Q4 2021 Nexa Resources SA Earnings Call

Good morning, and welcome to next of resources fourth quarter and full year 2021 conference call.

Speaker 1: Good morning and welcome to NEXA Resources fourth quarter and full year 2021 conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

All participants will be in listen only mode.

Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

Speaker 1: This event is being recorded and is also being broadcast via webcast and may be accessed through NEXA's investor relations website where the presentation is also available.

This event is being recorded and is also being broadcast via webcast and may be accessed through next us Investor Relations Web site, where the presentation is also available.

Speaker 1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Remember that the participants of the webcast will be able to register via webcast questions.

After todays presentation, there will be an opportunity to ask questions.

To ask a question you May press Star then one on your telephone keypad to withdraw your question. Please press Star then two remember.

Remember that the participants of the webcast will be able to register via webcast questions.

Simply type your question in the box and click send and that will be answered soon.

Speaker 1: Simply type your question in the box and click send and that will be answered soon.

Speaker 1: I would now like to turn the conference over to Mrs. Roberto Varela, Head of Investor Relations, for opening remarks. Please go ahead.

I would now like to turn the conference over to Mrs. Roberto Zarella head of Investor Relations for opening remarks. Please go ahead.

Good day, and good afternoon, everyone and welcome to Nexobrid Services' fourth quarter and full year 2021 earnings conference call.

Speaker 2: Good day and good afternoon everyone and welcome to NEXA Resources fourth quarter and full year 2021 earnings conference call. Thanks for joining us today.

Thanks for joining us today.

During the call we'll be discussing the company's performance as part of your earnings release that we issued yesterday, we encourage you to follow along with these on screen presentation through the webcast before.

Speaker 2: During the call, we will be discussing the company's performance as per the earnings release that we issued yesterday. We encourage you to follow along with these on-screen presentations through the webcast.

Speaker 2: Before we begin, I'd like to draw your attention to slide number two, as you'll be making forward-looking statements about our business. And we just ask that you refer to the disclaimer and the conditions surrounding those statements.

Before we begin I'd like to draw your attention to slide number two as you will be making forward looking statements about our business and we just ask that you refer to the disclaimer and the conditions surrounding those statements.

Speaker 2: It's now my pleasure to introduce our speakers. Joining us today is our CEO Inacio Rosado, our CFO Rodrigo Menke and Leonardo Coelho, our Senior Vice President of Mining, as well the investor relations team. With that, I'm going to go ahead and turn the call over to Inacio. So Inacio...

It's now my pleasure to introduce our speakers.

Joining us today is our CEO <unk> <unk>, our CFO , who do who main key and Leonardo Quealy, our senior Vice president of mining as well the Investor Relations team.

With that I'm going to go ahead and turn the call virtually now.

So we're not too. Please go ahead.

Thank you very much Rebecca and thanks to everyone for being with US This morning.

Speaker 3: Thank you very much, Roberta, and thanks to everyone for being with us this morning.

This is my first formal interaction with the financial community.

Speaker 3: This is my first formal interaction with the financial community since I was appointed CEO .

I was appointed CEO .

Speaker 3: It is a privilege to lead this company and be part of this very talented group of people.

It is a privilege to lead this company and be part of these very talented group of people.

During my transition period.

Speaker 3: During my transition period, I had the opportunity to visit all the operators.

The opportunity to visit all of the operators and I believe we have world class asset.

Speaker 3: And I believe we have world class assets with high safety and environmental standards.

Hi, Andy.

Mental responders.

Speaker 3: I'm also impressed by the commitment of all the team and the strong culture based on diversity.

I'm also impressed by the commitment of all the team.

The strong culture based on diversity.

Please let's move now to slide number three where we will begin our presentation.

Speaker 3: Please, let's move now to slide number three, where we will begin our presentation.

Slide number three as you can see in our highlights 2021 what's a very strong year for Nixon.

Speaker 3: In slide number three, as you can see in our highlights, 2021 was a very strong year for NEX.

We had a strong operating results.

Speaker 3: We had strong operating results and achieved guidance in production, mining cash costs and metal sales.

And achieved guidance in production mining cash cost and maintenance data.

Speaker 3: Adipona is on track to production and we believe it will become a flagship operation with a long life of mine.

One on Eastland truck to production and we believe it will become our flagship operation with a long life of mine.

I will also give some updates on our exploration program.

Speaker 3: I will also give some updates on our exploration program.

We have been very successful in finding potential in most of our mines.

Speaker 3: We have been very successful in finding potential in most of our minds.

We have continued to benefit from high base metal prices.

Speaker 3: We have continued to benefit from high base metal prices.

Speaker 3: that combined with our strong operational performance generated a high adjusted EBITDA and a strong cash flow generator.

That combined with our strong operational performance generated a high adjusted EBITDA on a strong cash flow generation.

Speaker 3: our balance sheet continues to be strong.

Our balance sheet.

Continues to be strong.

Speaker 3: with available cash of over a billion dollars and a low financial leverage.

With available cash.

Over a billion dollars.

On a low financial leverage.

Speaker 3: Finally, we remain very optimistic about market fundamentals.

Finally, we remain very optimistic about market fundamentals.

Speaker 3: Moving now to the next slide, slide number four, I will discuss our results in more detail.

Moving now to the next slide slide number four.

Our results in more detail.

Speaker 3: In this slide, you can see that sink production in the fourth quarter of last year decreased by 12% compared to the fourth quarter of 2020.

And this is like you can see that zinc production in the fourth quarter of last.

Year decreased by 12% compared to the fourth quarter of <unk>.

2020.

This was mainly driven by lower production in Cerro Lindo.

Speaker 3: This was mainly driven by lower production in Cerro Lindo due to the expected lower average grade and temporary reduction in production due to a community stoppage in December .

Due to the expected lower average grade.

Temporary reduction in production due to our community is called <unk> in December .

However in 2021.

Speaker 3: However, in 2021, sink production reached 320,000 tons, which is 2% higher than in 2020.

Production reached 320000 tonnes, which is 2% higher than in 2020.

This increase was possible due to the higher production in our mines in Peru.

Speaker 3: This increase was possible due to the higher production in our mines in Peru, but partially offset by lower production in our Basante mines because of the extreme minorities in Spain.

But partially offset by lower production in our buy plans in mind.

Because of the Extremo Norte business space.

This area of the mine.

Speaker 3: This area of the mine restarted its activities during the fourth quarter of 2021 ahead of our initial plan.

Started its activities during the fourth quarter of 'twenty. One ahead of our initial plan.

Mining cash cost in 2021 decreased by 45%.

Speaker 3: Mining cash costs in 2021 decreased by 45% compared to the prior year and this was mainly explained by

Compared to the prior year and this was mainly explained by.

Speaker 3: higher byproducts and lower PC.

Higher growth byproducts.

<unk> disease.

It is worth mentioning that.

Speaker 3: It is worth mentioning that we had increases in operating costs related to maintenance activities and third-party service.

We had increases in operating costs related to maintenance activities and third party services.

We also face.

Speaker 3: And we also face and continue facing inflationary cost pressures. No.

<unk> facing inflationary cost pressures.

Now moving to the smelting segment.

In 2021 metal sales totaled 619000 bonds, 6% higher than in 2020, mainly due to a higher production in Gulf of multiyear.

Speaker 3: In 2021, metal fails total 619,000 tons.

Speaker 3: 6% higher than in 2020, mainly due to a higher production in Casa Marta.

And this is despite the budget of our Calpine supplier Bull run.

Speaker 3: In this smelter, despite the stoppage of our calcine supplier, though run at the beginning of the year, we were able to source material from third-party companies and increase our sales year over year.

At the beginning of the year, we were able to source material from third party companies.

Our sales.

Over a year.

Our smelting cash cost in 2021 increased by 39% compared to the one and 2020.

Speaker 3: Our smelting cash cost in 2021 increased by 39% compared to the one in 2020. And this was mainly driven by higher LME prices that increased 33% and lower TCR.

And this was mainly driven by higher alumina prices that increased 33%.

Where do you see.

Now moving to the next slide to the completion of our one off projects.

Speaker 3: Now moving to the next slide to the completion of our A

Deep water, we made a strong progress in 2021.

Speaker 3: In Odipona, we made a strong progress in 2021.

Overall PC called Broadridge has reached more than 99% at the end of December .

Speaker 3: Overall physical progress has reached more than 99% at the end of December .

Mechanical completion is almost concluded and.

Speaker 3: Mechanical completion is almost concluded and commissioning is underway in parallel.

Commissioning is underway in parallel.

Speaker 3: It is worth mentioning that during the last two months, productivity of the workforce went down due to heavy rains and the impact of the Omicron virus.

It is worth mentioning that during the last two months for one P. D of the workforce went down.

Due to heavy rains and the impact of the Omi grown volumes.

These effects combined with engineering issues.

Speaker 3: These effects, combined with engineering issues, added additional pressures on costs and in the project timeline.

Additional pressures on costs until the project finally.

Peter and specifics, but ramp up is now at scale for the early third quarter of 2022.

Speaker 3: Considering these effects, the ramp-up is now scheduled for the early third quarter of 2020.

It might be a moment, we have been very successful developing our IDEXX and zinc mines and.

Speaker 3: In mine development, we have been very successful developing our ADEX and LINQ mines.

Speaker 3: and have reached 2.5 months of production in stockpipes.

Im hop reach 2.5 months of production in the stockpile.

I had the opportunity to visit in December last year, and I am impressed with a high quality of infrastructure.

Speaker 3: I had the opportunity to visit the Ipona in December last year, and I am impressed with the high quality of infrastructure, a strong mind development program, and potential to grow resources.

Strong mine development brought him on potential to grow reserves.

I am confident that deep water will become a long life flagship mine.

Speaker 3: I am confident that the Poinar will become a long-life flagship microservice.

Moving now to the next slide where I will give you an update on exploration.

Speaker 3: Moving now to the next slide where I will give you an update on exploration.

Speaker 3: In 2021, we executed over 110,000 meters of Explorer 33.

In 2020 , one we executed over 110000 meters of exploratory drilling.

Speaker 3: At Cerro Lindo, the discovery of the Pucasaya mineralized body opens a large and promising brownfield exploration so far.

Our total Rainbow magic.

The discovery of the Pooka Saia mineralized body opens a large on bromeosin brownfield exploration so.

Speaker 3: at Basante, the brown pill exploration confirmed the extension of all bodies, especially in extremonor.

By Sunday.

Brownfield exploration confirm the ascension of ore bodies, especially in extra day mono.

Hi, Betty born on exploration drilling continued babassu ore body.

Speaker 3: Aperipona exploration drilling continue at Babasu or Bari with very promising results.

With very promising results.

In the following slide we show that at.

Speaker 3: In the following slide, we show that at the PASCO complex, the results on our sata or body are very promising.

The Pasco complex that restaurants on our sort of ore body are very promising.

Speaker 3: and we are aggressively drilling the San Gerardo piece to extend its life.

And we are aggressively.

Definitely hit out of the beats to extend its life.

In Boston faithful, our advanced projects that will accommodate it's or in the Moura will plant.

Speaker 3: In Bonsalceso, our advanced project that will accommodate its ore in the Moro Agudo plant, our exploration plan is reflecting continuity in the parallel orbit.

Our exploration plan is reflecting continuing D in a parallel or button.

Finally.

Speaker 3: Finally, I would like to comment on Hilarion, where the 2021 drilling campaign was completed and confirms the continuity of minerals in the southern extension.

I would like to comment on Israel.

The 2021 drilling campaign was completed.

Confidence that continuity of minerals in the south or extension.

Moving to the next slide two shows our financial results.

Speaker 3: Moving to the next slide to show our financial results.

Beginning with the chart.

Speaker 3: beginning with a chart of on your upper left consolidated net revenue for the fourth quarter grew 7% compared to the fourth quarter of 2020.

On your upper left consolidated net revenue for the fourth quarter grew 7% compared to the fourth quarter of 2020. These.

This was mainly driven by higher aluminum prices.

Speaker 3: This was mainly driven by higher LME prices.

Speaker 3: In all 2021, net revenue increased by 34% compared to 2020 due to the higher prices and volumes already explained before.

In all 2021 net revenue increased by 34%.

Compared to 2020 due to the higher prices on volumes already explained before.

Speaker 3: However, consolidated adjusted EBITDA for the quarter decreased by 19% and this was explained by

However, consolidated adjusted EBITDA for the quarter decreased by 19% and this was explained by.

Number one we.

Speaker 3: Number one, we have recognized a non-cash impact of $6 million related to our annual assets retirement obligations.

Recognize a noncash impact of $6 million related to our asset retirement obligations.

Second.

Speaker 3: Second, due to the sharp increases in metal prices at the end of the year, we had a temporary difference in the hedge book with a negative impact of $18 million.

Due to the sharp increases in metal prices at the end of the year, we had a temporary difference in the hedge book.

With a negative impact of $18 million.

Such impact is expected to be a reverse in the upcoming months.

Speaker 3: Such impact is expected to be reversed in the upcoming months as the stock position turns over.

The stock position turns over.

Last the temporary decline in Cerro Lindo affair.

Speaker 3: Last, the temporary decline in Cerro Lindo affected the production, and this was on community relation problems.

Affected the production on.

And this was on community relation problems.

Nevertheless.

Yes, yes, it EBITDA for 2021 was a record high and.

Speaker 3: The adjusted EBITDA for 2021 was a record high and increased 75% to $704 million.

And increased 75% to $704 million.

Speaker 3: This was driven by higher volumes and increases in price.

This was driven by higher volumes and increases in price.

Speaker 3: In the next slide, I will discuss the financial performance by technique.

In the next slide I will discuss the financial performance by segment.

In the mining segment net revenue total.

Speaker 3: In the mining segment, net revenue total $323 million in the fourth quarter of 2021.

$323 million in the fourth quarter of 'twenty one.

And increased 20% versus 2020.

Speaker 3: and increase 20% versus 2020.

Speaker 3: This was mainly driven by higher average element prices and lower benchmark TC.

This was mainly driven by higher average selling prices and lower benchmark Tcs.

Adjusted EBITDA, followed the upward trend on.

Speaker 3: Adjusted E-beta followed the upward trend and reached 110 million, 26% higher compared to the fourth quarter of 2020.

<unk> reached $110 million.

26% higher compared to the fourth quarter of 2012.

In all 21 mining net revenue grew.

Speaker 3: In all 21, mining net revenue grew.

Speaker 3: 56% to $1.2 billion, supported by the same effect mentioned before.

6% to $1 $2 billion supported by the same effect mentioned before.

Adjusted EBITDA was $441 million in 2021 .

Speaker 3: A adjusted EBITDA was $441 million in 2021, resulting from a strong performance across all my...

Starting from a strong performance across all mines.

In the smelting segment net revenue in the fourth quarter of 'twenty, one totaled $516 million and rose 7% versus the same quarter in 2020.

Speaker 3: In this melting segment, net revenue in the fourth quarter of 2021 totaled 516 million and rose 7% versus the 10th quarter in 2020, also supported by higher LME prices.

Also supported by higher <unk> prices.

Adjusted EBITDA was $27 million.

Speaker 3: a decrease compared to the fourth quarter of 2020, mainly explained by lower volumes and PC's.

The decrease compared to the fourth quarter of 2020, mainly explained by lower volumes on Pcs.

Speaker 3: and in addition to the factors I mentioned in the previous slide.

In addition to the factors I mentioned in the previous slides.

Speaker 3: In 2021, net revenue grew 31% to $2 billion, and was also supported by higher element prices and the increase in sales volume.

In 2021 net revenue grew 31% to $2 billion and was also supported by higher prices and the increase in sales volume.

Speaker 3: while adjusted EBITDA was almost flat year over year.

While adjusted EBITDA was almost flat year over year.

On slide 11, we can see the strong operating cash generation of.

Speaker 3: On slide 11, we can see the strong operating cash generation of $277 million. Most of this cash flow has been...

$277 million.

Most of this cash flow has been invested in deep water.

We have also prepay debt.

Speaker 3: We have also prepaid that of $276 million and paid dividends of $52 million, which includes...

276 million on paid dividends of $52 million.

Which includes all our dividends paid to minorities.

Without these effects.

Presented in the slide free cash flow in 2021 was a negative.

Speaker 3: presented in the slide. Free cash flow in 2021 was a negative $342 million.

$342 million.

Speaker 3: This negative effect was possible to be financed due to our strong cash balance explained in the following slide.

These native these effects was possible to.

To be finance due to our strong cash balance explained in the following slides.

And this is like you can see that our liquidity remains strong.

Speaker 3: In this slide, you can see that our liquidity remains strong.

Speaker 3: as we continue to report a healthy balance sheet with an extended debt profile.

We continue to report a healthy balance sheet with an extended debt profile.

By the end of the year. Our current available liquidity was $1 1 billion, which includes our undrawn revolving credit facility of 300 million Laurence.

Speaker 3: By the end of the year, our current available liquidity was 1.1 billion, which includes our drone revolving crate facility of 300 million.

As of December 31, the average maturity of our total debt.

Speaker 3: As of December 31st, the average maturity of our total debt was 5.3 years, with a 4.7% average debt cost.

153 years with up four 7% average debt cost.

Our leverage measured by the net debt to adjusted EBITDA ratio decreased to 137 times from 229 times at the end of 2000, and this was mainly driven by higher adjusted EBITDA explained before.

Speaker 3: Our leverage measured by the net debt to adjusted EBITDA ratio decreased to 1.37 times from 2.29 times at the end of 2020. And this was mainly driven by higher adjusted EBITDA explained before.

Now moving on to slide 13, where we present the market fundamentals.

Speaker 3: Now moving on to slide 13 where we present the market fundamentals.

And this is like we want to show you that the average price in 2021 increased more than 30% year over year.

Speaker 3: In this slide, we want to show you that the average price in 2021 increased more than 30% year over year.

Speaker 3: During the last months of 2021, the price had a stability between 3,300 and 3,400 per ton. And more recently, the price has increased and was trading above 3,600 per ton.

In the last months of 2021, the price hottest stability between 303000 303400 per ton.

And more recently the price has increased on.

And the worst trading above 3600 per ton.

Copper prices also follow this upward trend and increased by 50% in 'twenty, one compared to 20 points.

Speaker 3: Copper prices also follow this upward trend and increase by 50% in 2021 compared to 2020.

Regarding market fundamentals, you can see that the supply projections foreseeing or are both real mine production and this effect combined with a strong demand.

Speaker 3: Regarding market fundamentals, you can see that the supply projections for zinc are above real mine production. And this effect, combined with strong demand, creates a strong scenario for zinc in the coming months.

Our strong scenario foreseeing in the coming months.

So in a scenario where macroeconomic factors should be less volatile.

Speaker 3: So, in a scenario where macroeconomic factors should be less volatile, the price of think should reflect market fundamentals.

The price of zinc should reflect market wound up maintenance.

Speaker 3: meaning that prices are expected to be at high levels in the coming months.

Meaning that prices are expected to be at high levels in the coming months.

I will now turn over the call total video will make our CFO , who will comment on our three year guidance.

Speaker 3: I will now turn over the call to Rodrigo Meng, our CFO , who will comment on our three-year guidance.

Rodrigo please.

Thank you.

Speaker 4: Thank you, Inashi, and good day, everyone. As shown on slide 16, for 2022, zinc production at the mid-range of the guidance is estimated to decrease by 5% from 2021, driven by expected lower grades from settling and the temporary capacity reduction in vazante as a consequence of heavy rainfalls in the state of Minas Gera.

Hey, everyone.

Shown on slide 16 for 2022 zinc production at the mid range of the guidance.

Estimated to decrease by 5% from 2021, driven by expected lower grades from seven.

Temporary capacity reduction in bad debt as it comes.

Sequencers of heavy rainfalls in the state of Minnesota.

Speaker 4: For 2023, zinc production is estimated to increase 16% over 2022 due to the start-up of alipona and with a further 1% in 2024 over 2021.

For 2023 zinc production is estimated to increase 16% over 2022.

Due to the startup of unemployment and with a further 1% in 2024 over 2023.

Speaker 4: At the midpoint of the guidance range, copper production in 2022 is forecasted to increase 6% on average compared to 2021, mostly driven by Cerro Lindo and Aripuan. On the same basis, lead production follows the trend and should increase by 5%.

At the midpoint of the guidance range copper production in 2022 is forecasted to increase 6% on average compared to 2021, mostly driven by 17 and I think one on.

On the same basis led production follows that trend and shouldn't need by 5%.

In terms of cash costs, we estimate mining hemorrhage.

Speaker 4: In terms of cash costs, we estimate mining average cash costs of 23 cents per pound in 2022, compared with 21 cents per pound in 2021, as we forget.

Quinn.

Oh 2022, compared with 21 cents per pound in 2020 , one as we forecast.

Speaker 4: Inflationary pressures impacting third-party services, logistics, and consumable goods. Continued health protocols to fight COVID-19, which should be partially offset by higher by product credits in our pollutant mines and cost reduction and operational efficiency.

From their own pressures impacting third party services logistics and consumable goods.

Health protocols to fight Covid, 19, which should be partially offset by higher byproduct credits in the mines and cost reduction and operational efficiency initiatives.

Turning to slide 17 for our smelting segment three year guidance.

Speaker 4: Turn to slide 17 for our melting segment three year guide.

Speaker 4: Metal sales volume in 2022 at the midpoint of the guidance range is estimated to decrease 7% from 2021 due to lower production. As we disclosed in the first quarter of 2021, our calcine supplier in Peru shut down its facility and for the forecasted period, we are assuming it will not resume at 2021.

Sales volume in 2022 at the midpoint of the guidance range is estimated to decrease 7% complete.

Due to lower production as we disclosed in the first quarter of 'twenty, one hour call funds Warrington shutdowns facility important forecast, we are assuming will not resume activities. The temporary increase in Boston as mine production is also impacting the production of our smelters in Brazil during 2000.

Speaker 4: The temporary decrease in basenci's mine production is also impacting the production of ours melters in Brazil during 2020.

Sure.

Speaker 4: For 2023-24, we assume supply from our mines maintains historical levels and thus we expect sales volume to increase over 2023.

For 'twenty 'twenty three 'twenty four we assume supply from our mines maintain historical levels and thus we expect sales volume to increase over 2022.

Despite such decrease in volumes, we remain focused.

Speaker 4: Despite such decreasing volumes, we remain focused in improving the profitability of our products.

The profitability of our business.

In terms of cash costs, we estimate smelting average cash cost of $1.

Speaker 4: In terms of cash costs, we estimate smelting average cash costs of $1.15 per pound in 2022 as we forecast. Installationary cost pressure on third party services, consumable labor costs, higher energy prices, and concentrated prices at higher levels, which should be partially offset by higher byproduct credits and continued cost reduction initiatives. 30 now to the next slide.

In 2022, as we forecast inflationary cost pressure on third party.

Services saw broad labor costs higher energy prices and concentrate prices at higher levels, which should be partially offset by higher byproduct credits and continued cost reduction initiatives turning now to the next slide slide 18.

Speaker 4: For 2022, we expect capital expenditures of 385 even.

For 2022, we expect capital expenditures of $385 million, we estimate to invest additional $55 million.

Speaker 4: we estimate to invest additional 55 million dollars to conclude the implementation of the LEPONUM code.

And patients.

Okay.

Sustaining investments are expected to total $206 million, including $42 million 20 sustaining expenses also.

Speaker 4: Sustaining investments are expected to total $256 million, including $42 million to a per millionD

Speaker 4: Also, we expect to invest $12 million in technology and contribute $5 million to our host communities where we invest in education, training, and we endeavor to hire local services supporting their social and economic development.

To invest $12 billion in technology.

5 million belongs to our wholesale business.

We invest in education training, and we endeavor to hire local services supporting their social and economic.

In terms of mineral exploration and project evaluation in 2020 to estimate a total investment of $82 million as we maintain our efforts to replace the mineral reserves and resources supporting our business growth.

Speaker 4: In terms of mineral exploration and project evaluation in 2022, we estimate a total investment of $82 million as we maintain our efforts to replace and increase mineral reserves and resources supporting our business growth.

Moving to slide 19.

Where we provide more details of our exploration strategy for 2022.

Speaker 4: where we provide more details of our exploration strategy for 2020.

Speaker 4: We plan to drill over 120,000 meters, being approximately 63,000 meters in Peru, 50,000 meters in Brazil, and the remaining amount in the Middle East. Our focus is to expand mineral resources through brownfield and greenfield drilling, near operating lines, and extension drilling on advanced projects.

We plan to drill over 120000 meters being approximately 63000 meters.

50000 units in Brazil, and the remaining amount of them.

Our focus is to expand mineral resources through brownfield and into Britain year operating lines and extension drilling on the French project.

Speaker 4: I will now handle the call back to Inasha for his final remarks. Inasha, please. Thank you, Meng. I am now on slide 20. I would like to close this presentation by briefly explaining our priorities for this session.

Now handle the call back to NASA for his final remarks.

Please. Thank you may I am I am now on slide 20, I would like to close this presentation by briefly explaining our priorities for this year.

Speaker 3: We need to focus on taking a Rituanat into production and work on its life of my next...

We need to focus on taking or whatnot into production on work only slight of mine extension.

We also need to continue working on improving our cash generation from our operations.

Speaker 3: We also need to continue working on improving our cash generation from our operations. I believe there is still room for cost reductions and capex optimization.

Believe there is still room for cost reductions on Capex, obviously optimization.

Extending our life of mine of our mine assets is also a priority and this action has to be implemented in combination with a clear growth strategy in copper.

Speaker 3: Extending our life of mine, of our mine assets, is also a priority. And this action has to be implemented in combination with a clear growth strategy in copy.

Finally, our strong balance sheet is a priority. So we can fund most of our growth with our cash flow.

Speaker 3: Finally, a strong balance sheet is a priority, so we can fund most of our growth with our cash.

Thank you all for attending this presentation I will now open up for questions.

Speaker 3: Thank you all for attending this presentation. I will now open up for questions.

We will now begin the question and answer session.

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Speaker 1: At this time, we will pause momentarily to assemble the roster.

At this time of a pause momentarily to assemble the roster.

And our first question comes from Carlos de Alba.

Speaker 1: And our first question will come from Carlos Villalba of Morgan Stanley . Please go ahead.

Morgan Stanley . Please go ahead.

Speaker 5: Yeah, good morning everyone. Thank you very much Ignacio. Good luck with your new responsibilities as CEO . I have a couple of questions, maybe three questions. One is on the smelting results in the fourth quarter, which were very challenging and below what we were expecting. And those are related to the price effects. One is the hedge and the other is the...

Yeah. Good morning, everyone. Thank you very much Ignacio good luck with your new responsibilities as CEO .

I have a couple of questions maybe three questions. One is on the smelter and results in the fourth quarter, which were very challenging.

And below what we were expecting.

And those are related to the price effect.

One is is the hedge and the other is the <unk>.

When it was called the adjustments on the quotation period in that operation.

Speaker 5: what it was called adjustments on the quotation period in that operation. Could you maybe give us a little bit more color on the quotation period?

Could you maybe give us a little bit more color on the quotation period that that may be that is provisional pricing, but what we see that zinc prices increase following September 30th.

Speaker 5: that maybe that is provisional pricing, but what we see is that sink prices increase following September 30th, and therefore we would probably expect a positive impact on higher sink prices versus the curve that existed at the end of the third quarter. So some color there would be appreciated. Maybe we just didn't have it clear. And then on the hedging also, could you give us some comment as to what exactly is the smelting business being hedged or has been hedging given that prices went up and that would have been a negative for the smelting business, but we would have thought that then the hedges would have.

And therefore, we would've probably expect a positive impact on higher zinc prices and vessels curve that existed at the end of the third quarter. So some color there would be appreciated maybe we just didnt have it clear and then on the hedging also could you give us some.

Comment as to what exactly is the smelting business has been hedged.

It has been hedging given that prices went up and that would have been a negative for the smelting business, but.

We would have thought it then the hedges would have give you a positive benny.

Speaker 5: give you a positive benefit or positive result, potentially that was what we would expect the company was going to try and hedge. And then finally if you could give us some color.

Benefit a positive result.

S potentially that was what we would expect the company what was going to try and hedge.

And then finally, if you could give us some color.

Speaker 5: on what are the conversion costs embedded in the guidance for smelting in 2022 to 2024 period. Thank you very much.

On what are the conversion costs embedded in the guidance for his mouth team in 2022 to 2024 period. Thank you very much.

Okay goggles.

Speaker 3: Ok Carlos, thank you for the questions. Do you listen to me?

Thank you for the questions when you listen to me.

So.

Speaker 3: So, MENG is going to give you more color on the detail on hedge, but first I would like to comment and reiterate what I explained in the presentation that the hit we got in the fourth quarter of 2021, and this was a big hit in our EBITDA, was around 40 million dollars.

Meg is going to give you more color on the on the <unk>.

Detail on hedge, but first I would like to commend that.

And reiterate what happening what I explained in the presentation that the heat we got in the fourth quarter of 2021.

And this was a big hit in the in our EBITDA.

Around $40 million.

Speaker 3: One was because of Cerro Lindo, $6 million. And this was this four year stoppage that we have because of community—

One was because of Cerro Lindo $6 million and this was this four years saw budget that we have because of.

Community relations programs.

Speaker 3: The second one was a 6 million related to mind closure effects. This is a non-cache item, this is a provision.

The second one was <unk> 6 million related to mine closure effects. This is a noncash item. This is a provision yes.

In the third.

Speaker 3: The third event that happened is that there are almost 10 million on La Ripuana, that are expensive.

The event that hub Ben is that there are almost 10 million on the deep water that they are expenses.

Speaker 3: such as insurance and other expenses, the construction of the hospital in the town and others that you cannot capitalize in the project. So these are new to us. So these were mainly affecting the fourth quarter of 2021. And on top of this were the $18 million on hedge.

Such as a insurance and other expenses.

The construction of the hospital in the town.

That you cannot you cannot capitalize in the projects. So these are new to us. So this these were mainly.

Affecting the fourth quarter of 2021 and on top of these where the $18 million on hedge.

That hit us, but it's very important that we know that this effect is going to reverse.

Speaker 3: that hit us, but it's very important that we know that this effect is gonna reverse.

Speaker 3: So, Rodrigo is going to explain this effect to you more clear, so you can get a flavor of what's happening and how is this going to react.

So Rodrigo is going to explain this effect to U a E.

A more clear so you can get a flavor of what's happening and how easy is golar revives.

Speaker 4: Carlos, nice talking to you. The hedge that we do is not hedge on pricing for final sales only. This would be fixing the revenues and this is not the intention. What we call here hedge book is to match.

Carlos Nice talking to you.

The hedge that we do not hedge on pricing for final sales only this would be <unk>.

The revenues and this is not the intention what we call here hedge book is to match the <unk> piece for the concentrate we buy from third parties.

Speaker 4: the QP for the the the constant rate we buy from third party

Speaker 4: in relation to the zinc metal that we are selling on the other end, originated by this third party concentrate. So the idea here is pretty much to match the cash flow from what we buy, which usually is QpM-1, and then what we sell, which is the Qp of the month, and we try to match this. There is a part of the entry of the concentrate and the zinc metal that goes to inventory.

In relation to the zinc metal that we're selling on the other end originated by this third party concentrates. So the idea here is it's pretty much to match the cash flow from what we buy which usually is.

Q B.

M minus one and then what we sell which is the QP have them months and we try to match. This there is a part of the entry of the concentrate and zinc metal that goes to inventory.

Speaker 4: and this is what imbalanced this specific hedge because there was an increased position in inventory which will be sold in the coming month and will reverse the negative impact of the hedge of that month when it turns into cash generation.

And this is what imbalance. This is specific hedge because there wasn't an increased position in inventory, which will be sold in the coming months that will reverse the negative impact of the hedge of that month when it turns into cash generation.

Do you see my point, though is it clear.

Speaker 4: Do you see my point? Is it clear? Yeah, yeah, thank you Rodrigo.

Yes, Thank you Rodrigo.

Yes.

Speaker 3: Yeah, and one more comment, Carlos, because we were reading most of the reports that came out this morning, and we thank you for that.

One more common catalogs, because we were reading most of us are reports.

That came out this morning.

We thank you for that is.

Is that in terms of costs that.

Speaker 3: Yeah, the cost per ton in the mine and the cash cost.

The cost the cost per ton in the mine under under cash costs.

Speaker 3: overall were in line with what we had. We didn't have increases on those. We had inflationary pressures in some items that we don't control and we have some maintenance additional costs and some third-party services costs that are...

Overall.

We're in line with what we had we didn't have increases on those we had.

Inflationary pressures in some a items that we don't control and we have some maintenance.

This will cost us some a third party servicing skills.

Speaker 3: always happens when we have prices that go up. Cost related to labor because people demand more salaries, cost related to oil, cost related to energy today, energy today is going up, and others. So we have been able to offset most of those with some productivity measures.

It always happens when we have a.

Prices go up no cost related to labor because.

People demand more salary cost.

Related to oil goes related to energy today than a year today is going up.

Another so well.

We have been able to offset most of those with some productivity measures. So the the cost part of the mines.

Speaker 3: So the cost part of the mines is becoming flat and we are expecting similar trends in 2020.

Is becoming blood and we're expecting a similar trends in 2022. So I wanted to tell you. This because this is important for us.

Speaker 3: So I wanted to tell you this because this is important for us that you will know. We will provide in the coming months more colour and cost.

Is that you will know we will provide in the coming months more color on costs, we know that we disclose costs on a on a cash cost.

Speaker 3: We know that we disclose costs on a cash cost per pound basis, and we would like you to expose more in terms of costs of smelting another man.

Around a basis and we would like you to expose more in terms of cost of the smelting the mines.

Thank you and just on costs.

Speaker 5: Thank you, and just on cost then, or the guidance on the smelting cost, you provide the cash cost guidance. Can you give us the underlying assumptions for conversion cost that basically do not include the benefit of byproducts?

Oh the <unk>.

I'm sorry, just mentioned cost you provide the cash cost guidance can you give us the underlying.

Assumptions for conversion cost that basically do not include the benefit of byproduct.

Now we don't have that information to be disclosed now Carlos conversion cost is something that we are following up constantly so that we can have a reliable source of information and once we have the performance of this specific PPI, we intend to disclose.

Speaker 4: We don't have that information to be disclosed now, Carlos. Conversion cost is something that we are following up constantly so that we can have a reliable source of information. And once we have the performance of this specific KPI, we intend to disclose an additional guidance for next year. So I will ask you for a bit of patience so that you can follow up this information in the coming quarters.

Additional guidance for next year.

I would ask you for a bit of patients. So that you can follow up is this information in the coming quarters.

Alright, Thank you very much.

Thank you Carla.

Speaker 1: The next question comes from Jackie Przybylowski of BMO Capital Markets. Please go ahead.

The next question comes from Jackie Principal L. B.

BMO capital markets. Please go ahead.

Yes.

Speaker 6: Thanks very much. I want to just go back to the ARIPNA project. I think actually this question was asked last quarter, but can you maybe talk about the

Very much I wanted to just go back to the everything up project.

I think actually this question was asked last quarter, but.

Can you maybe talk about the.

The gap between the hot commissioning or the hot and cold commissioning I think which has already started.

Speaker 6: the gap between the hot commissioning or the hot and cold commissioning, I think, which has already started, and the first production, which looks like it's now been pushed back by two quarters to Q3 2022. What exactly, what activities do you do in the meantime to get to that first production after the commission has been completed?

And the first production, which looks like it's now been pushed back by two quarters to Q3 2022.

What what exactly what activities do you do.

In mean time to get to that first production. After the commission has been completed.

Speaker 3: What really happened, Jackie, here is that we were somehow optimistic in the guidance...

What really had been Jackie here is that we were somehow optimistic.

In the guidance we gave before.

Speaker 3: And I guess the factors that we were considering in our timetable really went wrong. What happened was that between December and January , we were impacted by rainfall, but really heavy rainfall.

And I guess, we were the factors that we will consider in our timetable.

It really went wrong what happened was that between December and January .

I mean, we were impacted by rainfall, but really saving rainfalls, we were impacted by by the Omi grown a virus that and the two of them combined.

Speaker 3: we were infected by the Omicron virus and the two of them combined reduce the productivity of labor force. And that is one effect. The second one is...

The productivity of labor workforce.

That is one effect the second one is.

Speaker 3: related to a turnover. You know that when you have like a you are towards the end of the project.

Related to turnover.

You know that when you have like a you are towards the end of the project.

Speaker 3: Most of the workers, knowing that the project is finishing, they try to go to different areas so they can work on new projects and have more stability. So we had like 1,500 people in the last six months that lived the project.

Most of the workers knowing that the project is finishing they tried to go to different areas. So they can work on new projects and hot moist IBD. So we had like 1500 people in the last six months that that debt.

That leaves the projects that we're leaving the project and we needed to hire more.

Speaker 3: They were leaving the project and we needed to hire more.

Speaker 3: and we hire almost 700, but hiring the cycle takes at least three weeks. So it's not that easy. And this effect was more relevant towards the end of the year.

And we hired almost 700.

Hiring the cycle. It takes at least three weeks, so it's not that easy.

And this effect was more relevant towards the end of the year.

And then we also had some problems.

Speaker 3: And then we also had some problems with engineering, especially in piping. You know, and this is something that I don't know if the company explained before, but when you have a design

Problems with the engineering, especially in piping Juno.

And this is something that I don't know if the company explained before but when you have a design that has some gaps when he just started at the end of the project most likely it will hit you.

Speaker 3: that has some gaps when it is started, at the end of the project, most likely it will hit.

Speaker 3: because some of the piping design and some of the piping infrastructure won't match. And you have to fix that, and that takes some days and sometimes weeks.

Cause.

Some of the of the pump.

Piping design and some of the piping infrastructure.

One much.

You have to fix that and that takes some days and sometimes weeks.

Speaker 3: And on top of that, I can comment on, and this is in mechanical completion, some quality of equipment that was not built on specifications or specifications were a little bit different than what we have.

And on top of that I can't comment on a this isn't mechanical completion.

Some quality of equipment.

It was not.

Specifications or OSP specifications were a little bit different.

Then what we have.

