Ero Copper Corp.
(TSX: ERO, NYSE:
ERO) (“Ero” or the “Company”) is pleased to
announce the results of its optimized Feasibility Study (the "2021
Feasibility Study") on the Boa Esperança Copper Project ("Boa" or
the "Project"), located in Pará State, Brazil.
HIGHLIGHTS
- 41.8% after-tax internal rate of
return ("IRR") and $380 million after-tax net present value (8%)
based on Consensus Copper Price (as defined below) and 5.00 BRL:USD
exchange rate;
- Doubled life-of-mine ("LOM") copper
production to approximately 326,000 tonnes from 163,000 tonnes in
the 2017 Study (as defined below) with increased mine life of
twelve years;
- Increased annual average LOM copper
production from approximately 18,000 tonnes to over 27,000 tonnes,
with the first five years of production averaging approximately
35,000 tonnes per annum;
- Mine life of twelve years supported
by updated proven mineral reserves of 30.7 million tonnes at 0.89%
copper and probable mineral reserves of 12.4 million tonnes at
0.67% copper, containing a total of 356.6 thousand tonnes of
copper, a 93% increase in contained copper as compared to the 2017
Study (as defined below);
- Low capital-intensity of
approximately $8,400 per tonne of copper produced annually over the
first 5 years of the Project resulting in rapid payback of 1.4
years at Consensus Copper Price;
- Significant exploration upside
identified within an under-explored area within the final pit
limits, known as the "Gap Zone", expected to enhance the Project by
(i) confirming continuity of mineralization between near-surface
high-grade zones and high-grade zones near the pit limits at depth;
and, (ii) converting material currently classified as waste into
mineral resources. Subsequent to August 31, 2021, or the effective
date of the mineral resource and mineral reserve estimates in the
2021 Feasibility Study (the “Effective Date”), ten exploration
holes were drilled in the Gap Zone, all of which showed
mineralization. To date, assay results have been received for three
of these holes. Results are highlighted by hole BSPD-166 that
intercepted 21.2 meters grading 0.98% copper and 15.3 meters
grading 1.25% copper and BSPD-169 that intercepted 64.9 meters
grade 0.86% copper including 15.0 meters grading 1.40% copper;
and
- Detailed engineering design efforts
are currently underway with early construction works expected to
commence during H1 2022, subject to the approval of Ero's Board of
Directors.
2021 FEASIBILITY STUDY SUMMARY |
|
|
General |
|
|
Type of Operation |
|
Open Pit |
Mine Life |
years |
12 |
Mill Throughput |
Mtpa |
4.0 |
Total Tonnes Processed |
kt |
43,052 |
Life-of-Mine Strip Ratio |
waste:ore |
3.7 |
Copper Head Grade |
% Cu |
0.83 % |
Metallurgical Recovery |
% |
91.3 % |
First Five Years
of Production |
|
|
Average Annual Recovered Copper |
kt |
35 |
C1 Cash Cost(1) |
$/lb Cu produced |
$1.12 |
Total Recovered Copper Production |
kt |
174 |
Life-of-Mine Production |
|
|
Average Annual Recovered Copper |
kt |
27 |
C1 Cash Cost(1) |
$/lb Cu produced |
$1.36 |
Total Recovered Copper Production |
kt |
326 |
Financial Highlights |
|
|
Copper Price |
$/lb |
Consensus Copper Price(2) |
Foreign Exchange Rate |
USD:BRL |
5.00 |
Initial Capital |
$M |
$294 |
Sustaining Capital |
$M |
$196 |
After-Tax Net Present Value (8%) |
$M |
$380 |
After-Tax Internal Rate of Return |
% |
41.8 % |
After-Tax Payback Period |
years |
1.4 |
(1) C1 Cash Cost is a non-IFRS Measure. Please
refer to the Notes section of this press release for a discussion
of non-IFRS Measures.(2) Consensus Copper Price forecast is based
on the average analyst copper price estimates from 26 financial
institutions as of the Effective Date, resulting in $3.80 per pound
in 2024, $3.95 per pound in 2025 and $3.40 per pound in 2026 and
thereafter.
SENSITIVITY OF ECONOMIC RESULTS TO COPPER PRICE (USD/LB)
A chart accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/d2dcb7e7-ae75-4bce-acef-25332ea89f31
Commenting on the results, David Strang, CEO,
stated, “The Boa Esperança Project is the most recent example of
our team's commitment and outstanding track record of creating
shareholder value from our existing portfolio, and we could not be
more excited about the outcome of these efforts. We started the
re-evaluation of Boa from the ground up, beginning with a complete
review of the mineral resource calculations that identified
significant upside opportunities on which to build a new vision for
Boa.
