Q3 2025 Nexa Resources SA Earnings Call

Speaker #2: Good morning, ladies and gentlemen, and welcome to Nexa Resources' third-quarter 2025 earnings conference call. Please note that today's event is being recorded and broadcast live via Zoom with access also to Nexa's investor relations website.

Speaker #2: I slide presentation accompanying the webcast is available for download, as well as a replay of the conference call following its conclusion. As a reminder, all participants are in listen-only mode.

Speaker #2: Following today's presentation, we will open the floor for questions. To ask a question, if you are joining via Zoom, please click the raise hand button.

Speaker #2: If your question is answered, you can lower your hand by clicking put hand down button. You may also submit your question via the Q&A icon.

Operator: If your question is answered, you can lower your hand by clicking the put hand down button. You may also submit your question via the Q&A icon. Please include your name and company when submitting your question. For participants joining by phone, press star followed by nine to raise or lower your hand. Once announced, press star followed by six to mute or unmute your microphone. Reading questions that are not addressed during the call will be answered afterwards by the Investor Relations team. Questions from media outlets will be handled separately by our Corporate Affairs team. Now, I would like to turn the conference over to Mr. Rodrigo Cammarosano, Head of Investor Relations and Treasury, for his opening remarks. Please go ahead.

Speaker #2: Please include your name and company when submitting your question. For participants joining by phone, press star followed by nine to raise or lower your hand.

Speaker #2: Once announced, press star followed by six to mute or unmute your microphone. Reading questions that are not addressed during the call will be answered afterwards by the investor relations team.

Speaker #2: Questions from media outlets will be handled separately by our Corporate Affairs team. Now, I would like to turn the conference over to Mr. Rodrigo Cammarosano, Head of Investor Relations and Treasury, for his opening remarks.

Speaker #2: Please go ahead.

Speaker #3: Good morning, everyone, and welcome to Nexa Resources' third-quarter 2025 earnings conference call. Thank you for joining us today. During the call, we will discuss Nexa's performance as per our earnings release issued yesterday.

Rodrigo Cammarosano: Good morning, everyone, and welcome to Nexa Resources' Q3, Q2, 2025 earnings conference call. Thank you for joining us today. During the call, we will discuss Nexa's performance as per our earnings release issued yesterday. We encourage you to follow the on-screen presentation through the webcast. Before we begin, I would like to highlight slide number two, which outlines forward-looking statements about our business. Please refer to the disclaimer regarding these statements and their conditions. Now, it is my pleasure to introduce our speakers. Joining us today are our CEO, Ignacio Rosado; our CFO, José Carlos Del Valle; and our Senior Vice President of Mining Operations, Leonardo Coelho. I will now hand the call over to Ignacio for his comments. Ignacio, please go ahead.

Speaker #3: We encourage you to follow the on-screen presentation through the webcast. Before we begin, I would like to highlight slide number two, which outlines forward-looking statements about our business.

Speaker #3: Please refer to the disclaimer regarding these statements and their conditions. Now, it is my pleasure to introduce our speakers. Joining us today are our CEO, Ignacio Rosado; our CFO, José Carlos Del Valle; and our senior VP of mining operations, Leonardo Coelho.

Speaker #3: I will now hand the call over to Ignacio for his comments. Ignacio, please go ahead.

Speaker #4: Thank you, Rodrigo. Good morning, everyone, and thank you for joining us today. Before we dive into our third-quarter results, I would like to highlight the strategic catalysts that are strengthening Nexa's competitive position and underpinning our long-term value creation.

Ignacio Rosado: Thank you, Rodrigo. Good morning, everyone, and thank you for joining us today. Before we dive into our Q3 results, I would like to highlight the strategic catalysts that are strengthening Nexa Resources S.A.'s competitive position and underpinning our long-term value creation. We are executing our strategy across five key business catalysts, building a more resilient portfolio for long-term sustainable cash generation. Starting with Aripuanã, we are pleased to share that the fourth tailings filter is en route to the mine site. Installation begins in the fourth quarter of this year, enabling commissioning in early 2026. This is a critical step to achieving full production capacity. We will provide more details shortly. In Peru, the Cerro Pasco Integration Project advances on plan. It leverages a well-known high-potential mineral district with over 15 years of potential mine life and meaningful net smelter return uplift.

Speaker #4: We are executing our strategy across five key business catalysts, building a more resilient generation. Starting with Aripona, we are pleased to share that the fourth retailing filter is en route to the mine site.

Speaker #4: Installation begins in the fourth quarter of this year, enabling commissioning in early 2026. This is a critical step to achieving full production capacity. We will provide more details shortly.

Speaker #4: In Peru, the Cerro Pasco integration project advances on plan. It leverages a well-known high-potential mineral district with over 15 years of potential mine portfolio for long-term sustainable cash life and meaningful net smelter return uplift.

Speaker #4: Our integrated mine smelter model remains a core differentiator. It mitigates volatility during down cycles, captures stronger margins in supportive pricing environments, and enhances value retention across the sink chain.

Ignacio Rosado: Our integrated mine smelter model remains a core differentiator. It mitigates volatility during down cycles, captures stronger margins in supportive pricing environments, and enhances value retention across the zinc chain. Finally, our growth strategy involves actively evaluating accretive opportunities in mining-friendly jurisdictions. Any investment will be grounded in disciplined capital allocation, prioritizing returns, operational excellence, and sustainability. Together, these catalysts reinforce our strategic position and lay a strong foundation for long-term performance. Let's begin with a review of our strong Q3 performance on slide number four. Nexa Resources S.A. delivered robust operational and financial results this quarter, driven by disciplined execution, improved mining output, and a constructive price environment. Mining production reached 84,000 tons of zinc, a sequential and year-over-year increase. This was driven mainly by a record quarter at Aripuanã and a solid recovery at Vazante following the disruptions at the beginning of the year.

Speaker #4: Finally, our growth strategy involves actively evaluating accretive opportunities in mining-friendly jurisdictions. Any investment will be grounded in disciplined capital allocation, prioritizing returns, operational excellence, and sustainability.

Speaker #4: Together, these catalysts reinforce our strategic position and lay a strong foundation for long-term performance. Let's begin with a review of our strong third-quarter performance on slide number four.

Speaker #4: Nexa, deliver robust operational and financial results this quarter driven by disciplined execution, improved mining output, and a constructive price environment. Mining production reached 84,000 tons of zinc as a sequential and year-over-year increase.

Speaker #4: This was driven mainly by a record quarter at Aripona and a solid recovery at Basante, following the disruptions at the beginning of the year.

Speaker #4: In smelting, total zinc sales were 150,000 tons reflecting a stronger performance across all units, with Cajamarquilla also achieving its highest quarterly output to date.

Ignacio Rosado: In smelting, total zinc sales were 150,000 tons, reflecting stronger performance across all units, with Cajamarquilla also achieving its highest quarterly output to date. Financially, this translates into net revenues of $764 million and adjusted EBITDA of $186 million, both improving in all comparable periods, supported by higher volumes and stronger byproducts prices. We recorded a net income of $100 million, or $0.52 per share, and a free cash flow of $52 million, up versus the previous quarter, strengthening our balance sheet with net leverage slightly decreasing to 2.2 times. Now, let's dive deeper into our mining performance on slide number five. Our quarterly zinc production of 84,000 tons was up 14% from the second quarter. This was powered by a solid recovery at Vazante and a record quarter increase at Aripuanã, which produced 10,000 tons of zinc, a 70% sequential increase.

