Ero Copper Corp. (TSX: ERO, NYSE: ERO) (“Ero” or
the “Company”) is pleased to announce its 2021 production results,
2022 guidance and a five-year operating outlook through 2026.
HIGHLIGHTS
Record Copper Production Result for
2021
- At the MCSA Mining Complex, total production for 2021 was
45,511 tonnes of copper in concentrate, surpassing the high-end of
full-year guidance of 42,000 to 45,000 tonnes; and,
- At the NX Gold Mine, total production for 2021 was 37,798
ounces of gold, surpassing high-end of full-year guidance of 34,500
to 37,500 ounces of gold.
Updated mineral reserve estimate for
Deepening Extension Zone enables the creation of a two-mine system
at the Pilar Mine with redesigned larger external
shaft
- The creation of a two-mine system at the Pilar Mine, known as
"Pilar 3.0", whereby the upper levels of the mine will be serviced
by the existing shaft, while the Deepening Extension Zone will
utilize the new, larger external shaft, expected to result in
significant growth in total production from the mine;
- Annual ore production from the Pilar Mine is now forecast to
achieve approximately 3.0 million tonnes by 2026 versus the current
production rate of approximately 1.3 million tonnes. From 2027
onwards, annual ore production is expected to range from 2.6
million to 3.0 million tonnes; and,
- Pilar 3.0 results in the deferral of capital related to the
construction of higher operating cost ore- sorting projects at
N8/N9 and Siriema.
2022 Production, Cost and Capital
Expenditure Guidance
- 2022 MCSA Mining Complex production guidance of 43,000 to
46,000 tonnes of copper in concentrate at a C1 cash cost guidance
range of $1.05 to $1.15 per pound of copper produced;
- 2022 NX Gold Mine production guidance of 39,000 to 42,000
ounces of gold at C1 cash cost and all-in sustaining ("AISC")
guidance ranges of $500 to $600 and $925 to $1,025 per ounce of
gold produced, respectively; and,
- Capital expenditures expected to total $330 to $375 million in
2022, including $39 to $46 million in consolidated exploration
spend and $70 to $80 million towards the construction of the Boa
Esperança Project expected to commence in Q2 2022, subject to
approval by the Board of Directors of the Company. Also reflected
in the 2022 capital expenditure guidance:
- Ongoing construction of the larger external shaft and
completion of the Phase 2 cooling project as part of Pilar Mine
3.0; and,
- Commencement of the Caraíba Mill expansion to 4.2 million
tonnes per annum in preparation for expanded operations at the MCSA
Mining Complex.
5-Year Operating Outlook
- Copper production is forecast to more than double1 compared to
the Company's 2021 results to a range of 92,000 to 102,000 tonnes
of copper in concentrate in 2025, assuming contributions from
the Boa Esperança Mine2;
- Copper C1 cash costs are expected to average approximately
$1.051 per pound of copper produced on forecasted production
totaling approximately 350,0001 tonnes from 2022 to 2026;
- Annual gold production is forecast to increase to a range of
55,000 to 60,000 ounces by 2024, an increase of over 50%1 compared
to 2021 results;
- Gold C1 cash costs and AISC are expected to average
approximately $5151 and $6751, respectively, per ounce of gold
produced with production totaling approximately 265,0001 ounces
from 2022 through 2026; and,
- Key capital projects aimed at doubling copper production,
positioning the MCSA Mining Complex for expanded operations, and
achieving higher sustained gold production at the NX Gold Mine
include:
- Approximately $300 million for the construction of the Boa
Esperança Project2;
- Approximately $250 million for the construction of Pilar 3.0
including the larger external shaft, associated infrastructure,
ventilation, cooling and equipment plus an estimated $35 million
for ancillary capital costs including contingency and third-party
construction management costs;
- Approximately $30 million to support expanded operations at the
MCSA Mining Complex, including the expansion of mill capacity for
the Caraíba Mill to 4.2 million tonnes per annum and long-term
tailings storage capacity improvements to support the increased
throughput and longer mine life; and,
- Approximately $10 million to support higher sustained gold
production of approximately 60,000 ounces at the NX Gold Mine as
part of the Company's "NX 60" initiative.