“By re-logging core, focusing our efforts on
geologic modelling and optimizing the mine sequence, we were able
to identify a superior mine plan capable of supporting a much
larger operation by pulling forward high-grade mineralization in
the production plan. The result of this work is significantly
higher annual copper production averaging approximately 35,000 over
the first five years of the mine's life, a very attractive payback
of 1.4 years and a 41.8% internal rate of return. Further, we see
potential for additional value generation through ongoing
exploration within the newly designed final pit shell.
“Our near-term focus will be targeting
exploration in an area referred to as the Gap Zone, where we
currently have four drill rigs operating. The Gap Zone is a
sizeable target area within the current pit shell where there has
been limited historic drilling. As a result, material mined from
this zone, which is currently included in the later phases of the
mine plan, is largely treated as waste. While early in the program,
the ten holes we have drilled within the Gap Zone subsequent to the
cut-off date of the 2021 Feasibility Study show mineralized zones
in the areas where we would expect to see extensions and continuity
of mineralization. With continued exploration success, we see
potential to meaningfully increase the mine's production profile
beyond year five of the current life-of-mine plan.
"Our excitement around our organic growth
initiatives, including the delivery of the Boa Esperança Project
and production growth at the MCSA Mining Complex, continues to
build as we establish a clear path to doubling our copper
production profile over the coming years while continuing to
generate peer- leading returns on invested capital. With a robust
balance sheet and strong cash flow generation, we are
well-positioned to execute on our growth strategy and continue
delivering shareholder value."
GAP ZONE EXPLORATION SUCCESS
Subsequent to the Effective Date, ten
exploration drill holes were drilled within the Gap Zone, all of
which show mineralization. To date, assay results have been
received for three of these holes. Results are highlighted by hole
BSPD-166 that intercepted 21.2 meters grading 0.98% copper and 15.3
meters grading 1.25% copper, including 6.5 meters grading 2.46%
copper, hole BSPD-169 that intercepted 64.9 meters grade 0.86%
copper, including 15.0 meters grading 1.40% copper and hole
BSPD-175 that intercepted 14.1 meters grading 0.73% copper
including 5.7 meters grading 1.59% copper. Additional mineralized
intercepts from within these holes are pending assay results.
Continued positive exploration results within
the Gap Zone are expected to further enhance the Project by (i)
confirming continuity of mineralization between near-surface
high-grade zones and high-grade zones near the pit limits at depth;
and, (ii) converting material currently classified and mined as
waste into mineral resources. The Company expects the Gap Zone to
contribute to increased copper production beyond year five of the
mine plan.
Gap Zone drill results outlined in this press
release, including drill collar locations, are shown below in
Figure 1 and can be viewed on the Company’s Boa Esperança project
tour and interactive three- dimensional ("3D") model, which can be
accessed via the Company’s VRIFY Technology Inc. (“VRIFY”) project
page (http://www.vrify.com/companies/ero-copper-corp) or via VRIFY
directly (www.vrify.com).
Hole ID |
From (m) |
To (m) |
Length (m) |
Cu (%) |
GAP Zone -
Assay Results |
|
|
|
|
BSPD-166 |
31.0 |
44.0 |
13.0 |
0.25 |
and |
125.4 |
141.3 |
15.9 |
0.44 |
and |
174.0 |
179.2 |
5.2 |
1.27 |
and |
189.7 |
200.6 |
10.9 |
0.67 |
and |
339.5 |
360.7 |
21.2 |
0.98 |
including |
339.5 |
343.3 |
3.9 |
2.78 |
and |
383.5 |
398.8 |
15.3 |
1.25 |
including |
386.3 |
392.8 |
6.5 |
2.46 |
and |
435.4 |
445.6 |
10.3 |
1.27 |
including |
435.4 |
439.8 |
4.4 |
2.21 |
and |
467.8 |
476.6 |
8.8 |
0.39 |
BSPD-169 |
317.2 |
382.0 |
64.9 |
0.86 |
including |
346.5 |
354.9 |
8.4 |
1.46 |
and including |
367.0 |
382.0 |
15.0 |
1.40 |
BSPD-175 |
336.8 |
350.8 |
14.1 |
0.73 |
including |
345.1 |
350.8 |
5.7 |
1.59 |
and |
401.0 |
438.0 |
37.0 |
0.20 |
|
GAP Zone -
Additional Mineralized
Intervals for
Above Drill
Holes (Assay
Results Pending) |
BSPD-169 |
112.0 |
119.0 |
7.0 |
assays pending |
and |
158.5 |
183.0 |
24.5 |
assays pending |
and |
201.0 |
263.0 |
62.0 |
assays pending |
and |
484.0 |
499.0 |
15.0 |
assays pending |
and |
509.0 |
536.0 |
27.0 |
assays pending |
BSPD-175 |
101.0 |
117.9 |
16.9 |
assays pending |
and |
127.0 |
138.0 |
11.0 |
assays pending |
and |
185.0 |
192.5 |
7.5 |
assays pending |
and |
203.8 |
220.7 |
16.9 |
assays pending |
and |
302.0 |
320.3 |
18.3 |
assays pending |
(1) Mineralized intercepts below cut-off grade
of 0.20% copper not reported. Drill holes were drilled from surface
using diamond core drill rigs. The length of intercept may not
represent the true width of mineralization. Values may not add up
due to rounding. From, to and mineralized intercepts are rounded to
the nearest tenth of a meter. The seven remaining drill holes from
the Gap Zone drilling campaign are pending assay results in their
entirety.