Speaker #4: Financially, this translates into net revenues of 764 million and adjusted EBITDA of 186 million, both improving in all comparable periods. Supported by higher volumes and a stronger byproducts prices.

Speaker #4: We recorded an net income of 100 million dollars or 52 cents per share, and a free cash flow of 52 million. Up versus the previous quarter, strengthening our balance sheet with net leverage slightly decreasing to 2.2 times.

Speaker #4: Now, let's dive deeper into our mining performance on slide number five. Our quarterly zinc production of 84,000 tons was up 14% from the second quarter.

Speaker #4: This was powered by a solid recovery at Basante, and a record quarter increase at Aripona, which produced 10,000 tons of zinc at 70% sequential increase.

Speaker #4: For the first nine months of 2025, zinc production reached 225,000 tons, reflecting lower treated volumes and grades in the first half of this year.

Ignacio Rosado: For the first nine months of 2025, zinc production reached 225,000 tons, reflecting lower treated volumes and grades in the first half of this year. Our consolidated mining cash cost net of byproducts strongly improved to minus $0.49 per pound, driven by higher byproduct grades and lower TCs. Year-to-date cash costs were minus $0.18 per pound, better than our guidance. Our cost per run of mine was $51 per ton, stable quarter over quarter and in line with our guidance. As we previously highlighted, the year-over-year increase mainly reflects conditions at Aripuanã earlier in the year. Excluding Aripuanã, costs were broadly in line with the prior year. Financially, the mining segment delivered net revenues of $372 million and adjusted EBITDA of $164 million, with a 44% EBITDA margin, supported by stronger prices and improved operational performance. With that, let's move to slide number six for more on Aripuanã's quarterly milestone.

Speaker #4: Our consolidated mining cash cost net of byproducts strongly improved to minus 49 cents per pound, driven by higher byproduct grades and lower TCs. Year-to-date cash costs were minus 18 cents per pound, better than our guidance.

Speaker #4: Our cost per run of mine was 51 dollars per ton, stable quarter over quarter, and in line with our guidance. As we previously highlighted, the year-over-year increase mainly reflects conditions at Aripona, earlier in the year, excluding Aripona, costs were broadly in line with the prior year.

Speaker #4: Financially, the mining segment delivered net revenues of 372 million and adjusted EBITDA of 164 million, with a 44% EBITDA margin. Supported by stronger prices and improved operational performance.

Speaker #4: With that, let's move to slide number six for more on Aripona's quarterly milestone. Aripona delivered its best performance since ramp-up, reflecting a more stable operation and a higher throughput in this period.

Ignacio Rosado: Aripuanã delivered its best performance since ramp-up, reflecting a more stable operation and a higher throughput in this period. The arrival of the fourth tailings filter is a critical step. We expect this upgrade to enable reaching nameplate capacity by the second half of 2026, securing long-term operational stability and cash generation. On cost performance, we saw a notable quarterly improvement supported by higher treated ore volumes and ongoing optimization. Finally, exploration continues to enhance future potential. Recent drilling results confirm new mineralized extensions, reinforcing our confidence in the geological upside and the potential to keep extending the life of the asset. Let's move to slide number seven to review the latest developments on the Cerro Pasco Integration Project. In the third quarter, we made strong progress on phase one, which focuses on the new tailings pumping and piping system.

Speaker #4: The arrival of the fourth tailing filter is a critical step. We expect this upgrade to enable reaching nameplate capacity by the second half of 2026, securing long-term operational stability and cash generation.

Speaker #4: On cost performance, we saw a notable quarterly improvement, supported by higher treated oil volumes and ongoing optimization. And finally, exploration continues to enhance future potential.

Speaker #4: Recent drilling results confirm new mineralized extensions, reinforcing our confidence in the geological upside and the potential to keep extending the life of the asset.

Speaker #4: Let's move to slide number seven to review the latest developments on the Cerro Pasco integration project. In the third quarter, we made a strong progress on phase one which focuses on the new tailings pumping and piping system.

Speaker #4: Site mobilization is now complete, and we are progressing well with earthworks and civil construction on key areas, including the plant platform, tailings thickener, and drive pipe channel.

Ignacio Rosado: Site mobilization is now complete, and we are progressing well with earthworks and civil construction on key areas, including the plant platform, tailings thickener, and drive pipe channel. Major procurement packages are secured, with two key packages fully manufactured this quarter. In parallel, we are advancing with phase two studies, which include technical assessment for the Picasso shaft and underground integration to define the most efficient long-term configuration. This project remains a strategic enabler for Cerro Pasco Integration Project's long-term sustainability, supporting future production in this important mineral district. Let's move to slide number eight to review our smelting operating performance in more detail. In our smelting segment, sales reached 150,000 tons in the quarter, a 3% sequential increase driven by higher production across all units, including a record quarter at Cajamarquilla and a continued recovery at Três Marias.

Speaker #4: Major procurement packages are secured, with two key packages fully manufactured this quarter. In parallel, we are advancing with Phase Two studies, which include technical assessment for the Picasso shaft and underground integration to define the most efficient long-term configuration.

Ignacio Rosado: For the first nine months of 2025, sales totaled 425,000 tons, in line with our sales guidance, which reflected lower production earlier in the year. Financially, in the third quarter of this year, the segment delivered net revenues of $541 million and adjusted EBITDA of $23 million, reflecting the current margin environment and cost dynamics. Our cost performance in the quarter was in line with expectations, with a cash cost of $1.32 per pound, driven by higher zinc prices and lower TCs. Year-to-date cash costs were $1.24 per pound, well aligned with our revised guidance. Our conversion cost was $0.35 per pound, stable quarter over quarter and slightly below guidance year-to-date. The year-over-year comparison reflects lower sales volumes and higher operational costs, as expected. With that, I will hand the call over to our CFO, José Carlos Del Valle, for a detailed review of our financial results.

Ignacio Rosado: José, please go ahead.

José Carlos Del Valle: Thank you, Ignacio, and good morning, everyone. Let's turn to slide number nine for a summary of our financial performance. We saw strong momentum this quarter. Starting with the chart on the upper left, net revenues reached $764 million, up 8% sequentially and year-over-year, driven by higher zinc prices, byproduct grades, and stronger operational performance. Year-to-date, net revenues reached $2.1 billion, an increase of 4% versus the first nine months of 2024. Moving to adjusted EBITDA, we reported $186 million in the quarter, a 16% increase from the last quarter and a 2% increase year-over-year, with a healthy margin of 24%. This performance was supported by higher sales volumes and improved byproduct revenues. For the first nine months of the year, adjusted EBITDA totaled $472 million, 9% lower than last year, primarily due to lower sales volumes in the first half of the year, lower TCs, and higher operating costs.

José Carlos Del Valle: Now, turning to slide number 10 for some detail on our investments. In the first nine months of 2024, we invested $227 million in CapEx, with the majority allocated to sustaining activities, including mine development, maintenance, and tailings storage facilities, fully aligned with our operational priorities. In the quarter alone, CapEx totaled $90 million, in line with our expectations. For the Cerro Pasco Integration Project, phase one investments reached $12 million in the quarter and $30 million year-to-date, keeping us firmly on track with our full-year guidance of $44 million. As such, our total 2024 CapEx guidance remains unchanged at $347 million. Moving to the lower part of the slide, exploration and project evaluation investments totaled $53 million in the first nine months of the year, of which $21 million was in the third quarter.

For the first 9 months of the year, adjusted EBITDA totaled $472 million, 9% lower than last year, primarily due to lower sales volumes in the first half of the year, lower TC's, and higher operating costs.

Now, turning to slide number 10 for some detail, on our investments.

In the first 9 months of 2025, we invested 227 million in capex with the majority allocated to sustaining activities including mind development maintenance and tailing storage facilities, fully aligned with our operational priorities.

In the quarter, our loan capex totaled $90 million, in line with our expectations.

For the Sero pass integration project Phase 1 Investments, reach 12 million in the quarter and 30 million dollars. A year to date. Keeping us firmly on track with our full year. Guidance of 44 million

As such our total, 2025 capex, guidance remains unchanged at 347 million.

José Carlos Del Valle: These investments were primarily directed towards exploration, drilling, and mine development across our portfolio, supporting long-term optionality and value creation. We also reaffirm our $88 million guidance for exploration and project evaluation for the year as we continue to invest in our long-term pipeline. Let's look at our cash flow generation for the quarter on slide number 11. We generated $196 million in operating cash flow before working capital, starting from $186 million of adjusted EBITDA and after excluding non-operational items. From this amount, we paid $48 million in interest and taxes and invested $91 million in CapEx across our operations. Loans and investments required $10 million, reflecting regular payment of financing and lease liabilities, partially offset by dividends received and the net sales of financial investments. We also paid $16 million in dividends to non-controlling interest.

Going to the lower part of the slide, exploration and project evaluation Investments total of 53 million in the first 9 months of the year of which 21 million was in the third quarter.

This Investments were primarily directed towards exploration Drilling and Mine Development. Across our portfolio, supporting long-term, optionality, and value creation.

We also reaffirm our $88 million guidance for exploration and project evaluation for the year, as we continue to invest in our long-term pipeline.

Let's look at our cash flow generation for the quarter on slide 11.

we generated 196 million in operating cash flow before working capital starting from 186 million of adjusted Ava, and after excluding non-operational items,

This amount we paid $48 million in interest and taxes and invested $91 million in CAPEX across our operations.

Loans and investments required: $10 million, reflecting regular payments of financing and lease liabilities, partially offset by dividends received and the net sales of financial investments.

José Carlos Del Valle: Foreign exchange gains contributed $2 million, mainly to the continued appreciation of the Brazilian real. Finally, working capital posted a positive impact of $19 million, as we continue to prioritize initiatives to optimize our cycle and strengthen our liquidity. Looking ahead, we expect working capital to remain positive in the fourth quarter, bringing the full-year position closer to neutral. Combining these effects, free cash flow in the quarter totaled $52 million. With that, let's move to slide number 12. As you can see, our liquidity position remains healthy, supporting a solid balance sheet and an extended debt maturity profile. We ended the quarter with a solid liquidity of $790 million, including our undrawn $320 million sustainability-linked revolving credit facility. Our average debt maturity stands at 7.4 years, with an average cost of 6.2%.

We also paid $16 million in dividends to non-controlling interests.

For an exchange, gains contributed to million dollars, mainly due to the continued appreciation of the Brazilian real.

Finally working capital posted a positive impact of 19 million as we continue to prioritize initiatives to optimize our cycle and strengthen our liquidity.

Looking ahead. We expect working capital to remain positive in the fourth quarter, bringing the full year position closer to neutral.

Combining these effects, free cash flow in a quarter totaled $52 million.

With that, let's move to slide number 12.

As you can see, our liquidity position, remains healthy, supporting a solid balance sheet and an extended debt maturity profile.

We ended the quarter with a solid liquidity of 790 million included. Our undrawn 320 million sustainability linked, revolving credit facility.

José Carlos Del Valle: Importantly, our available liquidity, excluding the RCF, comfortably covers all of our financial commitments through the next four years. Net leverage improved to 2.2 times, down from 2.3 times at the end of last quarter, reflecting higher EBITDA for the last 12 months and a reduction in net debt. Furthermore, we continue to optimize our capital structure by diversifying funding sources and enhancing liquidity. A key priority is maintaining a debt maturity profile that is aligned with the long life of our assets while preserving our investment grade rating and guaranteeing competitive financing costs. We remain committed to deleveraging and reducing gross debt. Additionally, in the fourth quarter, we expect working capital normalization and stronger cash generation to further support our financial flexibility. With that, I will now hand the call back to Rodrigo, who will discuss market fundamentals and our key insights from LME Week. Rodrigo, please go ahead.

Our average debt maturity stands at 10.4 years, with an average cost of 6.2%.

Importantly, our available liquidity, excluding the RCF comfortably covers, all of our financial commitments through the next 4 years.

Net leverage improved to 2.2 times down from 2.3 times at the end of last quarter, reflecting higher Eva for the last 12 months and a reduction in net debt.

Furthermore, we continue to optimize our capital structure by diversifying funding sources and enhancing liquidity. A key priority is maintaining a debt maturity profile that is aligned with the long life of our assets, while preserving our investment-grade rating and guaranteeing competitive financing costs.

We remain committed to delivering and reducing gross debt. Additionally, in the fourth quarter, we expect working capital normalization and stronger, cash generation to further, support our financial flexibility.

José Carlos Del Valle: Thank you, José Carlos. Moving to slide number 13. Let's start with the zinc market, where we see the backdrop continuing to evolve in a more constructive direction. During the quarter, LME prices trended higher, closing September at around $3,010 per ton. This strength was primarily supported by low exchange inventories and a weaker U.S. dollar. On the supply side, while concentrate availability is gradually improving, utilization across the smelting segment remains uneven. We believe seasonal and logistical factors will likely keep markets relatively tight in the near term, supporting prices. This is reflected in treatment charges. In China, imported spot TCs rose to about $110 per ton, reflecting increased concentrate availability. Meanwhile, Chinese domestic TCs eased toward the quarter's end as local supply restricted against steady smelter demand. Looking ahead, we see the market moving toward a balance.

With that, I will now hand the call back to Rio, who will discuss market fundamentals and our key insights from LMU week. Please go ahead.

Thank you. Jose, Carlos. Moving to slide number 13.

Let's start with the zinc Market where we see the backdrop continuing to evolve in a more constructive Direction.

During the quarter, LME prices trended higher, closing September at around $310 per ton.

This is strength was primarily supported by low exchange inventories and a weaker US dollar.

Data availability is gradually improving utilization across. This melting segment remains uneven

We Believe seasonal and logistical factors will likely keep Market relatively tight in the near term supporting prices.

This is reflected in treatment charts in China, imported spot. TCS Rose to about 110 US dollar per tonne reflecting increased. Concentrate availability.

Meanwhile, Chinese domestic disease has powered the quarter's ends as local supply is restricted against steady melter demand.

José Carlos Del Valle: Galvanization demand remains robust, supported by global infrastructure and renewable energy investments. On the other hand, supply growth continues to face structural headwinds from declining ore grades and mine depletion, particularly in the Western Hemisphere. Now, turning to slide 14 for a look at copper and silver. The copper market remains well supported by strong fundamentals. Supply disruptions and slower-than-expected mine ramp-ups have restricted balances, helping to keep prices at around $10,300 per ton. Demand continues to be driven by electrification, infrastructure spending, and the rapid expansion of AI-related infrastructure, such as data centers. Silver also performed strongly, up roughly 58% year-over-year. This reflects its dual role as both a key industrial metal for the energy transition and a safe-haven asset supported by the monetary dynamics. Our outlook for both is constructive.

Looking ahead, we see the market moving towards a balanced organization. Demand remains robust, supported by global infrastructure and renewable energy investment.

On the other hand, supply growth continues to face structural headwinds from decline, your rate, and mind depletion, particularly in the Western Hemisphere.

Now, turning to a slight 14 for a look at copper and silver.

