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- Interested in Ero Copper Corp.? Here are five stocks we like better. - Record financial performance was driven by higher sales volumes, stronger metal prices and increased throughput, generating about $191 million in operating cash flow and more than $200 million in adjusted EBITDA in Q3. Ero remains on track for full-year copper guidance and expects record gold output from Xavantina. - Ero reduced net debt by $99 million to approximately $353 million, lowering leverage to about 0.5 times, while liquidity rose to $264 million. Management expects to repay its revolving credit facility in Q4 if favorable price conditions continue and is discussing a shareholder-return framework. - Copper operations maintained momentum, while historic concentrate sales helped lift Xavantina's total gold output and recovery to a record of about 25,000 ounces. The company also completed Furnas' Phase III drilling program and remains on track to publish a pre-feasibility study in 2027. - 3 Sectors Where Volatility Is Creating Entry Points, Not Exit Signals Ero Copper (NYSE:ERO) reported record third-quarter financial results as higher copper and gold sales volumes, stronger metal prices and increased throughput supported cash flow and debt reduction. The company said it remains on track to meet full-year copper production guidance and now expects record annual gold output from its Xavantina operation. President and Chief Executive Officer Makko DeFilippo said the company generated approximately $191 million in cash flow from operations and more than $200 million in adjusted EBITDA during the third quarter. Both figures rose nearly 40% from the prior quarter, according to the company. → 3 Waste Services Stocks With More Growth Than You Might Expect - 3 Metals and Mining Stocks Riding the Commodity Supercycle For the first nine months of 2026, Ero Copper generated more than $420 million in operating cash flow and $470 million in adjusted EBITDA, representing increases of about 60% and 110%, respectively, from the comparable period a year earlier, DeFilippo said. The company used its stronger cash generation to continue deleveraging. Chief Financial Officer Wayne Drier said Ero repaid $70 million on its revolving credit facility during the quarter, bringing total 2026 repayments to $105 million. → Marvell Eyes a Swing for the AI Networking Fences as Markets Weigh Lumentum Price Tag - 3 Vital Copper Stocks Helping EVs and AI Data Centers Take Off Net debt fell by $99 million in the third quarter to approximately $353 million. Combined with higher last-12-month adjusted EBITDA of $657 million, that reduced Ero Copper's net-debt-to-EBITDA leverage ratio to approximately 0.5 times, down from a peak of 2.6 times at the start of 2025. Liquidity increased by $82 million to $264 million at quarter-end, including $114 million in cash and cash equivalents and $150 million available under the company's revolving credit facility. → Exxon's Refining Profits Soared—Did Chevron Get the Same Windfall? During the question-and-answer session, Drier said the company expects to repay its revolver during the fourth quarter if current price conditions persist. He said management and the board are actively discussing a shareholder-return framework but did not provide a timetable for an announcement. Ero Copper produced 18,300 tonnes of copper in the third quarter at consolidated C1 cash costs of just over $2.50 per pound. Throughput rose 8% sequentially at the Caraíba operation and 14% at Tucumã. DeFilippo said both operations are positioned to achieve record annual throughput volumes in 2026. At Caraíba, copper production totaled 9,387 tonnes, up 12% from the second quarter, at C1 cash costs of $2.89 per pound. The company attributed the increase to higher throughput, grades and recoveries. Costs were affected by accelerated waste stripping at the Surubim open pit, elevated road-fleet maintenance costs and higher diesel prices. Management expects Caraíba's fourth-quarter production to improve with higher grades from deeper, high-grade benches at Surubim and contributions from the Pilar underground mine. DeFilippo said some high-grade material originally expected late in the third quarter was shifted into the fourth quarter and could extend into the first quarter of 2027. At Tucumã, production was 8,958 tonnes of copper at C1 cash costs of $2.12 per pound. While process grades declined as planned, higher throughput offset the impact. Recoveries were affected by operating adjustments following a mill liner replacement and maintenance shutdown, though management said this was temporary and recoveries improved during the quarter. The company expects higher throughput and metallurgical recoveries at Tucumã in the fourth quarter. Three new filters were delivered to the site late in the third quarter and are expected to be installed and commissioned before year-end. Management said Tucumã is expected to exit 2026 at a 4 million-tonne-per-year processing rate, which it also views as the expected rate for 2027. At Xavantina, mine gold production was 7,844 ounces at C1 cash costs of $1,892 per ounce. The company said access delays to key high-grade stopes limited the grades processed during the quarter, despite increases in mine and process grades. However, total gold produced and recovered at Xavantina increased 23% sequentially to a record approximately 25,000 ounces, aided by sales of historic concentrate stockpiles. Gold recovered from those stockpiles rose 47% from the prior quarter to 17,414 ounces at C1 cash costs of $621 per ounce. DeFilippo said investments in drying capacity, including a mobile filter press and industrial dryer commissioned at the end of June, supported the stockpile program. Ero Copper expects between 75,000 and 80,000 ounces of total gold production from Xavantina in 2026. Management said it has assays for the material expected to be sold over the next eight weeks. It expects historic concentrate sales to continue for at least the next several quarters, potentially into 2027, though it did not provide an outlook for grades beyond the fourth quarter because the remaining material cannot be sampled until it is processed and dried. Ero Copper said a stronger Brazilian real increased reported operating costs and capital expenditures during the quarter. The company revised its consolidated C1 cash-cost guidance to reflect an estimated $0.10-per-pound inflationary impact tied to diesel prices and the stronger currency. Its foreign-exchange hedging program generated $10 million in realized gains during the third quarter and $30 million through the first nine months of the year. Drier said those gains are not included in reported C1 costs but would equate to a $0.15-per-pound reduction in consolidated copper C1 costs and a $50-per-ounce reduction in Xavantina C1 costs for the full year if allocated on a pro-rata basis. The company said its fourth-quarter hedge structure provides protection at a Brazilian-real floor of 5.54, while allowing participation in currency weakness up to a cap of 6.42. Management also said it has begun establishing hedges for 2027. On the company's growth pipeline, Ero completed its 45,000-meter Phase III drilling program at the Furnas project in August, more than two years ahead of the schedule in its earn-in agreement with Vale Base Metals. The company expects to release full drilling results before year-end and remains on track to publish a pre-feasibility study in 2027. At Caraíba, Ero said its shaft-sinking project was approximately 1,250 meters complete at the end of the third quarter, with about 300 meters remaining. The company continues to expect completion in the first quarter. Of the project's $370 million expected cost, approximately $300 million had been spent by the end of the quarter. Ero Copper Corp. is a Canadian-based mining company focused on the exploration, development and production of copper and associated minerals. Its shares trade under the symbol ERO on the New York Stock Exchange and the Toronto Stock Exchange. The company's principal assets are in Brazil. Its Caraíba Operations in the state of Bahia include underground and open-pit copper mines, processing facilities and related infrastructure. Ero Copper also operates the Tucumã copper mine in the state of Pará, while advancing additional exploration and development opportunities in Brazil. Ero Copper was established in 2016 and has built its business around operating and expanding its Brazilian mining portfolio. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Ero Copper Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for November 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Record financial performance was driven by sequential quarterly increases in plant throughput at copper operations and metal price tailwinds, resulting in record cash flow from operations of approximately $191 million. - Management prioritized balance sheet strength, applying $0.97 of every available dollar toward debt reduction and reducing the net debt leverage ratio from a 2025 peak of 2.6x to 0.5x in Q3. - The '1 Arrow' cost-saving initiative and a proactive foreign exchange hedge strategy worked in tandem to maintain strong cash operating margins and offset sector-wide inflationary pressures, although the hedging gains are not included in reported C1 cash costs. - Operational flexibility at Xavantina was significantly enhanced by the gold concentrate program, which allowed the company to prioritize the sale of historic material at sub-$750 per ounce all-in sustaining costs. - Caraíba's cost performance was impacted by accelerated waste stripping at the Surubim open pit and elevated diesel prices, though these were partially mitigated by higher plant throughput. - Tucumã's production remained stable as a 14% increase in plant throughput offset a planned decrease in process grades; meanwhile, recoveries were temporarily impacted by operational adjustments following a mill liner replacement and maintenance shutdown. - Management expects Q4 to be the strongest operating quarter of the year, keeping the company on track to achieve its full-year copper production guidance. - Xavantina is projected to deliver record gold production of 75,000 to 80,000 ounces for the full year, supported by high-grade stopes transitioning into the Q4 mine plan. - The Furnas project remains on a path toward a pre-feasibility study in 2027, following the completion of the Phase III drill program more than two years ahead of schedule. - Tucumã is expected to exit 2026 at a 4 million tonne per annum throughput rate, with new filters scheduled for commissioning prior to year-end to support 2027 production levels. - The company expects to repay its revolving credit facility in full during Q4. Management has already held active discussions with the board regarding the structure of a shareholder return framework and will announce it when ready. - Completion of the 45,000-meter Phase III drill program at Furnas fulfilled the exploration component of the Vale Base Metals earning agreement significantly ahead of the original timeline. - Corporate G&A increased by approximately $4 million due to the implementation of a cloud-based SAP ERP system, which must be expensed rather than capitalized under current IFRS rules. - Realized foreign exchange hedge gains of $30 million year-to-date provided a cash margin buffer equivalent to a $0.15 per pound reduction in consolidated copper C1 cash costs. - The Caraíba shaft sinking project reached 1,250 meters complete, with approximately $70 million in capital expenditure remaining to reach completion in Q1 2027. - Management confirmed they are now below the target leverage ratio and expect the revolving credit facility to be fully repaid during Q4. - A shareholder return framework has been discussed with the board, but the company will wait until they are ready to formally present it to the market. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - The Q4 hedge book protects a floor of 5.54 with participation in BRL weakness up to a ceiling of 6.42. - Management has begun proactively building 2027 hedge positions to take advantage of recent currency weakening. - Lower Q3 grades were attributed to delayed access to high-grade stopes, which have now shifted into the Q4 production plan. - Record development levels achieved over the past few months serve as a leading indicator for improved mine performance in the coming quarter. - While drilling is two years ahead of schedule, the Final Investment Decision (FID) remains dependent on completing the PFS and feasibility studies. - Permitting workstreams are running in parallel with engineering, with key milestones being advanced this year following the Tucumã permitting model. - An updated technical report for Tucumã, including new resource and reserve estimates, is expected to be released before the end of 2026. - The report will provide details on how the reserves are constructed, but it will not include information regarding the phasing of the operation.

Ero Copper stock closed at CA$42.59 after the Q3 2026 earnings release, capping a week where the share price declined about 6.7% and the past month dropped about 21%. The headline story does not sit in the price screen. The miner reported Q3 revenue of US$348.0 million and basic earnings per share of US$1.11, with trailing net profit margins reported at 32.2%. Short term traders are reacting to the slide. Long term investors are looking at a copper producer on an 8.1x P/E with a strong profitability trend. Love Ero Copper's 32.2% net profit margin but uneasy about the share price sliding 21% over the month? Compare it with a broader list of profitable peers in our list of solid balance sheet and fundamentals stocks (6 results). - Revenue (Q3 2026 vs. Q3 2025): US$348.0 million vs. US$177.1 million (very large increase, close to 2x) - Net Income (Q3 2026 vs. Q3 2025): US$116.2 million vs. US$36.0 million (very large increase, more than 3x) - Basic EPS (Q3 2026 vs. Q3 2025): US$1.11 vs. US$0.35 (very large increase, more than 3x) - Trailing 12 Month Net Profit Margin (Q3 2026 vs. prior year): 32.2% vs. 23.4% (margin level higher year over year) Big earnings jump, modest revenue growth, and a discount multiple. Ask Charlie what makes Ero Copper's low P/E look cheap. The bullish pitch hangs on free cash generation, not just headline earnings. "The maiden inferred gold concentrate resource at Xavantina, combined with the plan to sell the full stockpile over roughly 12 to 18 months at reported operating costs of about US$300 to US$500 per ounce, suggests a high margin, time bound revenue stream that can help accelerate deleveraging and reduce interest expense." Q3 2026 results give that claim concrete backing. Higher copper and gold volumes, together with US$348.0 million of revenue, supported basic EPS of US$1.11 and a 32.2% trailing net margin. Management has already cut net debt by about US$100m after Q2, and Q3 continued that deleveraging trend, showing that Xavantina and broader operations are now feeding the balance sheet, not just the income statement. That disagreement has a full argument behind it. → Uncover the higher Fair Value this Narrative argues for. Bears argue that Ero Copper's growth plan leans on assets that could get stuck behind costly bottlenecks and rising inflation. The sharp pullback in the share price over the past month shows that concern is front of mind. "The push to increase throughput at Tucumã beyond current filtration limits, including adding new filtration capacity and a mobile filter press, could lead to higher sustaining and possibly growth capital requirements if bottlenecks persist. This may compress free cash flow and net margins." Q3 tells a mixed story. Production was strong, guidance for 2026 copper output remains intact and free cash flow supported about US$100m of further deleveraging. That suggests Tucumã constraints are not yet eroding margins in the reported numbers. At the same time, updated C1 cash cost guidance for inflation and FX confirms that cost pressures are real, even if they have not yet derailed the broader plan. Ero Copper's latest quarter shows how quickly sentiment can adjust when expectations and execution meet. The real opportunity could sit in stocks that seem misaligned with demonstrated business progress. - Company 1 - 30% below our estimate - keeps integrating acquired engineering operations into one delivery platform using a shared cost base. - Company 2 - 46% below our estimate - uses premium mall openings and faster online storefronts to consolidate full price fashion demand. - Company 3 - 32% below our estimate - keeps expanding quick payback boutiques while an app-led channel deepens engagement with repeat shoppers. Three companies from the same screener. Open every one of the 4 undervalued companies on it → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ERO.TO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Nov. 3, 2026 - VP, Investor Relations - Farooq Hamed - President and Chief Executive Officer - Makko DeFilippo - Executive Vice President and Chief Financial Officer - Wayne Drier - Executive Vice President and Chief Operating Officer - Gelson da Silva Batista - Executive Vice President, External Affairs and Strategy - Courtney R. Lynn Operator: Thank you for standing by. This is the conference operator. Welcome to the Arrow Copper Third Quarter 26 Operating and Financial Results Conference Call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. I would now like to turn the conference over to Farooq, VP, Investor Relations. Please go ahead. Farooq Hamed: Thank you, operator. Good morning, and welcome to Arrow Copper's third quarter earnings call. Our operating and financial results were released yesterday afternoon and are available on our website. Along with our financial statements and MD and A for the 3 and 9 months ended 09/30/2026. A corresponding earnings presentation can be downloaded directly from the webcast and is also available in the Presentations section of our website. Joining me on the call today are Makko DeFilippo, President and Chief Executive Officer Wayne Drier, Executive Vice President and Chief Financial Officer Gelson da Silva Batista, Executive Vice President and Chief Operating Officer and Courtney R. Lynn, Executive Vice President, External Affairs and Strategy. Before we begin, I would like to remind everyone that today's discussion will include forward looking statements which involve risks and uncertainties that may cause actual results to differ materially. For a detailed discussion of these risks, their potential impact on our business, please refer to our most recent annual information form available on our website as well as on SEDAR and EDGAR. Unless otherwise noted, all figures discussed today are in U. S. Dollars. With that, I will now turn the call over to Makko DeFilippo. Makko DeFilippo: Thank you, Farooq, and good morning, everyone. As always, we will keep today's prepared