Ero Copper Corp. (TSX: ERO, NYSE: ERO) (“Ero” or
the “Company”) is pleased to announce its operating and financial
results for the three and twelve months ended December 31, 2022.
Management will host a conference call tomorrow, Wednesday, March
8, 2023, at 11:30 a.m. Eastern time to discuss the results. Dial-in
details for the call can be found near the end of this press
release.
HIGHLIGHTS
- Record full-year copper production of 46,371 tonnes, including
12,664 tonnes produced in the fourth quarter, surpassed the
Company’s 2022 production guidance range of 43,000 to 46,000
tonnes
- Copper C1 cash costs(*) for the fourth quarter and full-year
were $1.41 and $1.36, respectively, per pound of copper
produced
- Gold production also marked a record 42,669 ounces in 2022,
including 11,786 ounces produced in the fourth quarter, and
exceeded the full-year guidance range of 39,000 to 42,000
ounces
- Gold C1 cash costs(*) for the fourth quarter and full-year were
$445 and $560, respectively, per ounce of gold produced. All-in
Sustaining Costs (“AISC”)(*) for the same periods were $1,096 and
$1,124, respectively, per ounce of gold produced
- Fourth quarter and full-year cash flows from operations were
$34.0 million and $143.4 million, respectively
- Fourth quarter and full-year adjusted EBITDA(*) were $58.2
million and $208.6 million, respectively
- Fourth quarter and full-year adjusted net income attributable
to owners of the Company(*) were $22.2 million ($0.24 per share on
a diluted basis) and $83.5 million ($0.91 per share on a diluted
basis), respectively
- Capital expenditures were nearly $90 million in the fourth
quarter as construction activity related to the Company’s strategic
growth initiatives ramped up. Full-year capital expenditures,
including deposits on contracts, were just under $300 million,
below 2022 capital expenditure guidance of $308 million to $354
million, primarily due to the success of Project Honeypot and
subsequent deferral of the delivery date for the new external shaft
of Pilar Mine
- Available liquidity at year-end was $392.4 million, including
cash and cash equivalents of $177.7 million, short-term investments
of $139.7 million, and $75.0 million of undrawn availability under
the Company’s senior secured revolving credit facility. Subsequent
to year-end, the Company extended the maturity and increased the
size of its senior secured revolving credit facility to $150.0
million, resulting in pro forma year- end liquidity of $467.4
million
- 2023 production, operating cost, and capital expenditure
guidance reaffirmed
*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 year ended December
31, 2022 and the Reconciliation of Non-IFRS Measures section at the
end of this press release.
“Our 2022 financial results showcase record
production levels amidst a backdrop of inflationary pressures
experienced across the global mining industry over the past year,”
said David Strang, Chief Executive Officer. “Despite encountering
some unique obstacles related to our domestic smelter that
necessitated a higher allocation of copper concentrate sales to the
export market, resulting in reduced tax benefits during the year,
we resumed domestic sales on a limited basis subsequent to
year-end. With the added benefit of higher metal prices, we are
witnessing stronger-than-expected operating margins as we enter
2023 and are well-positioned to execute on our growth strategy.
“At our Tucumã Project, road upgrade and
drainage infrastructure completed at the end of the third quarter
allowed us to build momentum during the rainy season with minimal
down- time. As of year-end, we reached just over 20% physical
completion and are ahead of schedule on pre-stripping activities.
As a result of these efforts, we were able to commence concrete
pours for the plant foundation subsequent to year-end.
“At the Pilar Mine, we revised our timeline for
the new external shaft following the success of Project Honeypot
and updates to Caraíba’s Strategic Life-of-Mine Plan. The Project
Honeypot stopes added to our production plan have allowed us to
maintain high margins while smoothing our capital profile during
construction of the shaft, for which the delivery date has been
deferred by approximately nine months.
“Given the scarcity of new copper development
projects and extraordinary demand anticipated from global
decarbonization efforts, the timing of our near-term growth plans
is highly favorable. With these unprecedented market conditions as
well as nearly $470 million in balance sheet liquidity as of
February 2023, we remain focused on delivering peer-leading
growth.”