Copper markets remains well supported by strong fundamentals.

Supply disruptions and lower than expected. My ramp UPS have restricted balances helping to keep prices at around 103%.

Demand continues to be driven by electrification infrastructure spending and the rapid expansion of AI related infrastructure. Such as data center,

Silver also performed strongly up. Roughly 58% year-over-year.

As both a key industrial metal for the energy transition and a safe haven asset supported by the monetary dynamics.

José Carlos Del Valle: Copper's fundamentals are solid, with structural demand from electrification, EVs, and grid investment expected to outpace new supply, which remains constrained by permitting and project delays. For silver, industrial demand, particularly from solar, electronics, and electric vehicles, continues to grow, while investment demand benefits from global monetary uncertainty. This combination should help sustain prices at elevated levels relative to historical averages. Now, moving to the next slide. Finally, on slides 15 and 16, I want to summarize our key takeaways from the LME Week held in London in mid-October. The sentiment was notably constructive. Despite global macro volatility, there was a broad bullish consensus on base metals and a strong recognition of zinc's essential role in decarbonization, especially in galvanizing steel for renewables, EVs, and infrastructure. This aligns perfectly with our earlier discussions and reinforces that Nexa is well positioned to capture value as the market rebalances.

Our outlook for both is constructed.

Copper from the mentors is solid, with the structural demand from electrification, EVs, and great investment expected to outpace new supply, which remains constrained by permitting and project delays.

For silver industrial demand, particularly from solar electronics and electric vehicles, continues to grow, while investment demand benefits from global monetary uncertainties.

This combination should help sustain prices at elevated levels, relative to historical average.

Now, moving to the next slide.

Finally, on July 1516 I want to summarize our key takeaways from the lnb week held in London in October.

The same mate was notably constructed despite Global macro volatility. There was a broad bullish consensus on base metals and a strong recognition of zinc's essential role in the carbonization especially in galvanizing steel. For Renewables EV and infrastructure.

This aligns perfectly with our earlier discussions and reinforces that Nexa is well positioned to capture value as the market rebalances.

José Carlos Del Valle: Looking forward, there are a few key factors we're watching closely: treatment charges benchmarks for the next year, Chinese export flows, mine output in the Western Hemisphere, and trade policy developments. The 2026 forecasted TC benchmark is currently trending toward around $130 to $180 per ton, which points to a gradual recovery in smelter margin. We see zinc prices holding near $3,000 per ton, with limited downside given the tightened supply outside China. Furthermore, potential export restrictions and logistical issues in China could redirect material flows to other markets. This would favor producers like Nexa, with our regionally integrated low-carbon operations in the Americas. As major mines in the Western world approach depletion and our Aripuanã mine advances towards full capacity, Nexa's reliable and sustainable asset base is a key differentiator, strengthening our leadership position.

Looking forward. There are a few key factors. We are watching closest.

Treatment charge benchmarks for the next year, Chinese export flows, mine output in the Western Hemisphere, and trade policy developments.

The 2026 for tested PC Benchmark, is currently trained in powered around 130 to 180 US dollar per ton which points to a gradual recovery in these melter margins.

We see zinc prices holding near 3,000 US dollar per ton with limited downside. Given the tightening Supply outside China.

Furthermore potential, export restrictions and logistical issues. In China could redirect material flows to other markets.

This would favor producers like Nexa with our regional integrated, low-carbon operations in the Americas.

José Carlos Del Valle: In summary, we see a highly supportive backdrop across our key commodities: resilient demand, tightening supply, and a growing recognition of zinc's strategic importance. Now, on slide 17, I will comment on our ESG agenda. First, in social performance and community, we received the DePeromin Seal of Excellence in Gender Equity, a recognition of our efforts to advance diversity and inclusion in the mining sector. We also launched Nexa Transforma in Brazil, a unified platform to scale our social investments. Second, in environmental stewardship, we obtained the GAT Protocol Brazil Gold Seal for the second year, demonstrating our progress in reducing emissions. We also advanced circular economy projects at our smelters. Third, in governance and transparency, we achieved full compliance with the LME Responsible Sourcing Standards, Track A, aligned with OECD due diligence guidance. This is an important milestone that reinforces credibility across our value chain.

As major mines in the west are more approach. The depletion, and our our mind advances, powerful capacity, Nexus reliable, and sustainable asset. Base is a key differentiator is strengthening our leadership position.

In summary, we see a highly supportive backdrop across our key Commodities, resilient demand tightening Supply and a growing recognition of the D strategic importance.

Now, on slide 17, I will comment on our ESG agenda.

We also launched, next up, Transformer in Brazil, a unified platform to scale our social investments.

Second in the environmental stewardship, we obtained. The Gap protocol Brazil, gold, seal for the second year, demonstrating our progress in reducing emissions.

We also Advanced circular economy projects at ours melters.

And third in governance and transparency. We achieved full compliance with the LME Responsible Sourcing Standards track.

Aligned with OECD due diligence guidance.

José Carlos Del Valle: Taken together, these achievements underscore our leadership in sustainable zinc production and our commitment to creating long-term value for all stakeholders. Now, moving to our final slide, our focus and priorities. I will now hand it back to Ignacio for his comments. Ignacio, the floor is yours.

An important milestone that reinforces credibility across our value chain.

Taking together these achievements underscores our leadership in sustainable zinc production and our commitment to creating long-term value for all stakeholders.

Ignacio Rosado: Thank you, Rodrigo. Now, turning to slide number 18 to explain our focus and priorities. We deliver a strong third quarter and continue to execute our strategy with discipline. At Aripuanã, while some short-term challenges remain, the asset is demonstrating its long-term strength. Our record quarter production reinforces its potential and sustainable cash generation. At Cerro Pasco, execution continues to move forward, unlocking a significant value creation opportunity in a proven district. Exploration results across our portfolio indicate potential further mine life extensions and greater mine smelter integration, reinforcing our business model. From a financial perspective, our balance sheet remains solid, supported by disciplined capital allocation and a clear commitment to deleveraging. Most importantly, our unwavering commitment to safety for our people and communities remains the foundation of everything we do.

Now, moving to our final slide, our focus, and priorities. I will now hand it back to enough for his comments and answer. The floor is yours.

Thank you, Rodrigo. Now turning to a slide number 18, to explain our focus and priorities.

We deliver a strong third quarter and continue to execute our strategy with discipline.

While some short-term challenges remain.

The asset is demonstrating its long-term strength.

A record quarter production reinforces its potential and sustainable cash generation.

As a Pasco execution continues to move forward, unlocking a significant value creation opportunity in the approving District.

Expiration results are portfolio. Indicate potential further. Mine life extensions and greater melter integration reinforcing our business model.

From a financial perspective, our balance sheet remains solid supported by discipline Capital allocation and a clear commitment to the leveraging.

Ignacio Rosado: This is all underpinned by our ESG leadership, exemplified by our Cajamarquilla smelter, one of the world's largest zinc smelters, which is now powered by 100% renewable energy. In closing, we thank you again for the time and continued confidence in Nexa. Operator, we are now ready to take questions.

Most importantly, our unwavering commitment to safety or our people and communities Remains the foundation of everything we do.

this is all underpinned by our EEG leadership exemplified by our kahama smelter,

1 of the world's largest sinks melters, which is now powered by 100% renewable energy.

In closing, we thank you again for the time and continued confidence index.

Operator. We are now ready to take questions.