remarks short to allow sufficient time for Q&A. Before turning to the quarter, I do want to take a step back for a moment. Despite recent market volatility and lingering questions about the pace of AI in infrastructure spending, the underlying value of high quality copper production strong free cash flow generation a tangible organic growth pipeline, has never been more clear. This brings me to what I hope will be the 4 key takeaways from today's call. First, our operational performance is translating directly into cash generation and balance sheet strength. This year, we have applied $0.97 of every available dollar towards debt reduction. Our commitment to balance sheet has resulted in a net debt reduction of approximately $100 million in Q3 alone. For Arrow, this means greater flexibility to continue advancing our organic growth projects including Furnas. Second, our cash operating margins remain strong. Cost savings from our 1 Arrow initiative and a successful foreign exchange hedge strategy while working in tandem, as intended to offset the impact of inflationary pressures we are seeing at Arrow and throughout the mining sector. Third, our copper business continues to perform well, and we remain well positioned to achieve our full year copper production guidance. Fourth, the gold concentrate program we launched at Xavantina in late 25 has provided us with real operational and commercial flexibility this year. We now have assays for the in process material we expect to sell over the next 8 weeks And based on those results, we expect a combined 75 thousand to 80 thousand ounces of gold from Xavantina this year, a record for the company by any measure. With those takeaways in mind, let me now turn to the quarter. As you have seen, we delivered record financial performance this quarter, and year to date establishing new high watermarks across all key financial metrics. Our results reflect progress. In particular, I would point to the sequential quarterly increases in plant throughput at our copper operations Both Caraíba and Tucumã are set to achieve record annual throughput volumes this year. Operating momentum across our business paired with metal price tailwinds contributed to record cash flow from operations approximately $191 million and adjusted EBITDA of over $200 million both up nearly 40% quarter on quarter. An impressive 260% since our third quarter of last year. On a year to date basis, we generated over $420 million in cash flow from operations and $470 million in adjusted EBITDA. Up approximately 60%, 110%, respectively, compared to this time last year. Against this backdrop of improving operational performance, should be no surprise that this was our seventh consecutive quarter of accelerated de levering. When I look back and compare our vastly improved net debt leverage ratio of 0.5x in Q3 to our peak of 2.6x at the start of 2025 cannot help but be proud of our leadership team's commitment and focus to this objective. Turning to our operations themselves, our copper business produced 18.3 thousand tonnes of copper during the third quarter at a consolidated C1 cash cost of just over $2.50 per pound. Throughput volumes at Cariba and Tucumar remain strong during Q3, increasing quarter on quarter by 8%, 14%, respectively. We continue to expect Q4 to be the strongest operating quarter of the year, and are on track to achieve full year copper production guidance. On the cost side of the equation, since the onset of the BRL comp we have pointed to a potential $0.10/lb impact on a reported cash costs as a result of the inflationary pressures we are seeing and the flow through of a stronger BRL on our functional currency. We have now reflected that in our consolidated C1 cash cost guidance for the year. Offsetting this from a cash margin perspective, through the first 9 months of the year, we have generated realized gains of $30 million our foreign exchange hedge book. This protection is in place to protect our business against exactly the type of environment we have operated in during the first 9 months of this year. Wayne will speak to how we as management view this margin protection in the context of our adjusted C1 cash costs in more detail. At Xavantina, mine performance was just short of 8 thousand oz, and objectively below our expectations in Q3, total gold produced and recovered grew by 23% quarter on quarter to a record of approximately 25 thousand ounces. Increasing production from historic concentrates was a key operational focus for us this year given the slow start to mining operations in the first half and at sub-$750 per ounce of all in sustaining costs, is perhaps no surprise we prioritize the sale of this material. The investments we made during the first half of the year enhance our drying capacity of historic concentrates are clearly paying off as we enter the second half of the year. As A Result, We Expect Total Gold From Xavantina of between 75 thousand to 80 thousand ounces this year. Transitioning into our growth pipeline at the Furnas project, we completed the 45 thousand-meter Phase III drill program in August completing the entirety of the exploration component of the earning agreement with Vale Base Metals, more than 2 years ahead of schedule. Drilling results have consistently demonstrated high grade continuity within the deposit extensions at depth and along strike. We expect to provide the full results of the Phase 3 program prior to year end. Parallel, we are moving forward across all technical work streams to support the projects pre feasibility study, and we expect to publish this in 2027. The work we have done and are continuing to do strengthen our operating performance and improve operating margins for our 1 Arrow program are translating into strong free cash flow generation and record financial performance. With that, I will turn the call over to Wayne. Gelson da Silva Batista: Thank you, Makko, and good morning, everyone. As Makko outlined, we had a strong metal production in Q3 and our expected improved performance across all 3 operations in Q4. I will provide some additional detail on the underlying operation drivers and our expectations for the remaining of the year. At Caraíba, copper production totaled 9.39 thousand tonnes. During the quarter, at C1 cash costs of $2.89/lb produced Production increased by 12% over the previous quarter driven by higher plant throughput. Grades and recoveries. Costs in the quarter were impacted by accelerated waste stripping costs at Surubim open pit and elevated road fleet maintenance costs. Both of these cost centers were heavily influenced by the elevated diesel price environment in Q3. Looking ahead, we expect stronger production at Caraíba in Q4 driven by higher mined and processed grades. Coming from deeper high grade benches at Surubim combined with contributions from the Pilar underground mine. Positioning us well to achieve full year production guidance. Q1 cash costs are expected to decline in Q4 with increased production volumes. At Tucumã, copper production totaled 8.96 thousand tonnes at C1 cash costs of $2.12/lb produced. Production and costs were similar to the prior quarter, as a planned decrease in process grades was offset by 14% increase in plant throughput. Recoveries were impacted in Q3 due to operating operational adjustments that were required coming out of a mill liner replacement and maintenance shutdown. This was a temporary impact which Marcos spoke to our spoke to on our Q2 conference call. Looking to Q4, we expect production to benefit from higher throughput rates and increased metallurgical recoveries. C1 cash costs are expected to decline sequentially supporting our Montaigne full year production and cost guidance for Tucuman. The 3 new filters we are installing were delivered to site in late Q3 and will remain on schedule to finalize their installation and commissioning. Prior to year end. At Xavantina, Mine gold production totaled 7.84 thousand oz at C1 cash costs of $1.89 thousand/oz produced in Q3. Mine and process grades increased as expected. However, as Makko noted, operational delays in assets in key high grade stopes resulted in lower grades processed during the war time. Looking ahead, we expect MIND and processed tonnage and grades to improve in the fourth quarter. This outlook is supported by all time record development led achieved over the past few months. Gold recovered from the historic stockpiles increased by 47% from the previous quarter to 17.4 thousand oz at C1 cash costs of $621/oz. As the operations benefited from the mobile field depress and inducer dry air commission. At the end of Q2. Looking to quarter 4, further increase in throughput volumes along with an improved grade profile we expect will translate directly into lower C1 cash costs. We expect historic concentrate volumes to remain robust based on the volume shipped and in process so far through October. As Marco mentioned. I will now turn the call over to Wayne walk through our financial results. Wayne Drier: Thank you, Gelson, and good morning all. Our third quarter financial results reflected a 10%, 47% quarter on quarter increase in copper and gold sales volumes respectively. Coupled with strong metal prices. These factors together drove quarterly revenue to $348 million up 22% from the second quarter. As Makko noted, we achieved record quarterly cash flow from operations which increased to $191 million while adjusted EBITDA increased to a record of $201 million both measures up 39% sequentially. The strong financial performance allowed us to accelerate debt reduction with repayments of $70 million in the quarter against our revolving credit facility, bringing total repayments in 2026 to $105 million. As a result, net debt declined by $99 million during Q3 to approximately $353 million, while the last 12-month adjusted EBITDA increased to $657 million. Together, these factors reduced our net leverage our net debt leverage ratio to approximately 0.5x. Our liquidity position also improved during the period, increasing $82 million to $264 million including $114 million in cash and cash equivalents $150 million of availability under our revolver. Turning to foreign exchange. A stronger real continued to adversely impact our reported operating costs and capital expenditures during the quarter. However, on a cash basis, our hedge program worked as intended. Generating $10 million of realized gains in the quarter and bringing the total foreign exchange gains through the first 3 quarters to $30 million While these gains mitigate the cash impact of the stronger real, they are not included in our reported C1 cash costs. To better capture how we think about our cash margins at Ero, if we were to apply the year to date $30 million of realized gains to the operations on a pro rata basis, This would translate to a $0.15/lb reduction in consolidated copper C1 cash costs and a $50/oz reduction to Xavantina's C1 cash costs over the full year. This is illustrated on Slide 17 of the webcast presentation. With that, I will pass the call back to Makko for some closing remarks. Makko DeFilippo: Thank you, Wayne. Before we open the line for questions, let me bring everyone back to the full points I opened with. First, we are turning operating performance into cash generation. We have put $0.97 of every dollar available towards debt reduction this year, including approximately $100 million of net debt reduction in Q3 alone. Second, our copper business is performing well and we remain on track to meet our full year production guidance. Third, the gold concentrate program at Xavantina has us on track approximately 75 thousand to 80 thousand ounces of gold this year, a record for the company. Fourth, our 1 Arrow program and our BRL hedge strategy are working in tandem and as intended maintain strong cash operating margins despite the inflationary pressures we are seeing across the sector. Finally, looking a little bit further ahead to Furnas milestones, we remain on track to deliver the pre feasibility study in 2027. Thank you for joining us this morning. Operator, we are ready for questions. Operator: Thank you. We will now begin the question and answer session. First question comes from Fahad Tariq with Jefferies. Please go ahead. Fahad Tariq: Hi, thanks for taking my questions. With the leverage ratio and net debt to EBITDA now at 0.5x, can you talk a little bit about shareholder return program? When we should be expecting some sort of announcement? And just how the management team is thinking about shareholder returns? Thanks. Makko DeFilippo: Yes. Thanks for the question. Look, think I covered it fairly extensively on our Capital Markets Day in September in Sao Paulo. We are well on that journey We are below the leverage ratio where we wanted to be We are on track to repay the revolver. And certainly with the current price environment, the expectation is that we will be repaid during Q4. We had a very active discussion with our board. And around what that shareholder return framework will look like. And I think you just have to see when we are ready to put that out to the market. Fahad Tariq: Okay. And then just on the Brazilian real, I mean, it is weakened pretty substantially over the past couple of weeks since the election. What how should we be thinking about the effect of that in the fourth quarter as it pertains to the hedges and the floor price in the second half? Along with the operating cost impact. Makko DeFilippo: Like, does it net out? Yeah. I will take that question as well. Obviously, we have already in place our hedge book for 2026, and so we are fairly well covered. For Q4. That obviously does not cover the entire amount of OpEx and CapEx. So certainly, some of these tailwinds we have seen following the election will help but I think if we look through to 2027, we are very. You know, we actively manage our book in a in a in a proactive manner. We have taken advantage of some of this weakening to put in place some hedges for 2027. So we are starting to build up 10/27 slot. Wayne Drier: Yes, maybe just to answer that question, As we think about Q4, I think it is important to note that the way that our hedge strategy works is, you know, we protect the floor in this case, for Q4 of 5.54 So that is our protection level. We participate in the exposure of the BRL all the way up to our ceiling, which is 6.42. And that showed on Slide 8 of the webcast presentation. So when you think about where we were the first 9 months of the year versus where we are today, Should we see continued weakness in the BRL? We will participate in that up to our cap of 6.42. Operator: The next question comes from Orest Wowkodaw with Scotiabank. Please go ahead. Orest Wowkodaw: Hi, good morning. Brett to see the cash flow generation. I had a couple of questions on Xavantina. First of all, I mean, the grade was quite low in Q3. I am wondering if you have now seen the turn in Q4 in terms of a grade that is say, closer to reserve grade? Makko DeFilippo: Yeah. Look, I will jump in, Orest, and then Gelson can comment on this. We expect Q4 to be the strongest quarter of the year. I think some of the key high-grade stopes, as Gelson pointed to in the conference call, that we had planned coming in late Q3 were shifted a bit. So those are coming in Q4. I mean, I think, Orest, it is important to keep in mind that when we think about reserve grade, you know, that is an average over life of mine. We obviously. Every month, every quarter, we mine stopes that are well above that range. In some instances as we saw the last couple of years and then some that are lower. it is obviously a blended grade and we think about reserves, but what I can tell you is that you know, looking at results here, we do see grades climbing as expected. it is well supported by our infill drill program and channel sampling that we have for Q4. So we are feeling pretty good about the steps that we are into now and get to them in Q4. Gelson da Silva Batista: Gelson, if you have got anything? Other-- No. Thanks, Orest, for the call. I think Makko mentioned well there. Well, the stopes that we got in and into the squad and then back on track. I have no further. Yeah. Makko DeFilippo: Orest, you know, we Gelson mentioned this too. At Xavantina, our real priority for us Coming out of the first half, obviously, we are behind where we hope to be in terms of development in mine performance. I think the good leading indicator for us Gelson mentioned there, we achieved record development in the last 3 months, all time historic record development levels. So, you know, we are certainly not out the woods yet. I think it is too early to declare victory, but based on, you know, achieving the achieving the development that we. You know, ahead of being ahead of development being in some high-grade stopes and seeing that flow through, I think is a strong indicator. For where we think Q4 is heading. Orest Wowkodaw: Thank you for that. And just as a follow-up, you are guiding to, I believe 15 thousand oz of gold from the concentrate sales in Q4. Why are you thinking it is going to be lower than Q3 Is that are you expecting sort of a pickup in the rainy season late in the year? Or I am just wondering if that is a conservative estimate or is there something constraining volume here in Q4? Makko DeFilippo: Yes. Look, obviously, we have made big investments in the drying infrastructure, and we saw that flow through in Q3. That did coincide with a seasonal dry period, which obviously helps that dryer perform well. I would say the reality, Orest, is that our approach in the concentrates has been consistent. We can Only provide forward looking information for the information that we have available on hand and what we have today in dried inventory or drying inventory is that 9 thousand oz? Obviously, we expect to add more to that, but the 15 thousand is what we have assayed and available today. And I would say that includes also over 6 thousand ounces were invoiced in October. Right. So I think that is an important thing to keep in mind as I think about Q4. Orest Wowkodaw: Okay, thank you for that. And just finally, if I could just switch gears for a second. Can you give us an update on the shaft sinking project at Caraíba? In terms of current expectation for completion and how much CapEx is remaining on the project? Makko DeFilippo: Yeah, sure. I will jump in here and Gelson can pick up. If I miss anything there. So as of right now, we are about 1.25 thousand meters complete. That means that we have got about 300 meters to go if you follow. We are that progress has been as we talked about on our Capital Markets Day. We still expect to complete that shaft in Q1 as we outlined in September. At our Capital Markets Day, that is an important metric for us. As I said, you know, when we think about the timing and completion of shaft, go back to some of the commentary from Q2, I want to remind everyone that the last shaft that was built in Kilar was in 1.99 thousand 40 years ago. So we are we are certainly not trying to