FOURTH QUARTER & FULL-YEAR REVIEW
• Mining & Milling
Operations
- The Caraíba Operations achieved record full-year production of
46,371 tonnes of copper in concentrate, following strong year-end
operating performance driven by the addition of high-grade Project
Honeypot stopes to the fourth quarter production plan
- Higher mined and process copper grades during the fourth
quarter resulted in copper production of 12,664 tonnes in
concentrate, representing an increase of approximately 13% compared
to the third quarter
- Full-year copper production exceeded 2022 copper production
guidance range of 43,000 to 46,000 tonnes and reflect a
year-on-year increase to mill throughput of nearly 500,000 tonnes
of ore
- The Xavantina Operations delivered record quarterly and
full-year gold production of 11,786 and 42,669 ounces, respectively
- Fourth quarter gold production benefited from higher processed
gold grades of 10.17 grams per tonne (“gpt”), representing an
increase in grade of nearly 20% compared to the prior quarter
- Full-year gold production, which surpassed 2022 gold production
guidance range of 39,000 to 42,000 ounces, increased approximately
13% year-on- year due to higher mill throughput as well as higher
mined and processed gold grades
• Organic Growth
Projects
- The Company continued to progress the construction of the
Tucumã Project, which is advancing on schedule with over 20%
physical completion achieved as of year- end
- Mine pre-stripping accelerated during Q4 2022 with
approximately 1.6 million tonnes of pre-stripping completed as of
year-end, or approximately 12% of total. Waste dump construction is
progressing on schedule with completion expected in Q3 2023
- Completion of the on-site concrete batch plant and mobilization
of the civil works contractor occurred subsequent to year-end with
first foundations poured in February 2023
- Approximately 55% of planned capital expenditures were under
contract as of year-end, up from approximately 30% at the end of Q3
2022. An additional 25% of Feasibility Study capital expenditures
remain in various stages of tendering or negotiation. Consistent
with Q3 2022 project capital forecasts, total planned capital
expenditures remain within 12% of pre- contingency Feasibility
Study as of year-end
- In partnership with The National Service for Industrial
Training, a Brazilian non-profit organization focused on improving
the competitiveness of Brazil’s manufacturing sector through
technical and vocational education, the Company commenced
comprehensive training programs within the city of Tucumã and
surrounding communities to further develop skills within the local
community that are expected to support the development and
operation of the Tucumã Project
- During the quarter, the Company’s Pilar 3.0 initiative was
significantly bolstered by the success of Project Honeypot as
reflected in the Caraíba Operations’ 2022 Strategic Life-of-Mine
(“LOM”) Plan (please refer to press release dated November 7,
2022). Project Honeypot, an engineering initiative focused on
recovering higher- grade material in the upper levels of the Pilar
Mine, is one of three projects that together are expected to enable
the creation of a two-mine system at the Pilar Mine. The other two
components of Pilar 3.0 include (i) construction of a new external
shaft to access the Deepening Extension Zone and (ii) an expansion
of the Caraíba mill to 4.2 million tonnes per annum
- The addition of Project Honeypot into the LOM Plan drove a
significant increase to the Caraíba Operations’ estimated mineral
resources, mineral reserves and mine life, allowing the Company to
defer the delivery date of the new external shaft by approximately
nine months without impacting expected copper production
- Construction of the new external shaft continued to advance
well against the revised timeline with physical completion at
approximately 20% as of year-end and approximately 35% of planned
capital expenditures under contract or in the final stages of
negotiation. Based upon current capital expenditure forecasts which
reflect additional supplier and contractor quotes, construction of
the new external shaft remains on budget
- The Caraíba mill expansion remains on schedule with completion
expected in Q4 2023
Figure 1: Tucumã Project
pre-stripping progress (February 2023).
Figure 2: Aerial view of future
Tucumã Project processing areas, including (A) primary crushing,
(B) secondary and tertiary crushing, and (C) plant and
administrative buildings.
• Subsequent Events
- In January 2023, the Company entered into a zero-cost collar
program on 3,000 tonnes of copper per month for February through
December of 2023. The collars establish a floor price at $3.50 per
pound of copper on total hedged volumes of 33,000 tonnes of copper,
representing approximately 75% of full-year production volumes. The
program protects a meaningful portion of the Company’s revenue at
the Company’s 2023 budget copper price which was used for capital,
cash flow and liquidity planning purposes, while providing upside
to increases in the copper price up to a cap of $4.76 per pound -
within 5% of the all-time high copper price. The hedge contracts
are financially settled on a monthly basis.
- Subsequent to year-end, the Company also closed its amended
senior secured revolving credit facility (the “Amended Senior