1. Based on midpoint of guidance range(s).2.
Outlook assumes contributions from the Boa Esperança Mine.
Construction of the Boa Esperança Project is expected to commence
in Q2 2022 but remains subject to the approval of the Board of
Directors of the Company.
Commenting on the results, David Strang, CEO,
stated, “2021 was a pivotal year for Ero Copper. Our team delivered
another year of record production results and laid the foundation
for significant organic growth of copper and gold production in the
years ahead. In addition to announcing the results of our optimized
Feasibility Study on the Boa Esperança Project and demonstrating
meaningful growth in our reserves and resources across our
operating portfolio, we completed a redesign of the Pilar Mine,
known as Pilar 3.0. Both projects fit with our focus on maximizing
returns on invested capital ("ROIC"). In the case of Pilar 3.0, we
have replaced a lower ROIC initiative, the ore sorting project,
with a higher one. Likewise, at our NX Gold operations, we have
initiated a project, known as NX 60, that is focused on sustaining
longer term gold production of approximately 60,000 ounces per year
by incorporating the new Matinha Vein into our mine plan from 2024
onwards.
"We are now well-placed to achieve the next
stage of our growth — becoming a 100,000 tonne a year copper and
60,000 ounce a year gold producer by 2025 — while maintaining first
quartile operating costs and industry-leading ROIC."
2021 PRODUCTION RESULTS
- At the MCSA Mining Complex, approximately 2.4 million tonnes of
ore grading 2.08% copper was processed during the year, resulting
in 45,511 tonnes of copper in concentrate produced after average
metallurgical recoveries of 92.4%;
- Fourth quarter mill throughput of 646,319 tonnes of ore grading
1.99% copper resulted in 11,918 tonnes of copper in concentrate
produced after average metallurgical recoveries of 92.7% during the
period;
- At the NX Gold Mine, 171,581 tonnes of ore grading 7.27 grams
per tonne ("gpt") gold was processed during the year, producing
37,798 ounces of gold and 25,031 ounces of silver as by- product
after average metallurgical recoveries of 94.2%;
- Fourth quarter mill throughput of 47,159 tonnes of ore grading
6.24 gpt gold resulted in 8,544 ounces of gold produced and 5,859
ounces of silver produced as by-product after average metallurgical
recoveries of 90.3% during the period;
2022 PRODUCTION GUIDANCE
Copper production guidance from the MCSA Mining
Complex in 2022 of 43,000 to 46,000 tonnes of copper in concentrate
is expected to come from the Pilar and Vermelhos underground mines
as well the Surubim open pit mine. Total ore processed of
approximately 3.0 million tonnes at a blended grade of 1.60% copper
is expected to be comprised of 1.8 million tonnes at 1.50% copper
from the Pilar Mine, 900,000 tonnes at 2.05% copper from the
Vermelhos Mine, and 300,000 tonnes at 0.75% copper from the Surubim
Mine.
Gold production guidance from the NX Gold Mine
for 2022 of 39,000 to 42,000 ounces is expected to come from the
Santo Antônio Vein based on total ore processed of approximately
168,000 tonnes at a gold grade of 8.00 grams per tonne.