solve for a specific month next year. This investment will support the operation for hopefully decades to come. On the CapEx side, yeah, look, we have were it is a $370 million investment at the end of Q3. So about $300 million. So $70 million to go. We expect to spend a good chunk of that here in Q4 with some balance in through next year. Operator: The next question comes from Guilherme Rosito with Bank of America. Please go ahead. Guilherme Rosito: All right. Thank you for taking my questions. Good morning, everyone. So I have 2 on my side. Wayne if you could begin with an update on Tucumã, how are the filters coming along? And what are you expecting for Wayne if you can give us some color for 2027 versus what you guys are probably producing 2026 or how 4Q is coming along? And then my second is also on Xavantina. I know you guys comment on that a bit, but if we look at the previous 3-year production outlook that implied 50 thousand to 60 thousand ounces in Xavantina and with the performance we had year to date especially in terms of grades. It seems a bit more challenging than it would have seemed in the early in the year, right? So my question is if how are you guys thinking about the 3 year production outlook? Is there any chance you guys seeing it could be revised lower? To hear your thoughts on that. Thank you. Gelson da Silva Batista: Thank you. Thank you for your question, Guilherme. it is Gelson here. In Tucumã, we have got all the filters on-site. They arrived in last quarter late last quarter. Everything is on track. For completion by the year end. And, we expect, as we mentioned before, to come out of 2026 at 4 million per annum as we planned before. So the filters are on track. And team is working there to make sure that we can complete them on time. Makko DeFilippo: Yeah. And I think just maybe touching on that point, Guilherme, Gelson and I speak about this a lot. And if you look at their performance, we are foregoing out the additional filtration capacity, huge progress being made there reaching that above 800 thousand tonnes a quarter. So we are, you know, we are all on our way. And as Gelson said, expect to exit the year there at that 4 million tonne a year rate, which is which is where we expect to be for 2027. Certainly to the question on Xavantina. I would maybe point you in a slightly different direction there. I think if you look at our even our adjusted guidance, obviously, which came down versus our expectations in the early part of the year, that really reflects a delay in ventilation cooling development. If you look at the Q4 in isolation, I think that is a better representation of where what that asset is capable of doing. With obviously the transition that happened this year. So looking at Q4, and multiplying by 4, I think it is probably a better representation than looking at the full year 2026 especially the first 9 months. And getting to that range. So I would say that you know, when we think about Xavantina, I think Q4 is more representative of what we think we can do both in terms of throughput volumes, mine performance, throughput volumes and also processed grade. Guilherme Rosito: All right. Thank you. Operator: The next question comes from Matthew Murphy with Bradesco BBI. Please go ahead. Matteis: Yes. Thank you. Good morning, everyone. Thanks for taking my questions. 2 questions on my side. First, at Caraíba, you mentioned that we should see production improving in the last quarter driven by higher grades. I am just wondering how should we expect these grades to extend into 2027? And could you help us understand what will be a reasonable production mix between Pilar, Vermelhos and Surubim next year? And then my second question on Furnas. I mean, you have completed the Phase 3 drilling program during the quarter. Which is, you know, roughly 2 years ahead of the original schedule. Does that give you room to bring forward an eventual FID? And what are the key milestones you still need to work through? And then maybe just 1 more on the PFS. Which you expect to complete in 2027. Can you give us a sense of whether that is more likely to be early or late in the year? Those are my 2 questions. Thank you. Makko DeFilippo: Yeah. Perfect. Lots to unpack there. So if I miss something, I apologize. Just ask it again. But starting with the first question, on Caraíba, Yeah. Look, We have been, I think, consistent you know, with the main contributor to higher grades this year from Caraíba is a mix of these lower levels, these lower benches in Surubim. We have been mining at Surubim for the last couple of years, really, and when you look at the investment the last couple years, the strength of that investment is really supported by these lower benches, right? They are about 1% copper versus where we were a few years ago. it is a very high grade open pit operation, at least the lower levels of Surubim. We do expect to see some of that into Q4 with a bit of a delay there. In Q3, we expect some of that material to roll forward into Q1 of next year. But we provided in our capital market today, we gave more clarity about the relative mix and how we see Serbian transitioning into N8 for next year and over the next couple of years. So would point you to the Capital Markets Day for that allocation on the grade on the mix of relative sources, but we do see this transition in 2027 from Surubim into N8 and, again, you know, a little bit of a great profile difference there, particularly because the lower benches that we are mining now are quite high grade from an open pit perspective at Caraíba. Furnas, just to touch on a couple of questions you asked there. So 1, 2 years ahead of schedule. And I think there is there is very important milestones The 1 that we that we are, you know, able to control directly is the effort put on drilling. We think that with the quality of project that Furnas is, getting well ahead on drilling is 1 of the best places to put growth capital towards. So we have obviously done that. Right? 2 years ahead of schedule as you pointed to. In terms of pulling forward FID, we still have a couple of levels of engineering to go. Including the PFS here next year, and then obviously a feasibility study I would say let's get through the pre feasibility study and the work that we are doing now, and then have a discussion sometime next year about that. The reality, though, is, as I have said many times, we still have to go through the permitting process. We are obviously familiar with what that entails. Having done that for Tucumã, quite recently. So that is another key parallel work stream that is happening in conjunction with all the drilling and all the engineering work. So we have a couple of key milestones on permitting that we are advancing this year. Those are those are going well as we have talked about in our Capital Markets Day. As well. And in terms of timing of the pre feasibility study, I would say, look, yeah, we are going as fast as we can. If you follow the milestone agreement, we have until September to finalize that. Obviously, we are we continue to work as fast as possible to get that done. But I would say September at the latest, given the timeline as outlined in the earnings agreement. Matthew Murphy: that is very good color. Thank you. Thanks, Makko. Operator: The next question comes from Ricardo Monagalia with Banco Safra. please go ahead. Ricardo: Hello, guys. Good morning. Thank you for taking my questions. I have 2. First, on Tucumã, just a quick follow-up. Throughput rows and that is great. But recoveries fell a bit short of our estimates. So could you give us some color on what drove it? And maybe how confident are you on reaching that high 80s or low 90s level? Makko DeFilippo: Yes, perfect. So thanks for the question. We have spoken about this on our Q2 conference call, right? We did see coming out of right at the end of Q2 we had a mill reline and a major maintenance period that was successfully completed. We did, however, see an impact on recovery coming out of that. There was operational adjustments that needed to be made largely around liberation side that impacted the recoveries for Q3. That was early in the quarter. Throughout the quarter, we did see an increase in recovery. And obviously, that supports kind of where we think we are going to be through the balance of that year as Justin mentioned improving recoveries. Into the, you know, into the highest range. I would say that you know, keep in mind that recoveries are a function of grade. So there is a grade recovery curve at Tucumã as with all copper flotation operations. And so, we expect strong recoveries in Q4 over time is obviously a relationship to grade and we have got a number of initiatives to help improve recovery as we go forward. But again, I would say that the read through on Q3 is really a 1 off improvement coming or 1 off impact coming out of that maintenance period. Until the operational adjustments that we had to make to improve the circuit. Again, with higher throughput volumes during the period as well. Ricardo: Thank you, Michael. Very clear. My second question on corporate G and A. G and A in the operations were fairly in line with what we expected, but corporate G and A bit higher. And growing, like, 30% year-over-year. So just wanted to understand, what could we consider as a 1 off and maybe what run rate do you think we should model for the upcoming quarters and maybe 2027? Wayne Drier: Yeah, good question. The change in from Q2 to Q3 was about $4 million is actually entirely related to SAP implementation project, which is underway. So right now, we are basically instituting SAP HANA, which is a cloud based ERP system through the enterprise. Unfortunately, the new. The rules. The IFRS rules under cloud based system do not allow us to capitalize that much like legacy ERP systems. And so those costs are being expensed through the implementation And so I think you can expect to see that amount for the next 2 quarters 2 to 3 quarters. We expect implementation to be done by Q2. But the run rate, certainly, if you look at Q1, Q2, that is our typical run rate. The change is simply related to the SAP implementation. Right. Thanks, Wayne. And congrats on the results. Operator: The next question comes from Stefan Ioannou with ATB Cormark. Please go ahead. Stefan Ioannou: I am not sure if I maybe missed it earlier, but just maybe when we were down on-site, I guess, a month or so ago, at Xavantina, just wondering if the outlook for the concentrate that will be still coming out of the ground, say through the middle of next year? Or is there any additional color on sort of the outlook over the coming quarters for what the gold in concentrate production might look like? Makko DeFilippo: And we do not have a. We do not have an outlook beyond Q4. it is a good question. I think the reality there is as outlined, we comfortable with the 8 weeks that we have. All the material's been assayed and is in an inventory or, you know, drying process. now. To go beyond that, obviously, difficult you know, difficult to provide any information on given the lack of samples there as we have discussed you know, a few times here. I do think that there is volume remaining. We are obviously prioritizing the extraction sale of that material, particularly in this gold price environment. Again, as I mentioned, you know, $750 all-in sustaining cost Probably no surprise while we are doing that. But I think, you know, stay tuned. We will consider reconcile some of the what is what is remaining on the balance there. But I think, you know, looking at the next that material continuing for the next couple of quarters into 2027 is not unreasonable. Know, unreasonable timeline. Obviously, cannot speak to the grades. Yeah. That are in there because we do not know. But I think it is reasonable to assume that we will we will have additional material remaining from which to sell over the next couple of quarters. Stefan Ioannou: Okay. I mean, I guess the simplest-- simplistically is it really just a function of the fact that it is obviously underwater, so it is hard to really guesstimate or estimate how many times you actually still have. Right? Yeah. In order to get a representative sample, we would have to pump all that material out Yeah. And dry it. And if we are going to do that, then we might as well sell it So yeah. So the reality is that we just will not be able to sample that material. Until it is in the drying process as we saw in Q4. Okay. Perfect. Thanks very much, guys. Operator: The next question comes from Rodrigo Fidelis with BTG. Please go ahead. Rodrigo: Hello. Good morning, guys. Good morning, all. 2 questions on my side. The first 1, could you give us some updates? how are the updated Technical reports for the 3 current mines evolving right now? So since the last 1, Ero has made meaningful development in operations, brought forward initiatives, We have new metal prices since then. So what do you expect from these studies? If there is a planned timeline, when you plan to release them? If you could give us an outlook and what you expect would be very helpful. Makko DeFilippo: Yeah. Good question. Again, had this question, particularly on Tucumã Last quarter. We do expect to put out an updated technical report for Tucumã out this year. that is in the late stages here. So stay tuned. That will be before year end. We will continue with our normal reporting process for Caraíba and Xavantina. So you know, on this call, we will not give a steer as to what we are seeing there. Obviously, metal prices being where they are at it is given us a good opportunity to kind of reevaluate those plans and make some optimizations. But I would say the focus for us is still on margin. So yeah, stay tuned. We will have that discussion later this year. Rodrigo: Okay, perfect. Thanks for the update. My second question for Makko and the team. Just how do you see the equity story until 2020 before Furnas, right? So we have been seeing many brownfield initiatives, Ero's generating cash, deleveraging in a fast pace, So just in a broader picture, in terms of operations, projects, shareholders return, how do you see the company until 2029? Makko DeFilippo: Yes, it is a good question. Thanks for that. I think as I have said many times, the investment case for high quality assets in copper ones that are generating significant amount of cash flow in this environment. Certainly, I think deserves attention. Obviously leveraging our assets and the strength of our balance sheet into what we think is truly an incredible growth project in Furnas and setting up a business for us to execute on that. it is something that we spend a lot of time thinking about. As well as advancing some of the exploration programs in our portfolio. I think what differentiates Ero in this environment from perhaps I do not want to say the rest of the sector. I think that is too broad of a brush, but certainly some of our peers we are at the tail end of what has been a multiyear, a very intensive capital intensive phase. We are seeing the rest of We have a few years until we embark on our next growth asset. We think that sets up our business very well to invest not only in the future growth that we have in Furnas, but a couple of organic growth drivers we have around our operations as we spoke to in detail in our Capital Markets Day. But it is an exciting time, obviously, to see the effort that we have put into the operations into value drivers like the concentrate sales program. And obviously, the 1 arrow initiative that we have been driving compared to our risk mitigation strategy in the currency I think, is all setting us up well. To position the company to execute on our organic growth pipeline, Furnas, add additional value through some of our exploration programs. And brownfield development projects that we spoke about on Capital Markets Day. And yeah, I have a strong balance sheet on top of that. So our priorities in the short term, I think, Wayne alluded to, when I think short term you know, next quarter, obviously, we want to pay down the balance of our revolver. That is a top priority for us as a team. it is something that we committed to all of our shareholders back in 2025. And I think collectively very pleased to see that on the near term horizon. that is very clear. Thanks for the update. Operator: The next question comes from Anita Soni with CIBC World Markets. Please go ahead. Anita Soni: Hi, good morning. I am just I apologize if this has been asked, but I just wanted to circle back to Xavantina. You mentioned that if we looked at Q4 as a run rate, that would be more indicative of what it could do in 2027. Did you give the parameters around what you are seeing for Q4? I might have missed that. Makko DeFilippo: You know, we-- but I think we just did. On grade. Yeah. Yeah. Sorry. Go ahead. If you just look at the, if you just look at sort of the midpoint of our guidance, I was obviously, it still implies a pretty big step up in operational performance there. I think the question is, how do you see yourself to the 50 thousand-ounce rate you know, plus range. Obviously, I think looking at the full year of 2026, and multiplying that you know, looking at the first 9 months and saying, well, you know, that is representative of what the asset could do. I do not think it is fair. Point to what we expect to do in Q4. I mean from an operational perspective, we talked about this in our Capital Markets Day, and if you look at where we expect to be, we are sort of triangulating into the 20 thousand- to 25 thousand- ton a month range. From the mine and plant. Think, you know, we saw very close to those levels in Q3. I think the normalized value is about 19 thousand/month. So we did see the mine come back as Gelson alluded to. Impact there was not great as we beat delays in access to some of the really you know, key high-grade stopes that we expect at the end of quarter and those are obviously transitioning to into Q4 here. So we did not provide specific parameters. It was more of an implied mathematical extrapolation based on the input of our guidance. And where we are going for the first 9 months. Anita Soni: Sure. And then at Caraíba, I just wanted to ask, in terms of the tonnage. So it looks like you have kind of ramped up to that, I think, with the capital markets they said, kind of a 4.5 to 4.7 million ton per annum sustained throughput and you are pretty close to that this quarter, if I am doing the math right. So do you expect that could be sustained in 2027 at this stage? Or is there something that I might be missing in terms of additional tie ins or other work that needs to be done in 2027 to sustain that rate? Makko DeFilippo: No. We think that is sustainable. Obviously, you know, from time to time, we obviously do have planned shutdowns that will impact that. On a quarterly basis. But nothing. No major tie ins. I think the debottlenecking work that the team did, it was led by Gelson here. I think it showed up this year sequential throughput improvement. And we think that pace is representative of what we can do. I said, notwithstanding the normal downtime for maintenance in the year, but pretty solid performance from that operation, given where we were just a few years ago. Okay, thank you. That is it for my questions. Operator: We have a follow-up question from Orest Wowkodaw with Scotiabank. Please go ahead. Orest Wowkodaw: Hi. Thanks for the follow-up. Just a question clarification question, Makko. You mentioned there is a tech report update coming for Tucumã before year end. Is that going to be only updated like reserves resources or should we or can we anticipate also like a life of mine production plan, updated in that as well? Makko DeFilippo: Yes. Yes. Thanks, Orest. We do expect an updated resource and reserve estimate coming from that operation prior to year-end. We there will not be details about the phasing of that operation. Is maybe as far as I am prepared to go on. that is our 921. So it is not a huge surprise, I think, on this call. But we will provide some information about the phases, particularly around how the reserve's constructed. That work is happening as we speak, and we are well positioned to put that out before year end. Okay. Thanks. Operator: This concludes the question and answer session. I would like to turn the conference back over to Makko DeFilippo for any closing remarks. Please go ahead. Makko DeFilippo: Yes. Thank you, operator, and thank you, everyone, for joining us. I know it is a very busy time. So as always, we appreciate the lively Q&A. Discussion. it is 1 of the highlights of the quarter for me and appreciate the dialogue. As always, our team is available for follow-up discussions and questions. Please do reach out to Courtney, Farooq or anyone on our team. For those of you that we are going to see in Toronto, Boston and Montreal in the coming days, we look forward to seeing you in person. Thank you very much. Talk soon. Operator: This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day. Before you buy stock in Ero Copper, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ero Copper wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Ero Copper (ERO) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

