructure related to the Deepening, underground paste fill and tailings, the Company has elected to invest in various upgrades throughout H2 2023. These enhancements aim to bolster the Caraíba Operations' ongoing projects and support expanded life-of-mine operating plans at the Pilar Mine. As a result, the Company is increasing its full-year capital expenditure guidance by $15 to $20 million.

The Company's capital expenditure guidance for 2023 assumes a USD:BRL foreign exchange rate of 5.30 and has been presented below in USD millions.

2023 Guidance
Caraíba Operations
Growth
$90 - $105
Sustaining
$70 - $80
Exploration
$22 - $27
Total, Caraíba Operations
$182 - $212
Tucumã Project
Growth
$150 - $165
Exploration
$0 - $1
Total, Tucumã Project
$150 - $166
Xavantina Operations
Growth
$4 - $5
Sustaining
$12 - $14
Exploration
$6 - $7
Total, Xavantina Operations
$22 - $26
Other Exploration Projects
$3 - $5
Company Total
Growth
$244 - $275
Sustaining
$82 - $94
Exploration
$31 - $40
Total, Company
$357 - $409

(*) 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 and EDGAR filings, including the recent Annual Information Form for the year ended December 31, 2022 and dated March 7, 2023 (the "AIF"), for complete risk factors.

9
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
CONFERENCE CALL DETAILS

The Company will hold a conference call on Friday, August 4, 2023 at 11:30 am Eastern time (8:30 am Pacific time) to discuss these results.


Date:
Friday, August 4, 2023
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:0319





Reconciliation of Non-IFRS Measures

Financial results of the Company are presented in accordance with IFRS. The Company utilizes certain alternative performance (non-IFRS) measures to monitor its performance, including C1 cash cost of copper produced (per lb), C1 cash cost of gold produced (per ounce), AISC of gold produced (per ounce), EBITDA, adjusted EBITDA, adjusted net income attributable to owners of the Company, adjusted net income per share, net (cash) debt, working capital and available liquidity. These performance measures have no standardized meaning prescribed within generally accepted accounting principles under IFRS and, therefore, amounts presented may not be comparable to similar measures presented by other mining companies. These non-IFRS measures are intended to provide supplemental information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

For additional details please refer to the Company’s discussion of non-IFRS and other performance measures in its Management’s Discussion and Analysis for the three and six months ended June 30, 2023 which is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

10
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
C1 cash cost of copper produced (per lb)

The following table provides a reconciliation of C1 cash cost of copper produced per pound to cost of production, its most directly comparable IFRS measure.

Reconciliation:2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Cost of production
$37,767 $36,285 $38,015 $74,052 $67,178 
Add (less):
Transportation costs & other1,733 1,339 2,579 3,072 4,448 
Treatment, refining, and other4,248 2,527 3,893 6,775 5,939 
By-product credits(3,704)(2,810)(6,438)(6,514)(11,250)
Incentive payments(1,129)(1,237)(1,016)(2,366)(1,920)
Net change in inventory1,323 (1,185)(1,907)138 (1,330)
Foreign exchange translation and other
(13)15 (178)2 208 
C1 cash costs$40,225 $34,934 $34,948 $75,159 $63,273 

Mining
$25,794 $23,210 $23,933 $49,004 $44,059 
Processing7,643 6,554 7,988 14,197 14,435 
Indirect6,244 5,453 5,572 11,697 10,090 
Production costs39,681 35,217 37,493 74,898 68,584 
By-product credits(3,704)(2,810)(6,438)(6,514)(11,250)
Treatment, refining and other4,248 2,527 3,893 6,775 5,939 
C1 cash costs$40,225 $34,934 $34,948 $75,159 $63,273 
Payable copper produced (lb, 000)26,464 20,564 28,073 47,027 49,643 
Mining$0.97 $1.13 $0.85 $1.04 $0.89 
Processing$0.29 $0.32 $0.28 $0.30 $0.29 
Indirect$0.24 $0.27 $0.20 $0.25 $0.20 
By-product credits$(0.14)$(0.14)$(0.23)$(0.14)$(0.23)
Treatment, refining and other$0.16 $0.12 $0.14 $0.15 $0.12 
C1 cash costs of copper produced (per lb)$1.52 $1.70 $1.24 $1.60 $1.27 




11
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
C1 cash cost of gold produced and All-in Sustaining Cost of gold produced (per ounce)

The following table provides a reconciliation of C1 cash cost of gold produced per ounce and AISC of gold produced per ounce to cost of production, its most directly comparable IFRS measure.