Gap Zone drill results from BSPD-166, BSPD-169
and BSPD-175, as referenced herein, reflects mineralization not
captured in the Company's NI 43-101 (as defined below) compliant
mineral resource and mineral reserve models developed for the 2021
Feasibility Study. There has been insufficient work and analysis
surrounding Gap Zone drilling to define a mineral resource and it
is uncertain if further exploration and analysis will result in
such targets being delineated as a mineral resource.
Figure 1 shows high-grade and low-grade mineralization, as well
as the Gap Zone exploration target area within the final pit design
of the Project. Figure 2 highlights recent Gap Zone drilling
results.
The center of the final pit design is located at
UTM Easting 450722.00 and UTM Northing 9241657.00. Boa Esperança
mineralization based on data compilation work which includes review
of geological controls, structural analysis and copper
mineralization identified during the Company’s technical programs.
The interpretation and boundary limits do not imply continuity of
mineralization or actual thickness of mineralization. Mineral
resources which are not mineral reserves do not have demonstrated
economic viability.
Figure 1: Boa Esperança VRIFY
3D Model, Plan View looking North (Ero Copper, 2021) is
available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/c6dfee9a-605f-44d8-b1a1-5513b780e764
The center of the final pit design is located at
UTM Easting 450722.00 and UTM Northing 9241657.00. The GAP Zone
volume is shown to demonstrate a future area of exploration within
the Boa Esperança final pit design. The shape is based on data
compilation work which includes review of geological controls and
structural analysis during the Company’s technical programs. The
interpretation and boundary limits do not imply continuity of
mineralization or actual thickness of mineralization.
Figure 2: Boa Esperança VRIFY
3D Model, Gap Zone Results, view looking North (Ero Copper,
2021) is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/bc04e274-5ba7-4bbf-a7f3-b29950a9b500
MINERAL RESERVES & RESOURCES, 2021 |
|
|
Tonnes(000s) |
Grade(Cu %) |
Contained Cu(kt) |
Mineral Reserves |
|
|
|
Proven Reserves |
30,674 |
0.89 |
273.2 |
Probable Reserves |
12,378 |
0.67 |
83.3 |
Proven &
Probable Reserves |
43,052 |
0.83 |
356.6 |
|
|
|
|
Mineral Resources
(Pit Constrained,
inclusive of
Reserves) |
|
|
|
Measured Resources (High-Grade) |
7,117 |
2.16 |
153.6 |
Indicated Resources (High-Grade) |
1,661 |
2.27 |
37.6 |
Measured &
Indicated Resources
(High-Grade) |
8,778 |
2.18 |
191.3 |
Measured Resources (Low-Grade) |
25,476 |
0.60 |
152.0 |
Indicated Resources (Low-Grade) |
13,434 |
0.51 |
68.4 |
Measured &
Indicated Resources
(Low-Grade) |
38,909 |
0.57 |
220.4 |
Total Measured
& Indicated
Resources |
47,687 |
0.86 |
411.7 |
|
|
|
|
Inferred Resources |
|
|
|
Inferred Resources (Pit Constrained High-Grade) |
40 |
2.69 |
1.1 |
Inferred Resources (Pit Constrained Low-Grade) |
514 |
0.49 |
2.5 |
Inferred Resources
(Pit Constrained) |
555 |
0.65 |
3.6 |
Inferred Resources (Unconstrained High-Grade Outside Pit
Limits) |
1,354 |
2.24 |
30.4 |
Inferred Resources (Unconstrained Low-Grade Outside Pit
Limits) |
9,681 |
0.60 |
58.2 |
Inferred Resources
(Unconstrained Mineralization
Outside Pit) |
11,035 |
0.80 |
88.6 |
Total Inferred
Resources |
11,590 |
0.80 |
92.2 |
(1) Mineral reserves and mineral resources have
an effective date of August 31, 2021.(2) Stated mineral resources
are inclusive of mineral reserves. All figures have been rounded to
the relative accuracy of the estimates. Summed amounts may not add
due to rounding. High-grade and low-grade mineral resources defined
as greater than or equal to 1.00% copper and less than 1.00%
copper, respectively.(3) A 3D geologic model was developed for the
Boa Esperança Project. Geologically constrained copper grade shells
were developed using a copper cut-off grade of 0.20% and 0.51% for
pit constrained and unconstrained mineral resources, respectively,
to generate a 3D mineralization model of the Boa Esperança Project.