(all amounts in US dollars, unless otherwise noted) VANCOUVER, British Columbia, Nov. 02, 2026 (GLOBE NEWSWIRE) -- Ero Copper Corp. (TSX: ERO, NYSE: ERO) ("Ero" or the "Company") is pleased to announce its operating and financial results for the three and nine months ended September 30, 2026. Management will host a conference call tomorrow, Tuesday, November 3, 2026, at 10:30 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 - Consolidated quarterly copper production totaled 18,345 tonnes in concentrate, up 6% sequentially, at C1 cash costs(1) of $2.51 per pound produced. - Gold from the Xavantina Operations totaled 25,258 ounces, up 23% from the previous quarter on increased ounces recovered from historic gold concentrate stockpiles. - Gold recovered from historic concentrate stockpiles increased 47% to a record of 17,414 ounces at C1 cash costs(1) and AISC(1) of $621 and $710 per ounce, respectively. - Mined gold production totaled 7,844 ounces at C1 cash costs(1) and AISC(1) of $1,892 and $3,607 per ounce, respectively. - Record financial metrics, including cash flow from operations, adjusted EBITDA(1) and net income, supported by strong operating performance, higher copper and gold sales volumes, and favorable metal prices. - Cash flow from operations was $191.2 million, up 39% quarter-on-quarter. - Adjusted EBITDA(1) was $200.6 million, also up 39% quarter-on-quarter. - Net income attributable to the owners of the Company was $116.2 million, or $1.10 per diluted share, representing a 30% quarter-on-quarter increase. - Adjusted net income attributable to the owners of the Company(1) increased 48% quarter-on-quarter to $129.3 million, or $1.22 per diluted share. - Reduced net debt(1) by approximately $100 million during the quarter and nearly $200 million since the beginning of 2025 to $353.5 million. Accelerated deleveraging was supported by the Company's strong cash flow generation, with approximately 97% of every dollar of cash available for deleveraging(2) applied toward debt reduction year-to-date. The Company's net debt leverage ratio improved to 0.5x at quarter-end from 1.2x at December 31, 2025.(3) - Available liquidity(1) increased by $82.3 million quarter-on-quarter to $264.1 million, including $114.1 million in cash and cash equivalents and $150.0 million of undrawn availability under the Company's senior secured revolving credit facility. - The Company's foreign exchange hedge program generated realized gains of $10.4 million in Q3 and $30.3 million year-to-date, offsetting the cash impact of the stronger BRL. These gains are recognized separately and are not reflected in the Company's reported unit operating costs. Allocating the year-to-date realized gains across the Company's operations on a pro rata basis would equate to estimated reductions of approximately $0.15 per pound on full-year consolidated copper C1 cash costs(1) and approximately $50 per ounce on Xavantina's full-year C1 cash costs(1) and AISC(1). - Reaffirming consolidated copper production and updating consolidated copper cost guidance as well as Xavantina production and cost guidance to reflect year-to-date performance and Q4 historic gold concentrate sales outlook. - Consolidated copper production guidance remains unchanged at 67,500 to 77,500 tonnes, with Q4 expected to be the strongest production quarter of the year at both copper operations. - Consolidated copper C1 cash cost(1) guidance has been updated to $2.25 to $2.45 per pound produced, reflecting inflationary pressures associated with the ongoing U.S.-Iran conflict and a stronger BRL. Allocating year-to-date realized foreign exchange hedge gains across the Company's operations on a pro rata basis would reduce full-year C1 cash costs(1) by approximately $0.15 per pound to $2.10 to $2.30 per pound, in line with the Company's original 2026 guidance. - Total gold from Xavantina is expected to be 75,000 to 80,000 ounces, comprising approximately 45,000 ounces recovered from historic concentrate stockpiles and 30,000 to 35,000 ounces of mined production. Q4 mined production is expected to benefit from higher mining rates and grades following the acceleration of underground development during Q3. - Xavantina C1 cash cost(1) and AISC(1) guidance for mined gold production has been updated to $1,650 to $1,800 per ounce and $3,300 to $3,600 per ounce, respectively. Allocating year-to-date realized foreign exchange hedge gains across the Company's operations on a pro rata basis would reduce these ranges by approximately $50 per ounce to $1,600 to $1,750 and $3,250 to $3,550 per ounce, respectively. - Capital expenditure guidance remains unchanged at $285 to $330 million. - The Company continued to advance the Furnas Copper-Gold Project ("Furnas" or the "Project"), completing the Phase 3 drill program in Q3 2026, more than two years ahead of schedule. - Completion of the 45,000-meter Phase 3 drill program satisfies the exploration component of the Furnas earn-in agreement with Vale Base Metals. - The Company continues to advance key technical workstreams, including permitting, hydrogeological studies, environmental studies, and confirmatory metallurgical testwork in support of a Pre-Feasibility Study expected to be published in 2027. "Ero delivered record financial results in Q3. Significant free cash flow generation enabled us to accelerate our pace of deleveraging - one of the core commitments we have made to our shareholders. Results were supported by continued growth in copper and gold sales volumes, cost savings from our OneEro initiative, and our foreign exchange hedge strategy designed to protect cash operating margins," said Makko DeFilippo, President & Chief Executive Officer. "Our operating performance continued to strengthen during the quarter as optimization initiatives launched in 2025 and advanced further in 2026 translated into sustainable improvements across the business. Caraíba and Tucumã delivered sequential throughput gains of 8% and 14%, respectively, and our operations remain on track to deliver record consolidated copper production in 2026. At Tucumã, the tailings filtration expansion remains on track for completion by year-end. At Xavantina, increased recovery of gold from historic concentrate stockpiles supported higher quarterly gold sales, while mine operations achieved record underground development, which we expect will translate to higher sustained mining rates and additional flexibility in the coming quarters. "We are pleased with the progress across our operations, our continued commitment to deleveraging and the significant progress we have made throughout our growth initiatives this year, including the completion of all drilling requirements at Furnas more than 2 years ahead of schedule." (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. Please refer to the Company's discussion of Non-IFRS measures in its Management's Discussion and Analysis for the three and nine months ended September 30, 2026 and the Reconciliation of Non-IFRS Measures section at the end of this press release. (2) | Cash available for deleveraging, on a year-to-date basis, represents cash flow from operations of $421.9 million, less capital expenditures of $222.3 million ($203.1 million for additions to mineral properties, plant and equipment and $19.2 million for additions to exploration and evaluation assets) and interest, lease, and finance payments of $63.2 million ($36.7 million for interest paid on loans and borrowings, $16.4 million for lease liability payments and $10.1 million for other finance expenses paid). Of the resulting $136.4 million of cash available for deleveraging, $132.0 million was applied to debt principal repayments, equivalent to approximately $0.97 of every $1.00 available. (3) | The Company's net debt leverage ratio as of September 30, 2026 was 0.5x, based on net debt of $353.5 million and trailing 12-month adjusted EBITDA of $656.6 million. By comparison, the ratio as of December 31, 2025 was 1.2x, based on net debt of $501.7 million and trailing 12-month adjusted EBITDA of $409.7 million. | THIRD QUARTER REVIEW The Caraíba Operations - The Caraíba Operations produced 9,387 tonnes of copper in concentrate during the period at C1 cash costs(1) of $2.89 per pound produced. - Production increased by approximately 12% quarter-on-quarter driven by higher plant throughput with modestly higher processed grades and recoveries. C1 cash costs(1) were impacted by higher waste stripping costs at Surubim, increased diesel and maintenance costs, and the continued strength of the BRL. The Tucumã Operation - The Tucumã Operation produced 8,958 tonnes of copper in concentrate during the quarter at C1 cash costs(1) of $2.12 per pound produced. - Production was in line with the prior quarter, as improved plant throughput offset lower grades and recoveries. C1 cash costs(1) were also in line with the prior period, with initial OneEro cost savings offsetting the impact of inflationary pressures on input costs and the continued strength of the BRL. - The Company remains on schedule to install and commission modular tailings filters in Q4, providing additional capacity to Tucumã's tailings filtration circuit. The incremental filtration capacity and associated plant throughput benefits are expected to support future production plans and have not been reflected in 2026 operational guidance. The Xavantina Operations - Gold produced and recovered at the Xavantina Operations increased 23% quarter-on-quarter to 25,258 ounces, supported by increased ounces recovered from historic gold concentrate stockpiles. - Gold recovered from historic concentrate stockpiles increased 47% quarter-on-quarter to 17,414 ounces at C1 cash costs(1) and AISC(1) of $621 and $710 per ounce, respectively. Operations benefited from drier seasonal conditions and additional drying infrastructure installed in late Q2. - Mine production was 7,844 ounces at C1 cash costs(1) and AISC(1) of $1,892 and $3,607 per ounce, respectively. Higher throughput was offset by lower processed grades, as mine operations focused on accelerating underground development during the quarter, limiting access to higher-grade stopes. - Gold sales also increased approximately 47% quarter-on-quarter to 24,957 ounces, comprising 4,949 ounces of gold doré and 20,008 ounces of gold in concentrate, including contributions from Xavantina's historic gold concentrates. (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. Please refer to the Company's discussion of Non-IFRS measures in its Management's Discussion and Analysis for the three and nine months ended September 30, 2026 and the Reconciliation of Non-IFRS Measures section at the end of this press release. | OPERATING HIGHLIGHTS | | | | | | | | | | | | 2026 - Q3 | | 2026 - Q2 | | 2025 - Q3 | | 2026 - YTD | | 2025 - YTD Copper (Caraíba Operations) | | | | | | | | | | Ore Mined (tonnes) | | | 1,142,352 | | | 1,098,614 | | | 1,018,972 | | | 3,226,543 | | | 2,507,975 Ore Processed (tonnes) | | | 1,161,102 | | | 1,074,182 | | | 996,661 | | | 3,307,493 | | | 2,481,508 Grade (% Cu) | | | 0.90 | | | 0.87 | | | 1.01 | | | 0.90 | | | 1.14 Recovery (%) | | | 89.4 | | | 89.0 | | | 90.4 | | | 88.9 | | | 90.6 Cu Production (tonnes) | | | 9,387 | | | 8,351 | | | 9,085 | | | 26,564 | | | 25,604 Cu Production (000 lbs) | | | 20,694 | | | 18,411 | | | 20,030 | | | 58,564 | | | 56,448 Cu Sold in Concentrate (tonnes) | | | 9,537 | | | 7,926 | | | 9,080 | | | 26,668 | | | 25,416 Cu Sold in Concentrate (000 lbs) | | | 21,026 | | | 17,474 | | | 20,017 | | | 58,793 | | | 56,031 Cu C1 cash cost(1) | | $ | 2.89 | | $ | 2.76 | | $ | 2.32 | | $ | 2.81 | | $ | 2.20 | | | | | | | | | | Copper (Tucumã Operation) | | | | | | | | | | Ore Mined (tonnes) | | | 1,224,488 | | | 590,600 | | | 1,333,748 | | | 2,271,772 | | | 2,460,850 Ore Processed (tonnes) | | | 814,137 | | | 715,415 | | | 575,041 | | | 2,093,269 | | | 1,288,054 Grade (% Cu) | | | 1.30 | | | 1.44 | | | 1.51 | | | 1.44 | | | 1.74 Recovery (%) | | | 85.0 | | | 88.2 | | | 89.2 | | | 87.1 | | | 88.0 Cu Production (tonnes) | | | 8,958 | | | 8,964 | | | 7,579 | | | 26,383 | | | 18,997 Cu Production (000 lbs) | | | 19,749 | | | 19,763 | | | 16,707 | | | 58,164 | | | 41,880 Cu Sold in Concentrate (tonnes) | | | 8,638 | | | 8,581 | | | 6,622 | | | 25,970 | | | 17,758 Cu Sold in Concentrate (000 lbs) | | | 19,044 | | | 18,918 | | | 14,598 | | | 57,254 | | | 39,149 Cu C1 cash cost(1)(2) | | $ | 2.12 | | $ | 2.10 | | $ | 1.62 | | $ | 2.07 | | $ | 1.62 | | | | | | | | | | Gold (Xavantina Operations) | | | | | | | | | | Ore Mined (tonnes) | | | 56,527 | | | 49,484 | | | 50,268 | | | 138,831 | | | 121,325 Ore Processed (tonnes) | | | 55,478 | | | 48,564 | | | 47,865 | | | 141,170 | | | 118,922 Grade (g / tonne) | | | 4.90 | | | 6.20 | | | 8.15 | | | 5.55 | | | 7.46 Recovery (%) | | | 89.7 | | | 89.8 | | | 78.4 | | | 87.5 | | | 84.7 Au Production (oz) | | | 7,844 | | | 8,693 | | | 9,073 | | | 22,032 | | | 23,454 Historic Au Concentrate Recovered (oz) | | | 17,414 | | | 11,860 | | | — | | | 31,386 | | | — Au Sold in Doré (oz) | | | 4,949 | | | 6,663 | | | 8,439 | | | 17,631 | | | 22,549 Au Sold in Concentrate (oz)(3) | | | 20,008 | | | 10,353 | | | — | | | 34,672 | | | — Au Production C1 cash cost(1) | | $ | 1,892 | | $ | 1,586 | | $ | 1,086 | | $ | 1,828 | | $ | 1,100 Au Production AISC(1) | | $ | 3,607 | | $ | 2,881 | | $ | 2,425 | | $ | 3,528 | | $ | 2,307 Historic Au Concentrate C1 cash cost(1) | | $ | 621 | | $ | 633 | | | — | | $ | 645 | | | — Historic Au Concentrate AISC(1) | | $ | 710 | | $ | 715 | | | — | | $ | 733 | | | — (1) | Please refer to the Company's discussion of Non-IFRS measures in its Management's Discussion and Analysis for the three and nine months ended September 30, 2026 and the Reconciliation of Non-IFRS Measures section at the end of this press release. (2) | The Company declared commercial production at the Tucumã Operation effective July 1, 2025. As such, copper C1 cash costs for the Tucumã Operation reflect costs from Q3 2025 onward only. (3) | Gold sold in concentrate includes gold ounces produced in flotation and the historic gold concentrate stockpile. | FINANCIAL HIGHLIGHTS ($ in millions, except per share amounts) | | | | | | | | | | | | 2026 - Q3 | | 2026 - Q2 | | 2025 - Q3 | | 2026 - YTD | | 2025 - YTD Revenues | | $ | 348.0 | | $ | 284.3 | | $ | 177.1 | | | $ | 895.5 | | $ | 465.7 | Gross profit | | | 169.6 | | | 121.4 | | | 57.4 | | | | 396.9 | | | 180.2 | EBITDA(1) | | | 195.8 | | | 159.8 | | | 90.8 | | | | 531.0 | | | 322.8 | Adjusted EBITDA(1) | | | 200.6 | | | 144.0 | | | 77.1 | | | | 469.8 | | | 223.0 | Cash flow from operations | | | 191.2 | | | 137.9 | | | 110.3 | | | | 421.9 | | | 266.0 | Net income | | | 118.0 | | | 90.7 | | | 36.5 | | | | 318.0 | | | 188.2 | Net income attributable to owners of the Company | | | 116.2 | | | 89.5 | | | 36.0 | | | | 314.6 | | | 186.8 | Per share (basic) | | | 1.11 | | | 0.86 | | | 0.35 | | | | 3.02 | | | 1.80 | Per share (diluted) | | | 1.10 | | | 0.85 | | | 0.35 | | | | 2.97 | | | 1.80 | Adjusted net income attributable to owners of the Company(1) | | | 129.3 | | | 87.4 | | | 27.9 | | | | 289.1 | | | 111.9 | Per share (basic) | | | 1.24 | | | 0.84 | | | 0.27 | | | | 2.77 | | | 1.08 | Per share (diluted) | | | 1.22 | | | 0.83 | | | 0.27 | | | | 2.73 | | | 1.08 | | | | | | | | | | | Cash, cash equivalents, and short-term investments | | | 114.1 | | | 101.7 | | | 66.3 | | | | 114.1 | | | 66.3 | Working capital (deficit)(1) | | | 89.4 | | | 87.7 | | | (45.2 | ) | | | 89.4 | | | (45.2 | ) Available liquidity(1) | | | 264.1 | | | 181.7 | | | 111.3 | | | | 264.1 | | | 111.3 | Net debt(1) | | | 353.5 | | | 452.7 | | | 545.5 | | | | 353.5 | | | 545.5 | (1) | Please refer to the Company's discussion of Non-IFRS measures in its Management's Discussion and Analysis for the three and nine months ended September 30, 2026 and the Reconciliation of Non-IFRS Measures section at the end of this press release. | 2026 GUIDANCE Consolidated copper production guidance remains unchanged at 67,500 to 77,500 tonnes, with Q4 expected to be the strongest production quarter of the year at both copper operations. At the Caraíba Operations, Q4 copper production is expected to benefit from higher mined and processed copper grades. At the Tucumã Operation, higher plant throughput and improved recoveries are expected to offset lower planned copper grades. Full-year consolidated copper C1 cash cost(1) guidance has been updated to $2.25 to $2.45 per pound produced, reflecting the impact of continued strength in the BRL, inflationary pressures arising from the ongoing U.S.