|
|
2021 Guidance |
|
2021 Actual Production |
|
2022 Guidance |
MCSA Mining
Complex |
|
|
|
|
Tonnes Processed |
|
2,700,000 |
|
|
2,370,571 |
|
|
3,000,000 |
|
Copper Grade (%) |
|
1.75 |
% |
|
2.08 |
% |
|
1.60 |
% |
Copper Recovery (%) |
|
93.0 |
% |
|
92.4 |
% |
|
92.5 |
% |
Copper Production (kt) |
|
42,000 - 45,000 |
|
|
45,511 |
|
|
43,000 - 46,000 |
|
|
|
|
|
|
NX Gold
Mine |
|
|
|
|
Tonnes Processed |
|
167,000 |
|
|
171,581 |
|
|
168,000 |
|
Gold Grade (gpt) |
|
7.20 |
|
|
7.27 |
|
|
8.00 |
|
Gold Recovery (%) |
|
92.0 |
% |
|
94.2 |
% |
|
93.0 |
% |
Au Production (koz) |
|
34,500 - 37,500 |
|
|
37,798 |
|
|
39,000 - 42,000 |
|
Ag Production (koz) |
|
n/a |
|
|
25,031 |
|
|
n/a |
|
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 SEDAR and EDGAR filings, including the Company's Annual
Information Form for the year ended December 31, 2020 and dated
March 16, 2021 (the "AIF") for complete risk factors.
2022 COST GUIDANCE
C1 Cash Cost guidance at the MCSA Mining Complex
in 2022 of $1.05 to $1.15 per pound of copper produced reflects
increased mill feed from the Surubim open pit mine compared to its
partial year of production in 2021. AISC per ounce of gold produced
at the NX Gold Mine in 2022 reflect higher sustaining capital
expenditures related to projects rescheduled from 2021 to 2022. The
Company's 2022 cost guidance assumes a USD:BRL foreign exchange
rate of 5.30, a gold price of $1,725 per ounce, and a silver price
of $20.00 per ounce.
|
2021 Guidance |
|
|
Original |
|
Revised |
|
2022 Guidance |
Copper C1 Cash Cost ($/lb) |
$0.75 - $0.85 |
|
no change |
|
$1.05 - $1.15 |
Gold C1 Cash Cost ($/oz) |
$500 - $600 |
|
no change |
|
$500 - $600 |
Gold All-in Sustaining Cost
($/oz) |
$875 - $975 |
|
$650 - $725 |
|
$925 - $1,025 |
Note: C1 Cash Costs and AISC are non-IFRS
measures. Please see the Notes section of this press release for
additional information. 2021 guidance assumed a USD:BRL exchange
rate of 5.00, with no change to gold and silver price
assumptions.
2022 CAPITAL EXPENDITURE
GUIDANCE
Forecasted capital expenditures for 2022 reflect
growth investments related to expanding production at the MCSA
Mining Complex (Pilar 3.0), development of the Matinha Vein (part
of project NX 60), and the planned construction of the Boa
Esperança Project1. Higher expected sustaining capital expenditures
at the NX Gold Mine are related to the timing of certain sustaining
capital projects that were deferred from 2021 into 2022. The
Company's capital expenditure guidance for 2022 assumes a USD:BRL
foreign exchange rate of 5.30 versus a 5.00 USD:BRL foreign
exchange rate assumed in 2021. Capital expenditure guidance has
been presented below in USD millions.
|
2021 Guidance |
|
|
|
|
Original |
|
Revised |
|
2022 Guidance |
MCSA Mining
Complex |
|
Growth |
|
$12.5 - $15.0 |
|
$26.0 - $28.5 |
|
$125 - $140 |
Sustaining |
|
$69.0 - $78.0 |
|
$69.0 - $78.0 |
|
$80 - $90 |
Exploration |
|
$30.0 - $35.0 |
|
no change |
|
$25 - $30 |
Total |
|
$111.5 - $128.0 |