Credit Facility”), increasing its capacity from $75.0 million to
$150.0 million and extending the maturity from March 2025 to
December 2026. The Company also achieved improved terms on the
Amended Credit Facility, including a 25 basis point reduction to
the applicable margin on drawn funds and reduced standby fees on
undrawn commitments.
OPERATING AND FINANCIAL HIGHLIGHTS
|
3 monthsendedDec. 31,
2022 |
|
|
3 monthsendedSep. 30, 2022 |
|
|
3 monthsendedDec. 31, 2021 |
|
|
12 monthsendedDec. 31, 2022 |
|
|
12 monthsendedDec. 31, 2021 |
|
Operating Highlights |
|
Copper (Caraíba
Operations) |
|
|
|
|
|
Ore Processed (tonnes) |
|
745,850 |
|
|
720,725 |
|
|
646,319 |
|
|
2,864,230 |
|
|
2,370,571 |
|
Grade (% Cu) |
|
1.84 |
|
|
1.68 |
|
|
2.01 |
|
|
1.76 |
|
|
2.08 |
|
Cu Production (tonnes) |
|
12,664 |
|
|
11,189 |
|
|
11,918 |
|
|
46,371 |
|
|
45,511 |
|
Cu Production (000 lbs) |
|
27,918 |
|
|
24,669 |
|
|
26,275 |
|
|
102,230 |
|
|
100,333 |
|
Cu Sold in Concentrate (tonnes) |
|
13,301 |
|
|
10,522 |
|
|
12,393 |
|
|
46,816 |
|
|
45,717 |
|
Cu Sold in Concentrate (000 lbs) |
|
29,323 |
|
|
23,197 |
|
|
27,321 |
|
|
103,211 |
|
|
100,788 |
|
C1 cash cost of Cu produced (per lb)(1) |
$ |
1.41 |
|
$ |
1.46 |
|
$ |
0.96 |
|
$ |
1.36 |
|
$ |
0.77 |
|
Gold (Xavantina Operations) |
|
|
|
|
|
Au Production (oz) |
|
11,786 |
|
|
10,965 |
|
|
8,544 |
|
|
42,669 |
|
|
37,798 |
|
C1 cash cost of Au Produced (per oz)(1) |
$ |
445 |
|
$ |
537 |
|
$ |
582 |
|
$ |
560 |
|
$ |
525 |
|
AISC of Au produced (per oz)(1) |
$ |
1,096 |
|
$ |
1,135 |
|
$ |
910 |
|
$ |
1,124 |
|
$ |
732 |
|
Financial Highlights
($ in millions,
except per share
amounts) |
Revenues |
$ |
116.7 |
|
$ |
85.9 |
|
$ |
134.9 |
|
$ |
426.4 |
|
$ |
489.9 |
|
Gross
profit |
|
52.7 |
|
|
22.8 |
|
|
84.4 |
|
|
187.2 |
|
|
318.9 |
|
EBITDA(1) |
|
58.7 |
|
|
27.9 |
|
|
80.7 |
|
|
218.6 |
|
|
296.4 |
|
Adjusted
EBITDA(1) |
|
58.2 |
|
|
32.1 |
|
|
86.8 |
|
|
208.6 |
|
|
331.9 |
|
Cash
flow from operations |
|
34.0 |
|
|
43.0 |
|
|
66.7 |
|
|
143.4 |
|
|
364.6 |
|
Net
income |
|
22.5 |
|
|
4.0 |
|
|
60.2 |
|
|
103.1 |
|
|
202.6 |
|
Net
income attributable to owners of the Company |
|
22.2 |
|
|
3.7 |
|
|
59.8 |
|
|
101.8 |
|
|
201.1 |
|
Per share (basic) |
|
0.24 |
|
|
0.04 |
|
|
0.67 |
|
|
1.12 |
|
|
2.27 |
|
Per share (diluted) |
|
0.24 |
|
|
0.04 |
|
|
0.65 |
|
|
1.10 |
|
|
2.21 |
|
Adjusted
net income attributable to owners of the Company(1) |
|
22.2 |
|
|
4.0 |
|
|
59.7 |
|
|
83.5 |
|
|
215.4 |
|
Per share (basic) |
|
0.24 |
|
|
0.04 |
|
|
0.67 |
|
|
0.92 |
|
|
2.43 |
|
Per share (diluted) |
|
0.24 |
|
|
0.04 |
|
|
0.65 |
|
|
0.91 |
|
|
2.37 |
|
Cash,
cash equivalents, and short-term investments |
|
317.4 |
|
|
359.8 |
|
|
130.1 |
|
|
317.4 |
|
|
130.1 |
|
Working
capital(1) |
|
263.3 |
|
|
343.2 |
|
|
86.0 |
|
|
263.3 |
|
|
86.0 |
|
Net
(cash) debt(1) |
|
100.7 |
|
|
51.5 |
|
|
(70.9 |
) |
|
100.7 |
|
|
(70.9 |
) |
(1) EBITDA, Adjusted EBITDA, Adjusted net income
(loss) attributable to owners of the Company, Adjusted net income
(loss) per share attributable to owners of the Company, Net (Cash)
Debt, Working Capital, C1 cash cost of copper produced (per lb), C1
cash cost of gold produced (per ounce) and AISC of gold produced
(per ounce) are non-IFRS measures. These measures do not have a
standardized meaning prescribed by IFRS and might not be comparable
to similar financial measures disclosed by other issuers. Please
refer to the Company’s discussion of Non-IFRS measures in its
Management’s Discussion and Analysis for the year ended December
31, 2022 and the Reconciliation of Non-IFRS Measures section at the
end of this press release.
2023 PRODUCTION AND COST
GUIDANCE(*)
In 2023, the Caraíba Operations are expected to
produce 44,000 to 47,000 tonnes of copper in concentrate with
higher mill throughput levels expected towards the end of the year
following the anticipated completion of the Caraíba mill expansion
in Q4 2023. As a result, copper production is expected to be
slightly weighted towards H2 2023 with Q1 2023 expected to
contribute the lowest amount of production of the year due to
planned stope sequencing driving lower anticipated processed copper
grades.
The Company’s 2023 C1 cash cost guidance range
for the Caraíba Operations of $1.40 to $1.60 per pound of copper
produced reflects (i) sales allocation of 100% of copper
concentrate produced to the international market and (ii) elevated
consumable cost input assumptions based on Q4 2022 consumable
pricing. Q1 2023 C1 cash costs are expected to be slightly above
the full-year guidance range due to the impact of lower anticipated
copper grades and production during the quarter.
At the Xavantina Operations, the Company expects
to produce 50,000 to 53,000 ounces of gold in 2023 with production
expected to be lowest in Q1 2023 and slightly weighted towards H2
2023 due to higher mill throughput levels following the expected
commencement of production from the Matinha vein during H2
2023.
The Xavantina Operations’ 2023 C1 cash cost
guidance range of $475 to $575 per ounce of gold produced reflects
the impact of significantly higher anticipated mined and processed
gold grades in 2023 compared to 2022, partially offset by elevated
consumable cost assumptions reflecting Q4 2022 consumable pricing.
The Company’s AISC guidance range for 2023 is $725 to $825 per
ounce of gold produced.
The Company’s cost guidance for 2023 assumes a
USD:BRL foreign exchange rate of 5.30, a gold price of $1,725 per
ounce and a silver price of $20.00 per ounce.
|
2023 Guidance |
Caraíba Operations |
Copper Production (tonnes) |
44,000 - 47,000 |
C1 Cash Cost (US$/lb)(1) |
$1.40 - $1.60 |
|
Xavantina
Operations |
Gold Production (ounces) |
50,000 - 53,000 |
C1 Cash Cost (US$/oz)(1) |
$475 - $575 |
All-in Sustaining Cost (AISC) (US$/oz)(1) |
$725 - $825 |
(1) These are non-IFRS measures and do not have
a standardized meaning prescribed by IFRS and might not be
comparable to similar financial measures disclosed by other
issuers. See the Reconciliation of Non-IFRS Measures section at the
end of this press release for additional information.
2023 CAPITAL EXPENDITURE GUIDANCE(*)
The Company’s capital expenditure guidance for 2023 assumes a
USD:BRL foreign exchange rate of 5.30 and has been presented below
in USD millions.
|
2023 Guidance |
Caraíba
Operations |
|
Growth |
$80 - $90 |
Sustaining |
$65 - $75 |
Exploration |
$22 - $27 |
Total, Caraíba Operations |
$167 - $192 |
|
|
Tucumã
Project |
|
Growth |
$150 - $165 |
Exploration |
$0 - $1 |
Total, Tucumã
Project |
$150 - $166 |
Xavantina
Operations |
Growth |
$4 - $5 |
Sustaining |
$12 - $14 |
Exploration |
$6 - $7 |
Total, Xavantina
Operations |
$22 - $26 |
Company Total |
Growth |
$234 - $260 |
Sustaining |
$77 - $89 |
Exploration |
$31 - $40 |
Total, Company |
$342 - $389 |
|
|
(*) Guidance is based on certain
estimates and assumptions, including but not limited to, mineral
reserve estimates, grade and continuity of interpreted geological
formations and metallurgical performance. Please refer to the
Company’s SEDAR and EDGAR filings, including the recent Annual
Information Form for the year ended December 31, 2022 and dated
March 7, 2023 (the “AIF”), for complete risk factors.
CONFERENCE CALL DETAILS
The Company will hold a conference call on
Wednesday, March 8, 2023 at 11:30 am Eastern time (8:30 am Pacific
time) to discuss these results.
Date: |
Wednesday,
March 8, 2023 |
|
|
Time: |
11:30 am Eastern time (8:30 am Pacific time) |
|
|
Dial in: |
North America: 1-800-319-4610, International:
+1-604-638-5340 |
|
please dial in 5-10 minutes prior and ask to join the call |
|
|
Replay: |
North America: 1-800-319-6413, International:
+1-604-638-9010 |
|
|
Replay Passcode: |
9896 |
|
|
Reconciliation of Non-IFRS Measures
Financial results of the Company are presented
in accordance with IFRS. The Company utilizes certain alternative
performance (non-IFRS) measures to monitor its performance,
including C1 cash cost of copper produced (per lb), C1 cash cost of
gold produced (per ounce), AISC of gold produced (per ounce),
EBITDA, adjusted EBITDA, adjusted net income attributable to owners
of the Company, adjusted net income per share, net (cash) debt,
working capital and available liquidity. These performance measures
have no standardized meaning prescribed within generally accepted
accounting principles under IFRS and, therefore, amounts presented
may not be comparable to similar measures presented by other mining
companies. These non-IFRS measures are intended to provide
supplemental information and should not be considered in isolation
or as a substitute for measures of performance prepared in
accordance with IFRS.
For additional details please refer to the
Company’s discussion of non-IFRS and other performance measures in
its Management’s Discussion and Analysis for the year ended
December 31, 2022 which is available on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov.
C1 cash cost of copper produced (per lb.)
The following table provides a reconciliation of C1 cash cost of
copper produced per pound to cost of production, its most directly
comparable IFRS measure.
Reconciliation: |
2022 - Q4 |
|
2022 - Q3 |
|
2021 - Q4 |
|
2022 |
|
2021 |
Cost of production |
$ |
40,067 |
|
|
$ |
39,047 |
|
|
$ |
30,016 |
|
|
$ |
146,292 |
|
|
$ |
96,975 |
|
Add (less): |
|
|
|
|
|
Transportation costs & other |
|
2,362 |
|
|
|
2,209 |
|
|
|
1,998 |
|
|
|
9,019 |
|
|
|
6,331 |
|
Treatment, refining, and other |
|
4,949 |
|
|
|
4,198 |
|
|
|
2,645 |
|
|
|
15,086 |
|
|
|
4,093 |
|
By-product credits |
|
(6,103 |
) |
|
|
(4,929 |
) |
|
|
(6,250 |
) |
|
|
(22,282 |
) |
|
|
(22,983 |
) |
Incentive payments |
|
(1,092 |
) |
|
|
(902 |
) |
|
|
(3,482 |
) |
|
|
(3,914 |
) |
|
|
(5,527 |
) |
Net change in inventory |
|
(861 |
) |
|
|
(3,849 |
) |
|
|
654 |
|
|
|
(6,040 |
) |
|
|
(1,697 |
) |
Foreign exchange translation and other |
|
(47 |
) |
|
|
212 |
|
|
|
(293 |
) |
|
|
373 |
|
|
|
(97 |
) |
C1cashcosts |
$ |
39,275 |
|
|
$ |
35,986 |
|
|
$ |
25,288 |
|
|
$ |
138,534 |
|
|
$ |
77,095 |
|
|
|
|
|
|
|
|
|
|
Mining |
$ |
26,433 |
|
|
$ |
23,594 |
|
|
$ |
18,560 |
|
|
$ |
94,086 |
|
|
$ |
59,867 |
|
Processing |
|
8,033 |
|
|
|
7,687 |
|
|
|
6,365 |
|
|
|
30,155 |
|
|
|
21,585 |
|
Indirect |
|
5,963 |
|
|
|
5,436 |
|
|
|
3,968 |
|
|
|
21,489 |
|
|
|
14,533 |
|
Production costs |
|
40,429 |
|
|
|
36,717 |
|
|
|
28,893 |
|
|
|
145,730 |
|
|
|
95,985 |
|
By-product credits |
|
(6,103 |
) |
|
|
(4,929 |
) |
|
|
(6,250 |
) |
|
|
(22,282 |
) |
|
|
(22,983 |
) |
Treatment, refining and
other |
|
4,949 |
|
|
|
4,198 |
|
|
|
2,645 |
|
|
|
15,086 |
|
|
|
4,093 |
|
C1cashcosts |
$ |
39,275 |
|
|
$ |
35,986 |
|
|
$ |
25,288 |
|
|
$ |
138,534 |
|
|
$ |
77,095 |
|
|
|
|
|
|
|
Payable copper produced (lb,
000) |
|
27,918 |
|
|
|
24,669 |
|
|
|
26,275 |
|
|
|
102,230 |
|
|
|
100,333 |
|
|
|
|
|
|
|
Mining |
$ |
0.95 |
|
|
$ |
0.96 |
|
|
$ |
0.71 |
|
|
$ |
0.92 |
|
|
$ |
0.60 |
|
Processing |
$ |
0.29 |
|
|
$ |
0.31 |
|
|
$ |
0.24 |
|
|
$ |
0.29 |
|
|
$ |
0.22 |
|
Indirect |
$ |
0.21 |
|
|
$ |
0.22 |
|
|
$ |
0.15 |
|
|
$ |
0.21 |
|
|
$ |
0.14 |
|
By-product credits |
$ |
(0.22 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.23 |
) |
Treatment, refining and
other |
$ |
0.18 |
|
|
$ |
0.17 |
|
|
$ |
0.10 |
|
|
$ |
0.16 |
|
|
$ |
0.04 |
|
C1
cash costs of
copper produced
(per lb) |
$ |
1.41 |
|
|
$ |
1.46 |
|
|
$ |
0.96 |
|
|
$ |
1.36 |
|
|
$ |
0.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C1 cash cost of gold produced and All-in Sustaining Cost
of gold produced (per ounce)
The following table provides a reconciliation of C1 cash cost of
gold produced per ounce and AISC of gold produced per ounce to cost
of production, its most directly comparable IFRS measure.
Reconciliation: |
2022 - Q4 |
|
2022 - Q3 |
|
2021 - Q4 |
|
|
2022 |
|
|
|
2021 |
|
Cost of production |
$ |
4,834 |
|
|
$ |
7,317 |
|
|
$ |
4,737 |
|
|
$ |
24,768 |
|
|
$ |
19,837 |
|
Add (less): |
|
|
|
|
|
Incentive payments |
|
(167 |
) |
|
|
(177 |
) |
|
|
(150 |
) |
|
|
(1,117 |
) |
|
|
(788 |
) |
Net change in inventory |
|
258 |
|
|
|
(1,031 |
) |
|
|
(16 |
) |
|
|
(119 |
) |
|
|
(27 |
) |
By-product credits |
|
(199 |
) |
|
|
(145 |
) |
|
|
(128 |
) |
|
|
(613 |
) |
|
|
(586 |
) |
Foreign exchange translation and other |
|
523 |
|
|
|
(80 |
) |
|
|
533 |
|
|
|
976 |
|
|
|
1,398 |
|
C1
cash costs |
$ |
5,249 |
|
|
$ |
5,884 |
|
|
$ |
4,976 |
|
|
$ |
23,895 |
|
|
$ |
19,834 |
|
Site general and
administrative |
|
1,196 |
|
|
|
1,011 |
|
|
|
699 |
|
|
|
3,648 |
|
|
|
1,976 |
|
Accretion of mine closure and
rehabilitation provision |
|
106 |
|
|
|
106 |
|
|
|
42 |
|
|
|
436 |
|
|
|
215 |
|
Sustaining capital
expenditure |
|
4,547 |
|
|
|
4,105 |
|
|
|
736 |
|
|
|
14,638 |
|
|
|
2,300 |
|
Sustaining leases |
|
1,559 |
|
|
|
1,036 |
|
|
|
1,083 |
|
|
|
4,311 |
|
|
|
2,326 |
|
Royalties and production
taxes |
|
262 |
|
|
|
298 |
|
|
|
235 |
|
|
|
1,041 |
|
|
|
1,036 |
|
AISC |
$ |
12,919 |
|
|
$ |
12,440 |
|
|
$ |
7,771 |
|
|
$ |
47,969 |
|
|
$ |
27,687 |
|
|
|
|
|
|
|
|
2022 - Q4 |
|
2022 - Q3 |
|
2021 - Q4 |
|
|
2022 |
|
|
|
2021 |
|
Costs |
|
|
|
|
|
Mining |
$ |
2,311 |
|
|
$ |
3,071 |
|
|
$ |
2,403 |
|
|
$ |
12,529 |
|
|
$ |
9,394 |
|
Processing |
|
2,067 |
|
|
|
1,867 |
|
|
|
1,843 |
|
|
|
7,917 |
|
|
|
7,465 |
|
Indirect |
|
1,070 |
|
