Q1 2026 Nexa Resources SA Earnings Call

May 7, 2026

Operator 1: Good morning, ladies and gentlemen, and welcome to Nexa Resources' Q1 2026 Earnings Conference Call. Please note that today's event is being recorded and broadcast live via Zoom with access also through Nexa's investor relations website. A 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 currently in listen-only mode. 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. 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 at the bottom of your screen. Please include your name and company when submitting your question.

Operator: Good morning, ladies and gentlemen, and welcome to Nexa Resources' Q1 2026 Earnings Conference Call. Please note that today's event is being recorded and broadcast live via Zoom with access also through Nexa's investor relations website. A 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 currently in listen-only mode. Following today's presentation, we will open the floor for questions.

Speaker #2: Good morning, ladies and gentlemen. And welcome to Nexa Resources first quarter 2026 earnings conference call. Please note that today's event is being recorded and broadcast live via Zoom, with access also through Nexa's investor relations website.

Speaker #2: A slide presentation accompanying the webcast is available for download, as well as a replay of the conference call for following its conclusion. As a reminder, all participants are currently 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, click please click the raise hand button.

Operator: To ask a question, if you are joining via Zoom, please click the Raise Hand button. 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 at the bottom of your screen. Please include your name and company when submitting your question.

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 at the bottom of your screen.

Speaker #2: Please include your name and company when submitting your question. For participants joining by phone, press star followed by 9 to raise or lower your hand.

Operator 2: 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. Written questions that are not addressed during this 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.

Operator: 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. Written questions that are not addressed during this 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: Once announced, press star followed by 6 to mute or unmute your microphone. Written questions that are not addressed during this 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.

Rodrigo Cammarosano: Good morning, everyone, welcome to Nexa Resources' Q1 2026 Earnings Conference Call. Thank you for joining us today. During the call, we will discuss Nexa's performance as detailed in the earnings release issued yesterday. We encourage you to follow along with the presentation available through the webcast. Before we begin, please turn to slide number 2, which contains our forward-looking statements disclaimer. We ask that you review the information regarding these statements and the associated risk factors. Joining the call today are our CEO, Ignacio Rosado, our CFO, José Carlos del Valle, our Senior Vice President of Mining Operations, Leonardo Coelho. With that, I will turn it over to Ignacio.

Speaker #3: Good morning, everyone, and welcome to Nexa Resources first quarter 2026 earnings conference call. Thank you for joining us today. During the call, we will discuss Nexa's performance as detailed in the earnings release issued yesterday.

Speaker #3: We encourage you to follow along with the presentation available through the webcast. Before we begin, please turn to slide number 2, which contains our forward-looking statements disclaimer.

Rodrigo Cammarosano: Before we begin, please turn to slide number two, which contains our forward-looking statements disclaimer. We ask that you review the information regarding these statements and the associated risk factors. Joining the call today are our CEO, Ignacio Rosado, our CFO, José Carlos del Valle, our Senior Vice President of Mining Operations, Leonardo Coelho. With that, I will turn it over to Ignacio.

Speaker #3: We ask that you review the information regarding this statement and the associated risk factors. Joining the call today are our CEO, Ignacio Rosado; our CFO, José Carlos Del Valle; and our senior vice president of mining operations, Leonardo Coelho.

Speaker #3: With that, I will turn it over to Ignacio.

Speaker #4: Thank you, Rodrigo, and good morning, everyone. Starting on slide number 3, our main highlights. The first quarter of 2026 was a strong start to the year.

Ignacio Rosado: Thank you, Rodrigo, and good morning, everyone. Starting on slide 3, our main highlights. The Q1 2026 was a strong start to the year. Adjusted EBITDA more than doubled year-over-year to $283 million, with a margin of nearly 32%. Net income was $118 million or $0.67 per share, and net leverage continued to come down, closing the quarter at 1.59 times, half a turn lower than where we were a year ago, benefited by a strong last 12 months Adjusted EBITDA. Three things drove the results. A constructive price environment across our entire metal mix, most notably silver, where prices averaged 164% above the Q1 2025.

Ignacio Rosado: Thank you, Rodrigo, and good morning, everyone. Starting on slide three, our main highlights. The Q1 2026 was a strong start to the year. Adjusted EBITDA more than doubled year-over-year to $283 million, with a margin of nearly 32%. Net income was $118 million or $0.67 per share, and net leverage continued to come down, closing the quarter at 1.59 times, half a turn lower than where we were a year ago, benefited by a strong last 12 months Adjusted EBITDA. Three things drove the results. A constructive price environment across our entire metal mix, most notably silver, where prices averaged 164% above the Q1 2025.

Speaker #4: Adjusted EBITDA, more than double year over year, to $283, with a margin of nearly 32%. Net income was $118 million or 67 cents per share, and net leverage continued to come down, closing the quarter at 1.59 times.

Speaker #4: Half a turn lower than where we were a year ago. Benefited by a strong last 12 months adjusted EBITDA. Three things drove the results.

Speaker #4: A constructive price environment across our entire metal mix, most notably silver, where prices averaged $164% above the first quarter of 2025, higher sales volumes in both segments, and operating performance that continues to improve particularly at 3.0, which delivered another quarterly production record.

Ignacio Rosado: Higher sales volumes in both segments, and operating performance that continues to improve, particularly at Aripuanã, which delivered another quarterly production record. The quarter was not without challenges. Heavy rainfall at Cerro Lindo, an illegal community blockade at Atacocha, and a shaft constraint at El Porvenir all impacted the Peruvian production sequentially. Those issues have been addressed, and the affected operations returned to normal run rates. In mining, zinc production reached 79,000 tons, up 18% year over year, with all 5 mines benefiting from improved ore grades. In smelting, zinc metal and oxide sales totaled 147,000 tons, up year over year and quarter over quarter, supported by ongoing operational improvements at our Brazilian smelters and continued solid performance at Cajamarquilla. The negative free cash flow in the quarter is consistent with our typical Q1 seasonality, reflecting working capital build-up and tax payments.

Speaker #4: The quarter was not without challenges. Heavy rainfall at Cerro Lindo, an illegal community blockade at Atacocha, and a shaft constraint at El Porvenir all impacted the Peruvian production sequentially.

Speaker #4: Those issues have been addressed. And the affected operations returned to normal run rates. In mining, zinc production reached 79,000 tons, up 18% year over year, with all five mines benefiting from improved ore grades.

Speaker #4: In smelting, zinc metal and oxide sales total $147,000 tons, up year over year, and quarter over quarter. Supported by ongoing operational improvements at our Brazilian smelters, and continued solid performance at Cajamarquilla.

Ignacio Rosado: In smelting, zinc metal and oxide sales totaled 147,000 tons, up year over year and quarter over quarter, supported by ongoing operational improvements at our Brazilian smelters and continued solid performance at Cajamarquilla. The negative free cash flow in the quarter is consistent with our typical Q1 seasonality, reflecting working capital build-up and tax payments. We expect this to unwind over the coming quarters, reinforcing expectations of a strong free cash flow generation in 2026. Let me move to slide number 4 for a closer look at the mining segment.

Speaker #4: The negative free cash flow in the quarter is consistent with our typical first quarter seasonality. Reflecting working capital buildup and tax payments. We expect this to unwind over the coming quarters, reinforcing expectations of strong free cash flow generation in 2026.

Ignacio Rosado: We expect this to unwind over the coming quarters, reinforcing expectations of a strong free cash flow generation in 2026. Let me move to slide number 4 for a closer look at the mining segment. Year-over-year, the 18% increase in zinc production reflects better ore grades across all of our operations. Quarter-over-quarter, the decline was driven by the temporary constraints at the Peruvian mines. Cash costs net of byproducts came in at -$0.76 per pound, well below our 2026 guidance range, driven by stronger by-product credits following from higher zinc, copper, silver, and gold prices. Cost per run of mine was $57 per ton, in line with guidance. The year-over-year increase was driven by the appreciation of the Brazilian real, higher maintenance costs, and higher variable costs in specific operations. The financial picture for the segment is strong.

Speaker #4: Let me move to slide number 4 for a closer look at the mining segment. Year over year, the 18% increase in zinc production reflects better ore grades across all of our operations.

Ignacio Rosado: Year-over-year, the 18% increase in zinc production reflects better ore grades across all of our operations. Quarter-over-quarter, the decline was driven by the temporary constraints at the Peruvian mines. Cash costs net of byproducts came in at -$0.76 per pound, well below our 2026 guidance range, driven by stronger by-product credits following from higher zinc, copper, silver, and gold prices. Cost per run of mine was $57 per ton, in line with guidance.

Speaker #4: Quarter over quarter, the decline was driven by the temporary constraints at the Peruvian mines. Cash cost net of byproducts came in at negative $76 per pound, well below our 2026 guidance range, driven by stronger byproduct credits following from higher zinc, copper, silver, and gold prices.

Speaker #4: Cost per run of mine was $57 per ton, in line with guidance the year over year increase was driven by the appreciation of the Brazilian real, higher maintenance costs, and higher variable costs in a specific operations.

Ignacio Rosado: The year-over-year increase was driven by the appreciation of the Brazilian real, higher maintenance costs, and higher variable costs in specific operations. The financial picture for the segment is strong. Net revenues of $460 million and Adjusted EBITDA of $231 million, translating into a 50% EBITDA margin. The kind of operating leverage we expect when prices and volumes both move in the right direction. On slide number 5, I will talk about Aripuanã. Aripuanã was the standout asset of the quarter.

Speaker #4: The financial picture for the segment is strong. Net revenues of $460 million and adjusted EBITDA of $231 million. Translating into a 50% EBITDA margin.

Ignacio Rosado: Net revenues of $460 million and Adjusted EBITDA of $231 million, translating into a 50% EBITDA margin. The kind of operating leverage we expect when prices and volumes both move in the right direction. On slide number 5, I will talk about Aripuanã. Aripuanã was the standout asset of the quarter. We produced 13,000 tons of zinc, a quarterly record since the operation reached commercial production, supported by higher grades, better plant utilization, and improved operational stability. On the 4th tailings filter, construction and installation were completed in late April. Commissioning started now in early May and is expected to be concluded in Q2. Once fully operational, the filter materially reduces our exposure to weather-driven throughput disruptions during the rainy season. Exploration continued to deliver encouraging results in the quarter.

Speaker #4: The kind of operating leverage we expect when prices and volumes both move in the right direction. On slide number 5, I will talk about Atipona.

Speaker #4: Atipona was the standout asset of the quarter. We produced 13,000 tons of zinc, a quarterly record since the operation reached commercial production supported by higher grades better plant utilization, and improved operational stability.

Ignacio Rosado: We produced 13,000 tons of zinc, a quarterly record since the operation reached commercial production, supported by higher grades, better plant utilization, and improved operational stability. On the 4th tailings filter, construction and installation were completed in late April. Commissioning started now in early May and is expected to be concluded in Q2. Once fully operational, the filter materially reduces our exposure to weather-driven throughput disruptions during the rainy season. Exploration continued to deliver encouraging results in the quarter.

Speaker #4: On the fourth tailings filter, construction and installation were completed in late April. Commissioners started now in early May, and is expected to be concluded in the second quarter.

Speaker #4: Once fully operational, the filter materially reduces our exposure to weather-driven throughput disruptions during the rainy season. