Ero Copper Q1 2024 Earnings Call Transcript

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Provided by Quartr
May 8, 2024

There are 9 speakers on the call.

Operator

Thank you for standing by. This is the conference operator. Welcome to the ARO Copper First Quarter 2024 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.

Operator

I would now like to turn the conference over to Courtney Lynn, Senior Vice President of Corporate Development, Investor Relations and Sustainability. Please go ahead.

Speaker 1

Thank you, operator. Good morning, and welcome to Aerocopters' Q1 earnings call. Our operating and financial results were released yesterday afternoon and are available on our website, as are our financial statements and MD and A for the 3 months ended March 31, 2024. On the call with me today are David Strang, Arrow's Co Founder and Chief Executive Officer Maco DiFilippo, President and Chief Operating Officer and Wayne Dreyer, Chief Financial Officer. We will be making forward looking statements that involve risks and uncertainties from which actual results may differ materially.

Speaker 1

We would refer you to our most recent annual information form available on our website, SEDAR and EDGAR, for a discussion of the risk factors of our business and their potential impact on future performance. As a reminder, and unless otherwise noted, all amounts are in U. S. Dollars. I will now pass the call over to David Strang.

Speaker 2

Thank you, Courtney, and thank you, everyone, for joining us today. We've had a great start to 2024, driven by the strong execution of our growth strategy coinciding with highly favorable market conditions for copper and gold. During the quarter, copper prices rallied to their highest levels in nearly 2 years, fueled by rising demand expectations, while the supply outlook remains extremely constrained, as evidenced by our recent treatment and refining charge negotiations where we locked in 2 year TCRC terms in the low teens on roughly onethree of our projected concentrate production. At the same time, due to macro and geopolitical uncertainty, gold prices hit all time highs. These positive trends in both copper and gold markets arrive at an opportune time as we are on track to reach our highest annual production levels ever.

Speaker 2

This includes anticipated contributions from the Tucumã project, which is now approximately 97% complete. I'm also happy to share that commissioning at Tucama is advancing ahead of schedule. And as a result, we are narrowing our projected time line for initial production to early Q3 'twenty four. While Mako will delve into more detail on our progress at Tucumã, I want to express my deepest gratitude to our team on the ground, which just marked over 5,000,000 hours of work completed with 0 lost time injuries. This is an incredible achievement, and I commend our leadership team at Tucumã for the strong safety culture built over the past 2 years.

Speaker 2

As we rapidly approach an important inflection point in our consolidated copper production profile, I'm also pleased to report that our Javan Tina operations are on track to deliver record gold production again this year. In fact, during the Q1, we produced 18,234 ounces, representing an increase of nearly 5,800 ounces or approximately 47% compared to the Q1 of 2023. This increase is attributable to the successful completion of the NX-sixty growth initiative last year as well as higher than expected gold grades, which averaged over 16 grams per ton during the period. This performance also resulted in unit operating costs for the quarter that were below our full year guidance. More specifically, C1 cash costs averaged $3.95 per ounce in the quarter versus our 20.24 guidance range of $550 to $6.50 per ounce.

Speaker 2

And all in sustaining costs per ounce averaged $7.97 versus a full year range of $10.50 to $11.50

Speaker 3

per ounce.

Speaker 2

Given the continuation of positive grade reconciliations and additional visibility into mineable grades for the remainder of the quarter from in ore development channel samples, we are raising our 2024 gold production guidance from 55,000 to 60,000 ounces to a range of 60,000 to 65,000 ounces. Consequently, we are guiding to the low end of our full year Gold C1 cash cost and all in sustaining cost guidance. With gold prices continuing to hit all time highs, we are well positioned to deliver record operating margins and cash flows at Javan Timo this year. At our Carribe operations, our performance during the quarter was largely in line with our expectations. From a strategic execution standpoint, we made good progress at the new external shaft, where we remain unscheduled to reach a projected depth of approximately 600 meters by year end.