|
|
1,091 |
|
|
|
858 |
|
|
|
4,062 |
|
|
|
3,561 |
|
Production costs |
|
5,448 |
|
|
|
6,029 |
|
|
|
5,104 |
|
|
|
24,508 |
|
|
|
20,420 |
|
By-product credits |
|
(199 |
) |
|
|
(145 |
) |
|
|
(128 |
) |
|
|
(613 |
) |
|
|
(586 |
) |
C1
cash costs |
$ |
5,249 |
|
|
$ |
5,884 |
|
|
$ |
4,976 |
|
|
$ |
23,895 |
|
|
$ |
19,834 |
|
Site general and
administrative |
|
1,196 |
|
|
|
1,011 |
|
|
|
699 |
|
|
|
3,648 |
|
|
|
1,976 |
|
Accretion of mine closure and
rehabilitation provision |
|
106 |
|
|
|
106 |
|
|
|
42 |
|
|
|
436 |
|
|
|
215 |
|
Sustaining capital
expenditure |
|
4,547 |
|
|
|
4,105 |
|
|
|
736 |
|
|
|
14,638 |
|
|
|
2,300 |
|
Sustaining leases |
|
1,559 |
|
|
|
1,036 |
|
|
|
1,083 |
|
|
|
4,311 |
|
|
|
2,326 |
|
Royalties and production
taxes |
|
262 |
|
|
|
298 |
|
|
|
235 |
|
|
|
1,041 |
|
|
|
1,036 |
|
AISC |
$ |
12,919 |
|
|
$ |
12,440 |
|
|
$ |
7,771 |
|
|
$ |
47,969 |
|
|
$ |
27,687 |
|
|
|
|
|
|
|
Costs
per ounce |
|
|
|
|
|
Payable gold produced
(ounces) |
|
11,786 |
|
|
|
10,965 |
|
|
|
8,544 |
|
|
|
42,669 |
|
|
|
37,798 |
|
|
|
|
|
|
|
Mining |
$ |
196 |
|
|
$ |
280 |
|
|
$ |
281 |
|
|
$ |
294 |
|
|
$ |
249 |
|
Processing |
$ |
175 |
|
|
$ |
170 |
|
|
$ |
216 |
|
|
$ |
186 |
|
|
$ |
197 |
|
Indirect |
$ |
91 |
|
|
$ |
99 |
|
|
$ |
100 |
|
|
$ |
95 |
|
|
$ |
94 |
|
By-product credits |
$ |
(17 |
) |
|
$ |
(12 |
) |
|
$ |
(15 |
) |
|
$ |
(15 |
) |
|
$ |
(15 |
) |
C1
cash costs of gold
produced (per ounce) |
$ |
445 |
|
|
$ |
537 |
|
|
$ |
582 |
|
|
$ |
560 |
|
|
$ |
525 |
|
AISC
of gold produced
(per ounce) |
$ |
1,096 |
|
|
$ |
1,135 |
|
|
$ |
910 |
|
|
$ |
1,124 |
|
|
$ |
732 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before interest, taxes, depreciation and
amortization (EBITDA) and Adjusted EBITDA
The following table provides a reconciliation of EBITDA and
Adjusted EBITDA to net income, its most directly comparable IFRS
measure.
Reconciliation: |
2022 - Q4 |
|
2022 - Q3 |
|
2021 - Q4 |
|
2022 |
|
|
2021 |
Net Income |
$ |
22,472 |
|
|
$ |
3,999 |
|
$ |
60,212 |
|
$ |
103,067 |
|
|
$ |
202,632 |
Adjustments: |
|
|
|
|
|
Finance expense |
|
12,290 |
|
|
|
7,283 |
|
|
2,296 |
|
|
33,223 |
|
|
|
12,159 |
Income tax expense |
|
7,540 |
|
|
|
1,887 |
|
|
4,528 |
|
|
23,316 |
|
|
|
34,288 |
Amortization and depreciation |
|
16,361 |
|
|
|
14,743 |
|
|
13,675 |
|
|
58,969 |
|
|
|
47,291 |
EBITDA |
$ |
58,663 |
|
|
$ |
27,912 |
|
$ |
80,711 |
|
$ |
218,575 |
|
|
$ |
296,370 |
Foreign exchange (gain) loss |
|
(4,569 |
) |
|
|
65 |
|
|
4,419 |
|
|
(19,910 |
) |
|
|
21,968 |
Share based compensation |
|
4,123 |
|
|
|
4,151 |
|
|
981 |
|
|
7,931 |
|
|
|
7,848 |
Incremental COVID-19 costs |
|
— |
|
|
|
— |
|
|
669 |
|
|
1,956 |
|
|
|
4,459 |
NX Gold stream transaction fees |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
1,219 |
Adjusted
EBITDA |
$ |
58,217 |
|
|
$ |
32,128 |
|
$ |
86,780 |
|
$ |
208,552 |
|
|
$ |
331,864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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: |
|
2022 - Q4 |
|
|
|
2022 - Q3 |
|
|
|
2021 - Q4 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income as reported attributable to the owners of
the Company |
$ |
22,159 |
|
|
$ |
3,745 |
|
|
$ |
59,804 |
|
|
$ |
101,831 |
|
|
$ |
201,053 |
|
Adjustments: |
|
|
|
|
|
Share based compensation |
|
4,123 |
|
|
|
4,151 |
|
|
|
981 |
|
|
|
7,931 |
|
|
|
7,848 |
|
Unrealized foreign exchange (gain) loss on USD |
|
|
|
|
|
denominated balances in MCSA |
|
(1,782 |
) |
|
|
2,106 |
|
|
|
1,642 |
|
|
|
25 |
|
|
|
5,348 |
|
Unrealized foreign exchange gain on foreign exchange |
derivative contracts |
|
(3,017 |
) |
|
|
(6,733 |
) |
|
|
(3,125 |
) |
|
|
(32,960 |
) |
|
|
(3,762 |
) |
Incremental COVID-19 costs |
|
— |
|
|
|
— |
|
|
|
664 |
|
|
|
1,944 |
|
|
|
4,434 |
|
NX Gold stream transaction fees |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,219 |
|
Unrealized gain on interest rate derivative contracts |
|
— |
|
|
|
— |
|
|
|
(714 |
) |
|
|
— |
|
|
|