Speaker 3: So, what we did is we have a lot of detail on this in December and January and we knew that this was going to be a delay, yeah, so we put a plan to try to catch up to this, but it was very difficult because we are finishing the project and you cannot change that much.

So what we did is we have a lot of detail on this in December .

January and we knew that this was going to be a delay. So we put a plan to try to catch up to lease but he was very difficult because we are finishing the project.

Duke will not change that much of what we do up.

Speaker 3: So what we are doing is that we're saying that mechanical completion is finishing. I mean it's very very close to finish so this is something that we don't see a delay on that. Commissioning is underway and we are following up commissioning in a very close way.

So what we are doing is that we're seeing that mechanical completion is finishing I mean, it's very very close to finish or this is something that we don't see a delay on that.

Commissioning is underway.

We are following up commissioning in a in a in a very close way.

Speaker 3: and the ramp-up will come after commissioning, but you know, and well, at least this is the experience that we have between the commissioning and the ramp-up.

On the ramp up we've got them after commissioning, but you know on oil at least.

This is the experience that we have.

Between the commissioning and the ramp up.

Speaker 3: mean it could be one or two weeks of delay because it's always a matter of the process. So with all these factors...

It could be one or two weeks of delay because it's always a matter of the process. So with all of these factors, yes, we wanted to be more.

Speaker 3: We wanted to give more clarity to the market. I know that the market was not expecting this. I know that we have been missing this guy.

To give more clarity to the market I know that the market. It was noticed in this I know that we have been missing these guidance.

Speaker 3: in the last year and this project was a difficult one and created a sort of gaps on credibility on NEXA, but the only thing that we can do now is make sure that we finish the project in a good way, yeah, and we are expecting to start the ramp-up and production in the third quarter, hopefully early third quarter. We will keep you up to date.

The last year and destroy it was a difficult one and created a sort of gaps on create immediate youll mixed up but the only thing that we can do now is make sure that we finished the project in a good way yet.

And we are expecting to start is the ramp up in production in the third quarter hopefully early third quarter, we will keep you up to date.

Speaker 3: Yeah, so having said this, given that I am new to this, and I understand all this frustration of the market.

So having said this given that I am I am new to this and I understand all these frustration of the market.

Speaker 3: I really want to focus on the future of Alipua. Because yes, we spent more than 600 million dollars here. This mine is going to become a reality this year.

I I really yucky wanted to focus on the future of any partner because yes, we spent more than $600 million here. Yeah. These mine has gone up become a reality this year.

Speaker 3: And what I have seen in terms of the future of Haripona is very good because the ramp up, the minus is prepared for the ramp up, the minus is prepared for the plan for the following 2023.

On.

What I have seen in terms of.

The future of <unk> is very good because.

The ramp up the mine. This is prepare for the ramp up the mining is prepare for the or the plan for the following 2023.

Speaker 3: And today we have like 11 years of reserves. And I believe that because of this potential in Baba Zu and this impill drilling that we are doing on our resources.

And today, we have like a 11 years of reserves.

And I believe that because of this a potentially bubba true in these infill drilling that we're doing on our resources.

Speaker 3: I believe that we could expand the life of mine going forward and we have very aggressive targets for 22 and 23.

I believe that we could expand the life of mine going forward and we have very aggressive targets for 'twenty two 'twenty three.

No.

Speaker 3: In summary, we were optimistic on the timeline. These effects that I explained hit us very much. We are, towards finishing this, it's going to be easier in terms of we know what we need to do. We will make sure that we are tight on doing what we need to do. We are focused.

In summary, we were optimistic on the timeline.

These effects that I explained hit us.

Very much.

We are towards finishing this is going to be easier in terms of we know what we need to do we will make sure that we are tight.

On doing what we need to do.

We are focusing on the on the ramp up and.

Speaker 3: And also, we are focusing on the future of inequality.

And also we are focusing on the future of Ebola.

Speaker 3: So, hopefully, once we finish this and we show you the upside of Aripuana, hopefully, you will see that YIC, which is a very good project, executed probably in a not that very well way, and we recognize that as a company, but it's a very good project that going forward is going to create value for NEXT. So, that's more or less, Jackie, the explanation.

Hopefully once we finish these.

And we show you the upside.

Upside already but hopefully you will see that while I see which is a very good project.

Executed broadly.

Not that very well.

Right.

We recognize us as a company, but it's a very good project that going forward is going to create value for them. So that's more or less Jackie the explanation.

That's super helpful. Thank you very much Ignacio.

The next question comes from Lawson Winder.

Speaker 1: The next question comes from Lawson Linder of Bank of America Security. Please go ahead.

America Securities. Please go ahead.

Hello, Ignacio Rodrigo Roberta and team. Thank you for the update.

Speaker 7: Hello Ignacio, Rodrigo, Liberta, and team. Thank you for the update.

I would like to see.

Speaker 7: I would like to get an understanding of the impact of

Understanding of the impact of.

Speaker 7: COVID and absenteeism and what your outlook is for that to improve. So how has that trended so far in January ? And when do you expect you can get back to a point where, you know, absenteeism is back at a manageable level, particularly with respect to Arikundia, but you know, also with the other operating underground mines and even the smelters to the extent that they were impacted. Thanks very much.

Colin answered absenteeism and what your outlook is for that to improve so.

How has that trended so far in January and when do you expect you can get back to a point, where you know S&P isn't it back at a manageable level, particularly with with respect to our equity out but.

Also with the other operating underground mines.

Albert to the extent that they were in.

Thanks very much.

No problem Yeah. It's good question, because we have two separate any boiler with the other mines because <unk> is a project that has a workers that is specific areas.

Speaker 3: No problem. Yeah, you know, it's good that question because we have to separate any one with the other minds, because any one is a project that has a workers that do a specific area.

Speaker 3: and that if you don't have them, you get a productivity problem. So aripuanagos adapticti.

If you don't have them you get.

Productivity programs, so our reported growth at the peak.

Speaker 3: almost 900 people that were positive. You know that Omicron is not a virus that is heavy today. I mean, if you are vaccinated, you don't go to the hospital, you don't get sick.

Almost a 900 people that were positives you'll know that <unk> is not a virus that is a heavy today I mean, if you are vaccinated.

Don.

Don't go to the hospital are you don't you won't get sick.

Sometimes yet but it is not is not is not a trend, but you have to isolate the people because.

Speaker 3: Sometimes, yes, but it's not that trend. But you have to isolate the people because that's the protocol and that's the responsible thing to do. So in the case of marijuana, replacing these people was very difficult. In the case of the mines, even if we were having the same effects and we were seeing increases in positive cases week on week.

The protocol.

Responsible thing to do so in the case of <unk> why not replacing these people west was very difficult.

In the case of the mines, even if we were in the same effects and we were seeing.

Increases in positive cases.

Week on week since I would say last week of December and January and towards the end of January yet in some of the mines. We have 300 400 cases that were not present.

Speaker 3: since I would say last week of December and January and towards the end of January , yeah? In some of the mines, we have 300, 400 cases that were not present.

<unk>.

Speaker 3: a focus on activities that are related to the production.

A focus on activities that are.

Related to the production.

Speaker 3: and this happened. We were hit in Peru more because the loss in Peru when you are positive.

And this happened no.

We were hit in Peru, more because a the the loss in Peru.

When you are positive.

Speaker 3: At the beginning, you needed to isolate people for 14 days.

Beginning you needed to isolate people for 14 days you went down to 10 days after that windows seven but in Brazil was easier because it was only seven days. So so the the people going back to the to the mines on the smelters in Brazil was faster than in Peru.

Speaker 3: It went down to 10 days and after that went down to 7. But in Brazil it was easier because it was only 7 days. So the people going back to the mines and the smelters in Brazil was faster than in Peru.

Speaker 3: So, but what we did was try to make sure that with all these safety protocols that we follow

But what we did was try to make sure that with all these safety protocols that we follow.

We make sure that the main activities do not affect production.

Speaker 3: we make sure that the main activities do not affect production.

Were being taken care of.

Speaker 3: So we got some delays on, let's say, development of the ramps and the stops, some projects that are delayed right now, but these are not critical for this quarterly production.

So we got some delays on the let's say development of the ramps on the stopes.

Projects that.

It's a delayed.

Delayed right now, but these are not critical for this.

Quarterly production.

However.

Speaker 3: we will need to catch up with those activities in the future. And we are taking care of those activities right now. So the short question is that COVID didn't impact the mines on the smelters, impacted the Aripuan approach.

We will need to catch up with those activities in the future and we are taking care of those activities right now. So the short question is the Kobe.

Didn't impact the minds on this matter.

Impacted the Eddie Pent up project.

And because and this is the case in Brazil, and in Peru, and I would say most of the countries that trend is going down.

Speaker 3: because, and this is the case in Brazil and in Peru, and I would say most of the countries that trend.

Speaker 3: is going down of positive cases in most and this is not the exception for Nexa. So

Of positive cases in most and this is not deception for mixer. So.

Speaker 3: Since the last two weeks, we have been looking at trends that are negative, positive cases are lower now, so we are recovering from that and we are doing much better.

Since the last two weeks we have been.

We have been looking at trends that are negative positive cases are lower now so we are recovering from that.

<unk>.

We are.

Doing much better.

Speaker 3: I think it's worth mentioning, and this is the case of the mining industry and especially with NEXA, is that we have been able to manage, I mean we are very robust in COVID protocols today.

I think I think it's worth mentioning this is the case of the mining industry, and especially with mix up.

Is that we have been able to.

Manoj I mean, we are we are very robust and COVID-19 protocols to weight.

In <unk>, we have a two weeks two meetings a week.

Speaker 3: In Nexa we have two meetings a week where we are...

We evaluate every case.

Speaker 3: and we evaluate all the operations and what are affecting them, not only to follow on COVID, but also to make sure that the safety standards are always there, yeah? So these, I guess for this Omicron virus, the worst has happened.

Evaluates all the operations and what are affecting them.

Not only to follow on on Covid, but also to make sure that our safety standards are always there yeah. So do you say I guess the four this homegrown virus the worst.

HUS.

And we don't know if more viruses similar to Omega with gum, but we believe that we are prepared for that yeah. We are not projecting that in our in our estimates or predictions, but we believe that we are prepared for that and I think the words prepared for that as well so.

Speaker 3: We don't know if more viruses similar to Omicron will come, but we believe that we are prepared for that. We are not projecting that in our estimates, in our projections, but we believe that we are prepared for that. And I think the world is prepared for that as well. So we're following that trend.

We're following that trend.

Okay. Thanks, very much for that.

Speaker 7: Okay, thanks very much for that. Also, I'd like to ask about the cost reduction initiatives, and particularly for 2022, which of those do you view as the most promising, and could we start to see those flowing through with lower 2023 unit cost guidance versus the 2022?

Also I'd like to ask about the cost reduction initiatives and particularly for 2022, which of those do you view as the most promising and could we start to see those flowing through with the lower 2023.

Right.

Unit cost guidance versus the 2022.

Yeah.

Speaker 3: Yeah, I think we have our VP, a senior VP of operations here. Hey, I don't know if you want

I think we have our VP senior VP of operations here.

I don't know if you want to comment on those.

I think I can I can add some comment on that Ignacio.

Speaker 8: I think I can add some comment on that, Ignacio, and I think most of the cost optimization or reduction initiative, it's coming to look at all the cost lines that you have.

And I think most of the cost optimization or reduction initiative, it's coming to look at all the cost lines that you have.

Also addressing some predictive test and increments can yeah.

Speaker 8: also addressing some productivity increments that can, in the end, reduce our costs. And this is changing the way you are operating nowadays, trying to offset the inflationary increments that we are seeing so far. And what we are targeting right now is to really come back, look again for some productivities and initiatives that can go across all the operations.

Indiana reduce our costs and this is changing the way you are operating nowadays.

Trying to offset the inflationary.

The increments that you are seeing so far.

And what we are talking to right now is to really come back look again for some productivity and for us.

Asia team that can go across all of the operations.

So that you can try to raise new additional cost initiatives to be to continue to work on the program as we did so far so predictive to some cost reduction and some cost optimization, where there was there to have default so far.

Speaker 8: so that you can try to raise new additional cost initiatives to continue to work on the program as we did so far. So productivity, some cost reduction, and some cost optimization were the ones that have been followed so far.

And.

Speaker 7: And, you know, would you, I don't know if you want to comment now, but just in terms of 2023, can you see some positive impact in 2023? Would that be fair to expect?

Would you.

I don't know if you want to comment now, but just in terms of 2023 can you did you see some positive impact in 2023 would that be fair to expect.

Yes.

It's very difficult to predict that.

Speaker 3: It's very difficult to project that, what I can tell you is that a...

What I can tell you is that a.

What we are trying to do is make sure that we keep track of all minus.

Speaker 3: What we are trying to do is make sure that we keep track of all mines and smelters on a monthly basis in terms of costs and capex.

<unk> on the smelters on a monthly basis in terms of costs on Capex.

Speaker 3: What Leo is explaining is that, I mean, if you see, I would say if you put all the pie on costs, 30% of the costs are productivities, are people.

What they always explaining is that I mean, if you see.

I would say if you put all that volume costs.

The percent of the cost or productivity or people.

Speaker 3: So we are, this year we're focusing on that very much.

So we are this.

This year, we're focusing on that very much.

Okay.

Speaker 3: We are, as Leo was saying, we are also focusing on other initiatives, yeah? So this trend is going to go and it should be impact 2023 as well.

We are.

There was saying we are also focusing on all on order on order.

Initiatives Yeah. So this trend is going to go and it should be impact 2023 as well.

Speaker 3: What happens with inflation in 2023, we don't know.

What what happens with inflation in 2020, we don't know.

Speaker 3: But we know that most of inflation of 2022 is going to be...

But we know that most of the inflation of 2022 is going to be offset.

Speaker 3: Not only with these measures at the mine, but also with other, I would say, initiatives in logistics. Because there are some prices that you don't control. The price on oil, the price on energy, you don't control. But in the prices that we control, we are trying to find more initiatives to try to compensate in part these pressures. But to go further.

Not only with the D. C. These measures at the mine, but also with older I would say in each of these in logistics note because there are some a prices.

Prices that you don't control the price of oil the price on energy you don't control, but in the places that we control we are trying to find more initiatives to try to compensate.

In part these these pressures.

But to go further into 2023.

I would say is difficult.

Speaker 3: I would say it's difficult, yeah? Because, ah, one factor that I would like to mention also is that the FX in Brazil has been helping us. Most of the costs in Brazil are in reais. So FX is helping us. Not in Peru. In Peru, a good part is in dollars.

One factor that I would like to mention also is that the FX in Brazil has been helping us.

Most of the cost in Brazil in Reais, So FX is helping us not in Peru in Peru.

A good part is in dollars.

But this has been also so theres somebody apples that we don't control that.

Speaker 3: But that is helping us all. So there are some variables that we don't control, that we don't know how they will impact in 2023. But what I can say is that what we are always aiming, and this is something that, as I explained, we're gonna build a month-on-month, is to make sure that our cash cost per ton.

We don't know how they will impact in 2023, but what I can say is that what we are always aiming in D C something.

Obviously, we're going to build more.

Month on month is to make sure that our cash.

Cash cost per tonne.

Speaker 3: that is the one that LEO really controls, and Bollet and the smelters as well, the conversion cost, is always flat or goes down in terms of productivity measures that we take to be more competitive. So, that's more or less this explanation, so I don't know if you have any other questions.

That is the one that label.

Really April .

<unk> draws.

On the smelters as well the commercial growth.

Is is always flat or goes down in terms of.

The productivity measures that we take to be more competitive so that's more or less this explanation.

So I don't know if you have any other questions here.

No that's abundantly clear and actually if you wouldn't mind I just had one clarification point on and I apologize to belabor this but on the $18 million hedging impact from Q4.

Speaker 7: I know that's abundantly clear and actually, if you wouldn't mind, I just had 1 clarification point and I apologize to belabor this, but on the 18Million dollar hedging impact from Q4. You know, should we should we be putting a positive 18Million dollar working capital adjustment in our cash flow for for Q1? Sorry, just to be really clear on that.

Should be should we be putting a positive $18 million working capital adjustment in our cash flow for for Q1.

Can you really clear on that.

Conceptually, yes, but it will depend on how this inventory has realized throughout time. So conceptually it should be the case of course, there are some varieties, but when you consider inventories been dean.

Speaker 4: Conceptually, yes, but it will depend on how this inventory is realized throughout time. So, conceptually, it should be the case. Of course, there are some variances, but when you consider inventories being accounted for as first in, first out, this is diluted throughout the quarter. It's not necessarily directly 18 because they will be compensated by the incoming inventories, but conceptually, you're correct. Thank you.

<unk> accounted for as first lien first out this is diluted throughout the quarter is not necessarily directly 18, because they will be compensated by the incoming inventory, but conceptually youre correct.

Thanks very much.

Thank you.

Speaker 8: Thank you.

The next question comes from Wow.

Speaker 1: Our next question comes from Oris Waucadal of Scotiabank. Please go ahead.

Of Scotiabank. Please go ahead.

Speaker 9: Hi, good morning. Ignacio, I'd like to get some color from you just as the incoming CEO and how you see the future of NEXA with respect to growth and from our perspective, obviously, the development of Arapana has not gone as expected, but at the same time, it seems like you've lost some third party.

Hi, good morning, I'd like to get some color from you just as the incoming CEO and how you see the future of next with respect to growth and.

From our perspective, obviously the development of apparel partner has not gone as expected.

But at the same time it seems like you've lost some third party zinc feed in Peru. So I'm wondering strategically whether you plan to exit plans to take a pause on building kind of the next generation of mines to generate positive free cash flow de lever.

Speaker 9: zinc feed in Peru. So I'm wondering, you know, strategically, whether you plan to, NEXA plans to take a pause on

Speaker 9: building the next generation of minds to generate positive free cash flow, de-lever, or whether you see moving to the next project fairly quickly in order to make up that concentrate torfault.

Or whether you see moving to the next project fairly quickly in order to make up that concentrate shortfall.

Well Youre right I guess I guess for me there are two actions that we have to take here. The first one is we want to make sure that we deliver on cash flow in 2022.

Speaker 3: No, you're right. I guess for me, there are two actions that we have to take here. The first one is we want to make sure that we deliver on cash flow in 2020.

We have some targets here.

Speaker 3: We have some targets here, and I can tell you that.

I can tell you that.

Speaker 3: our mines and smelters generate gas.

Our our minds on the smelters generate cash flow.

Speaker 3: And to give you an idea, the expenditure in the last two years was $400 million. So last year was $260 million, and this year it's $130 million. So it's almost $400 million, and we paid that from our cash flow from OperAid. So what I'm trying to do, what we are trying to do here is that Cerro Lindo, Basanti,

To give you an idea.

The spending that you pointed out in the last two years was $400 million. So last year was to 60. This year is 130, so it's almost $400 million and we paid that from a cash flow from operation. So what I'm trying to do but we're trying to do here.

Is that.

Cerro Lindo.

My son G and at any point.

In 'twenty two 'twenty three.

Speaker 3: in 2022 and 2023, start to optimize their cash flow with these productivity measures, with this optimization of capex, and make sure that we have or optimize this cash flow from this stream.