Within grade shells, mineral resources were estimated using
ordinary kriging within a 2.0 meter by 2.0 meter by 4.0 meter block
size. Open pit constrained, unconstrained and marginal cut-off
grades are based upon a copper price of US$6,400 per tonne with
cost parameters appropriate to the deposit. The mineral resource
estimates were prepared in accordance with the Canadian Institute
of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards
for Mineral Resources and Mineral Reserves, adopted by the CIM
Council on May 10, 2014 (the “CIM Standards”), and the CIM
Estimation of Mineral Resources and Mineral Reserves Best Practice
Guidelines, adopted by CIM Council on November 29, 2019 (the ‘CIM
Guidelines”), using geostatistical and/or classical methods, plus
economic and mining parameters appropriate to the deposit.(4)
Mineral reserve estimates were prepared in accordance with the CIM
Standards and the CIM Guidelines, using geostatistical and/or
classical methods, plus economic and mining parameters appropriate
for the deposit. Mineral reserves are based on a long-term copper
price of US$6,613 per tonne; concentrate grade of 27% copper;
average metallurgical recoveries of 91.3%; copper concentrate
logistics costs of US$108.20 per wet metric tonne ("wmt");
transport losses of 0.2%; copper concentrate treatment charges of
US$59.50 per dry metric tonne ("dmt"), refining charges of U$0.0595
per pound of copper; copper payability of 96.3%; average mining
cost of US$2.47 per tonne mined; processing cost of US$7.74 per
tonne processed and G&A costs of US$3.83 per tonne processed;
average pit slope angles that range from 30º for saprolite to 50º
for fresh rock and a 2% CFEM government royalty.
Mineral resources which are not mineral reserves do not have
demonstrated economic viability. Please refer to the Technical and
Scientific section of this press release for additional
information.
MINERAL RESERVE
COMPARISON TO
2017 STUDY
|
2021 Feasibility
Study(1,2,3) |
2017 Study(4) |
Change |
|
Tonnes |
Grade |
Contained Cu |
Tonnes |
Grade |
Contained Cu |
Contained Cu |
|
(000s) |
(Cu %) |
(kt) |
(000s) |
(Cu %) |
(kt) |
(kt) |
% |
Proven Reserves |
30,674 |
0.89 |
273.2 |
18,528 |
0.96 |
178.1 |
95.1 |
53 |
% |
Probable Reserves |
12,378 |
0.67 |
83.3 |
975 |
0.72 |
7.0 |
76.3 |
1,091 |
% |
Proven &
Probable Reserves |
43,052 |
0.83 |
356.6 |
19,503 |
0.95 |
185.1 |
171.5 |
93 |
% |
(1) Mineral reserves have an effective date of
August 31, 2021.(2) All figures have been rounded to the relative
accuracy of the estimates. Summed amounts may not add due to
rounding.(3) Mineral reserve estimates were prepared in accordance
with the CIM Standards and the CIM Guidelines, using geostatistical
and/or classical methods, plus economic and mining parameters
appropriate for the deposit. Mineral reserves are based on a
long-term copper price of US$6,613 per tonne; concentrate grade of
27% copper; average metallurgical recoveries of 91.3%; copper
concentrate logistics costs of US$108.20 per wmt; transport losses
of 0.2%; copper concentrate treatment charges of US$59.50 per dmt,
refining charges of U$0.0595 per pound of copper; copper payability
of 96.3%; average mining cost of US$2.47 per tonne mined;
processing cost of US$7.74 per tonne processed and G&A costs of
US$3.83 per tonne processed; average pit slope angles that range
from 30º for saprolite to 50º for fresh rock and a 2% CFEM
government royalty.(4) Please refer to the 2017 Study for
additional technical and scientific information.
Please refer to the Technical and Scientific section of this
press release for additional information.