(1,270 |
) |
Tax effect on the above adjustments |
|
731 |
|
|
|
706 |
|
|
|
477 |
|
|
|
4,726 |
|
|
|
574 |
|
Adjusted net income attributable to owners of
the |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company |
$ |
22,214 |
|
|
$ |
3,975 |
|
|
$ |
59,729 |
|
|
$ |
83,497 |
|
|
$ |
215,444 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common
shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
91,522,358 |
|
|
|
90,845,229 |
|
|
|
89,637,768 |
|
|
|
90,789,925 |
|
|
|
88,602,367 |
|
Diluted |
|
92,551,916 |
|
|
|
91,797,437 |
|
|
|
91,727,452 |
|
|
|
92,170,656 |
|
|
|
90,963,452 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.24 |
|
|
$ |
0.04 |
|
|
$ |
0.67 |
|
|
$ |
0.92 |
|
|
$ |
2.43 |
|
Diluted |
$ |
0.24 |
|
|
$ |
0.04 |
|
|
$ |
0.65 |
|
|
$ |
0.91 |
|
|
$ |
2.37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Cash) Debt
The following table provides a calculation of net (cash) debt
based on amounts presented in the Company’s consolidated financial
statements as at the periods presented.
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
Current portion of loans and borrowings |
$ |
15,703 |
|
$ |
9,049 |
|
$ |
4,344 |
|
Long-term portion of loans and
borrowings |
|
402,354 |
|
|
402,275 |
|
|
54,906 |
|
Less: |
|
|
|
|
|
|
Cash and cash equivalents |
|
(177,702 |
) |
|
(210,244 |
) |
|
(130,129 |
) |
Short-term investments |
|
(139,700 |
) |
|
(149,554 |
) |
|
— |
|
Net (cash)
debt |
$ |
100,655 |
|
$ |
51,526 |
|
$ |
(70,879 |
) |
|
|
|
|
|
|
|
|
|
|
Working capital and Available liquidity
The following table provides a calculation for these based on
amounts presented in the Company’s consolidated financial
statements as at the periods presented.
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
Current assets |
$ |
392,427 |
|
$ |
444,188 |
|
$ |
208,686 |
|
Less: Current liabilities |
|
(129,121 |
) |
|
(100,943 |
) |
|
(122,660 |
) |
Working
capital |
$ |
263,306 |
|
$ |
343,245 |
|
$ |
86,026 |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
177,702 |
|
|
210,244 |
|
|
130,129 |
|
Short-term investments |
|
139,700 |
|
|
149,554 |
|
|
— |
|
Available undrawn revolving
credit facilities |
|
75,000 |
|
|
75,000 |
|
|
100,000 |
|
Available
liquidity |
$ |
392,402 |
|
$ |
434,798 |
|
$ |
230,129 |
|
|
|
|
|
|
|
|
|
|
|
ABOUT ERO COPPER CORP
Ero is a high-margin, high-growth, clean copper
producer with operations in Brazil and corporate headquarters in
Vancouver, B.C. The Company’s primary asset is a 99.6% interest in
the Brazilian copper mining company, Mineração Caraíba S.A.
(“MCSA”), 100% owner of the Company’s Caraíba Operations (formerly
known as the MCSA Mining Complex), which are located in the Curaçá
Valley, Bahia State, Brazil and include the Pilar and Vermelhos
underground mines and the Surubim open pit mine, and the Tucumã
Project (formerly known as Boa Esperança), an IOCG-type copper
project located in Pará, Brazil. The Company also owns 97.6% of NX
Gold S.A. (“NX Gold”) which owns the Xavantina Operations (formerly
known as the NX Gold Mine), comprised of an operating gold and
silver mine located in Mato Grosso, Brazil. Additional information
on the Company and its operations, including technical reports on
the Caraíba Operations, Xavantina Operations and Tucumã Project,
can be found on the Company’s website (www.erocopper.com), on SEDAR
(www.sedar.com), and on EDGAR (www.sec.gov). The Company’s shares
are publicly traded on the Toronto Stock Exchange and the New York
Stock Exchange under the symbol “ERO”.
FOR MORE INFORMATION, PLEASE
CONTACT
Courtney Lynn, VP, Corporate Development & Investor
Relations (604) 335-7504info@erocopper.com
CAUTION REGARDING FORWARD LOOKING INFORMATION
AND STATEMENTS
This press release contains “forward-looking
statements” within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and “forward-looking
information” within the meaning of applicable Canadian securities
legislation (collectively, “forward-looking statements”).