Speaker 2

Upon our anticipated project completion at the end of 2026, this shaft is expected to reach a depth of over 1.5 kilometers, making it the 2nd deepest shaft in South America. From an operational standpoint, we started to see the positive impact of the recently completed Carribe Mill expansion during the quarter with tons processed up over 5% compared to Q4 at approximately 853,000 tons. This increase in mill throughput partially offset a planned decrease in mined and processed copper grades that was compounded by delays in underground development during the period. As a result, a higher portion of ore was mined from lower grade stopes than planned, resulting in average processed copper grades of 1.08% and production of 8,091 tonnes after recoveries of approximately 88%. At the same time, we benefited from the sale of copper concentrate inventories carried over from the 4th quarter, resulting in copper tons sold being nearly 1400 tons higher than tons produced during the quarter.

Speaker 2

With respect to full year production, we are reaffirming our guidance range of 42,000 to 47,000 tons, with production expected to be weighted towards the second half of the year. Conversely, our copper C1 cash costs, which averaged $2.30 per pound produced during the quarter, are expected to decrease throughout the year due to projected sequential increases in copper grades and production over the next three quarters. As a result, we are reaffirming our full year cost guidance at Cariba of $1.80 to $2 per pound. It is worth noting that there is potential for unit cost to improve further as we continue to lock in more favorable concentrate treatment and refiring charges than we had assumed in our guidance. Before I pass the call to Mako for a deeper dive into project execution, I will share a few highlights of our Q1 financial performance.

Speaker 2

As mentioned, we experienced a fortunate combination of high copper and gold prices, record production operating margins at Argentina and the sale of copper concentrate inventories carried over from the last year at Caraiba. Collectively, these factors drove solid first quarter cash flow from operations of $17,200,000 and adjusted EBITDA of $43,300,000 I'll now hand the call over to Mako, after which Wayne will provide more detail on our Q1 financial results.

Speaker 3

Thank you, and good morning, all. As we turn the corner towards the finish line on the construction phase of the Chukuma project, I want to reiterate what David said and recognize our site leaders, our operational teams and our third party partners at the Tucumã project for their continued commitment to safety. Since green lighting, the Tucumã build, our top priority as an organization has been to deliver the project safely. While we have had many successes at Tucumab over the past few years, I speak for all of us here at Arrow in saying that our performance on safety is what we are most proud of. Whether looking at our safety record, reaching 97% physical completion this quarter, achieving key commissioning milestones ahead of schedule with a line of sight visibility we now have on our unchanged $310,000,000 capital cost estimate.

Speaker 3

To put it simply, we are finding a lot to celebrate at Tucumã these days. Looking at where we are at in terms of conditioning and production sequencing for the balance of the year, we have continued to make excellent progress towards the start of operation. Following the successful completion and ramp up of our crushing, screening and conveyance systems earlier this year, we've been able to focus all of our attention to the systematic completion of our milling, flotation and filtration systems in order to commence integrated commissioning. With the recent completion of our freshwater intake system as well as the conclusion of major mechanical and subcomponent commissioning steps throughout the process plant. We expect to initiate integrated commissioning just prior to the end of the quarter.

Speaker 3

On the mining side at Tucumã, which is already in full operational mode, our cumulative operational performance remains well ahead of schedule despite strong range during the second half of March. We ended Q1 with approximately 36,000 tons of ore in a run of mine stockpile and an additional 160,000 tons of stripped ore in the mine ready to be blasted. With the rainy season well behind us, a significant amount of sulfide ore available for processing and new commissioning milestones being reached on a daily basis, we are in an excellent position to achieve 1st concentrate production in early Q3 and reach commercial production, which we define as 80% of nameplate capacity by the end of the Q3. At our Cariba operation, while the quarter had slightly lower grades mined in process versus our expectations due to development delays in the Pilar mine, since the beginning of Q2, we have made strong progress on development and production, and we are reaffirming our full year production guidance. As it relates to the construction of the new shaft for the Palar mine, also at our Cariba operations, shaft sinking continues to progress as planned and we remain on track to achieve our target depth of approximately 600 meters by year end.