Optimize their cash flow.

This growth is the measures with this optimization of Capex and make sure that we are.

Or optimize the schedule for these three months.

On top of that we have over two.

Speaker 3: On top of that, we have all the two a.

Okay.

The Pasco complex that is a four way need ultra yeah.

Speaker 3: The Paso Complex, that is Porvenir and Atacocha, yeah.

Speaker 3: And there has been a project around the integration of these two.

Been a project around the integration of two.

Mhm.

Speaker 3: have a lot of potential underground, Atacocha a lot. But if you go directly only in Atacocha.

Have a lot of a potential underground at our core channel, but if you go directly.

Only a culture that cost of developing that is going to be higher so you won't get the reserves.

Speaker 3: The cost of developing that is going to be higher, so you won't get reserves. But if you use the infrastructure of El Porvenir.

But if you use the infrastructure of.

And for many of.

Speaker 3: and you upgrade that infrastructure, you might be able to connect.

You upgrade that infrastructure, you might be able to connect them.

Speaker 3: So this project has been, we were assessing this project in the last two years, and what I'm trying to do is, okay, we need to have a clear view on this because if we.

This project has been.

As we were assessing this project in the last two years.

What I'm trying to do is okay. We have we need to have a clear view on this because if we.

Speaker 3: have an idea that is profitable, this conflict is going to also generate a lot of cash flow in the coming months, and I would say in the coming years. So that's a question mark that I want to clarify in the coming months, and if we have something, we will get back to the market.

Okay.

They have an idea that is profitable.

This complexity is going to also generate a lot of.

Cash flow in the coming months and I would say in the coming years, yeah. So that's a question mark.

Ill clarify in the coming months.

We have something we will get back to the market.

Speaker 4: On top of that, we have a small mine that is in Brazil that has all the infrastructure, has the plant, has the tailings dam, has the camps, has good infrastructure. And it's a mine that doesn't generate a lot of cash flow. But there is this Bonsucesso project that is very close, yeah, and that is going to fail three.

On top of that we.

We have a small.

Mind that is more oil in Brazil.

It has.

All the infrastructure.

The tailings dam.

The accounts.

<unk> has good infrastructure Anita mine that doesn't generate a lot of cash flow.

There is these bonds from central project that.

That is very close yes.

That is a it is going to phase III.

So we really we believe that is a good project.

Speaker 3: So if we believe that it's a good project, if we see that it's a project that we have to implement.

That is a brewery that we have to implement.

Speaker 3: This metal is going to be accommodated in Moragudo infrastructure.

Dcs these metal is going to be accommodated in more rural infrastructure yeah. So.

For the time being we have three important lines.

Speaker 4: For the time being, we have three important mines that generate between, I don't know, 280,000 to 320,000 tons of zinc.

Jen <unk>.

Between I don't know 280 to $320000 of.

Zinc.

When you have that robust growth that we have to get clarity and then a more substantial more right.

Speaker 3: We do have a repasco that we have to get clarity and then a bon successo morrago.

W.

Speaker 3: The view that I have, and I have been sharing this with the team and the board, is that, okay, this amount of things in the coming years is enough for us to be diversified or to be concentrated on.

I have I have.

Ensuring this will be with the team and the board is that okay.

This amount of <unk>.

In years.

Is enough for us to be diversify or to be concentrated dosing.

Speaker 3: We have a project that is very promising, but very early stage. Yeah, we are signing some budget this year.

We have a brand that is very.

Very promising but very early stage, yes.

Signing some budget this year.

Speaker 3: But it's something that is early stage. And we will evaluate if we will be doing Hilarion in the future. Yeah? And that's the thing part of the equation.

But it is something that is early stage and we will evaluate if we will be in the future.

And that's I think part of the of the equation. The only part of the equation is okay, guys. We have to diversify the metal and we have winter in corporate.

Speaker 3: The other part of the equation is, OK, guys, we have to diversify the metal, and we have to enter in copper. Yeah? And what we are aiming to do in copper is, today we produce 30,000 tons of copper. So we are aiming to produce more, to produce at least two or three times of that.

And what we are aiming to do incorporate today, we produce 30000 tons of copper.

Our aim is to produce more.

To produce at least two or three times of course.

So many things many alternatives to do that.

Speaker 4: So many things or many alternatives to do that.

So you go into your pipeline and Youll see that you have a matching strategy.

Speaker 4: so you go into your pipeline and you see that you have a magistral, yeah? My, I had a quick view of magistral and I went through all the details and we have a lot of discussions and I think magistral is a good project. It's in Peltree, yeah?

My eye.

I had a quick view on western style and I went through all of these days and we have a lot of these casuals and I think it's always a good for you.

It's in phase III.

Yes.

But we are assessing again, the capex and we are assessing the country.

Speaker 3: But we are assessing again the CAPEX, yeah.

Speaker 3: And we are assessing the country. I am Peruvian. I know Peru.

I am Peruvian I know I know.

Speaker 4: And I don't think that this government is going to create a lot of impact in the mining sector in Peru. But this project is going to be built in the coming years. You don't know what will happen in Peru in the future.

I don't think that these goldman mainly is going to create a lot of impact in the mining sector in Peru, but this break is going to be build in the coming years. We you don't know what will happen in Peru in the future.

Speaker 4: And as a company, we need to diversify risks from Peru, especially from Peru. I have a very positive view on Brazil.

And as a company.

Need to diversify risks from Peru, especially from bedroom I have a very positive view on Brazil.

Yeah.

Speaker 3: to compete with other opportunities that we will see in the market.

But he suddenly compete with all the opportunities that we will see in the market.

Speaker 4: Yeah, and these opportunities will be, we will try to have these opportunities in producing mines and in close to producing mines, in brownfield projects.

Yeah.

These opportunities will be we will try to tap these opportunities in producing mines, I mean close to producing mines and brownfield projects, which was our diverse you know they've been on.

Speaker 4: Which ones are the best? You know, depends on the assessment. I mean, we know that all of them are always expensive and this is the case of the market. So we have to be patient, but we have to be very active.

On the assessment.

I mean, we know that all of them are always expensive and this is the case of the markets, where we have to be patient, but we have to be there yet.

Speaker 4: We have to be very active on those. So to that, we are putting together a team, a team that is going to take care of that. And that team has to be active in the market, looking for opportunities.

We have to be very active on both so that we are putting together a team.

A team that is going to take care of that and that thing has to be active in the market looking for opportunities. We are open to JV skier get bigger projects. We are open to many alternatives here.

Speaker 4: We are open to have JVs here to get a bigger project. We are open to many alternatives here because we wanna make sure that.

Because we want to make sure that.

Speaker 3: With the think as a base and having exposure to copper, we will have a more diversified.

With the <unk>.

And.

Having an exposure to cover.

We will have a more diverse diversified company.

Speaker 3: The third pillar is the smelting business, yeah? And I know that the company has been talking about the smelting business being integrated with the mines. Yeah? My view is that the smelting business is strong enough.

The third pillar is the smelting business.

And I know that the company has been talking about the smelting business being integrated with our minds Yep.

My view is that.

This mezzanine business is strong enough.

To be isolated to be profitable by themselves what I'm trying to say here is that <unk>, yeah, we choose.

Speaker 3: to be isolated and to be profitable by themselves. What I'm trying to say here is that Cajamarquilla, which is a fantastic operation.

Thus the operation.

Speaker 3: has to look for options in the market to get the concentrates and feed the plant. It's a very, very efficient filter and makes a lot of money. These next years, the byproducts are helping very much, the sulfuric acid especially.

Uh huh.

He has to look for options in the market to get on the concentrates and feed the plant.

It's a very very efficient.

Filter and makes a lot of money. These next years.

<unk> has been very much food.

For you guys, especially.

Speaker 3: Maria is integrated with the Sunday, but Sunday is a long life of mine, Maria will be there.

As Murray said integrated with outstanding by 10 days, a long life of mine.

For many years.

Speaker 3: for many years. And in the case of U.S. Defora, it's not that big, but it's very efficient and it gets cash.

Therefore, it out.

It's not that big but it's very efficient and it gets cash flow.

So I guess the strategic plan for this method will be okay, guys. How are we gonna crunch or made in terms of technology. These three smelters power.

Speaker 3: So I guess the strategic plan for the smelters will be, okay guys, how are we going to transformate in terms of technology, these three smelters? How are we going to be able to recover other byproducts? And how are we going to position these smelters to be low transformation costs in the future?

Or are we going to be able to recover all of it.

Thereby probes.

How are we going to position. This has meant there has to be low.

Formation costs in the future.

So this is this is more the.

Speaker 3: So this is more or less the overall strategy that we have. I guess that is somehow easy to explain. I guess that it's going to be very difficult to implement. But we have clarity on that. So we will know. Thank you. I appreciate the call.

The overall is try to you that we have.

Yes.

Somehow easy to explain.

Again that is going to be very difficult to implement but we have clarity on that so we will we will know.

Thank you I appreciate the color.

Speaker 2: So, our next question comes from the webcast, Isabela Vasconcelos from Bradesco. Good morning. We'd like to know your view on the zinc market outlook given recent strong performance and also capital allocation stress.

Our next questions come from the wet.

Uh huh.

None of the confirmed some brand batesville.

Good morning, we'd like to know your view on the zinc market outlook.

Recent third quarter.

Publication strategy.

Speaker 2: Should we expect higher dividends while growth projects post-aripuana take some time to materialize?

Should we expect.

Higher dividend why growth progress.

It.

I think sometimes too much right now materialized.

Yeah, Okay, as we were saying in the presentation the zinc.

Speaker 3: Yeah. Okay. As we were saying in the presentation, the think market outlook is strong today. Many factors. Mine supply is today low.