Operator: Thank you. We will now begin the Q&A session. To ask a question, if you are joining via Zoom, please click the raise hand button. You may also submit your question using the Q&A icon. Please include your name and company when typing your question. For participants joining by phone, press star 9 to raise or lower your hand. Once announced, press star 6 to mute or unmute your microphone. Our first question comes from Gabriel Barra from Citi. Mr. Barra, you may proceed.

Thank you.

We will now begin the Q&A session to ask a question. If you are joining via Zoom, please click the raise hand button. You may also submit your question. Using the Q&A icon, please include your name and Company when typing your question.

For participants joining by phone press star 9 to raise or lower your hand once announced press star, 6 to mute or unmute your microphone.

Our first question comes from Gabrielle Baja from sichi, Mr. Ba, you may proceed

[Analyst 1]: Hi everyone. Hi Ignacio, hi José. Hi, our team, Leonardo. Thanks for taking my question. I have two here from my side and mostly focusing on the capital allocation. You guys have mentioned about the working capital relief in the fourth quarter. We believe and we are seeing the results of the company. We expect the company to have a stronger free cash flow for now on. How should you see the leverage level of the company behaving in the short to medium term, and what's the level of leverage that the company is targeting for next year? I know that you guys cannot give it like a kind of guidance, but I want to understand the trend here for the leverage. Additionally, on this question, is there any other way here to decrease faster the gross debt in the short term?

Hi everyone. Uh, I do. Uh, thanks for taking my question. I have 2 here from my side and mostly focus on the in the capital location. Uh, you guys have mentioned about the working capital release in the fourth quarter. Uh, we we believe and we are seeing the results of the company. We are expecting the opportunity to have a stronger fit cash flow for now 1. Uh, how, how should you see, uh, The Leverage level of the company.

[Analyst 1]: How do you see this liability management given this comfortable level of liquidity in the short term of the company? I think those are the two questions that I have here. Thank you, guys.

Uh, behaving in the in the short to medium term, and how what's the level of, uh, of Leverage that the company is talking to for next year? I don't I know that you guys cannot give it like a kind of guidance, but uh, I want you to send the training here for the leverage and, and additionally, on this on this question, uh, there is any other way here to decrease faster. The the, uh, the grass that in the short term, how do you see this liability management, uh, given, uh, this comfortable level of liquidity in the short term of the company? So, most of the, uh, seen that. Those are, the 2 questions that I have here. Thank you, guys.

José Carlos Del Valle: Hello, Gabriel. Good morning. Thank you for the question. I think this is an important topic and one that has come up in previous meetings as well. I think we can reinforce our commitment to deleveraging. Obviously, the speed at which we can do that will rely on, first of all, our discipline in achieving our operational results, which we are on track for. The expectation that we have on operational results going forward, that's key, and that's something that we can control. Something that we don't control, but that is showing favorable tailwinds, is the current level of prices, which will obviously help us to achieve better free cash flow and to reduce leverage faster as well. Going forward, we continue to see that operational results and free cash flow generation should improve, obviously subject to what prices are going to be.

Hello, Gabriel. Good morning. Thank you for the question.

José Carlos Del Valle: Ideally, we would like to reduce our gross debt by about $500 to $600 million in the next four years or so, but we have to take this one year at a time, obviously. We would like to bring down our net leverage to levels closer to one time so that we have more flexibility because we will continue to see volatility. We know we're in a cyclical industry, so conditions can change. This is all in parallel to our constant efforts to control costs. Despite inflation, our aspiration is to keep costs at least at the level of what we had the prior year despite inflation. That's a continuous effort, and I don't see that changing in the short to medium term. Our goals continue to be the same. Our priorities, as we have mentioned before, are the same. Deleveraging is key.

Our discipline in in achieving our operational results which we are on track for the expectation that we have on operational results going forward, that's key. And that's something that we can control something that we don't control. But that, you know, it's showing favorable Tailwind is, uh, current level of prices, which would obviously help us to, you know, achieve better, better free, cash flow and, and to reduce leverage faster as well. Um, going forward, we we continue to see that operational results and free cash, flow generation should improve. Uh, obviously subject to what prices are going to be ideally. We would like to reduce our gross debt by about 500 to 600 million in the next 4 years or so. But, you know, we have to take this 1 year at a time obviously. And and we would like to bring down our net leverage to

Levels closer to 1 time.

So that we have more flexibility because we will continue to see volatility and we know we are in a cyclical industry, so conditions can change and this all in parallel to our constant efforts to control costs. Despite inflation are are are aspiration is to keep costs at least at the level of what we have the prior year despite inflation. So that's a continuous effort. And I don't see that changing in the in the short to medium.

José Carlos Del Valle: In line with that, also maintaining our investment grade. Hope I answered your question. Please let me know if I missed something.

Hey, to medium per. So, our goals continue to be the same, our priorities as we have mentioned before are are the same, The Leverage in is key. And in line with that also maintaining our investment grade

[Analyst 1]: No, really clear. Thank you, guys.

Okay, I answer your question, please let me know that there's if if I missed something.

No, really clear. Thank you, guys.

Operator: Our next question comes via phone. Please, sir, you can open your microphone, pressing star 9.

Our next question comes via phone.

Please, sir, you can open your microphone, press install 9.

[Analyst 1]: Yes, hello. Can you hear me?

Yes, hello. Um, can you hear me?

José Carlos Del Valle: Perfectly.

[Analyst 1]: All right. Good morning, everyone. Thank you very much. Two questions. One is on the Aripuanã. Can you maybe provide Ignacio or Leonardo a little bit more color as to what are the next steps to install the fourth filter? You did mention, Ignacio, that you expect the second or middle of the year, second half of the year to have this in operation. What are the critical steps between now and then? My second question will be on free cash flow generation. I want to confirm, José Carlos, that you expect working capital in the fourth quarter to generate cash, therefore bringing the full year working capital to be neutral in terms of cash contribution. Any views, early views on the CapEx for 2026?

Perfectly.

All right. Uh, good morning everyone. Thank you very much. Um, so 2 questions 1 is on on the Adana H, can you maybe provide, uh, Ignacio or Ronaldo a little bit more color as to, um, what are the next steps to install the, the fourth filter? Um, you did mention in nio that you, you expect the second uh or middle of the Year second half of the year to to uh to have this in operation. But uh you know what what are the critical steps between now and uh and then and then my second question will be on on free cash flow Generation. Um, want to confirm

that you expect working capital in the fourth quarter to generate cash and therefore bringing the entire the full year, working capital to be neutral in terms of of, um, cash contribution and then, uh, any any

Any views early views on the capex for 2026?

Leonardo Coelho: Okay. Thank you, Carlos. Thank you for the questions. First of all, around Aripuanã, as I was saying, the project is on track to start commissioning in April next year. The filter has arrived in Brazil. It's going to be in the operation next week. All the infrastructure that we are building to accommodate the filter and putting the piping system in place and all the earthworks that have to be done are advancing very well. We anticipate that at the end of the first quarter, April, we will start commissioning. Commission should be very fast because, I mean, we have done everything we needed to do in terms of details of construction to make sure that we can commission in a fast way. That's why we're saying that the full benefit will come through the mid next year. Okay?

Okay, thank you, Carlos. Thank you for the questions.

First of all around as, as I was saying, the project is on track, to be to start commissioning in April. Next year. The, the filter has arrived in Brazil is going is going to be in the operation next week.

And all the infrastructure that we are building to accommodate the field, and putting the piping system in place, and all the earthworks that have to be done, are advancing very well. So we anticipate that at the end of the first quarter, in April, we will start commissioning. Commissioning should be very fast.