Speaker 3

In terms of specific milestones on this project, it's worth highlighting that we successfully and safely concluded the 2nd and longest raised bore segment of the shaft at the end of April. At its finished length of approximately 7 20 meters, the segment has set a new record for the longest raised bore ever completed in Brazil. Underground development and infrastructure installations required for the ore handling system of the shaft, including our pressure chamber, conveyance levels, as well as oil and waste silos are progressing on schedule and the project continues to remain on track for shaft handover to operations in Q4 of 2026. Lastly, we had an incredibly strong start at our Zabucina operations during the Q1, which has been well covered by David. If there's any specific questions on the progress at Javechina, I'd be happy to address those in our management Q and A.

Speaker 3

I will now turn the call to Wayne to discuss our financial results. Thank you, Mako. As David highlighted, our financial results for

Speaker 4

the quarter reflected several positive factors. These included rising copper and gold prices, record production and margins at the in foreign exchange led to a realized gain on our foreign exchange hedges of $2,100,000 that contributed to 1st quarter cash flows from operations of $17,200,000 and adjusted net income attributable to the owners of the company of $16,800,000 or $0.16 per share on a diluted basis. Subsequent to quarter end, we elected to take advantage of another favorable move in the exchange rate and added a layer of 0 cost collars for the second half of this year with floor and ceiling rates of 5.15 and 5.62 respectively. The real has since strengthened against the U. S.

Speaker 4

Dollar falling back to a rate of approximately 5.05 yesterday. As at the end of last month, the total notional value of our foreign exchange derivative position for the remainder of 2024 including both 0 cost collars and forward contracts was a little over $250,000,000 These hedges cover nearly all of our real denominated operating expenses and the majority of our major project capital expenditures for the remainder of the year and have a weighted average floor and ceiling of $502,000,000 and $538,000,000 respectively. Of the total hedge program approximately $65,000,000 is allocated for major project capital expenditures with a weighted average floor and ceiling of 5.10 and 523 respectively. The quarter saw a significant decrease in our capital expenditures with spend at Tucumac quickly winding down as we approach initial production. As a result, we ended the quarter with a total liquidity position of $156,700,000 including $51,700,000 in cash and cash equivalents, plus $105,000,000 of undrawn availability under our senior secured revolving credit facility.

Speaker 4

We have also entered into a $50,000,000 non priced copper prepayment facility subsequent to the quarter end. This facility provides cost effective capital in a favorable physical copper market particularly in light of persistently higher interest rates. The repayment of this facility is structured over 27 equal monthly installments of 272 metric tons of copper beginning in October 2024. Should the market value of the copper delivered in any given month exceed $2,100,000 we will receive a repayment for the excess amount. I will now pass the call back to David to share some closing thoughts.

Speaker 2

Thank you, Wayne, and thank you everybody who joined the call today. Before we proceed to the Q and A session, I want to extend my deepest gratitude to our teams in Brazil and Canada for their continued commitment and hard work in executing on both our operating plan and our organic growth strategy. I look forward to our Q3 earnings call when I expect to discuss the ramp up of production underway at Tucumab. Now I will hand the call back to the operator to open the line for questions. Operator?

Operator

Thank you. We will now begin the question and answer session. Today's first question is from Gordon Lawson with Paradigm Capital. Please go ahead.

Speaker 3

Hey, good morning and thanks for taking my questions. So starting with Cariba, to hit the 2024 guidance, is it reasonable to model nearly 4,000,000 tons of throughput for the year? And what average grade would you be expecting for the remainder of the year Great question. Thanks for that. Yes, look, I think the if you look at what we accomplished in Q1 in terms of our cadence on production for the year, in terms of copper, we're expecting our production to be 2nd half weighted.