-Iran conflict, and delayed access to the higher-grade pit bottom of Surubim at the Caraíba Operations during the third quarter. Unit costs are expected to decline in Q4 at both of the copper operations driven by increased production. The cash impact of the stronger BRL has been offset by year-to-date realized gains of $30.3 million from the Company's foreign exchange hedge program. Allocating the year-to-date realized foreign exchange hedge gains across the Company's operations on a pro rata basis would translate to an estimated reduction of approximately $0.15 per pound on full-year consolidated copper C1 cash costs(1), equating to $2.10 to $2.30 per pound produced, generally in line with the Company's original 2026 guidance. Gold from Xavantina is expected to total 75,000 to 80,000 ounces in 2026, including 30,000 to 35,000 ounces of mined production and approximately 45,000 ounces recovered from historic gold concentrate stockpiles. Mined gold production guidance has been revised to reflect extended downtime in H1 related to the installation of key ventilation and cooling infrastructure and lower mined and processed grades in Q3. Mined production is expected to increase in Q4, supported by higher mining rates and grades following the acceleration of underground development during Q3. As a result, gold C1 cash cost(1) and AISC(1) guidance has been updated to $1,650 to $1,800 per ounce and $3,300 to $3,600 per ounce, respectively. Allocating the year-to-date realized foreign exchange hedge gains across the Company's operations on a pro rata basis would translate to an estimated reduction of approximately $50 per ounce on Xavantina's full-year C1 cash costs(1) and AISC(1) equating to $1,600 to $1,750 and $3,250 to $3,550 per ounce, respectively. Gold recovered from historic concentrate stockpiles is expected to total approximately 45,000 ounces, including over 31,000 ounces recovered through the end of Q3 and approximately 15,000 ounces projected for Q4. The Q4 shipment outlook includes more than 6,000 ounces invoiced in October and approximately 9,000 ounces contained in concentrate at site undergoing drying prior to shipment. Total capital expenditure guidance is maintained in the range of $285 to $330 million. 2026 Production and Cost Guidance | | | | | | | | Previous Guidance | | Current Guidance | | Current Guidance with YTD $30M FX Gain Applied(1) Consolidated Copper Production (tonnes) | | | | | | Caraíba Operations | | 35,000 - 40,000 | | 35,000 - 40,000 | | 35,000 - 40,000 Tucumã Operation | | 32,500 - 37,500 | | 32,500 - 37,500 | | 32,500 - 37,500 Total Copper | | 67,500 - 77,500 | | 67,500 - 77,500 | | 67,500 - 77,500 | | | | | | Consolidated Copper C1 Cash Costs ($/lb)(2) | | | | | | Caraíba Operations | | $2.30 - $2.50 | | $2.55 - $2.75 | | $2.35 - $2.55 Tucumã Operation | | $1.95 - $2.15 | | $1.95 - $2.15 | | $1.85 - $2.05 Consolidated Copper Operations | | $2.15 - $2.35 | | $2.25 - $2.45 | | $2.10 - $2.30 | | | | | | The Xavantina Operations (oz) | | | | | | Mined Au Production | | 40,000 - 50,000 | | 30,000 - 35,000 | | 30,000 - 35,000 Au Recovered from Historic Stockpiles | | — | | Approx. 45,000 | | Approx. 45,000 Total Gold | | 40,000 - 50,000 | | 75,000 - 80,000 | | 75,000 - 80,000 | | | | | | Mined Gold Production Costs ($/oz) | | | | | | C1 Cash Cost(2) | | $1,100 - $1,350 | | $1,650 - $1,800 | | $1,600 - $1,750 AISC(2) | | $2,200 - $2,700 | | $3,300 - $3,600 | | $3,250 - $3,550 Note: Guidance is based on estimates and assumptions including, but not limited to, mineral reserve estimates, grade and continuity of interpreted geological formations and metallurgical recovery performance. Please refer to the Company's SEDAR+ and EDGAR filings, including the most recent Annual Information Form ("AIF"), for a detailed summary of risk factors. | (1) | Assumes $30.3 million realized gains through the end of Q3 from the Company's foreign exchange hedge program, allocated to the operations for the purposes of calculating C1 cash costs as follows: 55% ($16.7 million) to Caraíba, 30% ($9.1 million) to Tucumã, and 15% ($4.6 million) to Xavantina, amounts may not sum due to rounding. (2) | Please refer to the section titled "Reconciliation of Non-IFRS Measures" within this Press Release. | 2026 Capital Expenditure Guidance Figures presented in the table below are in USD millions. | | | | Current Guidance Caraíba Operations | | $170 - $185 Tucumã Operation | | $35 - $45 Xavantina Operations | | $50 - $60 Furnas Copper-Gold Project, Other Exploration & Corporate | | $30 - $40 Total | | $285 - $330 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 most recent AIF and Management of Risks and Uncertainties in the MD&A for complete risk factors. CONFERENCE CALL DETAILS The Company will hold a conference call on Tuesday, November 3, 2026 at 10:30 a.m. Eastern Time to discuss these results. A results presentation will be available for download via the webcast link and in the Presentations section of the Company's website on the day of the conference call. Date: | Tuesday, November 3, 2026 Time: | 10:30 a.m. Eastern Time Dial in: | Canada/USA Toll Free: 1-833-752-3380 International: +1-647-846-2821 Please dial in 5-10 minutes prior to the start of the call or pre-register using this link to bypass the live operator queue. (https://dpregister.com/sreg/10212017/104e507c7ef) Webcast: | To access the webcast, click here. (https://event.choruscall.com/mediaframe/webcast.html?webcastid=aGktY9cu) Replay: | Canada/USA: 1-855-669-9658, International: +1-412-317-0088 For country-specific dial-in numbers, click here. (https://services.choruscall.com/ccforms/replay.html) Replay Passcode: | 1109122 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 copper C1 cash cost, gold C1 cash cost, gold AISC, 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 nine months ended September 30, 2026 which is available on SEDAR+ at www.sedarplus.ca, and on EDGAR at www.sec.gov. Copper C1 cash cost The following table provides a reconciliation of copper C1 cash cost to cost of production, its most directly comparable IFRS measure. Amounts in US$ thousands, except per-pound amounts and where otherwise indicated. The Caraíba Operations | | | | | | | | | | Reconciliation: | | 2026 - Q3 | | 2026 - Q2 | | 2025 - Q3 | | 2026 - YTD | | 2025 - YTD Cost of production | | $ | 65,552 | | | $ | 59,098 | | | $ | 50,261 | | | $ | 187,002 | | | $ | 132,870 | Add (less): | | | | | | | | | | Transportation costs & other | | | 4,079 | | | | 2,895 | | | | 1,731 | | | | 9,870 | | | | 4,845 | Treatment, refining, and other | | | 610 | | | | (5,225 | ) | | | 2,508 | | | | (2,451 | ) | | | 7,258 | By-product credits | | | (8,726 | ) | | | (8,045 | ) | | | (6,693 | ) | | | (26,848 | ) | | | (17,597 | ) Incentive payments | | | (1,607 | ) | | | (1,700 | ) | | | (1,425 | ) | | | (4,841 | ) | | | (4,171 | ) Net change in inventory | | | (71 | ) | | | 3,647 | | | | 199 | | | | 2,093 | | | | 1,247 | Foreign exchange and other | | | (60 | ) | | | 106 | | | | (46 | ) | | | (41 | ) | | | (177 | ) C1 cash costs | | $ | 59,777 | | | $ | 50,776 | | | $ | 46,535 | | | $ | 164,784 | | | $ | 124,275 | Mining | | $ | 46,594 | | | $ | 42,510 | | | $ | 33,943 | | | $ | 131,515 | | | $ | 91,181 | Processing | | | 9,098 | | | | 9,986 | | | | 8,222 | | | | 28,186 | | | | 21,123 | Indirect | | | 8,122 | | | | 8,655 | | | | 6,824 | | | | 24,512 | | | | 17,465 | Production costs | | | 63,814 | | | | 61,151 | | | | 48,989 | | | | 184,213 | | | | 129,769 | By-product credits | | | (8,726 | ) | | | (8,045 | ) | | | (6,693 | ) | | | (26,848 | ) | | | (17,597 | ) Treatment, refining and other | | | 4,689 | | | | (2,330 | ) | | | 4,239 | | | | 7,419 | | | | 12,103 | C1 cash costs | | $ | 59,777 | | | $ | 50,776 | | | $ | 46,535 | | | $ | 164,784 | | | $ | 124,275 | | | | | | | | | | | | | | | | | | | | | | | 2026 - Q3 | | 2026 - Q2 | | 2025 - Q3 | | 2026 - YTD | | 2025 - YTD Costs per pound | | | | | | | | | | Total copper produced (lbs, 000) | | | 20,694 | | | | 18,411 | | | | 20,030 | | | | 58,564 | | | | 56,448 | | | | | | | | | | | Mining | | $ | 2.25 | | | $ | 2.31 | | | $ | 1.69 | | | $ | 2.25 | | | $ | 1.62 | Processing | | $ | 0.44 | | | $ | 0.54 | | | $ | 0.41 | | | $ | 0.48 | | | $ | 0.37 | Indirect | | $ | 0.39 | | | $ | 0.47 | | | $ | 0.34 | | | $ | 0.42 | | | $ | 0.31 | By-product credits | | $ | (0.42 | ) | | $ | (0.44 | ) | | $ | (0.33 | ) | | $ | (0.46 | ) | | $ | (0.31 | ) Treatment, refining and other | | $ | 0.23 | | | $ | (0.12 | ) | | $ | 0.21 | | | $ | 0.12 | | | $ | 0.21 | Copper C1 cash costs | | $ | 2.89 | | | $ | 2.76 | | | $ | 2.32 | | | $ | 2.81 | | | $ | 2.20 | The Tucumã Operation | | | | | | | | | | Reconciliation: | | 2026 - Q3 | | 2026 - Q2 | | 2025 - Q3 | | 2026 - YTD | | 2025 - YTD Cost of production | | $ | 33,646 | | | $ | 31,632 | | | $ | 18,308 | | | $ | 95,016 | | | $ | 35,504 | Add (less): | | | | | | | | | | Transportation costs & other | | | 8,191 | | | | 9,393 | | | | 4,880 | | | | 23,975 | | | | 4,880 | Treatment, refining, and other | | | 163 | | | | 378 | | | | 1,486 | | | | 3,012 | | | | 1,486 | By-product credits | | | (566 | ) | | | (425 | ) | | | — | | | | (1,692 | ) | | | — | Incentive payments | | | (552 | ) | | | (480 | ) | | | (401 | ) | | | (1,578 | ) | | | (401 | ) Net change in inventory | | | 981 | | | | 1,021 | | | | 2,783 | | | | 1,446 | | | | 2,783 | Pre-commercial cost of production | | | — | | | | — | | | | — | | | | — | | | | (17,196 | ) Foreign exchange and other | | | (6 | ) | | | 4 | | | | — | | | | (6 | ) | | | — | C1 cash costs | | $ | 41,857 | | | $ | 41,523 | | | $ | 27,056 | | | $ | 120,173 | | | $ | 27,056 | Mining | | $ | 10,943 | | | $ | 8,963 | | | $ | 4,552 | | $ | 26,444 | | | $ | 4,552 Processing | | | 18,649 | | | | 18,566 | | | | 12,455 | | | 55,191 | | | | 12,455 Indirect | | | 4,477 | | | | 4,648 | | | | 3,698 | | | 13,243 | | | | 3,698 Production costs | | | 34,069 | | | | 32,177 | | | | 20,705 | | | 94,878 | | | | 20,705 By-product credits | | | (566 | ) | | | (425 | ) | | | — | | | (1,692 | ) | | | — Treatment, refining and other | | | 8,354 | | | | 9,771 | | | | 6,351 | | | 26,987 | | | | 6,351 C1 cash costs | | $ | 41,857 | | | $ | 41,523 | | | $ | 27,056 | | $ | 120,173 | | | $ | 27,056 | | | | | | | | | | | | | | | | | | | | | | 2026 - Q3 | | 2026 - Q2 | | 2025 - Q3 | | 2026 - YTD | | 2025 - YTD Costs per pound | | | | | | | | | | Total copper produced (lbs, 000) | | | 19,749 | | | | 19,763 | | | | 16,707 | | | 58,164 | | | | 16,707 | | | | | | | | | | Mining | | $ | 0.55 | | | $ | 0.45 | | | $ | 0.27 | | $ | 0.45 | | | $ | 0.27 Processing | | $ | 0.94 | | | $ | 0.94 | | | $ | 0.75 | | $ | 0.95 | | | $ | 0.75 Indirect | | $ | 0.23 | | | $ | 0.24 | | | $ | 0.22 | | $ | 0.23 | | | $ | 0.22 By-product credits | | $ | (0.03 | ) | | $ | (0.02 | ) | | $ | — | | $ | (0.03 | ) | | $ | — Treatment, refining and other | | $ | 0.43 | | | $ | 0.49 | | | $ | 0.38 | | $ | 0.47 | | | $ | 0.38 Copper C1 cash costs | | $ | 2.12 | | | $ | 2.10 | | | $ | 1.62 | | $ | 2.07 | | | $ | 1.62 Gold Production C1 cash cost and gold AISC The following table provides a reconciliation of gold C1 cash cost and gold AISC to cost of production, its most directly comparable IFRS measure. Amounts in US$ thousands, except per-ounce amounts or where otherwise indicated. Reconciliation: | | 2026 - Q3 | | 2026 - Q2 | | 2025 - Q3 | | 2026 - YTD | | 2025 - YTD Cost of production | | $ | 16,684 | | | $ | 16,618 | | | $ | 10,032 | | | $ | 47,179 | | | $ | 25,018 | Less: Gold concentrate re-handling costs | | | (3,793 | ) | | | (3,682 | ) | | | — | | | | (9,116 | ) | | | — | Cost of mine production | | $ | 12,891 | | | $ | 12,936 | | | $ | 10,032 | | | $ | 38,063 | | | $ | 25,018 | Add (less): | | | | | | | | | | Incentive payments | | | (482 | ) | | | (427 | ) | | | (364 | ) | | | (1,229 | ) | | | (842 | ) Net change in inventory | | | 996 | | | | 357 | | | | 191 | | | | 546 | | | | 1,593 | By-product credits | | | (146 | ) | | | (284 | ) | | | (208 | ) | | | (619 | ) | | | (478 | ) Smelting, refining and selling expenses | | | 1,587 | | | | 1,167 | | | | 217 | | | | 3,523 | | | | 540 | Foreign exchange and other | | | (8 | ) | | | 40 | | | | (12 | ) | | | (6 | ) | | | (41 | ) Gold production C1 cash costs | | $ | 14,838 | | | $ | 13,789 | | | $ | 9,856 | | | $ | 40,278 | | | $ | 25,790 | Site general and administrative | | | 1,860 | | | | 1,647 | | | | 1,602 | | | | 4,916 | | | | 3,954 | Accretion of mine closure and rehabilitation provision | | | 149 | | | | 152 | | | | 151 | | | | 446 | | | | 437 | Sustaining capital expenditure | | | 8,046 | | | | 5,867 | | | | 7,307 | | | | 22,049 | | | | 15,651 | Sustaining lease payments | | | 2,958 | | | | 3,077 | | | | 2,524 | | | | 8,657 | | | | 6,858 | Royalties and production taxes | | | 436 | | | | 516 | | | | 566 | | | | 1,386 | | | | 1,415 | Gold production AISC | | $ | 28,287 | | | $ | 25,048 | | | $ | 22,006 | | | $ | 77,732 | | | $ | 54,105 | | | | | | | | | | | | | 2026 - Q3 | | 2026 - Q2 | | 2025 - Q3 | | 2026 - YTD | | 2025 - YTD Costs | | | | | | | | | | Mining | | $ | 7,156 | | | $ | 6,894 | | | $ | 4,871 | | | $ | 19,870 | | | $ | 13,183 | Processing | | | 3,515 | | | | 3,414 | | | | 2,787 | | | | 9,869 | | | | 7,465 | Indirect | | | 2,726 | | | | 2,598 | | | | 2,189 | | | | 7,635 | | | | 5,080 | Production costs | | | 13,397 | | | | 12,906 | | | | 9,847 | | | | 37,374 | | | | 25,728 | Treatment, refining and other | | | 1,587 | | | | 1,167 | | | | 217 | | | | 3,523 | | | | 540 | By-product credits | | | (146 | ) | | | (284 | ) | | | (208 | ) | | | (619 | ) | | | (478 | ) Gold production C1 cash costs | | $ | 14,838 | | | $ | 13,789 | | | $ | 9,856 | | | $ | 40,278 | | | $ | 25,790 | Site general and administrative | | | 1,860 | | | | 1,647 | | | | 1,602 | | | | 4,916 | | | | 3,954 | Accretion of mine closure and rehabilitation provision | | | 149 | | | | 152 | | | | 151 | | | | 446 | | | | 437 | Sustaining capital expenditure | | | 8,046 | | | | 5,867 | | | | 7,307 | | | | 22,049 | | | | 15,651 | Sustaining lease payments | | | 2,958 | | | | 3,077 | | | | 2,524 | | | | 8,657 | | | | 6,858 | Royalties and production taxes | | | 436 | | | | 516 | | | | 566 | | | | 1,386 | | | | 1,415 | Gold production AISC | | $ | 28,287 | | | $ | 25,048 | | | $ | 22,006 | | | $ | 77,732 | | | $ | 54,105 | | | | | | | | | | | Costs per ounce | | | | | | | | | | Total gold produced (ounces) | | | 7,844 | | | | 8,693 | | | | 9,073 | | | | 22,032 | | | | 23,454 | | | | | | | | | | | Mining | | $ | 912 | | | $ | 793 | | | $ | 537 | | | $ | 902 | | | $ | 562 | Processing | | $ | 448 | | | $ | 393 | | | $ | 307 | | | $ | 448 | | | $ | 318 | Indirect | | $ | 349 | | | $ | 299 | | | $ | 241 | | | $ | 346 | | | $ | 216 | Treatment, refining and other | | $ | 202 | | | $ | 134 | | | $ | 24 | | | $ | 160 | | | $ | 23 | By-product credits | | $ | (19 | ) | | $ | (33 | ) | | $ | (23 | ) | | $ | (28 | ) | | $ | (19 | ) Gold production C1 cash cost | | $ | 1,892 | | | $ | 1,586 | | | $ | 1,086 | | | $ | 1,828 | | | $ | 1,100 | Gold production AISC | | $ | 3,607 | | | $ | 2,881 | | | $ | 2,425 | | | $ | 3,528 | | | $ | 2,307 | Historic Gold Concentrate C1 cash cost and gold AISC The following table provides a reconciliation of historic gold concentrate C1 cash cost and historic gold concentrate AISC to cost of production, its most directly comparable IFRS measure. Reconciliation: | | 2026 - Q3 | | 2026 - Q2 | | 2025 - Q3 | | 2026 - YTD | | 2025 - YTD Cost of production | | $ | 16,684 | | | $ | 16,618 | | | $ | 10,032 | | | $ | 47,179 | | | $ | 25,018 | less: Cost of mine production | | | (12,891 | ) | | | (12,936 | ) | | | (10,032 | ) | | | (38,063 | ) | | | (25,018 | ) Gold concentrate re-handling costs | | $ | 3,793 | | | $ | 3,682 | | | $ | — | | | $ | 9,116 | | | $ | — | Add (less): | | | | | | | | | | Net change in inventory | | | 207 | | | | (11 | ) | | | — | | | | (132 | ) | | | — | By-product credits | | | (1,374 | ) | | | (974 | ) | | | — | | | | (2,482 | ) | | | — | Smelting, refining and selling expenses | | | 8,184 | | | | 4,811 | | | | — | | | | 13,749 | | | | — | Historic gold concentrate C1 cash costs | | $ | 10,810 | | | $ | 7,508 | | | $ | — | | | $ | 20,251 | | | $ | — | Royalties and production taxes | | | 1,556 | | | | 967 | | | | — | | | | 2,769 | | | | — | Historic gold concentrate AISC | | $ | 12,366 | | | $ | 8,475 | | | $ | — | | | $ | 23,020 | | | $ | — | | | | | | | | | | | | | 2026 - Q3 | | 2026 - Q2 | | 2025 - Q3 | | 2026 - YTD | | 2025 - YTD Costs | | | | | | | | | | Gold concentrate re-handling costs | | | 4,000 | | | | 3,671 | | | | — | | | 8,984 | | | | — Smelting, refining and selling costs | | | 8,184 | | | | 4,811 | | | | — | | | 13,749 | | | | — By-product credits | | | (1,374 | ) | | | (974 | ) | | | — | | | (2,482 | ) | | | — Historic gold concentrate C1 cash costs | | $ | 10,810 | | | $ | 7,508 | | | $ | — | | $ | 20,251 | | | $ | — Royalties and production taxes | | | 1,556 | | | | 967 | | | | — | | | 2,769 | | | | — Historic gold concentrate AISC | | $ | 12,366 | | | $ | 8,475 | | | $ | — | | $ | 23,020 | | | $ | — | | | | | | | | | | Costs per ounce | | | | | | | | | | Historic gold concentrate recovered (ounces) | | | 17,414 | | | | 11,860 | | | | — | | | 31,386 | | | | — | | | | | | | | | | Gold concentrate re-handling costs | | $ | 230 | | | $ | 310 | | | $ | — | | $ | 286 | | | $ | — Smelting, refining and selling costs | | $ | 470 | | | $ | 406 | | | $ | — | | $ | 438 | | | $ | — By-product credits | | $ | (79 | ) | | $ | (82 | ) | | $ | — | | $ | (79 | ) | | $ | — Historic gold concentrate C1 cash costs | | $ | 621 | | | $ | 633 | | | $ | — | | $ | 645 | | | $ | — Historic gold concentrate AISC | | $ | 710 | | | $ | 715 | | | $ | — | | $ | 733 | | | $ | — 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. Amounts in US$ thousands. Reconciliation: | | 2026 - Q3 | | 2026 - Q2 | | 2025 - Q3 | | 2026 - YTD | | 2025 - YTD Net Income | | $ | 117,954 | | | $ | 90,749 | | | $ | 36,513 | | | $ | 318,014 | | | $ | 188,168 | Adjustments: | | | | | | | | | | Finance expense | | | 9,952 | | | | 12,678 | | | | 11,331 | | | | 33,694 | | | | 22,030 | Finance income | | | (825 | ) | | | (1,443 | ) | | | (1,208 | ) | | | (3,389 | ) | | | (3,176 | ) Income tax expense | | | 25,564 | | | | 19,321 | | | | 12,774 | | | | 62,770 | | | | 40,597 | Amortization and depreciation | | | 43,117 | | | | 38,514 | | | | 31,369 | | | | 119,950 | | | | 75,204 | EBITDA | | $ | 195,762 | | | $ | 159,819 | | | $ | 90,779 | | | $ | 531,039 | | | $ | 322,823 | Foreign exchange gain | | | (5,077 | ) | | | (10,845 | ) | | | (22,055 | ) | | | (69,577 | ) | | | (119,095 | ) Share-based compensation | | | 7,458 | | | | 1,063 | | | | 6,742 | | | | 11,161 | | | | 15,671 | Unrealized loss (gain) on commodity derivatives | | | 2,462 | | | | (6,014 | ) | | | 1,627 | | | | (2,801 | ) | | | 3,093 | Others | | | — | | | | — | | | | — | | | | — | | | | 458 | Adjusted EBITDA | | $ | 200,605 | | | $ | 144,023 | | | $ | 77,093 | | | $ | 469,822 | | | $ | 222,950 | 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: | | 2026 - Q3 | | 2026 - Q2 | | 2025 - Q3 | | 2026 - YTD | | 2025 - YTD Net income as reported attributable to the owners of the Company | | $ | 116,237 | | | $ | 89,543 | | | $ | 35,978 | | | $ | 314,551 | | | $ | 186,753 | Adjustments: | | | | | | | | | | Share-based compensation | | | 7,458 | | | | 1,063 | | | | 6,742 | | | | 11,161 | | | | 15,671 | Unrealized foreign exchange loss (gain) on USD denominated balances in MCSA | | | 1,063 | | | | (3,267 | ) | | | (15,057 | ) | | | (32,464 | ) | | | (82,889 | ) Unrealized foreign exchange loss (gain) on foreign exchange derivative contracts | | | 3,042 | | | | 5,363 | | | | (3,964 | ) | | | (8,059 | ) | | | (27,309 | ) Unrealized loss (gain) on commodity derivatives | | | 2,452 | | | | (5,870 | ) | | | 1,574 | | | | (2,685 | ) | | | 3,020 | Others | | | — | | | | — | | | | — | | | | — | | | | 458 | Tax effect on the above adjustments | | | (1,000 | ) | | | 575 | | | | 2,661 | | | | 6,589 | | | | 16,221 | Adjusted net income attributable to owners of the Company | | $ | 129,252 | | | $ | 87,407 | | | $ | 27,934 | | | $ | 289,093 | | | $ | 111,925 | | | | | | | | | | | Weighted average number of common shares | | | | | | | | | | Basic | | | 104,351,583 | | | | 104,282,548 | | | | 103,621,631 | | | | 104,299,083 | | | | 103,589,664 | Diluted | | | 105,977,099 | | | | 105,876,946 | | | | 104,044,755 | | | | 105,903,492 | | | | 103,941,295 | | | | | | | | | | | Adjusted EPS | | | | | | | | | | Basic | | $ | 1.24 | | | $ | 0.84 | | | $ | 0.27 | | | $ | 2.77 | | | $ | 1.08 | Diluted | | $ | 1.22 | | | $ | 0.83 | | | $ | 0.27 | | | $ | 2.73 | | | $ | 1.08 | Net Debt (Cash) The following table provides a calculation of net debt (cash) based on amounts presented in the Company's condensed consolidated interim financial statements as at the periods presented. | | September 30, 2026 | | June 30, 2026 | | December 31, 2025 | | September 30, 2025 Current portion of loans and borrowings | | $ | 17,966 | | | $ | 34,578 | | | $ | 55,711 | | | $ | 50,590 | Long-term portion of loans and borrowings | | | 449,548 | | | | 519,856 | | | | 551,403 | | | | 561,146 | Less: | | | | | | | | Cash and cash equivalents | | | (114,053 | ) | | | (101,742 | ) | | | (105,442 | ) | | | (66,257 | ) Net debt (cash) | | $ | 353,461 | | | $ | 452,692 | | | $ | 501,672 | | | $ | 545,479 | 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. | | September 30, 2026 | | June 30, 2026 | | December 31, 2025 | | September 30, 2025 Current assets | | $ | 325,162 | | | $ | 324,000 | | | $ | 276,212 | | | $ | 207,413 | Less: Current liabilities | | | (235,774 | ) | | | (236,345 | ) | | | (260,718 | ) | | | (252,579 | ) Working capital (deficit) | | $ | 89,388 | | | $ | 87,655 | | | $ | 15,494 | | | $ | (45,166 | ) | | | | | | | | Cash and cash equivalents | | | 114,053 | | | | 101,742 | | | | 105,442 | | | | 66,257 | Available undrawn revolving credit facilities | | | 150,000 | | | | 80,000 | | | | 45,000 | | | | 45,000 | Available liquidity | | $ | 264,053 | | | $ | 181,742 | | | $ | 150,442 | | | $ | 111,257 | ABOUT ERO Ero is a Brazil-focused, growth-oriented mining company with a diversified portfolio of copper and gold assets. Headquartered in Vancouver, B.C., the Company operates two copper mines – the Caraíba Operations in Bahia State and the Tucumã Operation in Pará State – as well as the Xavantina Operations, a producing gold mine in Mato Grosso State. In addition to its operating assets, Ero is advancing the Furnas Copper-Gold Project, located in the mineral-rich Carajás Province in Pará State, through a definitive earn-in agreement with Vale Base Metals to acquire a 60% interest in the project. Ero's operating philosophy is grounded in a commitment to safety, operational excellence, and the responsible production of minerals essential for a better tomorrow. The Company's shares are publicly traded on the Toronto Stock Exchange and the New York Stock Exchange under the symbol "ERO." Additional information, including technical reports on the Company's operations and projects, is available on the Company's website (www.ero.com), SEDAR+ (www.sedarplus.ca), and on EDGAR (www.sec.gov). FOR MORE INFORMATION, PLEASE CONTACT Farooq Hamed, VP, Investor Relations [email protected] 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 Operation and the Xavantina Operations, including the expected timing and weighting of production, plant throughput, mined and processed copper or gold grades, recoveries and unit costs; 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, the Tucumã Project Technical Report and the Furnas Project Technical Report; the estimation of mineral reserves and mineral resources; estimated completion dates for certain milestones, including completion of the Pilar Mine's new external shaft at the Caraíba Operations; the ability of the Company to maintain improved performance at the Caraíba mill and realize the expected benefits associated with the Pilar Mine's new external shaft; the expected timing of delivery, installation and commissioning of additional modular tailings filters at the Tucumã Operation and the anticipated impact of such filters on tailings filtration capacity, plant throughput and future production; the expected benefits of the ventilation and cooling infrastructure installed at the Xavantina Operations, including increased mining rates, mill throughput and processed gold grades; expectations regarding gold concentrate sales from the Xavantina Operations, including the expected timing and volume of sales and the anticipated benefits of drier seasonal conditions and the mobile filter press and industrial dryer commissioned on site; the anticipated benefits of the new powerline and processing plant optimization initiatives at the Xavantina Operations; expectations regarding the impact of inflationary pressures, geopolitical conflicts and fluctuations in the Brazilian real on the Company's operating costs, capital expenditures and financial results; expectations of cost savings related to the OneEro Program; expectations regarding foreign exchange derivative contracts, including expected gains thereon and the exchange rate assumptions underlying such expectations; the Company's capital allocation priorities, including continued deleveraging of the balance sheet; the Company's ability to advance work programs under the Furnas earn-in agreement, including exploration, drilling, permitting, engineering, geotechnical, hydrogeological, environmental and metallurgical programs; the expected completion of planned exploration activities at the Furnas Copper-Gold Project; the timing and completion of a pre-feasibility study for the Furnas Copper-Gold Project, currently expected to be published in 2027; the potential to extend known mineralization, upgrade mineral resources to higher-confidence categories or mineral reserves, enhance project economics or increase the potential production profile at the Furnas Copper-Gold Project; the discovery of additional mineralization and the potential impact of exploration results on future production rates at the Company's mines or processing facilities; the Company's expectations associated with historic gold concentrate stockpiles at the Xavantina Operations, including operating costs, payability, grades, sales volumes and the timing of sales; 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 Company's most recent Annual Information Form ("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: 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 metals; 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, the Tucumã Operation and the Furnas Copper-Gold 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, interest rates and tariff rates; operating conditions being favourable such that the Company is able to operate in a safe, efficient and effective manner; workforce continuing to remain healthy in the face of prevailing epidemics, pandemics or other health risks; political and regulatory stability; the receipt of governmental, regulatory and third-party approvals, licenses and permits on favourable terms; obtaining required renewals for existing approvals, licenses and permits on favourable terms; requirements under applicable laws; sustained labour stability; stability in financial and capital goods markets; availability of equipment; 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.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 11:30 a.m. ET VP, Investor Relations - Farooq Hamed President and Chief Executive Officer - Makko DeFilippo Executive Vice President and Chief Financial Officer - Wayne Drier Executive Vice President and Chief Operating Officer - Gelson Batista Executive Vice President, External Affairs and Strategy - Courtney Lynn Operator: Thank you for standing by. This is the conference operator. Welcome to the Ero Copper Second Quarter 2026 Operating and Financial Results Conference Call. [Operator Instructions] And the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Farooq Hamed, VP, Investor Relations. Please go ahead. Farooq Hamed: Thank you, operator. Good morning, and welcome to Ero Copper's second quarter earnings call. Our operating and financial results were released yesterday afternoon and are available on our website, along with our financial statements and MD&A for the 3 and 6 months ended June 30, 2026. A corresponding earnings presentation can be downloaded directly from the webcast and is also available in the Presentations section of our website. Joining me on the call today are Makko DeFilippo, President and Chief Executive Officer; Wayne Drier, Executive Vice President and Chief Financial Officer; Gelson Batista, Executive Vice President and Chief Operating Officer; and Courtney Lynn, Executive Vice President, External Affairs and Strategy. Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially. For a detailed discussion of these risks and their potential impact on our business, please refer to our most recent annual information form available on our website, as well as on SEDAR and EDGAR. Unless otherwise noted, all figures discussed today are in U.S. dollars. With that, I'll now turn the call over to Makko DeFilippo. Makko Defilippo: Thank you, Farooq, and good morning. I appreciate everyone taking the time to join us today. As I reflected on our results this quarter, what stood out most was not any one individual metric, but the breadth of progress we are seeing across the business. Our efforts to reshape Ero are now increasingly visible in both our operating and financial results. A meaningful part of that progress traces back to OneEro, a company-wide initiative we launched at the start of 2025. OneEro is designed to streamline how we operate, improve efficiency and unlock synergies across operations, human resources, procurement and finance, while investing in people, systems and processes to drive frontline excellence in data and analytics. We have fundamentally changed how we work together, brought leadership changes on site and across the organization. These changes are translating into safer, stronger operational performance, higher cash flows and meaningful balance sheet improvements, allowing us to accelerate longer-term growth within our portfolio. These were the commitments I made to shareholders at the start of 2025, and we are delivering on that. These changes are coming together at exactly the right time. Paired with commodity price tailwinds, our operational momentum drove another quarter of solid financial performance. Cash flow from operations increased nearly 50% quarter-on-quarter to approximately $138 million, and adjusted EBITDA increased to $144 million. Stepping back to the first half as a whole, really illustrates how much our business has changed over the past year. Cash flow from operations for the first 6 months of 2026 increased to approximately $231 million from $156 million in the first half of 2025. Adjusted EBITDA increased to $269 million from $146 million over the same period. Stronger cash generation has enabled us to make significant progress on deleveraging our balance sheet, one of our key strategic priorities this year. Over the past 18 months, we have reduced net debt by approximately $100 million, while improving our net debt leverage ratio to 0.8 from a peak of 2.6 at the start of 2025. As outlined in our news release, we repaid an additional $25 million on our revolving credit facility in July, bringing total payments in 2026 to $60 million. OneEro has been an important contributor to that progress, and we can point to several tangible examples of the value it is creating across the business. Operationally, investments we continue to make in infrastructure, equipment, people, processes and technology are increasingly being reflected in our results. Our copper operations produced a combined 17,315 tonness of copper during the second quarter at a consolidated C1 cash cost of $2.42 per pound. At Caraiba, we are sustaining the higher throughput rates we achieved at the end of last year following our completion of a substantial debottlenecking effort and remain on track for a new annual throughput record in 2026. At Tucuma, plant throughput increased 27% quarter-on-quarter. And in June, we completed the first phase of our tailings filtration expansion. During the second half of the year, we are on track to install and commission 3 new modular filters, which are expected to significantly increase filtration capacity and support higher plant throughput into the future. At Xavantina, important investments in ventilation and cooling are supporting improving -- improved mining and development rates, and we saw that reflected during the quarter. Our focus on bringing forward value from our gold concentrate program coincided with the end of the rainy season, which allowed us to recover more gold from our historic gold concentrates. Together, improved mine performance and increased contributions from historic gold concentrates drove 170% quarter-over-quarter increase in total gold from Xavantina to more than 20,000 ounces. This included 8,693 ounces of mined gold production at a C1 cash cost of $1,586 per ounce and 11,860 ounces recovered from historic concentrates at a C1 cash cost of $633 per ounce. We expect the successful commissioning and ramp-up of our mobile filter press and industrial dryer to be a real benefit to our concentrate operations through the rest of this year. The collective improvements we have made and are making across our portfolio have positioned us for a strong second half of 2026. Our copper operations remain well positioned against full year guidance with stronger production expected in the second half. We have also maintained consolidated copper C1 cash cost guidance with unit costs expected to decline sequentially through the remainder of the year. At Xavantina, we expect mining rates, throughput and mine gold production to be meaningfully higher in the second half, with unit costs declining as production increases. The slower start to the year means we now expect mine gold production at the low end of the maintained guidance range. And as a result, we have updated full year C1 cash cost guidance to $1,100 to $1,350 per ounce and our all-in sustaining cost guidance to $2,200 to $2,700 per ounce. We have also increased our consolidated capital expenditure guidance by $10 million to include the approval of a new power line at Xavantina. Once operational, the power line is expected to strengthen site infrastructure, support our ongoing efforts to grow our operational footprint at Xavantina and importantly, reduce power transmission costs, allowing this investment to effectively pay for itself within 2 years. At Furnas, our June project update showed continued high-grade continuity with mineralization extending both at depth and along strike, an encouraging sign for the life of mine production plan we outlined in the PEA. We are well advanced on the 45,000-meter Phase 3 drill program and remain firmly on track to complete it before year-end. In parallel, we are progressing various work streams in support of a pre-feasibility study that we expect to publish in 2027. In summary, our strategy is working. We are investing in and strengthening operating performance across the portfolio, realizing measurable benefits from OneEro, converting that progress into cash flow and balance sheet improvement and rapidly advancing Furnas as Ero's next major leg of growth. Before I turn the call over to Gelson, I also want to remind everyone that we'll be hosting our Capital Markets Day in Sao Paulo on Monday, September 14. For those of you interested in attending, please reach out to our Investor Relations team for more information and to register. We look forward to seeing many of you there. With that, I will turn the call over to Gelson. Gelson Batista: Thank you, Makko, and good morning, everyone. As Makko outlined, we are entering the second half with improving performance across all 3 operations. I will provide some additional detail on the underlying operating drivers and our expectation for the remaining on our key projects. At Caraiba, copper production totaled 8,351 tonnes during the quarter. Lower planned head grades were partially offset by slightly higher throughput and improved recoveries. Looking ahead, we expect stronger production at Caraiba in the second half. This should be driven by access to higher grade benches at Surubim, as well as higher grades and tonnage from Pilar due to planned stope sequencing. We expect the higher throughput levels, grades and production in the second half of the year. And as a result, C1 cash costs are expected to decline sequentially through the remainder of the year. At Tucuma, copper production increased approximately 6% quarter-over-quarter to 8,964 tonnes as the 27% increase in plant throughput more than offset the planned decrease in processed grades. Looking to the balance of the year at Tucuma, we expect sustained higher throughput rates to increase overall processed tonnes, while copper grades are expected to moderate in accordance with the mine plan. As a result, production is expected to be modestly higher in the second half, while C1 cash costs should remain relatively stable, supporting our maintained full year production and cost guidance for Tucuma. As Makko discussed, we completed the expansion of Tucuma 3 existing filter presses in June. We continue to expect the new 3 modular filters to be delivered through the third quarter and commissioned during the fourth quarter. The combined initiatives are expected to increase filtration capacity and support higher plant throughput as we exit 2026. At Xavantina, completion of the ventilation and cool tie-ins supported higher mining rates, increased throughput and improved access to higher-grade stopes beginning in May. We have these benefits to become increasingly visible through the second half as mining rates continue to improve quarter-on-quarter. During Q2, we also advanced process optimization work at Xavantina processing plant to improve plant recoveries and increase efficiency. This work included a modest change to the overall process to achieved as well as new investments in flotation cells and the new Falcon concentrator. Our quarter-on-quarter increase in