Zinc market outlook is strong today.

Many factors.

Mine supply is today a low.

On the you can see that in the treatment charges going up.

Speaker 3: And you can see that in the treatment charges going up.

Speaker 3: I mean, it won't be a dramatic increase in TCs, but we are seeing TCs going up, and this is because mine supply is not catching up with the projections of the mine.

Okay.

I mean, it won't be dramatic.

The increase in D C. But we are seeing this is going up and this is because mine supply is not catching up with the projections of the market.

You go to the smelters.

Speaker 3: You go to the smelters and the smelters are facing a lot of costs, especially.

Theres are facing a lot of cost, especially in.

Speaker 4: energy costs. And you have the news that some smelters are announcing that they will cut production because they want to face these costs and the conversion costs are too high for them to operate. So you have a scarcity of metal as well.

Energy costs in Europe .

You have the news that some measures are launching that they will cut production because they don't want to phase. These calls on the conversion costs are too high for them to operate. So so you are you have a scarcity of metal as well.

And on top of that.

Speaker 3: You have a word that is a, that the fundamentals of the demand are there.

You'll have a word that is a that the fundamentals of the demand are there.

Speaker 3: And the world is demanding the sink right now. So in this equation, sink should be high in the coming months. What will happen in, I don't know, towards the end of the year, we don't know. But this trend is going to, we believe this trend is going to be, or going to prevail in the coming months.

The award is demanding the sink.

Right. So in this equation.

Sure.

Hi in the coming months, what will happen in I don't know towards the end of the year. We don't know, but these trainees. We believe this trend is going to be or going to prevail in the in the coming months.

Speaker 4: Regarding the capital structure, yeah, as I was saying in the presentation, we have a like a, in depth, we have a maturity of more than five years. So, so it's very a, a, a.

Regarding the capital structure yet.

I was saying in the in the presentation we have.

In that we have a maturity of more than five years so very.

Okay.

Goes goes.

Speaker 3: goes very far in the years. We have a cash on balance. And as I was saying, we are trying to build also cash flow in these coming years. And that cash flow, part of it will go to dividends, yes?

Very far in the years, we have cash on balance yes.

As I was saying we are trying to build also cash flow in these coming years.

That cash flow part of it will go to <unk>.

D V then yes.

I'm new to this and I don't have a.

Speaker 3: I'm new to this and I don't have a, probably Rodrigo can help me with that. I don't have like the police of dividends, but we will give dividends back to the, to the, to the shareholders. Yeah. And we will keep some cashflow to fund this growth. No, the thing that we did in Alipona, we're going to do that. And if we have some, good opportunities that are.

Probably rodeo can help me with that.

I don't have like the police of deviance, but we will give dividends back to that.

Holders.

We will keep some cash flow to fund these growth at that time that with you at any point that we're going to do that and we have some.

Good opportunities that are.

Speaker 4: Above the cash flow that we generate and the balance sheet that we generate, we will assess other alternatives.

Above the cash flow that we and that aid in our balance sheet that we end the day, we will assess other alternatives. We have discussed this with our board.

Speaker 4: We have discussed this with the board, with some shareholders, and they are open to see alternatives if we create value. So I guess there is clarity around that. I don't know, Rodrigo, if you can talk about the dividends.

Tom shareholders.

We are open to.

<unk> has done that if we create value so I guess the risk.

The Roundup I don't know if you can talk about the variance.

Speaker 8: As you all know, our dividend policy states that we should pursue at least 2% of market cap around the payments.

As you all know our dividend policy states that we should pursue at least 2% of market cap around the payment.

Speaker 8: Our payment yield has been above that. Last year, which was reflecting the tough year of 2020, we paid around 2.5%.

Your payment.

Has been above that last year, which was reflecting the tough year of 2020, we paid around two 5%.

Speaker 8: and this year we're pursuing a bit further. In the previous years, right after the IPO, we paid a larger amount. Every year, this is really analyzed and presented to the board as a way to really remunerate our shareholders the best way for keeping this faithful with us and in our growth strategy.

And this year, we're pursuing a bit further in the previous year. So right. After the IPO, we see larger amounts every year. This is this is there.

This is really analyzed and presented to the board as a way to really Ah remunerate, our shareholders. The best way for keeping this Facebook with us.

Our growth strategy and our efficiency project.

That's it let's see how the market reacts and how we perform and then next year, we'll come within different proposals.

Speaker 8: That's it. Let's see how the market reacts and how we perform and then with next year, we'll come with a different proposal.

Okay.

There's one more question.

We entered this crisis.

Speaker 4: We answer this question. Yes. Okay. So, so do you want to read the last question?

So do you want to read the last question.

We don't have we are running I'm going to read out of time so.

Speaker 2: We don't have time? No, no, we are running a little bit out of time, but we have time for one more question. And after that, we will respond to the questions to the IR team.

But we have time for one more question after.

After that the reason.

Respond to the questions to the IR team.

Okay. So do you want me to read the question could you read the question, Yes, I think with your question.

Speaker 4: Okay, so do you want me to read the question or can you read the question? Yes, I can read the question, no problem. So the next question comes from Bastian. Can you give more detail about the Aripuanã ramp-up delay? I think that COVID and rainfall seems like a very general explanation for a delay of two quarters in the ramp-up. Should we expect more delays in the future? Thanks.

So the next question comes from MS. Jenn can you give more detail about that.

Lee I think that full rhythm rainfall seems like a very generic.

And finally, a two quarter ramp up should we expect some more delays in the future.

Yes, I guess.

Speaker 4: Yeah, I guess, as I explained to Jackie before, we were in some way optimistic on the timetable, and we were considering that these factors of rain and COVID were not affecting us. But we also have other factors, as I explained, with gaps in engineering, some quality problems with equipment.

Thank you Jacky before.

We were.

Some way optimistic.

On the timetable and we were considering that.

These factors of rain on Kobe.

Not affecting us.

But we also have other factors outside of Spain with Eh.

Dobson engineering, some air quality.

<unk> with equipment that is.

I mean, something that is common in this at the end of this of these projects.

Speaker 3: I mean, something that is common at the end of this project.

So we are on top of things right now.

Speaker 3: So we are on top of things right now. I cannot tell you that we expect more delays, yeah? But I think that given that we are very, very close to finish the project, I would say that we are trying to be very conservative with the projections that we are showing to you today. So we make sure that we deliver on those.

I cannot tell you that we expect more delays yet, but I think that given that we are very very close to finish the project.

I would say that we are trying to be very conservative with the with the four year shows that we are showing to you today. So we made sure that we deliver on those.

Having said that.

Again, we want to make sure that we focus on yet at the point now of the future and towards that we will show you the potential of the <unk>.

Speaker 3: Again, we want to make sure that we focus on the ARIPANA of the future, and for that, we will show you the potential of ARIPANA and how this mine, even if this was a project that was not very good executed, this project is going to be a very important project for the future of NEXT. So, that's more or less.

Not on how these mine even if this was a project that was not very good executed.

This project is going to be very important for the future of next so that's more or less.

Yeah.

I don't know if there is another question or we have to.

Okay. So question.

Excuse me.

That concludes our question and answer session now I will hand over to Ignacio final remarks, Mr. Rosato. Please go ahead.

Speaker 1: That concludes our question and answer session. Now we will hand over to Ignacio for his final remarks. Mr. Rosado, please go ahead.

Thank you very much. Thank you very much for all.

Speaker 4: Thank you very much. Thank you very much for all the questions and for attending this call. It's very important for us to make sure that you understand the plans of the company. Yeah, I'm very excited with this position. I guess it's a big...

Yes.

Questions one for attending this call, it's very important for us to make sure that you understand the plans of the company.

Yeah.

I'm very excited with this position.

Is that is a big challenge for me I think.

Speaker 3: challenge for me. I think we have everything to make sure that we create a Nexa that creates value to shareholders. We have very good assets.

We have everything to make sure that we create a mix up.

And that creates value to shareholders, we have very good assets we.

Speaker 3: We have a very good, well-managed smelters. I guess it's something that we have to work on, probably more cash generation and show the market this more cash generation.

Have a very good well managed smelters I guess.

<unk> is something that we have to work on a probably more cash generation and show the market is more cash generation.

Speaker 3: And the other thing is that we want to be closer to the market. Yeah, I'm not saying that we are not close.

The other thing is that we wanted to be closer to the market, yeah, I am not saying that we're not close.

Speaker 3: But now that COVID is towards ending, and we can have like a more face-to-face meetings, we are planning to be close to a...

But.

Now that Colby.

Is towards ending no.

We can we can have like more a face to face meetings, we are planning to be close to two two.

All the financing financial community to explain the plans of mixer, so you'll get to know us better.

Speaker 3: all the financial community to explain the plans of NEXA so you get to know us better.

I I I think that we have to be more conservative on guidance because at the end of the day.

Speaker 3: I think that we have to be more conservative on guidance, because at the end of the day it's important that production, it's important to achieve all these metrics, and we have to be cautious on that. But I think most important is to focus on profitability, and at the end of the day profitability is cash flow.

It is important that production it is important to achieve all of these metrics, although we have to be.

Cautious on that but I think most important is to focus on profitability and at the end of the day profitability. These cash flow.

So.

Speaker 4: So this is more or less what we are aiming to do here. Again, thank you very much for the time. And we will speak soon in the first quarter results and hopefully visiting you in the coming months. So thank you very much.

This is more or less what we are aiming to lose here.

Again, thank you very much for the time.

We will speak soon.

In the first quarter results.

Hopefully visiting you in the coming months. So thank you very much and good morning.

The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.

Speaker 1: The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect.

Okay.

Speaker 10: And.

[music].

Yes.

Thanks.

Sure.

[music].