Speaker 3

I think it's reasonable to assume that we'll be slightly below that 4,000,000 ton target. Our original guidance for the year was just below that given the ramp up of our mill expansion circuit in Q1. And we anticipate grades being obviously slightly higher through the full year, but around 1.2% to 1.3% in the full year. Okay. Yes, that works out here.

Speaker 3

And just looking ahead, so there's been

Speaker 4

a lot of

Speaker 3

significant exploration at Cariba and reading what's going on at Palau right now. So I'm just curious if there are other expansions being evaluated further down the pipeline?

Speaker 2

Yes. We do have and we've been open with regards to a number of ore bodies that we've identified in the northern part of the project and the property. We are evaluating longer term and nothing imminent, but certainly in the longer term opportunities in order to try and extract value from ore bodies, which may include longer term the potential to construct a second concentrated plant in the north. But that's very preliminary right now. Where we stand overall with regards to our operations at Caraiba is the focus now is purely on getting the shaft completed, which will allow us to then access very high grade material in the deepening project and then further take us back to the position that we've always wanted to be and have been as one of the lower cost producers of copper in the world by accessing these high grade ore bodies to depth in the Palau mine.

Speaker 3

Okay. Thank you very much. I appreciate it.

Operator

Thank you. The next question comes from Orest Wowkodaw with Scotiabank. Please go ahead.

Speaker 5

Good morning. Questions for Mako around the Tucumab ramp up and completion here. I mean, you're guiding to a start up in early July, so we'll call it 2 months from now. What would you consider to be sort of the big critical path items that need to happen in order to achieve that timeline?

Speaker 3

Yes, great question, Orest. Look, I think we're if you strip it all down and you look at what needs to happen between now July, I'd say we're in the final the home stretch, which I would define as electrical installations, automation and some of the minor piping like compressed air, reagent pipelines, etcetera. So if you take a if you look at the project to Elixaouit from a critical path perspective, we really are down to the final straws. And we continue to make excellent progress on those initiatives. So in terms of our progress on, I would say, non critical path, piping, also the automation circuits that we're putting in, electrical cabling and instrumentation, that's really where our focus is for the next few months.

Speaker 4

Okay. And then

Speaker 2

Just to add to that, I mean, where we are right now, we are already running water through the filtration, I mean through the flotation circuits and the Jameson cells. We're in the process of turning the mill on. As we've previously put in, all dry commissioning has been completed, and we have all now sitting on the not the coarse ore stockpile, the run of mine stockpile. And so really as Neko has pointed out that we're really down to the final straws here. We're looking forward to turning on the tailings filtration plant over the course of the next couple of weeks and then moving as aggressively as we can towards full running of the wet circuit over the course of the next 3 weeks.

Speaker 5

Thanks, David. Just following up, I mean, earlier you mentioned that you hope to exit Q3. I think I heard it 80% of throughput. I mean, that's a pretty quick ramp up if we're talking start up in early July. What like what are you seeing that gives you that kind compressed ramp up schedule?

Speaker 2

Yes, Orest, I don't think to

Speaker 3

be honest, I don't think it's that compressed. I mean, I think we've given ourselves a better run on that early Q3 start up. I think the other thing I would point to is that we're commissioning these independent systems, again, on a daily basis here. So if you look at our flotation system, or as Dave mentioned, our Jamison cell, our filtration systems are being run and it's been designed independently. So I think there's a lot of activity happening that gives us comfort in the timeline.

Speaker 3

But if you look at our total ramp up schedule, obviously, we have a relatively, I would say, standard ramp up rate to achieve 80%. We're not forecasting achieving 100% nameplate capacity for about 9 months is our total ramp up curve. So

Speaker 2

said differently, I think in the

Speaker 3

initial phase, I think we're in really good shape to achieve that 80% nameplate. Obviously, the ramp up will continue over that 9 month period. But I don't think that our ramp up curve is well, I know for a fact in looking at many different projects that our ramp up curve is right in the middle of the fairway. Okay.