|
$125.0 - $141.5 |
|
$230 - $260 |
|
|
|
|
|
|
|
Boa
Esperança1 |
|
|
|
|
|
|
Growth |
|
$1.0 - $1.5 |
|
$7.0 - $9.0 |
|
$70 - $80 |
Sustaining |
|
— |
|
— |
|
— |
Exploration |
|
— |
|
— |
|
$5 - $6 |
Total |
|
$1.0 - $1.5 |
|
$7.0 - $9.0 |
|
$75 - $86 |
|
|
|
|
|
|
|
NX Gold
Mine |
|
|
|
|
|
|
Growth |
|
— |
|
$8.5 - $9.5 |
|
$0 - $1 |
Sustaining |
|
$13.0 - $15.0 |
|
$4.5 - $5.5 |
|
$16 - $18 |
Exploration |
|
$8.0 - $10.0 |
|
no change |
|
$9 - $10 |
Total |
|
$21.0 - $25.0 |
|
no change |
|
$25 - $29 |
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
Growth |
|
$13.5 - $16.5 |
|
$41.5 - $47.0 |
|
$195 - $221 |
Sustaining |
|
$82.0 - $93.0 |
|
$73.5 - $83.5 |
|
$96 - $108 |
Exploration |
|
$38.0 - $45.0 |
|
no change |
|
$39 - $46 |
Total |
|
$133.5 - $154.5 |
|
$153.0 - $175.5 |
|
$330 - $375 |
1. |
Capital expenditures for the construction of the Boa Esperança
Project expected to commence in Q2 2022, subject to receipt of
approval by the Board of Directors of the Company. For more
information on the Boa Esperança Project, including capital
expenditure assumptions, please refer to the NI 43-101 compliant
technical report 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. Eng., and Scott C. Elfen,
P.E., all of Ausenco Engineering Canada Inc., Carlos Guzmán,
FAusIMM RM CMC of NCL Ingeniería y Construcción SpA, who are
independent qualified persons under NI 43-101, and Emerson Ricardo
Re, MSc, MBA, MAusIMM (CP) (No. 305892), Registered Member (No.
0138) (Chilean Mining Commission) and Resource Manager of the
Company (the “2021 Boa Esperança Technical Report”). |
5-YEAR OPERATING OUTLOOK
The Company's five-year operating outlook
reflects execution of the following strategic growth projects:
- Construction of and production ramp-up at the Boa Esperança
mine with construction to commence in Q2 2022, subject to receipt
of approval by the Board of Directors of the Company;
- Pilar 3.0 beginning with construction of the new external shaft
and associated development at the Deepening Extension Zone followed
by ramp-up of production volumes to 3.0 million tonnes in 2026,
with longer-term (2027 onwards) volumes forecast to be between 2.6
and 3.0 million tonnes;
- Investments to support expanded operations at the MCSA Mining
Complex, including increasing both processing capacity of the
Caraíba Mill to 4.2 million tonnes per annum and long-term tailings
storage capacity to support the extended mine life; and,
- The development of the Matinha Vein at the NX Gold Mine in
support of project NX 60, with production from this new vein
expected to commence in 2024.
The Company's 2022 cost and capital expenditure
guidance assumes a USD:BRL foreign exchange rate of 5.30, while all
subsequent years assume a USD:BRL foreign exchange rate of 5.00.
Cost guidance assumes a gold price of $1,725 per ounce and a silver
price of $20.00 per ounce for the five-year projection period.
Capital expenditure guidance has been presented in the following
table in USD millions.