Leonardo Coelho: Important to mention that today, we are with the three filters that we have that have limited capacity in terms of achieving humidity for our stockpiles. We are performing very well on those, and we are achieving close to 80% of capacity of the plant. The filter, the fourth filter itself, has a capacity around 75,000 to 80,000 tons, and the total capacity of the plant is 180,000. It gives us a 35% to 40% capacity. With the three filters that we have today and the fourth filter that we have that is coming, we should be able to produce at full capacity, as we are saying. Starting April commissioning and in the second half at full speed.

Because, I mean, we have done everything we needed to do in terms of a, a, a details of construction to make sure that we can Commission in a fast way. So that's why we are saying that the full benefits will come in the, through the, through the mid next year. Okay?

It is important to mention that today we have the three filters that we have, which have limited capacity in terms of achieving humidity for state for our stockpiles and for stock prices.

On those.

And we are achieving close to 80% of capacity of the plant.

And the filter the 4 filter itself has a a capacity around 75 to 80,000 tons and the capacity to Total capacity of the planet is 180.

Leonardo Coelho: We are very confident on that, and we believe that the project is on track and the CapEx that we said that we were going to spend is also the one that we are achieving today. Okay? Regarding working capital, José Carlos, please.

So it it it give us a 35, 40% capacity. So, with the 3 filters that we have today, and the fourth filter that we have that is coming. We should be able to produce a full capacity. As we are saying starting April commissioning, and in, in the second half at full speed.

So we are very confident on that and and we believe that the project is on track and the cap is that we said that we were going to spend is is, is is also that 1 that we are achieving today.

José Carlos Del Valle: Yes. I will address that. You're right. As we have seen in prior years, we have this intra-year seasonality, which we have seen quarter after quarter this year as well. Our expectation is that in the fourth quarter, we will also have a positive contribution from working capital. The target continues to be that for the entire year, the impact should be close to zero. For planning purposes, that is the same assumption that we use, that we see some seasonality within the year, but year over year, unless something surprising happens, we should expect working capital to have a neutral effect on the cash flow generation of the company. In terms of CapEx for next year, we're still actually in the budgeting process. It will be early to tell you, to give you some guidance. Obviously, we will make that public as soon as we finalize our figures.

Okay, regarding working capital please.

Yes, I will address that and you're right. As as as we have seen in Prior years, we have this intra years seasonality which we we have seen quarter after quarter this year as well. So our expectation is that in the fourth quarter we will also have a positive contribution from from working capital and the target continues to be that for the entire year. The impact

To be close to zero. No. And and for planning purposes. That is the same assumption that we use know that we we see some seasonality within the year, but year over year. Unless something, you know, surprising happens. We should we, we should expect working capital to have a neutral effect on the cash flow generation of, of the, of the company.

In in terms of capex for next year, you know, it we're still actually in the budgeting process.

José Carlos Del Valle: I don't see anything drastic changing in 2026 compared to 2025. For practical purposes, you can assume that it will be something in the same neighborhood, but we are finalizing the details of that, and we will share as soon as we can.

So it will be early to tell you to give you some guidance so you'll see we will we will make that public as soon as we finalize our figures but I don't see anything drastic changing in in 2026 compared to 20 over to 2025. So you know, for for practical purposes you you can assume that it will be something in the same neighbor neighborhood, but we are finalizing the details of that and we will share as as soon as we can.

[Analyst 1]: Thank you, Ignacio and José Carlos.

José Carlos Del Valle: You're welcome.

[Analyst 1]: Thank you, Carlos.

You're welcome.

Thank you, Carlos.

Operator: Our next question comes from Patricia Congini from J.P. Morgan. Mrs. Congini, you may proceed.

Our next question comes from Tatian Keeney from JP Morgan.

Mrs. Kanini you may proceed.

[Analyst 2]: Good morning. I want to thank you for having me on this call. My question is a little bit of a follow-up for my colleagues, and I would just like to understand a little bit your perspective when it comes to 2026. I think we are a little bit more conservative on zinc prices with some rising supply demand, which is not following up that fast. We know that prices have been pretty resilient, but my question for you guys is the CapEx, and I understand that it's few budgets it does, but does the CapEx for next year have flexibility to adjust in case of lower zinc prices? We know that Pasco Complex has some development to happen. We know that Aripuanã, also, as you mentioned, is working on the fourth filter.

[Analyst 2]: My question here is just to understand a little bit on how flexibility do you feel that you have for CapEx if needed. Thank you.

Want to, um, thank you for having me in those on this call. Uh, my question is, uh, a little bit of a follow-up for my colleagues, and I would just like to understand a little bit, your perspective, when it comes to 2026, um, I think, um, we are a little bit more conservative on zinc prices with like some Rising supplies demand, which is not following up that that fast. We know that price has been pretty resilient, but my question for you guys, is the capex and I understand that is still budgeted this. But does the capex for next year has flexibility to adjust in case of lower zinc prices. Um, we know that Pasco complex have a like, has some development to happen. We know that at 1. Also, as you mentioned, uh, is working on the fourth filter. So my question here is just to understand a little bit on how flexibility. Do you feel that you have for a topics if needed. Thank you.

Leonardo Coelho: Thank you for the question. We have some flexibility on CapEx. Let's say we have three strips on CapEx. One is the projects that we have that are important for us, the fourth filter, the Cerro Pasco Integration Project, and those we have to develop because at the end of the day, this is value creation for the company in the long term. The second one is sustaining CapEx, which is the CapEx that you have to incur to make sure that you achieve your production for the year and that you make the money that you are expecting to make. That is something that is somehow flexible, but it's better to achieve that because otherwise the operations are going to suffer in 2027 because you have to develop the mines, you have to buy the equipment, and we are very, very rigid or disciplined on that.

Thank you. Thank you for the for the, for the question. We have we have some flexibility on capex. Let's say we have a, a 3D work, 3 streams on. Capex, 1 is the projects that we have.

That are important for us, the fourth filter of the several Pascal projects. And those we have to develop know because, at the end of the day, this is value creation for the company in the long term.

Leonardo Coelho: The third is the CapEx that we have in different projects that follow a capital allocation strategy. That CapEx that accounts more or less 20% to 25% of the total CapEx is the one that is flexible for us for 2026 and in general. Okay? Having said that, you're talking about prices. The way we do our budget is that we are very conservative on zinc. Zinc is our main metal. We believe that doing a conservative price scenario for zinc for next year for us is important. We challenge our operations and make sure that we have the production we want, we have the cost that we want, and we achieve the CapEx that we need to achieve. Okay?

But having said that, you're talking about prices. The way we do our budget is that we are very conservative with zinc. Zinc is our main metal.

Leonardo Coelho: The good thing is that we also produce other metals, 70,000 tons of lead, 12 million ounces of silver, which is a lot, and the upside on silver is very high. We produce almost 30,000 tons of copper. These three metals that are byproducts for us are showing fundamental values that might be able to be similar to the levels that we have today in 2026. Having said that, managing the variables that we can manage, I believe being conservative on zinc, we might get some exposure in the other metals, and we might get a more robust cash flow. Okay?

And we we believe that doing a conservative price scenario for seeing for next year for us is important. So we challenged our operations and make sure that we we we have the production we want, we have the cost that we want and and we achieve the capital that we need to achieve. Okay. The good thing is that we also produce other metals no 70,000 tons of lead, 12 million oz of silver, which is a lot. And, and the upside on Silver is very high and we produce almost 30,000, tons of copper. So these 3 metals, that I buy products for us are are showing a a fundamental values that might be able to, to be similar to the levels that we have today in 2026.