Speaker 4

And just final question, if

Speaker 5

I could. I remember the current mine plan for Tacoma obviously has very high copper production in the 1st 2 years or so. I'm wondering if you're seeing anything on the exploration side that could potentially extend that high grade sort of high production level for longer beyond 2026 and maybe what the timeline might be to see an updated mine plan around

Speaker 2

that? Thanks, Orest. Good question. So with respect to if you remember, we do have a currently small underground resource with regards to below the current pit, which is very high grade in nature, very similar to the grades that we'll be mining the first couple of years. Mike and the team, and for those who don't know Mike Richard, Chief Geologist, and the team are ready are ramping up and getting ready to bring the rigs back in to continue to drill out the underground extension option with a view that we'll start supplementing when we start seeing the higher grade decline from the open pit that we'll start supplementing that lower grades as we mine with higher grade from the underground operation.

Speaker 2

As it stands right now, we've got time to be able to do that over the course of the next 18 months to 2 years, and greater clarity will come out with regards to that mine plan over that time period. So this is a constant moving target with regards to Tucumã. There's only so much that we can take on at any one time. But certainly, the rigs are getting ready to come back in the 3rd, Q4 with a view to drilling out additional underground resources that can be looked to be mined. I'd look at it kind of something similar to what we've done at Vermeos in terms of size operation potentially down the road.

Speaker 2

And then as I said, supplementing the grades from the underground option at that time. Thanks very

Operator

much. Thank you. The next question comes from Craig Hutchison with TD Bank. Please go ahead.

Speaker 6

Hi, good morning guys. Just a question on Kareba with regards to the comment that there were some delays in the ground development required to access the scheduled high grade stopes. Is that now behind you guys or is there some issues that might creep into Q2 as well?

Speaker 3

Yes. Thanks, Craig. We don't see those issues creeping into Q2. I'd say relative to where we thought we'd be on development and some of these high grade stopes, I'd say a variety of factors contributed to that in terms of equipment availability and primarily. So we, as I said in the call here, coming out of Q1 and early Q2, we've seen strong development rates and also production.

Speaker 3

So we think that's largely behind us here.

Speaker 6

Okay, great. And just in your opening remarks, I think that David said that you've seen some favorable concentrate offtake terms. I don't know if you guys can speak to some of those terms and what your exposure is for in terms of pricing for optic in the back half of this year? Thanks.

Speaker 4

Yes.

Speaker 2

Thanks, Craig. Yeah. So we've been taking advantage of what a lot of people know in the marketplace is the favorable TCRC terms. We've entered into 2 contracts so far. They will be kicking in from May onwards, this month onwards.

Speaker 2

2 year contracts for about a third of our production. Obviously, we don't want to go into too much detail because it's unfair to all parties involved. But in general, the terms are in the low teens. We are looking to strengthen that portfolio right now with regards to an additional tender that we're about to enter into with various suppliers and we're waiting to receive those tender offers over the course of the next couple of weeks to further enhance that and increase the total amount that we have exposed at some of these lower TCRC rates. But on an overall basis, 2 years for about a third of our production beginning in May in the low teens, if you're looking to model.

Speaker 6

Great. Maybe one last question for me. I know you guys are excited about the Fernas project. Any kind of color in terms of when you guys will be able to finalize the definitive agreement?

Speaker 2

Yes. We're down to Deepak Hamdao, our Chief Counsel is here and he is down to the nitty gritty with regards to the last couple of comments between ourselves and Vale. So that agreement is imminent with regards to Signature. This is with regards to making sure that this agreement is done correctly. This is a template with regards to a lot of things that we're hoping to work with Vale in the future.