|
|
2022 |
|
2023 |
|
2024 |
|
2025 |
|
2026 |
Production
Guidance |
|
|
|
|
|
|
|
|
|
|
Copper (tonnes) |
|
|
|
|
|
|
|
|
|
|
MCSA Mining Complex |
|
43,000 - 46,000 |
|
43,000 - 47,000 |
|
45,000 - 50,000 |
|
45,000 - 50,000 |
|
47,000 - 52,000 |
Boa Esperança1 |
|
— |
|
— |
|
25,000 - 30,000 |
|
47,000 - 52,000 |
|
38,000 - 43,000 |
Total Copper |
|
43,000 - 46,000 |
|
43,000 - 47,000 |
|
70,000 - 80,000 |
|
92,000 - 102,000 |
|
85,000 - 95,000 |
|
|
|
|
|
|
|
|
|
|
|
Gold (ounces) |
|
|
|
|
|
|
|
|
|
|
NX Gold Mine |
|
39,000 - 42,000 |
|
50,000 - 55,000 |
|
55,000 - 60,000 |
|
55,000 - 60,000 |
|
55,000 - 60,000 |
Cost
Guidance |
|
|
|
|
|
|
|
|
|
|
Copper C1 Cash Cost ($/lb) |
|
|
|
|
|
|
|
|
|
|
MCSA Mining Complex |
|
$1.05 - $1.15 |
|
$1.05 - $1.15 |
|
$1.15 - $1.25 |
|
$1.10 - $1.20 |
|
$1.00 - $1.10 |
Boa Esperança1 |
|
— |
|
— |
|
$0.90 - $1.00 |
|
$0.80 - $0.90 |
|
$1.00 - $1.10 |
Blended C1 Cash Cost ($/lb) |
|
— |
|
— |
|
$1.05 - $1.15 |
|
$0.95 - $1.05 |
|
$1.00 - $1.10 |
|
|
|
|
|
|
|
|
|
|
|
Gold C1 Cash Cost ($/oz) |
|
$500 - $600 |
|
$475 - $575 |
|
$450 - $550 |
|
$450 - $550 |
|
$450 - $550 |
Gold All-in Sustaining Cost ($/oz) |
|
$925 - $1,025 |
|
$650 - $750 |
|
$550 - $650 |
|
$550 - $650 |
|
$550 - $650 |
Capital
Expenditure Guidance ($ in millions) |
|
|
|
|
|
|
MCSA Mining
Complex |
Growth |
|
$125 - $140 |
|
$60 - $70 |
|
$60 - $70 |
|
$50 - $60 |
|
$30 - $40 |
Sustaining |
|
$80 - $90 |
|
$80 - $90 |
|
$65 - $75 |
|
$50 - $60 |
|
$50 - $60 |
Exploration |
|
$25 - $30 |
future exploration expenditures dependent on exploration
success |
Total |
|
$230 - $260 |
|
$140 - $160 |
|
$125 - $145 |
|
$100 - $120 |
|
$80 - $100 |
|
|
|
|
|
|
|
|
|
|
|
Boa Esperança1 |
|
|
|
|
|
|
|
|
|
|
Growth |
|
$70 - $80 |
|
$160 - $180 |
|
$45 - $55 |
|
$0 - $0 |
|
$0 - $0 |
Sustaining |
|
$0 - $0 |
|
$0 - $0 |
|
$5 - $10 |
|
$15 - $25 |
|
$20 - $30 |
Exploration |
|
$5 - $6 |
future exploration expenditures dependent on exploration
success |
Total |
|
$75 - $86 |
|
$160 - $180 |
|
$50 - $65 |
|
$15 - $25 |
|
$20 - $30 |
|
|
|
|
|
|
|
|
|
|
|
NX Gold Mine |
|
|
|
|
|
|
|
|
|
|
Growth |
|
$0 - $1 |
|
$5 - $6 |
|
$5 - $6 |
|
$0 - $1 |
|
$0 - $1 |
Sustaining |
|
$16 - $18 |
|
$8 - $10 |
|
$4 - $6 |
|
$4 - $6 |
|
$4 - $6 |
Exploration |
|
$9 - $10 |
future exploration expenditures dependent on exploration
success |
Total |
|
$25 - $29 |
|
$13 - $16 |
|
$9 - $12 |
|
$4 - $7 |
|
$4 - $7 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
Growth |
|
$195 - $221 |
|
$225 - $256 |
|
$110 - $131 |
|
$50 - $61 |
|
$30 - $41 |
Sustaining |
|
$96 - $108 |
|
$88 - $100 |
|
$74 - $91 |
|
$69 - $91 |
|
$74 - $96 |
Exploration |
|
$39 - $46 |
future exploration expenditures dependent on exploration
success |
Total |
|
$330 - $375 |
|
$313 - $356 |
|
$184 - $222 |
|
$119 - $152 |
|
$104 - $137 |
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 SEDAR and EDGAR filings,
including the AIF, for complete risk factors. C1 Cash Costs and
AISC are non-IFRS measures. Please see the Notes section of this
press release for additional information. For more information on
the Boa Esperança Project, including production, cost and capital
expenditure assumptions, please refer to the 2021 Boa Esperança
Technical Report.
1. Outlook assumes contributions from the Boa Esperança Mine.
Construction of the Boa Esperança Project is expected to commence
in Q2 2022 but remains subject to the approval of the Board of
Directors of the Company.
5-YEAR PRODUCTION PLAN
The Company's five-year operating outlook
reflects the five-year production plan estimates provided below.
Tonnes and grades are based on current mine plan assumptions and
represent the midpoint of performance expectations with a range of
+/- 10%.
|
2022 |
2023 |
2024 |
2025 |
2026 |
Production Plan |
|
|
|
|
|
MCSA Mining Complex |
|
Pilar Mine |
|
Tonnes (kt) |
1,800 |
2,200 |
2,700 |
2,600 |
3,000 |
Grade (% Cu) |
1.50% |
1.30% |
1.25% |
1.25% |
1.30% |
Vermelhos Mine |
|
|
|
|
|
Tonnes (kt) |
900 |
850 |
850 |
950 |
800 |
Grade (% Cu) |
2.05% |
1.75% |
1.25% |
1.15% |
1.30% |
Surubim |
|
|
|
|
|
Tonnes (kt) |
300 |
550 |
550 |
600 |
500 |
Grade (% Cu) |
0.75% |
0.65% |
0.75% |
0.75% |
1.10% |
|
|
|
|
|
|
Processing Operations |
|
|
|
|
|
Tonnes (kt) |
3,000 |
3,700 |
4,200 |
4,200 |
4,200 |
Grade (% Cu) |
1.60% |
1.35% |
1.20% |
1.20% |
1.25% |
Recovery Rate |
92.5% |
92.5% |
92.5% |
92.5% |
92.5% |
|
|
|
|
|
|
Recovered Copper (tonnes) |
43,000 - 46,000 |
43,000 - 47,000 |
45,000 - 50,000 |
45,000 - 50,000 |
47,000 - 52,000 |
Boa Esperança1 |
|
|
|
|
|
Mining Operations |
|
|
|
|
|
Tonnes (kt) |
— |
— |
2,300 |
4,200 |
4,100 |
Grade (% Cu) |
— |
— |
1.30% |
1.25% |
1.05% |
|
|
|
|
|
Processing Operations |
|
|
|
|
Tonnes (kt) |
— |
— |
2,200 |
4,000 |
4,000 |
Grade (% Cu) |
— |
— |
1.35% |
1.35% |
1.10% |
Recovery Rate (%) |
— |
— |
93.0% |
93.0% |
92.0% |
|
|
|
|
|
|
Recovered Copper (tonnes) |
— |
— |
25,000 - 30,000 |
47,000 - 52,000 |
38,000 - 43,000 |
|
|
|
|
|
|
Total Recovered Copper (tonnes) |
43,000 - 46,000 |
43,000 - 47,000 |
70,000 - 80,000 |
92,000 - 102,000 |
85,000 - 95,000 |
|
|
|
|
|
|
NX Gold
Mine |
|
|
|
|
|
Tonnes (kt) |
167 |
190 |
220 |
230 |
230 |
Grade (gpt Au) |
8.00 |
9.50 |
8.75 |
8.25 |
8.25 |
Recover Rate |
93.0% |
93.0% |
93.0% |
93.0% |
93.0% |
|
|
|
|
|
|
Recovered Gold (ounces) |
39,000 - 42,000 |
50,000 - 55,000 |
55,000 - 60,000 |
55,000 - 60,000 |
55,000 - 60,000 |
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 SEDAR and EDGAR filings, including the AIF, for complete
risk factors. For more information on the Boa Esperança Project,
including production assumptions, please refer to the 2021 Boa
Esperança Technical Report.
1. Outlook assumes contributions from the Boa Esperança Mine.
Construction of the Boa Esperança Project is expected to commence
in Q2 2022 but remains subject to the approval of the Board of
Directors of the Company.