So, having said that, managing the variables that we can manage, I believe being conservative on zinc, we might get some exposure in the other metals and we might get a more robust cash flow. Okay?

[Analyst 2]: Clear, guys. Thank you so much.

Clear guys, thank you so much.

Operator: Our next question comes from Lawson Weinder with Bank of America. Mr. Weinder, you may proceed.

Our next question comes from Lawson Were with Bank of America. Mr. Were, you may proceed.

[Analyst 3]: Operator, can you hear me okay?

Operator, can you hear me? Okay.

[Analyst 1]: Yeah.

[Analyst 3]: Okay. Fantastic. My screen was just showing that I was muted. Thanks for confirming that. Also, good morning, Rodrigo and team. Thank you for today's presentation. If I could just turn the attention back to Aripuanã and dig in a bit more on the workforce turnover issues that you had had. Of course, on recent calls, you've spoken to some of the efforts to address those, but where is that today? Where is the turnover versus recent peaks? Some of the programs that you've spoken to in the past to address the issue, how are those proceeding? Thank you.

Yeah.

Okay. Yep. Fantastic. My screen was just showing up that I was muted. Uh, thanks for confirming that. Um and also uh good morning, Rodrigo and team, thank you for today's presentation. If if I could

uh,

turn the attention back to our Point. Yeah. And uh, dig in a bit more on the uh, the work. First first turnover issues that you you had had. And

Of course, on recent calls, you've spoken to some of the efforts to, to address those. But where is that today? And, and where is the turnover versus recent Peaks? And then some of the programs that you've spoken to in the past to address the issue. How are those uh, preceding thank you?

Leonardo Coelho: Yeah. No, very important your question because Aripuanã has been a very difficult project to build. We had a very tough two years of commissioning. One of the workstreams that is very important for us is turnover. We started with a turnover of 35-40%, and that was very high because this Aripuanã location is very isolated from the rest of Brazil. It's a small town that we have been developing for the long term. We have been working on putting schools, on hospitals, and building entertainment for families. That is important for us. You are right, turnover is improving. The average that we have today is between 18 to 20%, which is still high. The measures that we take is the most important one is trying to make sure that the families that live there have a long-term view of staying in the town.

Yeah, no, very important. Your question because has been a a very difficult project to build. We had a a very tough 2 years of commissioning and 1 of the of the work streams that are very important is very important for us is turning over. We started with a turnover of a, a 35 40%

And that was very high because this this allocation is very isolated from the rest of Brazil and it's a small town that we have been developing for the long term. No, we have been working on on putting schools on, on, on hospitals, and and building entertainment for families. That is important for us.

So you are right. We are a turnover is improving. The average that we have to today is, is, is between 18 to 20%, Which is still high. Yeah. So the measures that we that we take is is is the most important 1 is trying to make sure that the families

Leonardo Coelho: This is schools, this is health programs, this is building programs for the wives. We are also working on retention programs for key people. We need to bring senior people because of the turnover. The senior people are the ones that really manage the plant, the mine, and the main facilities. Because of the turnover, you have to train and train and train again. We are putting programs for senior people with retention bonuses that are important. We are giving them flexibility on the fly-in, fly-out again. There is a coordination effort to make sure that this turnover goes down to normal levels that are between 8 to 10%. Having said that, we experienced that many years in the past in Vazante. This is a process. We are aware that this is a process. We take some backup actions here.

That live there have a a, a long-term view of staying in that in that town. Okay. And this is the schools. This is a health programs. This is, this is building programs for the wives. We are also working on retention problems. For key people, we need to bring senior people because of the turnover, the senior people are, are the ones that really manage the plan, the mine, and the main facilities and because of the turnover, you have to train and train and train again. So we are putting programs for senior people with retention bonuses. That are important.

And we are giving them a flexibility on the flying fly out again.

So, there is a coordination effort to make sure that this turnover goes down to normal levels that are between 8% to 10%.

Leonardo Coelho: One is that instead of having, let's say, in maintenance for the plant, a shift of 20 people, we have more. We train them all, and with the turnover, we have the full people or the full team in the plant whenever it's needed. We have also some backup plans that are costing us money. If you can see, the cost of Aripuanã today is high, but it's part of the progress that we need to build in terms of building the team that we want. We have very good people there. We have talented people there. It's difficult for them because, again, Brazil is also a very full employment. We compete with other industries and other mining companies. We have to do a big effort to retain this talent. I think we are doing the right thing. We believe we have the right strategy.

So, we train them all, and with a turnover, we have the full people or the full team in the plan whenever it is needed. Okay? So, we also have some backup plans that are costing us money, and if you can see, the cost today is high, but this is part of the progress that we need to make in terms of building that team that we want.

Leonardo Coelho: That's why turnover is going down, but still, there is a long way to go.

We have very good people there. We have talented people there, but it's difficult for them because, again, in Brazil is also a, a very, it's a full employment. So, so we compete with other Industries and other mining companies. So we have to do a big effort to, to, to retain this talent, but I think we are doing the right thing. We, we believe we have the right strategy.

[Analyst 3]: Okay. Fantastic. Thank you for that perspective. I also wanted to just say thank you for providing that specific Q4 guidance. On Cerro Lindo, you didn't mention silver, but the guidance and NIMUS results imply flat silver production in Q4 versus Q3. Is that accurate?

So that's why turnover is going down and but still there is a long way to go. Okay, fantastic, thank you for that perspective. Um, also wanted to just uh, say thank you for providing that specific Q4 guidance. And then on Sarah, Len Lindo, you just, you didn't mention silver, but the, the guidance in 9 months, results, imply flat silver production and Q4 versus Q3 is that, is that accurate?

[Analyst 1]: Hi Lawson. This is Rodrigo. Thanks for the question. You're right. We expect Cerro Lindo. Actually, we expect Cerro Lindo to perform slightly better in Q4 versus Q3 in terms of zinc production and lead production. Silver may be flat quarter over quarter. This is basically driven by the current mine plan. As we move forward with the Q4 reaching the end of the year, we're going to revise the very short-term mine plan to see if we can eventually access higher silver grade. So far, we are planning to have a flat quarter over quarter in terms of silver.

Hi, welcome. This is Rodrigo. Thanks for. Thanks for the question. Uh, you're right. We expect the whole Endo, actually we expect the whole unit to perform, uh, it's likely better and for a q versus 3 Q in terms of zinc production and and and and Lead production.

[Analyst 3]: Thank you very much, Rodrigo. Finally, Ignacio, a question for you, just given where you come from. There's a national election just around the corner in Peru. What is your view right now on the mood in the country? Is there any risk of a potential material change in direction post-elections, particularly as it pertains to mining?

Silver may be flat quite a bit quieter. Uh, this is basically driven by the the current mine plan but, uh, as uh, as we we move forward with the, with the, with the, with the, with the for Q reaching the end of the year, we're going to revise, uh, the very short term mind plan to see if we can eventually access higher silver grid. But so far, we are planning to to have like a a flat a quarter over quarter in terms of silver.

Okay.

Thank you very much. Have you go. And then just, finally Ignacio, a question for you just given where where you come from? There's a national election, just around the corner in Peru. What, what is your view right now on the mood in the country and is there any risk of a potential material change in Direction? Postal options, I mean, particularly as it pertains to mining.