Reconciliation:
2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Cost of production
$5,657 $6,107 $7,225 $11,764 $12,617 
Add (less):
Incentive payments(311)(407)(188)(718)(773)
Net change in inventory936 (352)(73)584 654 
By-product credits(163)(176)(145)(339)(269)
Smelting and refining costs
63 76 62 139 104 
Foreign exchange translation and other
(119)176 265 57 429 
C1 cash costs$6,063 $5,424 $7,146 $11,487 $12,762 
Site general and administrative1,338 1,232 882 2,570 1,441 
Accretion of mine closure and rehabilitation provision111 105 112 216 224 
Sustaining capital expenditure3,530 3,013 3,690 6,543 5,986 
Sustaining leases1,740 1,660 894 3,400 1,716 
Royalties and production taxes556 338 277 894 481 
AISC$13,338 $11,772 $13,001 $25,110 $22,610 
Costs
Mining
$3,017 $2,567 $3,929 $5,584 $7,147 
Processing2,048 1,905 2,285 3,953 3,983 
Indirect1,098 1,052 1,015 2,150 1,797 
Production costs6,163 5,524 7,229 11,687 12,927 
Smelting and refining costs
63 76 62 139 104 
By-product credits(163)(176)(145)(339)(269)
C1 cash costs$6,063 $5,424 $7,146 $11,487 $12,762 
Site general and administrative1,338 1,232 882 2,570 1,441 
Accretion of mine closure and rehabilitation provision111 105 112 216 224 
Sustaining capital expenditure3,530 3,013 3,690 6,543 5,986 
Sustaining leases1,740 1,660 894 3,400 1,716 
Royalties and production taxes556 338 277 894 481 
AISC$13,338 $11,772 $13,001 $25,110 $22,610 
Costs per ounce
Payable gold produced (ounces)12,333 12,443 11,122 24,776 19,918 
Mining$245 $206 $353 $225 $359 
Processing$166 $153 $205 $160 $200 
Indirect$89 $85 $91 $87 $90 
Smelting and refining$5 $6 $6 $6 $5 
By-product credits$(13)$(14)$(12)$(14)$(13)
C1 cash costs of gold produced (per ounce)$492 $436 $643 $464 $641 
AISC of gold produced (per ounce)$1,081 $946 $1,169 $1,013 $1,135 
12
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
Earnings before interest, taxes, depreciation and amortization (EBITDA) and Adjusted EBITDA

The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net income, its most directly comparable IFRS measure.

Reconciliation:
2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Net Income
$29,941 $24,500 $24,110 $54,441 $76,596 
Adjustments:
Finance expense
5,995 6,526 8,154 12,521 13,650 
Income tax expense
5,773 4,666 5,283 10,439 13,889 
Amortization and depreciation
20,239 16,506 16,361 36,745 27,865 
EBITDA$61,948 $52,198 $53,908 $114,146 $132,000 
Foreign exchange (gain) loss
(15,057)(8,621)3,303 (23,678)(15,406)
Share based compensation4,909 5,017 (2,333)9,926 (343)
Unrealized loss (gain) on copper derivative contracts(2,654)— — (2,654)— 
Incremental COVID-19 costs— — 952 — 1,956 
Adjusted EBITDA$49,146 $48,594 $55,830 $97,740 $118,207 


13
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
Adjusted net income attributable to owners of the Company and Adjusted net income per share attributable to owners of the Company

The following table provides a reconciliation of Adjusted net income attributable to owners of the Company and Adjusted EPS to net income attributable to the owners of the Company, its most directly comparable IFRS measure.