Speaker 2

So we all want to make sure both from our side and Vale's side that we get this right. I am happy to say that we have signed with Vale a core sharing agreement that now allows us to move all of the core for the furnace project into the core shack for the project and that will allow us to immediately move as aggressively as we can to put together a 40 321 compliant mineral resource estimate that we hope that we'll be in a position to share with the market sometime in Q3 this year.

Speaker 6

That's great. Thanks guys.

Operator

Thank you. The next question comes from Stefan Ioannou with Cormark Securities. Please go ahead.

Speaker 7

Yes, thanks very much guys. Just wondering with the positive grade reconciliation we're continuing to see at Zaventina, is there any thought of maybe going in and doing some additional drilling ahead of production to really nail down your mine plan? Or I mean, I appreciate it's veins. So maybe is the plan just to continue mining and then get what you get?

Speaker 3

Yes, great question, Stefan. Look, I think the uniqueness of the Jabber tumor body and where we're at now, I think one of the what we talked about last quarter was the restriction on search ellipsis. So we have to go back and check exactly the approach that we've taken is, as Dave mentioned, we are doing development ahead of mining. So where we have channel sampling and we have a high degree of confidence in the grades continuing, we've assumed now flow through our full year production result. I'd say that in general, if you go back several years, the reconciliation against our long term model to short term has been really good.

Speaker 3

So in terms of going in and drilling out in detail and incurring that additional cost, given where we're at and where we see the deposit reconciliation heading at least for these next few levels. I'm not sure that that expense is warranted at this stage. Yes, I

Speaker 2

think, Stefan, just to add to that, I mean the zone that we're encountering here is not particularly wide. And so it's fortuitous that we've hit it. We've got 5 or 6 holes into them. As Michael said, the constraint on top cutting and search ellipses around holes have been conservative in this area. And I think the best thing just to continue to do and just take it as a happy opportunity right now for as long as it continues to give it to us.

Speaker 2

Certainly, if we're in a situation next year and we're ready and we continue to see this, we may have to rethink that strategy. But right now, as Paco said, it's really not worth trying to drill out this zone and try and add it into our resource or reserve estimate.

Speaker 7

Okay, got it. It sounds like it's very nice to have, but not necessarily a must have. So it's Correct. Yes, yes. And just maybe one other one for me, just on the great exploration with Arrow.

Speaker 7

I mean obviously nickel is still something we always think about in the background. Is there any more updates there? I know there was talk about still trying to secure some property positions before you sort of really push even hard run. Is that still the case or?

Speaker 3

Yes, yes. We're

Speaker 2

we continue to do work on nickel, albeit not at the same rate as we had done early last year. I've asked the team to take a step back and do them because as I've mentioned in the past over the last 6 to 8 months, the nickel opportunity has got a lot bigger than we ever thought it would become. And with that, I think we have to be cognizant and disciplined with regards to how we go about evaluating all of these target areas and what we do in terms of going about that. A lot of this predicated right now with regards to the government auction process. I'm happy to say the government has given us notification that we will imminently start that process, and we hope to see that and be able to give the marketplace more insights into how the auction has gone, etcetera, in the Q3.

Speaker 2

But certainly, the opportunity set on nickel sulfide exploration is significant. And but we just need to be super smart with regards to how we approach this right now because I think you could really go and blow your brains out in terms of trying to attack this so too quickly. And so Mike and the team are evaluating a number of different things with regards to surface geochemistry work, with regards to ground based EM analysis, etcetera, to see if there are ways that we can shortcut this process as opposed to having to drill significant amounts of holes to try and identify opportunities in nickel sulfide. So very much a work in progress and certainly one that we continue to evaluate and we'll continue to work on. But right now, the priority remains for us is Tucama, getting Tucama done.

Speaker 2

Obviously, Fanaas is such a big growth opportunity for us that really provides great future for us as a copper mining company. And as and if nickel continues to develop, so we will continue to follow it on a needs basis.