recoveries reflect these improvements and ongoing optimization work. For the remaining of the year, we expect mining rates and throughput to increase significantly. Approximately 65% of full year mine gold production is expected in the second half with unit cost declining as production increases. We are focusing on delivering value from our historical gold concentrate initiative. During the second quarter, we recovered 11,860 ounces of gold with sales volumes increasing significantly from Q1. We expect volumes to continue benefiting from dryer seasonal conditions, as well as from the mobile filter press and industrial dryer we successfully commissioned at the end of the quarter. I will now turn the call over to Wayne to walk through our financial results. Wayne Drier: Thank you, Gelson, and good morning, all. Our second quarter financial results reflected solid copper production, strong metal prices and a 65% quarter-on-quarter increase in gold sales. These factors drove quarterly revenue to $284.3 million, up 8% from the first quarter. As Makko noted, cash flow from operations increased to $138 million, while adjusted EBITDA increased to $144 million. This stronger cash generation has provided us with the financial capacity to accelerate debt reduction. Net debt declined by $38 million during Q2 to approximately $453 million, while last 12-month adjusted EBITDA increased to $533 million. Together, these factors reduced our net debt leverage ratio to approximately 0.8x. We continued that progress after quarter end, repaying an additional $25 million on our revolving credit facility in July, bringing total repayments in 2026 to $60 million. Our liquidity position also improved during the period, increasing $36 million to $182 million, including $102 million of cash and cash equivalents and $80 million of availability under the revolver. Turning to foreign exchange. While the stronger BRL continued to impact our reported operating costs and capital expenditures during the quarter, on a cash basis, our hedge program worked as intended, generating $13 million of realized gains, bringing the total gains for the first half of the year to $20 million. The hedge program is designed to protect approximately 70% of our consolidated full year operating and capital costs at an average floor of BRL 5.54 per U.S. dollar as described on Slide 8 of our results presentation. Assuming an exchange rate of $5.10 through year-end, we expect the hedge book to generate an additional $20 million to $25 million of realized gains, resulting in potential full-year gains of approximately $40 million to $45 million. While these gains substantially mitigate the cash impact of the stronger real, they are not included in C1 cash costs. As a result, reported unit costs remain sensitive to the local currency and to inflationary pressures on inputs such as fuel, consumables, transportation and freight. If current currency and inflationary conditions persist through year-end, we estimate potential incremental impacts of approximately $0.10 per pound on reported consolidated copper C1 cash costs and approximately $100 per ounce on reported mined gold C1 cash costs at Xavantina. Again, the cash impact associated with the stronger real is expected to be substantially offset by realized gains from the hedge program. Turning to capital expenditures. We have updated full year consolidated guidance to $285 million to $330 million, an increase of $10 million from our previous range. The increase reflects the approval of a new power line at Xavantina. As Makko discussed, this investment is expected to strengthen site infrastructure, support future growth and reduce ongoing power transmission costs once operational. If current currency and inflationary conditions persist, we estimate a potential incremental impact of approximately $20 million to $25 million on reported capital expenditures. The cash impact associated with the stronger real is also expected to be substantially offset by the hedge gains I just discussed. With that, I'll pass the call back to Makko for some closing remarks. Makko Defilippo: Thank you, Wayne. Before we open it up to questions, a few points I would like to leave everyone with this morning. First, our operations are performing well, and we are positioned to deliver on our full year guidance with stronger performance at both our copper and gold operations expected in the second half of the year. Second, with strong cash flows, we expect to continue to deliver on our commitment of deleveraging our balance sheet. And third, we are rapidly advancing Furnas, where we are on track to complete the Phase 3 drill program well before year-end and deliver a pre-feasibility study in 2027. With that, we'll open the line for questions. Operator: [Operator Instructions] Makko Defilippo: Operator, you can open the line for questions. Operator: Yes. Are you not hearing me? [Operator Instructions] Sorry? Are you able to hear me now? Makko Defilippo: We seem to be having some technical difficulties here. Just stay tuned. We're trying to open the line here for questions. Thank you. Operator: I'm sorry, can you hear me now? This is the operator. Are you able to hear me now? Okay. I'm getting worried that everyone else that others in the call can hear me. So what I'm going to do is ask the presenter line to reconnect. Perhaps the issue is on their end. So, if the presenter -- I'll just ask them now. Please standby, we'll get this resolved. Okay. We have our presenter line reconnected and they are able to hear me. So, let's get the question-and-answer session underway. [Operator Instructions] And our first question is from Matthew Murphy with BMO Capital Markets. Matthew Murphy: First question would be on the Tucuma tailings expansion. Can you just remind me what expansion was completed? And then what timeline are you currently looking at for adding these filters in the second half? Makko Defilippo: Yes. Hey, Matt, apologies for the delay there, everyone. So, the expansion that we completed so far was with our existing circuit. So, during the quarter, we added additional filtration plates to our 3 existing filters. That's about a net 8% improvement to tailings filtration capacity, and that was completed successfully during the quarter. Right now, our 3 modular filters are expected to arrive on site this quarter and be installed and operational in the fourth quarter. Matthew Murphy: Okay. Got it. And then on Xavantina, the addition of a dryer and filter press, what could that do for your Q3 concentrate sales? Makko Defilippo: Yes. Look, obviously, under the confines that we're at, we were unable to provide forward-looking guidance as we've talked about multiple times. That's related to the technical and scientific information that we have available. But what I can tell you, Matt, is that if you look at June and July, when we had those operational, both those months, we achieved more than 7,000 ounces of gold. And I think that speaks really well for Q3 and through the rest of the year. Operator: The next question is from Guilherme Rosito with Bank of America. Guilherme Rosito: So, my first question is on Xavantina and maybe, Makko, if you could just explore -- you haven't adjusted your production guidance and it sounded pretty confident on the call. So, maybe if you could just give us some color on what you guys are seeing already from July at Xavantina, what gives you -- makes you so confident that you're reaching guidance even after a rough first half of the operation? And maybe just if you could comment on that and what you guys are seeing in terms of grades and because they've been pretty volatile ever since you made the mechanization investments, right? So, maybe if you could just touch on that a bit. And second question is we're at 0.8x net debt to EBITDA, you generated cash this quarter from everything that looks like second half is stronger in production, therefore, in cash generation, so you're probably moving lower there. So, what's next now? What are your priorities in terms of capital allocation? Is this the time to maybe we can discuss shareholder returns or anything else? So, I just wanted to pick your brains there. Makko Defilippo: Perfect. Yes, we'll go through those in detail. A few things to unpack, but starting with Xavantina. I would say, look, as taking a step back here, as we discussed last quarter, we made very, very important investments at Xavantina in ventilation and cooling. What we've seen since we completed that tie-in is that we've been able to get back on track in terms of development rates. The reason that we're focused on the second half of the year at Xavantina and why we firmly expect to have a better second half is when you look at the stopes that we're developing into, particularly in San Antonio, we're developing into stopes that are higher grade, and they're also much thicker. What that translates to in operational terms is that every meter of development that we're doing now is releasing more ore to feed to the mill. And so, when you look at where we've been in the last several months, again, sort of May, June, July, all hitting those development rates that we need to achieve and really working towards getting these higher-grade stopes, larger stopes into the mine plan as we expect. Obviously, that we had a slightly slower ramp-up than we anticipated at the end of Q2, both in development in terms of getting to those development rates that we're achieving now and also as a consequence, mining rates -- but again, I think really the main thing to look forward to is how we see that translate into second half production at Xavantina. And I was just there with Gelson 2 weeks ago and really pleased to see the progress the team is making on site there to improve performance. Again, not just at the mine as we discussed, but as Matt asked, our concentrate -- gold concentrate sales. And as I mentioned, we're seeing really good progress on the -- not only the end of the rainy season, but also the filter and dryer that we put in place and achieving elevated levels for 2 months. Obviously, 2 months don't make a quarter and don't make a year. So, we've got a lot more work to do, but we're feeling good about where the mine is positioned and certainly where the gold concentrate program is positioned. This quarter, we -- I talked a little bit more about the operating costs associated with gold concentrates and as you can see, that's a very, very high-margin material and hence, our focus on delivering that to the bottom line. Hopefully, that answers your question, Xavantina. Happy to expand on that in a follow-up question. But getting to your second point on leverage and cash generation, absolutely, I'd say the cash inflection of our business, it's clear that it's already happened. We saw that happen in Q2 and in July, where we made another $25 million repayment on our revolver. Our objectives for this year that we set out were threefold. So, number one, to get below 1x leverage. We did that at the end of Q1. Obviously, coming at 0.8, we're progressing below that level. And step 2 is to pay down our revolver. As we mentioned, we paid to date $60 million in that revolver through the end of July. That means we have an additional $95 million to go. I think from our perspective, as a management team, we want to make sure that, that pace continues to decrease. We're making excellent progress so far. I think it's still too early to talk about shareholder return program. But obviously, it is top of mind, as everyone knows on this call, and we've talked about many times, Ero Copper was built around a philosophy of return on invested capital, and that certainly is one of our objectives. But we want to see us really achieving that second milestone, which is to pay down our revolver, and we've made excellent progress so far this year. We've got a bit more to go. Operator: The next question is from Craig Hutchison with TD Cowen. Craig Hutchison: I wanted to ask about Tucuma and specifically, I guess, around the reserves. It's been about 5 years since you guys provided an updated reserve report. And over that period of time, obviously, copper prices have nearly doubled here. Just curious whether there's a plan to put up an updated report, whether you guys have done some drilling there and whether there's a potential to see some of the measured indicated resources come into the mine plan over the next couple of years. Makko Defilippo: Yes. Thanks for the question. For sure, that's something top of mind, and we've been working. We do expect to publish a technical report on Tucuma this year. So, stay tuned for that. Operator: The next question is from Emerson Vieira with Goldman Sachs. Emerson Vieira: I have 3 questions maybe. First one on Caraiba. I think despite the low production grades and FX impacting costs, I mean, Q1 declined quarter-over-quarter, but it was helped by lower TC/RCs, right, that offset those impacts. You guys mentioned that you were able to achieve a $20 million savings due to renegotiations in TC/RCs. So, I just want to confirm if going forward into second half, TC/RCs will continue to be running at those lower levels that we saw in the second quarter and maybe providing some offset to other cost pressures? That's the first question. Wayne Drier: Yes, sure. It's Wayne speaking here. I think it's important to point out, yes, we did get the benefit of renegotiated contracts for our concentrate sales. We sell our concentrate on term contracts, not on spot contracts. And so some of our historical contracts rolled off, and we were able to negotiate obviously much more favorable terms given the current environment. I would say though the $20 million you referred to is the total savings. We didn't obviously benefit, we didn't get the full benefit of the $20 million in Q2. So, that benefit will be spread over the remainder of the year. And we are -- our contracts allow us to basically sell both mines production into each contract. So, that benefit you may see depending on shipping schedule and depending on which contract we're selling into, you could see some of that benefit flow to Tucuma in the second half of the year rather than Caraiba. Emerson Vieira: Right. So, my second question goes on Tucuma. Can you please comment on what was the exit throughput at the plant? And what could be, I don't know, incremental throughput in the second half, given that you have increased the tailings filtration capacity by 8%. Makko Defilippo: Yes. I would say we're really encouraged by what we're seeing at Tucuma. If you look at where we got to in Q2 and some of the levels that we're achieving there, I think the most important thing to probably look at is if you take what we achieved in the second half of the quarter into July, we've been able to maintain a rate of between 250,000 and 260,000 tonnes per month. I think what's particularly noteworthy is that in July, we achieved a rate of throughput right around 250,000, but that included 5 days of downtime for a mill liner replacement. And so, I think we're really pleased to see the daily progress that's happening there and increasing production rates. And again, we think that bodes well for the second half of the year as we outlined in our guidance discussion. Emerson Vieira: Okay. Just last one here. On the capital allocation, just a follow-up actually. The company has $120 million in the revolving debt facility, right? And if we just assume, I mean, the same pace of amortization, does it make sense to believe that the company will be in a better position by 3Q, 4Q of next year to maybe update us on the shareholder distribution policy, please? Does it make sense about the timing? Makko Defilippo: Yes. Look, I think if you go back to whenever we talk about shareholder returns and the commitments we made, it was a 3-step process. So, number one, get leverage below 1, which we achieved in Q1. Obviously, we're doing great there. The second was to pay down our revolver. Again, coming back to the payment we made in July, that brings year-to-date total payments on our revolver to $60 million, meaning that we have $95 million left to go in that program. I think the pace of that second step obviously depends on commodity prices. We continue to see very strong tailwinds there and also operational performance in the second half of the year. So, I would say stay tuned on both those things, and we'll give more clarity on what that looks like later in the year once we achieve the second step. Operator: The next question is from Fahad Tariq with Jefferies. Fahad Tariq: On the Xavantina concentrate, can you just remind us where we are on the remaining 80% of the stockpiles that were not sampled and when we should expect the next update? Makko Defilippo: Yes. Thank you. Look, just going back to Q4 last year for a bit of context, I'm sure everyone on this call is aware, but that was a value initiative that we announced in October of last year. At that time, we had sampled 20% of the known volume to develop a resource estimate. For -- as we've discussed before, under NI 43-101, we can't provide forward-looking guidance on information that's not supported by a 43-101 estimate. So really, unfortunately, unable to provide that information and clarity that you're looking for other than to say we've seen really strong sales in June, July coming out of dry season on the back of our filtration and concentrate program. We continue to expect this program to last through at least mid-2027 as we put out early in the year, and we see really strong sales in the second half, again, with the effort that we put into the filter press and dryer. Fahad Tariq: Okay. Great. And then just maybe a high-level question. Given where copper prices are now, is there anything in the portfolio that you're looking at differently, whether it's a brownfield opportunity or additional exploration spend at a particular asset? Just wondering if you're thinking about anything differently given how elevated copper prices are. Makko Defilippo: Yes. I don't think it's fundamentally changed the way we think about our business. We've continued to invest in exploration across the portfolio. It's been part of our strategy from day 1 when we started the company. Obviously, we've -- if you look at where our exploration dollars are allocated today, obviously, we're putting a big focus in Furnas as we've spoken to, but we've continued to allocate exploration dollars to earlier-stage opportunities throughout our portfolio. The last decade, we've built a really strong knowledge of the regions that we're operating in, and we're seeking to leverage those through some earlier-stage opportunities. But again, that's not a change in strategy that's continued over the last couple of years. Like could we, in the second half, see some of those programs getting a little bit more capital allocation perhaps but it's not going to fundamentally change the way that we think about our business or how we're operating. Operator: The next question is from Stefan Ioannou with Cormark