LIFE-OF-MINE PRODUCTION
PLAN AND CASH
FLOWS
|
Unit |
LOM |
2022 |
2023 |
2024 |
2025 |
2026 |
2027 |
2028 |
2029 |
2030 |
2031 |
2032 |
2033 |
2034 |
2035 |
2036 |
Mining Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore Mined |
kt |
43,052 |
— |
3 |
2,312 |
4,245 |
4,148 |
4,126 |
4,400 |
3,853 |
3,153 |
4,043 |
3,903 |
4,170 |
3,267 |
1,429 |
— |
Grade Mined |
% Cu |
0.83 |
— |
1.49 |
1.30 |
1.27 |
1.05 |
0.76 |
0.79 |
0.72 |
0.52 |
0.55 |
0.64 |
0.62 |
0.92 |
1.11 |
— |
Waste Mined |
kt |
160,025 |
3,017 |
8,050 |
8,055 |
8,112 |
14,957 |
15,874 |
15,600 |
15,912 |
16,160 |
15,957 |
16,097 |
13,750 |
7,053 |
1,430 |
— |
Total Mined |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Milling
Operations(*) |
kt |
203,077 |
3,017 |
8,054 |
10,367 |
12,357 |
19,104 |
20,000 |
20,000 |
19,765 |
19,313 |
20,000 |
20,000 |
17,921 |
10,320 |
2,859 |
— |
Ore Processed |
kt |
43,052 |
— |
— |
2,182 |
3,990 |
4,000 |
4,000 |
4,000 |
4,000 |
4,000 |
4,000 |
4,000 |
4,000 |
3,451 |
1,429 |
— |
Grade Processed |
% Cu |
0.83 |
— |
— |
1.34 |
1.33 |
1.08 |
0.77 |
0.82 |
0.70 |
0.49 |
0.56 |
0.64 |
0.63 |
0.90 |
1.11 |
— |
Metallurgical Recovery |
% |
91.3 |
— |
— |
93.2 |
92.8 |
92.1 |
90.6 |
91.8 |
90.7 |
87.2 |
89.9 |
90.4 |
91.2 |
91.3 |
91.5 |
— |
Cu in Concentrate |
kt |
326 |
— |
— |
27 |
49 |
40 |
28 |
30 |
26 |
17 |
20 |
23 |
23 |
28 |
14 |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
$M |
($407) |
$— |
$— |
($23) |
($28) |
($31) |
($44) |
($42) |
($27) |
($37) |
($35) |
($42) |
($44) |
($39) |
($15) |
$— |
Process(2) |
$M |
($328) |
$— |
$— |
($17) |
($30) |
($31) |
($31) |
($31) |
($31) |
($31) |
($31) |
($31) |
($31) |
($26) |
($11) |
$— |
Operational Support |
$M |
($42) |
$— |
$— |
($2) |
($4) |
($4) |
($4) |
($4) |
($4) |
($4) |
($4) |
($4) |
($4) |
($3) |
($1) |
$— |
G&A |
$M |
($24) |
$— |
$— |
($1) |
($2) |
($2) |
($2) |
($2) |
($2) |
($2) |
($2) |
($2) |
($2) |
($2) |
($1) |
$— |
TC/RCs(1) |
$M |
($40) |
$— |
$— |
($3) |
($6) |
($5) |
($3) |
($4) |
($3) |
($2) |
($2) |
($3) |
($3) |
($3) |
($2) |
$— |
Royalty |
$M |
($44) |
$— |
$— |
($4) |
($8) |
($5) |
($4) |
($4) |
($3) |
($2) |
($3) |
($3) |
($3) |
($4) |
($2) |
$— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transport Costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land Freight & Handling |
$M |
($115) |
$— |
$— |
($10) |
($17) |
($14) |
($10) |
($11) |
($9) |
($6) |
($7) |
($8) |
($8) |
($10) |
($5) |
$— |
Sea Freight |
$M |
($80) |
$— |
$— |
($7) |
($12) |
($10) |
($7) |
($7) |
($6) |
($4) |
($5) |
($6) |
($6) |
($7) |
($4) |
$— |
Unit Costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C1 Cash Costs(3) |
$/lb |
$1.36 |
$— |
$— |
$0.96 |
$0.85 |
$1.03 |
$1.55 |
$1.42 |
$1.37 |
$2.16 |
$1.85 |
$1.79 |
$1.83 |
$1.38 |
$1.14 |
$— |
|
|
|
|
|
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Capital Expenditures |
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Initial Capital |
$M |
($294) |
($75) |
($170) |
($49) |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
Sustaining Capital |
$M |
($196) |
$— |
$— |
($7) |
($19) |
($24) |
($15) |
($24) |
($51) |
($12) |
($22) |
($10) |
($13) |
$— |
$— |
$— |
Closure Costs |
$M |
($24) |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
($24) |
Salvage Value |
$M |
$7 |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$— |
$7 |
(*) Milling Operations reflect timing adjustments related to
run-of-mine stockpile handling. Summed amounts may not add due to
rounding.(1) TC/RCs defined as treatment charges and refining
charges.(2) Process includes mill operating and maintenance
expenses as well as costs related to dry stack tailings.(3) C1 Cash
Cost is a non-IFRS Measure. Please refer to the Notes section of
this press release for a detailed definition.
TECHNICAL AND SCIENTIFIC INFORMATION
Permitting
The Economic Exploitation Plan (PAE) for the
Project was ratified in 2012 and subsequently renewed in 2013. The
Company received the Installation License (LI) in August 2021,
which will allow for the commencement of surface and civil
construction activities in H1 2022. A formal request with the
Secretaria de Estado de Meio Ambiente e Sustentabilidade ("SEMAS")
will be made to incorporate changes in the Project's scope as
outlined in the 2021 Feasibility Study. SEMAS is the agency
responsible for approval of the Operating License (LO) for the
Project, which is planned to be issued at the time of commercial
production.