Speaker 7

Okay, great. Great. That's very helpful. Thanks, guys. Appreciate it.

Operator

Thank you. The next question comes from Connor MacKay with Ventum Financial. Please go ahead.

Speaker 8

Hi, guys. Thanks for taking my question this morning. Just along the same vein as the first question asked here, I was just wondering approximately when are you expecting to hit that full 4.2 1,000,000 ton per annum run rate at Carriba?

Speaker 3

Yes, great question. Look, I think for us at Cariba, obviously, we completed the mill expansion. Here, we have honeypot in production in the upper levels of the mine, which classifies as the whole complex. The deepening is in production as well. So those increased production rates up to 4.2 will be closed this year at the when the dust settles.

Speaker 3

But in terms of getting over 4,000,000 tons, that's really going to be a post shaft completion when we have the C mine system complete at Palore mine. So as I said, if you look at our throughput estimate for this year, it's going to be up significantly relative to prior years. But achieving the full mill capacity, as I said, is really longer term when we have both shops operating.

Speaker 8

Awesome. And then just one more quick one on Tucma. With the transition into operations from construction and getting into the 1st full year of production next year, what kind of levels of sustaining capital should we be expecting, particularly in relationship to the most recent technical report, which I imagine there's some level of inflation that needs to be factored in there at this point?

Speaker 3

Yes. Look, in the 1st year of operations,

Speaker 2

I wouldn't anticipate much in

Speaker 3

the way of sustaining capital at all really. I mean, obviously, we're we will be continuing to do some stripping during the year. But if you look at the our strip ratio in the 1st year is still really low. So I would anticipate that most of that is expensed in the 1st year. So we don't get into meaningful pushback until later on in the mine life but we'll incur additional sustaining costs related to stripping.

Speaker 3

So it's going

Speaker 4

to be a small amount.

Speaker 3

I don't have the exact number off the top of my head here. We can follow-up in a call afterwards to give you the specifics, but it's going to be very small.

Speaker 8

Appreciate it. Thank you very much.

Operator

Thank you. This concludes the question and answer session. I would like to turn the conference back over to David Strang for any closing remarks.

Speaker 2

Thank you, operator. And again, thanks to everybody for coming on the call. We really appreciate everybody's interest in our company. We look forward to talking to you all again in August where we hope to be having more detailed and granular conversations with regards to when which the exact day is that we're going to actually hit commercial production. And we'll be happily talking to you about how Tucumã is coming on schedule and the concentrate sales that we've started to make at that time.

Speaker 2

So thanks again everybody and we look forward to talking to you again as I said in August. Enjoy your summer. Thank you.

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Key Takeaways

  • Market conditions remained highly supportive as copper prices hit two-year highs and gold reached all-time peaks, allowing the company to lock in two-year treatment and refining terms in the low teens on roughly one-third of its expected concentrate production.
  • The Tucumã project is ~97% complete with commissioning ahead of schedule, and initial concentrate production is now targeted for early Q3 2024 within the unchanged US$310 million capex estimate.
  • At Javan Timo, Q1 gold output rose 47% year-over-year to 18,234 ounces, unit costs came in below guidance (C1 cash cost US$3.95/oz; AISC US$7.97/oz), and full-year gold guidance was raised to 60,000–65,000 ounces.
  • The Cariba operations saw a 5% increase in mill throughput following a plant expansion, produced 8,091 tonnes of copper at 1.08% grade, and reaffirmed full-year guidance of 42,000–47,000 tonnes at C1 cash costs of US$1.80–2.00 per pound.
  • First-quarter financials benefited from strong metal prices and inventory sales, delivering cash flow from operations of US$17.2 million, adjusted EBITDA of US$43.3 million, and ending liquidity of US$156.7 million (including US$51.7 million cash).
AI Generated. May Contain Errors.
Earnings Conference Call
Ero Copper Q1 2024
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