NOTES
Non-IFRS measures
Financial results of
the Company are prepared in accordance with IFRS. The Company
utilizes certain non-IFRS measures, including C1 cash cost of
copper produced (per lb), C1 cash 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 debt, working capital and available
liquidity, which are not measures recognized under IFRS. The
Company believes that these measures, together with measures
determined in accordance with IFRS, provide investors with an
improved ability to evaluate the underlying performance of the
Company. Non-IFRS measures do not have any standardized meaning
prescribed under IFRS, and therefore they may not be comparable to
similar measures employed by other companies. The data is intended
to provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
C1 cash cost of copper produced (per
lb.)
C1 cash cost of
copper produced (per lb) is the sum of production costs, net of
capital expenditure development costs and by-product credits,
divided by the copper pounds produced. C1 cash cost reported by the
Company include treatment, refining charges, offsite costs, and
certain tax credits relating to sales invoiced to the Company’s
Brazilian customer on sales. By- product credits are calculated
based on actual precious metal sales (net of treatment costs)
during the period divided by the total pounds of copper produced
during the period. C1 cash cost of copper produced per pound is a
non-IFRS measure used by the Company to manage and evaluate
operating performance of the Company’s operating mining unit and is
widely reported in the mining industry as benchmarks for
performance but does not have a standardized meaning and is
disclosed in addition to IFRS measures.
C1 cash cost of gold produced (per
ounce)
C1 cash cost of gold
produced (per ounce) is the sum of production costs, net of capital
expenditure development costs and silver by-product credits,
divided by the gold ounces produced. By-product credits are
calculated based on actual precious metal sales during the period
divided by the total ounces of gold produced during the period. C1
cash cost of gold produced per ounce 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.
All-in Sustaining Cost of gold produced
(per ounce)
All-in sustaining
cost of gold produced (per ounce) is the sum of production costs,
site general and administrative costs, accretion of mine closure
and rehabilitation provision, sustaining capital expenditures,
sustaining leases, and royalties and production taxes, net of
silver by- product credits, divided by the gold ounces produced.
By-product credits are calculated based on actual precious metal
sales during the period divided by the total ounces of gold
produced during the period. All-in sustaining cost of gold produced
per ounce 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.
QUALIFIED PERSONS
The technical and scientific information in this
news release has been prepared in accordance with NI 43-101 and has
been reviewed, verified and approved by Mr. Emerson Ricardo Re,
MSc, MBA, MAusIMM (CP) (No. 305892), Registered Member (No. 0138)
(Chilean Mining Commission) and Resource Manager of the Company,
who is a Qualified Person as such term is defined under NI
43-101.
ABOUT ERO COPPER CORP
Ero Copper Corp, headquartered in Vancouver,
B.C., is focused on copper production growth from the 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 development project, an
IOCG-type copper 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 the Company's guidance
and/or outlook on future production, costs and capital
expenditures; development plans, costs, timelines and/or approvals
for, as well as benefits, production and/or performance expected
by, growth projects including development of the Deepening
Extension Zone, construction of the new external shaft, and
creation of a two-mine system at the Pilar Mine, construction of
the Boa Esperança mine, development of the Matinha Vein at the NX
Gold Mine, expansion of the Caraíba Mill, and other infrastructure
projects at the MCSA Complex; the Company’s expectations,
strategies and plans for the MCSA Mining Complex, the NX Gold
Property and the Boa Esperança Property, including, but not limited
to, the Company’s planned exploration, development and production
activities; and the significance and timing of any particular
exploration program or result and the Company’s expectations for
current and future exploration plans including, but not limited to,
planned areas of additional exploration, further extensions and
expansion of mineralization at the MCSA Mining Complex, the NX Gold
Mine and the Boa Esperança Project.
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 AIF.
Although the Company has attempted to identify
important factors that could cause actual actions, events,
conditions, results, performance or achievements to differ
materially from those described in forward-looking 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 National Instrument 43-101
Standards of Disclosure for Mineral Projects ("NI 43-101")and are
classified 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”). 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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