Forward-looking statements include statements that use
forward-looking terminology such as “may”, “could”, “would”,
“will”, “should”, “intend”, “target”, “plan”, “expect”, “budget”,
“estimate”, “forecast”, “schedule”, “anticipate”, “believe”,
“continue”, “potential”, “view” or the negative or grammatical
variation thereof or other variations thereof or comparable
terminology. Forward-looking statements may include, but are not
limited to, statements with respect to the Company’s expected
production, operating costs and capital expenditures at the Caraíba
Operations, the Tucumã Project and the Xavantina Operations; the
ability of the Company to execute on its growth initiatives
according to the timeline and budget currently envisioned;
estimated completion dates for certain milestones, including
construction of the Tucumã Project, and completion of the projects
that comprise the Pilar 3.0 initiative, including the Caraíba mill
expansion and construction of the new external shaft to access the
Deepening Extension Zone; the ability of the Company to realize
benefits associated with Project Honeypot; the ability of the
Company to sell future copper concentrate production to its
domestic customer; and any other statement that may predict,
forecast, indicate or imply future plans, intentions, levels of
activity, results, performance or achievements.
Forward-looking statements are subject to a
variety of known and unknown risks, uncertainties and other factors
that could cause actual results, actions, events, conditions,
performance or achievements to materially differ from those
expressed or implied by the forward-looking statements, including,
without limitation, risks discussed in this press release and in
the AIF under the heading “Risk Factors”. The risks discussed in
this press release and in the AIF are not exhaustive of the factors
that may affect any of the Company’s forward-looking statements.
Although the Company has attempted to identify important factors
that could cause actual results, actions, events, conditions,
performance or achievements to differ materially from those
contained in forward-looking statements, there may be other factors
that cause results, actions, events, conditions, performance or
achievements to differ from those anticipated, estimated or
intended.
Forward-looking statements are not a guarantee
of future performance. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Forward-looking statements involve
statements about the future and are inherently uncertain, and the
Company’s actual results, achievements or other future events or
conditions may differ materially from those reflected in the
forward-looking statements due to a variety of risks, uncertainties
and other factors, including, without limitation, those referred to
herein and in the AIF under the heading “Risk Factors”.
The Company’s forward-looking statements are
based on the assumptions, beliefs, expectations and opinions of
management on the date the statements are made, many of which may
be difficult to predict and beyond the Company’s control. In
connection with the forward-looking statements contained in this
press release and in the AIF, the Company has made certain
assumptions about, among other things: continued effectiveness of
the measures taken by the Company to mitigate the possible impact
of COVID-19 on its workforce and operations; favourable equity and
debt capital markets; the ability to raise any necessary additional
capital on reasonable terms to advance the production, development
and exploration of the Company’s properties and assets; future
prices of copper, gold and other metal prices; the timing and
results of exploration and drilling programs; the accuracy of any
mineral reserve and mineral resource estimates; the geology of the
Caraíba Operations, the Xavantina Operations and the Tucumã Project
being as described in the respective technical report for each
property; production costs; the accuracy of budgeted exploration,
development and construction costs and expenditures; the price of
other commodities such as fuel; future currency exchange rates and
interest rates; operating conditions being favourable such that the
Company is able to operate in a safe, efficient and effective
manner; work force continuing to remain healthy in the face of
prevailing epidemics, pandemics or other health risks (including
COVID-19), political and regulatory stability; the receipt of
governmental, regulatory and third party approvals, licenses and
permits on favourable terms; obtaining required renewals for
existing approvals, licenses and permits on favourable terms;
requirements under applicable laws; sustained labour stability;
stability in financial and capital goods markets; availability of
equipment; positive relations with local groups and the Company’s
ability to meet its obligations under its agreements with such
groups; and satisfying the terms and conditions of the Company’s
current loan arrangements. Although the Company believes that the
assumptions inherent in forward-looking statements are reasonable
as of the date of this press release, these assumptions are subject
to significant business, social, economic, political, regulatory,
competitive and other risks and uncertainties, contingencies and
other factors that could cause actual actions, events, conditions,
results, performance or achievements to be materially different
from those projected in the forward-looking statements. The Company
cautions that the foregoing list of assumptions is not exhaustive.
Other events or circumstances could cause actual results to differ
materially from those estimated or projected and expressed in, or
implied by, the forward-looking statements contained in this press
release. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements.
Forward-looking statements contained herein are
made as of the date of this press release and the Company disclaims
any obligation to update or revise any forward-looking statement,
whether as a result of new information, future events or results or
otherwise, except as and to the extent required by applicable
securities laws.
CAUTIONARY NOTES REGARDING MINERAL RESOURCE AND
MINERAL RESERVE ESTIMATES
Unless otherwise indicated, all reserve and
resource estimates included in this press release and the documents
incorporated by reference herein have been prepared in accordance
with 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.
Photos accompanying this announcement are available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/48668f66-aac9-4654-a4aa-61f42e97c892
https://www.globenewswire.com/NewsRoom/AttachmentNg/f847121a-42b1-431b-8125-9d633dcc7b20
Ero Copper (NYSE:ERO)
Historical Stock Chart
From Sep 2024 to Oct 2024
Ero Copper (NYSE:ERO)
Historical Stock Chart
From Oct 2023 to Oct 2024