Leonardo Coelho: Yeah. It's a very important question. We have a new president that is in place two weeks ago. If you are not local or you're not close to Peru, you believe that this is a very difficult situation in terms of a political environment, which it is. In any case, what I want to convey, and this will happen also for the next elections, is that the country or the mining sector runs according to your relationship with communities and relationship with authorities regarding permits and projects and doing that. In the last 10, 15 years, the case has been that if you keep a strong relationship with communities, you make a win-win strategy, and you develop your projects, it shouldn't be a problem in the political environment. The political environment, in a sense, is isolated from the day-to-day of mining companies and other industries as well.

Yeah. It's it's very important question and and you know that we have a new president that is in place a 2 weeks ago.

And if you are not a local or you're not close to Peru, you believe that this is a very difficult situation in terms of the political environment, which is.

But in any case, what I want to convey—and this will happen also for the next elections—is that the country, or the mining sector, runs according to your relationship with communities.

And our relationship with authorities regarding permits and projects, and doing that...

so in the last 10 15 years, the case has been that if you keep a a a strong relationship with communities you you make a win-win strategy

Leonardo Coelho: Having said that, it's difficult to predict what will happen in the new election because today we have many candidates, and this has been the case for the last also 15, 20 years. Towards finishing to start the first round, which I think is in April next year, we will know three to five days before who are going to be the ones that are going to go to the second round. Today, we don't know. This is a career that is a marathon from here to April. The comment is that I think most presidents have realized always that the income that they get from the mining sector is so important that they cannot affect the mining companies and the mining sector. This has been the case for Las Bambas.

And you develop your projects; it shouldn't be a problem, the political environment. So the political environment, in a sense, is isolated from the day-to-day of mining companies and other industries as well. Having said that, it is difficult to predict what will happen in the new election because today we have many candidates. This has been the case for the last 15 to 20 years.

So the uh towards the, the finishing to start that the first round.

Uh, which is, I think, in April next year, we will.

Note, 3 to 5 days before who are going to be the ones that are going to go to the second round.

Today we don't know. So this is a this is a a a carrier that is a a Samaritan from here to the April.

Yeah. But that but the comment is that a a I think most presidents have realized always that the income that they get from the mining sector is so important that they, they cannot, I mean, affect the mining companies and the mining sector.

Leonardo Coelho: This has been the case for Cerro Verde and for most mining companies because 12, 15% of the GDP of Peru is mining. I think everybody realizes that it's good to keep the mining sector going on. I think this relates to new projects, this relates to permits that you will get, this relates to relationship with authorities that you have. You have to build always relationships with communities. This is more or less the context. I believe there is a lot that we can say in the next months. We have to wait. We have to wait.

This has been the case for last time but this has been like a case for S and for most mining companies because you know, 12 15% of the GDP of Peru is is mine and so I think everybody realizes that it's good to keep the mining sector going on.

This relates to new project, this relates to permits, that you will get this relates to relationship with authorities that you have. But then you have to build always relationship with community. So this is more or less the context lotion. I I I believe it's going to be there is a lot that we can say, in the next months.

And we have to wait. We have to wait.

[Analyst 3]: Okay. Thank you very much.

Thank you very much.

Operator: Now, I'll turn the call over to Mr. Rodrigo Cammarosano for reading questions. Please go ahead, sir.

Now I'll turn the call over to Mr. Hoodie for reading questions. Please go ahead, sir.

[Analyst 1]: Thank you, Operator. We have one initial question from an investor. The question is, with an increased silver price, is Nexa pursuing any opportunities to increase silver production? I will hand this discussion to José Carlos.

Thank you, operator. Um we have a 1 uh initial question from uh from an investor. So the question is uh with uh an increase silver price is next to presume any opportunities to increase silver production.

Ignacio Rosado: Thank you, Rodrigo. The short answer is no. I wish that we had that flexibility. As you probably know, for us, silver is a byproduct. It comes together with the other metals that we produce and they already have a defined mining plan. It's very difficult to prioritize, even though it would be great given current prices. However, the good news, and you probably remember this, we have a silver streaming agreement that dates back from 2016 or 2017. This is related to the silver production of Cerro Lindo. 65% of the Cerro Lindo silver production goes to the silver streamer. This streaming contract stipulates that once a certain threshold of 90 million ounces is reached, this steps down to 25%. This is happening towards the end of the second quarter. We expect that this will happen towards the end of the second quarter of next year.

Uh, I will hand this, uh, this question to Jose, Carlos.

Thank you.

The, the short answer is no. And I, I wish that we had that flexibility, but as you probably know for US, silver, silver silver is a byproduct. So it comes together with the other with the other metals that we produce. And that, you know, they already have a defined mining plan. So it's very difficult to prioritize, even though it will be great giving current prices. However, the good news and and you probably remember this, we have a

Ignacio Rosado: Cerro Lindo produces close to 4 million ounces, close to 4 million ounces of silver. This is about 1.6 million ounces. This could be $70 to $75 million of additional cash flow at current prices. This is significant. This is good news, even though our silver production is not that flexible. This is good news for Nexa in 2026.

Silver streaming agreement that dates back from 2016 or 2017 and this is is related to the silver production of cello. So 65% of the cello, silver production goes to the silver streamer. But this streaming contract stipulates that once a certain threshold of 90 million Oz is, reached these steps down to 25% and this is happening towards the end of the second quarter. We expect that this will happen towards the end of second quarter of next year. So, you know, that's about, you know, produces close to 4 million ounces close.

To 4 million ounces of silver. So this is about 1.6 million ounces. This could be 70 to 75 million dollars of cash flow, additional cash flow at current prices know. So this is, this is significant.

So so this is a good news even though our silver production is not that flexible. This is good news for Nexa in 2026.

Operator: This concludes our question and answer section. I would now like to hand the call over to Mr. Ignacio Rosado for his closing remarks. Mr. Rosado, please go ahead.

This concludes our question and answer section. I would now like to hand the call over to Mr. Ignazio Rosado for his closing remarks. Mr. Rosado, please go ahead.

Leonardo Coelho: Thank you very much. Thank you very much all for attending one more time. I would like to reiterate our commitment to deliver a strong production on the fourth quarter of this year. I believe that at these price levels, we should be able to generate additional cash flow. This has been a very difficult year for us. As we were saying, we had a very weak first half of the year based on the Aripuanã performance, based on the problems that we have, geotechnical problems we had in Vazante, and also based on the poor market of smelters regarding the TCs, very low TCs and sometimes negative TCs that affected the cash flows of the smelters. With those challenges, the third quarter for us was strong. We believe that we are in a good trend to build a fourth quarter also similar to the third one.

Thank you very much. Thank you. Thank you very much. All for attending one more time. I would like to reiterate our commitment to deliver a strong production in the fourth quarter of this year. I believe that at these price levels, we should be able to generate additional cash flow.

This has been a very difficult year for us. As we were saying, we have experienced a very weak first half of the year based on the Aripuana performance, which is a result of the technical problems we encountered on Bisonte, as well as the poor market conditions for smelters. As a result, there has been very low demand, and at times negative demand, which have affected the cash flows of these smelters.

Leonardo Coelho: Next year, we are very committed to make sure that Aripuanã achieves full production, that we finish the piping system in Cerro de Pasco, and that we are exposed to better commercial terms to our smelters, especially in Brazil. Thank you very much to all. We look forward to speaking to you for our year-end closing numbers. Thank you.

So with those challenges, the third quarter for us was was a strong. We believe that we are in a good Trend to build the fourth quarter. Also similar to the third 1. And next year, we are very committed to make sure that Arana achieves, full production that we finish the the the piping system in Pasco and that we are exposed to a better commercial terms to our smelters, especially in Brazil

So thank you very much to all we look forward to speaking to you for the our year, close closing numbers. Thank you.

[Unknown Speaker]: Goodbye.