Reconciliation:
2023 - Q22023 - Q12022 - Q22023 - YTD2022 - YTD
Net income as reported attributable to the owners of the Company
$29,576 $24,154 $23,820 $53,730 $75,927 
Adjustments:
Share based compensation4,909 5,017 (2,333)9,926 (343)
Unrealized foreign exchange (gain) loss on USD denominated balances in MCSA
(9,716)(4,753)1,038 (14,469)(299)
Unrealized foreign exchange (gain) loss on foreign exchange derivative contracts
(2,078)(3,152)1,405 (5,230)(23,210)
Unrealized gain on interest rate derivative contracts
(2,644)— — (2,644)— 
Incremental COVID-19 costs— — 946 — 1,944 
Tax effect on the above adjustments
2,205 1,208 (519)3,413 3,289 
Adjusted net income attributable to owners of the Company$22,252 $22,474 $24,357 $44,726 $57,308 
Weighted average number of common shares
Basic92,685,916 92,294,045 90,539,647 92,491,063 90,389,661 
Diluted93,643,447 93,218,281 91,850,321 93,429,191 91,887,665 
Adjusted EPS
Basic$0.24 $0.24 $0.27 $0.48 $0.63 
Diluted$0.24 $0.24 $0.27 $0.48 $0.62 

14
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
Net (Cash) Debt

The following table provides a calculation of net (cash) debt based on amounts presented in the Company’s condensed consolidated interim financial statements as at the periods presented.

June 30, 2023March 31, 2023December 31, 2022June 30, 2022
Current portion of loans and borrowings$17,105 $9,221 $15,703 $16,219 
Long-term portion of loans and borrowings409,818401,595402,354403,492
Less:
Cash and cash equivalents(124,382)(209,908)(177,702)(329,292)
Short-term investments(56,011)(26,739)(139,700)(100,589)
Net (cash) debt$246,530 $174,169 $100,655 $(10,170)

Working Capital and Available Liquidity

The following table provides a calculation for these based on amounts presented in the Company’s condensed consolidated interim financial statements as at the periods presented.

June 30, 2023March 31, 2023December 31, 2022June 30, 2022
Current assets$280,783 $331,241 $392,427 $523,201 
Less: Current liabilities(140,090)(112,448)(129,121)(105,527)
Working capital
$140,693 $218,793 $263,306 $417,674 
Cash and cash equivalents124,382 209,908 177,702 329,292 
Short-term investments56,011 26,739 139,700 100,589 
Available undrawn revolving credit facilities150,000 150,000 75,000 75,000 
Available liquidity$330,393 $386,647 $392,402 $504,881 

15
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
ABOUT ERO COPPER CORP

Ero is a high-margin, high-growth, low carbon-intensity copper producer with operations in Brazil and corporate headquarters in Vancouver, B.C. 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 Company's Caraíba Operations (formerly known as the MCSA Mining Complex), which are located in the Curaçá Valley, Bahia State, Brazil and include the Pilar and Vermelhos underground mines and the Surubim open pit mine, and the Tucumã Project (formerly known as Boa Esperança), an IOCG-type copper project located in Pará, Brazil. The Company also owns 97.6% of NX Gold S.A. ("NX Gold") which owns the Xavantina Operations (formerly known as the NX Gold Mine), comprised of an operating gold and silver mine located in Mato Grosso, Brazil. Additional information on the Company and its operations, including technical reports on the Caraíba Operations, Xavantina Operations and Tucumã Project, can be found on the Company's website (www.erocopper.com), on SEDAR (www.sedar.com), and on EDGAR (www.sec.gov). The Company’s shares are publicly traded on the Toronto Stock Exchange and the New York Stock Exchange under the symbol “ERO”.

FOR MORE INFORMATION, PLEASE CONTACT

Courtney Lynn, VP, Corporate Development & Investor Relations
(604) 335-7504
info@erocopper.com

16
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada

TSX: ERO
NYSE: ERO
CAUTION REGARDING FORWARD LOOKING INFORMATION AND STATEMENTS

This press release contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation (collectively, “forward-looking statements”). Forward-looking statements include 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. Forward-looking statements may include, but are not limited to, statements with respect to the Company's expected production, operating costs and capital expenditures at the Caraíba Operations, the Tucumã Project and the Xavantina Operations; the ability of the Company to execute on its growth initiatives according to the timeline and budget currently envisioned; estimated completion dates for certain milestones, including construction of the Tucumã Project, completion of the projects that comprise the Pilar 3.0 initiative, including the Caraíba mill expansion and construction of the new external shaft to access the Deepening Extension Zone, and commencement of mining from the Matinha vein at the Xavantina Operations; the estimated timing of construction activities comprising the Company's key growth initiatives, including the commencement of main shaft sinking at the Caraíba Operations' new external shaft; and any other statement that may predict, forecast, indicate or imply future plans, intentions, levels of activity, results, performance or achievements.

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual results, actions, events, conditions, performance or achievements to materially differ from those expressed or implied by the forward-looking statements, including, without limitation, risks discussed in this press release and in the AIF under the heading “Risk Factors”. The risks discussed in this press release and in the AIF are not exhaustive of the factors that may affect any of the Company’s forward-looking statements. Although the Company has attempted to identify important factors that could cause actual results, actions, events, conditions, performance or achievements to differ materially from those contained in forward-looking statements, there may be other factors that cause results, actions, events, conditions, performance or achievements to differ from those anticipated, estimated or intended.

Forward-looking statements are not a guarantee of future performance. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements involve statements about the future and are inherently uncertain, and the Company’s actual results, achievements or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to herein and in the AIF under the heading “Risk Factors”.

The Company’s forward-looking statements are based on the assumptions, beliefs, expectations and opinions of management on the date the statements are made, many of which may be difficult to predict and beyond the Company’s control. In connection with the forward-looking statements contained in this press release and in the AIF, the Company has made certain assumptions about, among other things: continued effectiveness of the measures taken by the Company to mitigate the possible impact of COVID-19 on its workforce and operations; 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, gold 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 Caraíba Operations, the Xavantina Operations and the Tucumã Project being as described in the respective technical report for each property; production costs; the accuracy of budgeted exploration, development and construction 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 continuing to remain healthy in the face of prevailing epidemics, pandemics or other health risks (including COVID-19), 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; 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. Although the Company believes that the assumptions inherent in forward-looking statements are reasonable as of the date of this press release, these assumptions are 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 statements. The Company cautions that the foregoing list of assumptions is 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 statements contained in this press release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Forward-looking statements contained herein are made as of the date of this press release and the Company disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws.

CAUTIONARY NOTES REGARDING MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

Unless otherwise indicated, all reserve and resource estimates included in this press release and the documents incorporated by reference herein have been prepared in accordance with National Instrument 43-101, Standards of Disclosure for Mineral Projects (“NI 43-101") and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) — CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended (the “CIM Standards”). NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Canadian standards, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission (the “SEC”), and reserve and resource information included herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, this press release and the documents incorporated by reference herein use the terms “measured resources,” “indicated resources” and “inferred resources” as defined in accordance with NI 43-101 and the CIM Standards.

Further to recent amendments, mineral property disclosure requirements in the United States (the “U.S. Rules”) are governed by subpart 1300 of Regulation S-K of the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) which differ from the CIM Standards. As a foreign private issuer that is eligible to file reports with the SEC pursuant to the multi-jurisdictional disclosure system (the “MJDS”), Ero is not required to provide disclosure on its mineral properties under the U.S. Rules and will continue to provide disclosure under NI 43-101 and the CIM Standards. If Ero ceases to be a foreign private issuer or loses its eligibility to file its annual report on Form 40-F pursuant to the MJDS, then Ero will be subject to the U.S. Rules, which differ from the requirements of NI 43-101 and the CIM Standards.

Pursuant to the new U.S. Rules, the SEC recognizes estimates of “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources”. In addition, the definitions of “proven mineral reserves” and “probable mineral reserves” under the U.S. Rules are now “substantially similar” to the corresponding standards under NI 43-101. Mineralization described using these terms has a greater amount of uncertainty as to its existence and feasibility than mineralization that has been characterized as reserves. Accordingly, U.S. investors are cautioned not to assume that any measured mineral resources, indicated mineral resources, or inferred mineral resources that Ero reports are or will be economically or legally mineable. Further, “inferred mineral resources” have a greater amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Under Canadian securities laws, estimates of “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies, except in rare cases. While the above terms under the U.S. Rules are “substantially similar” to the standards under NI 43-101 and CIM Standards, there are differences in the definitions under the U.S. Rules and CIM Standards. Accordingly, there is no assurance any mineral reserves or mineral resources that Ero may report as “proven mineral reserves”, “probable mineral reserves”, “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” under NI 43-101 would be the same had Ero prepared the reserve or resource estimates under the standards adopted under the U.S. Rules.
17
Ero Copper Corp
625 Howe Street | Suite 1050 | Vancouver | BC | V6C 2T6 | Canada
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