Securities. Stefan Ioannou: Just back on Xavantina, just you mentioned this is kind of the first quarter where we're seeing reported C1 and AISC costs for the concentrate gold production. And just looking at the numbers for the latest quarter, should we sort of interpolate those as sort of a steady state run rate for costs? Or do you think they could come down even further going forward? Makko Defilippo: Yes. Look, I think they're pretty steady state. Obviously, there's a -- it's mostly variable costs, right? Because if you look at the component that makes up that C1 the overwhelming majority is going to be on transport costs. So, we don't see much of an opportunity even with increased sales to reduce those costs further. We obviously now are operating the filter and the dryer, which has increased that cost relative to where we were last year. But as you can see, $700 all-in sustaining cost at $4,200 gold is a pretty healthy margin by any means. Stefan Ioannou: Definitely, definitely. And just before I got you, sorry, apologies to mine, maybe just one housekeeping question. Just when Wayne was talking about the FX hedge program, sorry, Wayne, did you say that the effect of the hedges are reflected in the C1 cash cost or not? Wayne Drier: They are not reflected, Stefan. Stefan Ioannou: Not. Okay, okay, okay. Wayne Drier: Yes, they're below the line. But obviously, the way we run the business and we think about the business is around the exchange rate that we guided to at the beginning of the year, which was $5.40, and we structure our hedges to protect that level. So, that's why you see the fairly significant gains year-to-date. Operator: The next question is from Orest Wowkodaw with Scotiabank. Orest Wowkodaw: I was wondering if you could give us an update on the shaft sinking project at Caraiba and what the time line is for, I guess, that to go into operation next year. Makko Defilippo: Yes. Thanks, Orest. Good question, and we'll have the opportunity in a few weeks to be the perfect person to review the progress there. Right now, we're just over 1,100 meters below surface. We've continued to see our sinking rate improve month-on-month since we started connecting that third leg, which is a fairly significant milestone in that project. I think the thing to keep in mind about the shafts, we started engineering on this back in 2020. The last shaft that was built at Polar was in 1986, and we're making this investment for the next several decades, not for one quarter or the next. But as we said last quarter, our objective is to get to shaft bottom by year-end with the progress that we've made so far and increasing. I talk to Gelson about this nearly daily. You look at some of the projects that are happening in the world today. I think that the team needs an extra month or 2 to make sure that we can deliver that project safely. We're going to go ahead and make that call 10 times out of 10. So, we'll have the opportunity to be on site in a few weeks to read that progress. I would say that, as I said, our sinking rate is improving. We're continuing to make significant improvements month-on-month. We need to see a bit faster pace here through the balance of the year to hit that milestone, but we're going to make sure that we do that safely and deliver that project for the next several decades. Orest Wowkodaw: No, that all totally makes sense. And then can you give us what about the budget? Where are you in terms of the capital spend on that? And are you seeing inflationary pressures? Makko Defilippo: Yes. We're not seeing much inflationary pressures there. We've got a small team that's on site that you'll meet that are coming in from South Africa. It's a third-party contractor that's doing that sinking rate. We'd have the same type of exposure that we do to our operations in terms of diesel prices because the hoist electrical powered. So, we're not seeing much in the way of inflation on the shaft itself. Obviously, if we make the decision to slow that rate down to make sure we deliver that project safely, there will be an incremental cost component, but it's relatively minor. And we think that if you look at where we're at against that budget, as I've said many times, we're very much through peak CapEx in our business. And so irrespective of kind of where we land through year-end, we see that capital coming down significantly into next year with this year being the last big year of CapEx that we have to spend. Orest Wowkodaw: Okay. And just to clarify, how much was left in the budget as of June 30 for that project? Makko Defilippo: Yes. So, if you look at what we said early on in the year, we had about $80 million to $90 million to spend this year with a stub into next year. We're about halfway through the budget on this year's spend. And what will be -- next year, we expect is a stub year of CapEx, right, as we switch that shaft over from its thinking phase into its operational phase. Operator: [Operator Instructions] Our next question is from Rafael Barcellos with Bradesco. Rafael Barcellos: My first question on Caraiba. Can you please provide like an update on the Pilar shaft in terms of the potential for productivity gains going forward and the timing for these gains? And of course, more color on what you're expecting in terms of the ramp-up of this project. And then moving to capital allocation, just a quick follow-up. I mean the company will probably turn into a net cash position by the end of the year. So, I'm just wondering if you could discuss more shareholder remuneration versus the preparation for starting the investment plans for Furnas. How do you expect to balance those things that could be interesting. Makko Defilippo: Yes. Perfect. Thank you. I think as Orest alluded to the shaft is making good progress. We continue to expect the full first year of full benefit to be 2028. Obviously, next year, '27 will be focused on transitioning that from the sinking phase into the operational phase after we reached shaft bottom. I think the easiest way to talk about the benefit is to give you the current experience in the future state. So, if you go right now to the deeper part of Pilar mine and you drive down the ramp, that can be -- can take up to about 1.5 hours. As you well know, underground mines in Brazil operate on 6-hour shifts. What that means in practical terms is we're starting out with 50% availability of our workforce in the deepest part of the mine. Obviously, we operate at multiple different levels. So, that's not true for the entire operation. But in the deeper higher-grade zones, that's the reality today. When the shaft is completed, it's been designed to get our entire workforce in and out of the mine in under an hour. So, we expect a very significant improvement in workforce productivity, improved access, improved ventilation. It will be a transformational investment that, again, if you go back to when the last shaft was built 1986, this one happening now, it's going to support the operation for decades to come. And there's no one more excited about finishing that project than me, having been involved with this since 2019, and we're making good progress. As I said to Orest, we're going to make sure that we deliver that project safely and on budget, and that's what we're committed to doing over the next -- the second half of this year and into next year. On the cash position and shareholder returns, yes, look, we're excited as everybody here. We're making great progress on our objectives that we committed to in 2025. I think the way that I would characterize our priorities in terms of capital allocation, we're still focused on that second step, which is paying down our revolver, right? We have $95 million left to pay down after the payment that we made in July. We're continuing to accelerate Furnas. It's not -- I would say it's not one or the other. If you look at where we're at in Furnas, we're going to finish effectively a 5-year drill program in the better part of 2 years, right? If you look at when we started drilling to this in October 2024 to the end of this year, we're going to complete all the 90,000 meters that were envisioned under that project, where we completed the PEA. We're rapidly advancing the PFS. So, I wouldn't look at it as an either/or. Obviously, if we see opportunity to accelerate Furnas and put more capital to work there, that's a great place to put capital. But we're working flat out on that project already. And so, taking a big step back, again, Furnas, first priority here, well, first priority was to get to below 1x leverage. We did that. Second priority, pay down our revolver. And number three, I think, come back to the market later this year when we've met that second milestone, which is to pay down our revolver. Rafael Barcellos: If I may, like one follow-up, still on this part of the capital allocation topic. How do you see Ero Copper in the middle of these recent M&A trend that we have seen over the past few years in the copper sector. I mean, how do you see the company in this environment? Makko Defilippo: Look, as I always say, we have a corporate development team. They have a very, very important job in organization. We look at opportunities in the Americas for growth. We do that pretty thoughtfully in the lens of what our existing portfolio looks like. We have, I would say, one of the better, if not the best, from our perspective, development projects in the market, which is Furnas. We have an incredible pipeline of early-stage exploration projects that our exploration team is working on. And so, we look at opportunities outside of our business through that lens. So, we take reviews in the Americas very, very seriously. But I think our focus is really on executing on our own portfolio. We -- as I said, we have a corporate development team. They have an important job to do in our company, but we're really happy with where our portfolio sits today, and that's what we're focused on executing. Operator: This concludes the question-and-answer session. I'd like to turn the call back over to Makko DeFilippo for any closing remarks. Makko Defilippo: Yes. Thank you, everyone. As always, our team is available. We appreciate your patience as we redial back in here. And just one last reminder on our Capital Markets Day in Sao Paulo. Look forward to seeing many of you there. Thank you very much. Have a great day. Operator: This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Ero Copper (ERO) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Ero Copper Corp.? Here are five stocks we like better. Strong second-quarter performance: Ero Copper generated approximately $138 million in operating cash flow and $144 million in adjusted EBITDA, while producing 17,315 tonnes of copper and remaining on track to meet full-year copper guidance. Gold output surged at Xavantina: Gold production rose 170% sequentially to more than 20,000 ounces, although Ero expects mined-gold production to reach the low end of guidance and raised its full-year cost outlook. Debt reduction and expansion continue: Net debt declined to about $453 million, with management prioritizing repayment of the remaining $95 million revolver balance. The company also increased 2026 capital-spending guidance to $285 million–$330 million, primarily for a new Xavantina power line and other growth projects. 3 Metals and Mining Stocks Riding the Commodity Supercycle Ero Copper (NYSE:ERO) reported stronger second-quarter operating and financial performance, supported by higher gold sales, solid copper output and commodity-price tailwinds, while continuing to reduce debt and advance expansion projects across its Brazilian operations. President and Chief Executive Officer Makko DeFilippo said the company’s “One Ero” initiative, launched in early 2025 to streamline operations and improve efficiency across functions, has contributed to operational improvements, higher cash generation and balance-sheet progress. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth 3 Vital Copper Stocks Helping EVs and AI Data Centers Take Off Second-quarter cash flow from operations rose nearly 50% from the prior quarter to approximately $138 million, while adjusted EBITDA reached $144 million. For the first six months of 2026, cash flow from operations totaled about $231 million, compared with $156 million in the first half of 2025. Adjusted EBITDA for the first half increased to $269 million from $146 million a year earlier. Ero produced a combined 17,315 tonnes of copper during the second quarter at a consolidated shipping cash cost of $2.42 per pound. The company said it remains positioned to meet its full-year copper production guidance, with stronger production expected in the second half and sequentially lower copper unit costs anticipated through the rest of the year. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling At the Caraíba operation, second-quarter copper production totaled 8,351 tonnes. Lower plant head grades were partly offset by higher throughput and improved recoveries, according to Executive Vice President and Chief Operating Officer Gelson Batista. The company expects second-half output to benefit from access to higher-grade benches at Surubim as well as increased grades and tonnage at Pilar under its planned stope sequencing. At Tucumã, copper output rose about 6% sequentially to 8,964 tonnes. Plant throughput increased 27% from the first quarter, more than offsetting lower processed grades. Batista said the operation achieved throughput rates of roughly 250,000 to 260,000 tonnes per month in the latter part of the second quarter and in July. July throughput was approximately 250,000 tonnes despite five days of downtime for a mill liner replacement. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High The company completed an expansion of Tucumã’s existing filtration circuit during the quarter, adding plates to three existing filters and increasing tailings filtration capacity by approximately 8%. Three modular filters are expected to arrive during the third quarter and be installed and operating in the fourth quarter. Ero said the combined filtration initiatives are expected to support higher plant throughput as it exits 2026. At Xavantina, investments in ventilation and cooling supported improved mining and development rates beginning in May, while process changes and investments in flotation cells and a Falcon concentrator contributed to improved recoveries. Total gold production from Xavantina increased 170% sequentially to more than 20,000 ounces. This included 8,693 ounces of mined gold production at a C1 cash cost of $1,586 per ounce and 11,860 ounces recovered from historical concentrates at a C1 cash cost of $633 per ounce. DeFilippo said the end of the rainy season, along with the commissioning of a mobile filter press and industrial dryer at the end of the quarter, supported higher concentrate sales. He said the company achieved more than 7,000 ounces of gold in both June and July with the equipment operating, though he did not provide quarterly forward guidance for concentrate sales. Ero expects approximately 65% of full-year mined gold production at Xavantina to occur in the second half. While the company maintained its mined-gold production guidance range, it now expects production to land at the low end after a slower first half. It updated full-year mined-gold C1 cash cost guidance to $1,100 to $1,350 per ounce and all-in sustaining cost guidance to $2,200 to $2,700 per ounce. Executive Vice President and Chief Financial Officer Wayne Drier said second-quarter revenue was $284.3 million, up 8% from the first quarter, aided by solid copper production, strong metal prices and a 65% sequential increase in gold sales. Net debt fell by $38 million during the quarter to approximately $453 million. With last-12-month adjusted EBITDA of $533 million, Ero’s net-debt leverage ratio declined to about 0.8 times. The company repaid an additional $25 million on its revolving credit facility in July, bringing total repayments in 2026 to $60 million. Liquidity increased by $36 million during the quarter to $182 million, including $102 million in cash and cash equivalents and $80 million available under the revolver. The stronger Brazilian real continued to affect reported operating costs and capital expenditures. However, Drier said Ero’s currency hedge program generated $13 million in realized gains during the second quarter and $20 million in the first half. Assuming an exchange rate of 510 Brazilian reais per U.S. dollar through year-end, the company expects an additional $20 million to $25 million in realized hedge gains, potentially bringing full-year gains to $40 million to $45 million. Ero said hedge gains are not included in C1 cash costs. If currency and inflationary conditions persist, it estimates an incremental impact of about $0.10 per pound on reported consolidated copper C1 costs and roughly $100 per ounce on reported mined-gold C1 costs at Xavantina. The company increased consolidated 2026 capital expenditure guidance by $10 million to a range of $285 million to $330 million, reflecting approval of a new power line at Xavantina. Management said the project is expected to strengthen infrastructure, support future growth and reduce power transmission costs, with an anticipated payback period of about two years. At the Furnas project, Ero said its 45,000-meter Phase 3 drill program remains on track for completion before year-end. The company is also advancing work toward a pre-feasibility study expected in 2027. Management said it expects to publish an updated technical report on Tucumã later this year. At Caraíba’s Pilar mine, the company is advancing a shaft-sinking project that had reached more than 1,100 meters below surface. DeFilippo said Ero’s objective remains to reach shaft bottom by year-end, although the company would accept additional time if needed to complete the work safely. The first full year of benefits from the shaft is expected in 2028, following a transition to operations in 2027. Management reiterated that its immediate capital-allocation priority is repaying the remaining $95 million on its revolving credit facility. DeFilippo said it was too early to discuss a shareholder-return program and that the company would provide greater clarity later in the year after progressing further on revolver repayment. Ero Copper Corp (NYSE: ERO) is a Canada-based natural resource company focused on the production of copper concentrate from its Brazilian operations. The company’s flagship asset is the Vale do Curaçá mining complex in the state of Bahia, which includes multiple underground mines and a centralized processing facility. Ero Copper’s primary product is copper concentrate, which is sold to smelters and end users around the world. The Vale do Curaçá complex comprises the Pilar and Surubim underground mines, supported by a fully integrated processing plant. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Ero Copper Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.