Mineral
Resources
Block model tonnage and grade estimates for the
Project were classified according to the CIM Standards and the CIM
Guidelines by Mr. Emerson Ricardo Re, RM CMC (0138) and MAusIMM
(CP) (305892), an employee of Ero Copper Corp. and a qualified
person as such term is defined under National Instrument 43-101,
Standards of Disclosure for Mineral Projects ("NI 43-101").
A 3D geologic model was developed for the
Project. Geologically constrained grade shells were developed using
various copper cut-off grades to generate a 3D mineralization model
of the Project. Within the grade shells, mineral resources were
estimated using ordinary kriging within a 2.0 meter by 1.1
meter by 4.0 meter block size. Within the optimized resource open
pit limits, a cut-off grade of 0.20% copper was applied based upon
a copper price of US$6,400 per tonne, net smelter return ("NSR") of
94.53%, average metallurgical recoveries of 90.7%, mining recovery
of 95.0%, dilution of 5.0%, mining costs of US$3.10 per tonne mined
run of mine ("ROM"), processing and transportation costs of US$5.65
per tonne ROM, and G&A costs of US$2.66 per tonne ROM.
Unconstrained inferred mineral resources have been stated at a
cut-off grade of 0.51% copper with a marginal cut-off grade of
0.32% copper based upon a copper price of US$6,400 per tonne, NSR
of 94.53%, mining recovery of 100%, average metallurgical
recoveries of 90.7%, mining costs of US$14.71 per tonne ROM,
processing and transportation costs of US$5.70 per tonne ROM, and
G&A costs of US$2.60 per tonne ROM. Stated mineral resources
estimates are inclusive of mineral reserves.
The mineral resource effective date is August
31, 2021.
Mineral
Reserves
The mineral reserves for the Project are derived
from the Measured and Indicated mineral resources as defined within
the resource block model following the application of economic and
other modifying factors further described below. Inferred mineral
resources, where unavoidably mined within a defined mining shape
have been assigned zero grade. Dilution occurring from Indicated
resource blocks were assigned grade based upon the current mineral
resource grade of the blocks included in the dilution envelope.
Mineral reserves were classified according to the CIM Standards and
the CIM Guidelines by Mr. Carlos Guzman, RM CMC (0119) and FAusIMM
(229036), an employee of NCL Ingenieria y Construcion SpA ("NCL")
and an independent qualified person as such term is defined under
NI 43-101. NCL is independent of the Company.
The pit designs and mine plan were optimized
using the following economic and technical parameters: copper price
of US$6,613 per tonne; average metallurgical recoveries of 91.3%;
concentrate grade of 27% copper, copper concentrate logistics costs
of US$108.20 per wmt; transport losses of 0.20%; copper concentrate
treatment charges of US$59.50 per dmt, refining charges of U$0.0595
per pound of copper; copper payability of 96.3%; average mining
cost of US$2.47 per tonne mined; processing costs of US$7.74 per
tonne processed and G&A costs of US$3.83 per tonne processed;
average pit slope angles that range from 30º for saproloite to 50º
for fresh rock and a 2% CFEM government royalty.
Other modifying factors considered in the
determination of the mineral reserve estimate include:
- Overall slope angles of 30.0 degrees
for saprolite, 42.0 degrees for weathered rock and 50.0 degrees for
fresh rock;
- Maximum bench height
of 8.0 meters for saprolite and weathered rock and 16.0 meter
double- benches for fresh rock;
- Double-traffic ramp
design of 18.0 meters in width with 10% maximum gradient; and
- Mining shapes of 6.0
meters by 10.0 meters with 4.0 meter flitch mining with
consideration for orebody orientation.
The mineral reserve effective date is August 31,
2021.
NOTES
Non-IFRS
measuresThe Company uses certain non-IFRS
measures, including C1 cash cost of copper produced (per lb) and
EBITDA, which are not measures recognized under IFRS. The Company
believes that these measures, together with measures determined in
accordance with IFRS, provide investors with an improved ability to
evaluate the underlying performance of the Company. Non-IFRS
measures do not have any standardized meaning prescribed under
IFRS, and therefore they may not be comparable to similar measures
employed by other companies. The data is intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS.
C1 cash
cost of copper
produced (per
lb.)C1 cash cost of copper produced (per lb) is
the sum of production costs, net of capital expenditure development
costs, divided by the copper pounds produced. C1 cash cost reported
by the Company include treatment, refining charges, and offsite
costs. C1 cash cost of copper produced per pound is a non-IFRS
measure used by the Company to manage and evaluate operating
performance of the Company’s operating mining unit and is widely
reported in the mining industry as benchmarks for performance but
does not have a standardized meaning and is disclosed in addition
to IFRS measures.
Earnings
before interest,
taxes, depreciation
and amortization
(EBITDA)EBITDA represents earnings before interest
expense, income taxes, depreciation, and amortization. The Company
believes EBITDA is an appropriate supplemental measure of debt
service capacity and performance of its operations.
DATA VERIFICATION & QUALITY ASSURANCE /
QUALITY CONTROL
The qualified persons responsible for the
preparation of the 2021 Feasibility Study have verified the data
disclosed, including sampling, analytical, and test data underlying
the information contained in this news release. Geological, mine
engineering and metallurgical reviews included, among other things,
reviewing mapping, core logs, and re-logging existing drill holes,
review of geotechnical and hydrological studies, environmental and
community factors, the development of the life of mine plan,
capital and operating costs, transportation, taxation and
royalties, and review of existing metallurgical test work. In the
opinion of the qualified persons responsible for the preparation of
the 2021 Feasibility Study, the data, assumptions, and parameters
used to estimate mineral resources and mineral reserves, the
metallurgical model, and the economic analysis as presented herein
are sufficiently reliable for these purposes.
The Company is currently drilling at the Project
from surface with core drill rigs operated by a third- party
contractor. Third-party drill rigs are operated by DrillGeo
Geologia e Sondagem Ltda., who is independent of the Company. Drill
core is logged, photographed, and split in half using a diamond saw
and then quartered. One half is sent for analysis and the remaining
half is sent for storage at the secure core logging and storage
facilities for the Project located in the city of Tucumã, Para
State, Brazil. Samples are collected on one-and-a-half-meter sample
intervals unless an interval crosses a geological contact. At the
completion of sample batching, individual sample bags are placed
into plastic bags which are numbered and labelled with the
respective sample interval and batch identification. Sample batches
are transported to a third-party laboratory for preparation and
analyses, along with a sample submission form.
Total copper and gold analysis is performed at
ALS Brasil Ltda’s ("ALS") facilities in Parauapebas, Brazil
(physical) and Lima, Peru (analytical). Total copper is determined
using a hydrofluoric, nitric, perchloric acid digestion and HCl
leach and analyzed using Inductively Coupled Plasma - Mass
Spectrometry (“ICP-MS”) and Atomic Absorption Spectrometry (“AAS”).
Gold values are determined using lead collection fire assay and
Inductively Coupled Plasma – Optical Emission Spectrometry
("ICP-OES"). ALS is a subsidiary of ALS Limited and is independent
of the Company. All sample results during the period have been
monitored through a quality assurance, quality control program that
includes the insertion of certified standards, blanks, and field
duplicate samples.
Qualified
Persons and the
NI 43-101
Technical ReportMr. Emerson
Ricardo Re, RM CMC (0138) and MAusIMM (CP) (305892), an employee of
Ero Copper Corp. and a qualified person as such term is defined
under NI 43-101, has reviewed and approved the scientific and
technical information contained in this press release related to
Gap Zone exploration drill results.
Mr. Kevin Murray, P.Eng registered with
Engineers and Geoscientists British Columbia, License #32350, and
an employee of Ausenco, an independent qualified person as such
term is defined under NI 43-101 has reviewed and approved all other
technical and scientific information in this press release. Ausenco
is independent of the Company.
The Company will file the associated NI 43-101
compliant report on SEDAR (www.sedar.com) and on the Company’s
website (www.erocopper.com) within 45 days of this press release,
which will serve as an update to the technical report entitled
“Feasibility Study Technical Report for the Boa Esperança Copper
Project, Pará State, Brazil”, dated September 7, 2017 with an
effective date of June 1, 2017, prepared by Rubens Mendonça,
MAusIMM of SRK Consultores do Brasil Ltda. (“SRK”) as at the date
of the report and Carlos Barbosa, MAIG and Girogio di Tomi,
MAusIMM, both of SRK Brazil, and each a “qualified person” and
“independent” of the Company within the meanings of NI 43-101 (the
“2017 Study”).
ABOUT ERO COPPER CORP
Ero Copper Corp., headquartered in Vancouver,
B.C., is focused on copper production growth from the Mineração
Caraíba S.A. ("MCSA") Mining Complex located in Bahia State,
Brazil, with over 40 years of operating history in the region. The
Company's primary asset is a 99.6% interest in the Brazilian copper
mining company, MCSA, 100% owner of the MCSA Mining Complex, which
is comprised of operations located in the Curaçá Valley, Bahia
State, Brazil, wherein the Company currently mines copper ore from
the Pilar and Vermelhos underground mines, and the Boa Esperança
Project, an IOCG- type copper development project located in Pará,
Brazil. The Company also owns 97.6% of the NX Gold Mine, an
operating gold and silver mine located in Mato Grosso, Brazil.
Additional information on the Company and its operations, including
technical reports on the MCSA Mining Complex, Boa Esperança and NX
Gold properties, can be found on the Company's website
(www.erocopper.com), on SEDAR (www.sedar.com), and on EDGAR
(www.sec.gov).
ERO COPPER
CORP.
/s/ David Strang |
For further information contact: |
David Strang, CEO |
Courtney
Lynn, VP, Corporate Development & Investor Relations |
|
(604)
335-7504 |
|
info@erocopper.com |
|
|
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. Such forward-looking statements include, without
limitation, statements with respect to mineral reserve and mineral
resource estimates as well as life-of-mine plans; targeting
additional mineralization within the Boa Esperança property,
including within the Gap Zone; the Company’s planned exploration,
development and production activities with respect to the Boa
Esperança Project; the significance of any drill results including,
but not limited to, extensions of defined mineralized zones,
possibilities for mine life extensions or continuity of high-grade
mineralization, the ability to convert material currently
classified as waste within the Boa Esperança mine plan to
mineralized material, the potential to increase or augment
production over Boa Esperança's mine life, the recoverable value of
any metals other than copper; the estimated timing of certain
milestones including the commencement of early works and
construction of Boa Esperança Project; the planned timing for
receipt of the Project's Operating License (LO), the significance
of any potential optimization initiatives in connection with the
Boa Esperança Project; the Company's future production outlook,
cash costs, capital resources and expenditures; the Company's
ability to internally fund future growth initiatives; and the
Company's ability to further improve Boa Esperança Project's
economics including internal rate of return and net present
value.
Forward-looking statements are not a guarantee
of future performance and are based upon a number of estimates and
assumptions of management in light of management’s experience and
perception of trends, current conditions and expected developments,
as well as other factors that management believes to be relevant
and reasonable in the circumstances, as of the date of this press
release including, without limitation, assumptions about: 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 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 MCSA Mining Complex, NX Gold Property and the Boa
Esperança Property being as described in the technical reports for
these properties; production costs; the accuracy of budgeted
exploration and development costs and expenditures; the price of
other commodities such as fuel; future currency exchange rates and
interest rates; operating conditions being favourable such that the
Company is able to operate in a safe, efficient and effective
manner; work force conditions 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 and critical supplies, spare parts and consumables;
positive relations with local groups and the Company’s ability to
meet its obligations under its agreements with such groups; and
satisfying the terms and conditions of the Company’s current loan
arrangements. While the Company considers these assumptions to be
reasonable, the assumptions are inherently subject to significant
business, social, economic, political, regulatory, competitive,
global health, 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. Many
assumptions are based on factors and events that are not within the
control of the Company and there is no assurance they will prove to
be correct.
Furthermore, such forward-looking statements
involve a variety of known and unknown risks, uncertainties and
other factors which may cause the actual plans, intentions,
activities, results, performance or achievements of the Company to
be materially different from any future plans, intentions,
activities, results, performance or achievements expressed or
implied by such forward-looking statements. Such risks include,
without limitation the risk factors listed under the heading “Risk
Factors” in the Annual Information Form dated March 12, 2021.
Although the Company has attempted to identify
important factors that could cause actual actions, events,
conditions, results, performance or achievements to differ
materially from those described in forward-looking statements,
there may be other factors that cause actions, events, conditions,
results, performance or achievements to differ from those
anticipated, estimated or intended.
The Company cautions that the foregoing lists of
important assumptions and factors are not exhaustive. Other events
or circumstances could cause actual results to differ materially
from those estimated or projected and expressed in, or implied by,
the forward-looking statements contained herein. 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
In accordance with applicable Canadian
securities regulatory requirements, all mineral reserve and mineral
resource estimates of the Company disclosed in this press release
have been prepared in accordance with NI 43-101 and are classified
in accordance with 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. NI 43-101
differs significantly from the disclosure requirements of the
Securities and Exchange Commission (the “SEC”) generally applicable
to U.S. companies. For example, the terms “mineral reserve”,
“proven mineral reserve”, “probable mineral reserve”, “mineral
resource”, “measured mineral resource”, “indicated mineral
resource” and “inferred mineral resource” are defined in NI 43-101.
These definitions differ from the definitions in the disclosure
requirements promulgated by the SEC. Accordingly, information
contained in this press release may not be comparable to similar
information made public by U.S. companies reporting pursuant to SEC
disclosure requirements.
Mineral resources which are not mineral reserves
do not have demonstrated economic viability. Pursuant to the CIM
Standards, mineral resources have a higher degree of uncertainty
than mineral reserves as to their existence as well as their
economic and legal feasibility. Inferred mineral resources, when
compared with measured or indicated mineral resources, have the
least certainty as to their existence, and it cannot be assumed
that all or any part of an inferred mineral resource will be
upgraded to an indicated or measured mineral resource as a result
of continued exploration. Pursuant to NI 43-101, inferred mineral
resources may not form the basis of any economic analysis.
Accordingly, readers are cautioned not to assume that all or any
part of a mineral resource exists, will ever be converted into a
mineral reserve, or is or will ever be economically or legally
mineable or recovered.
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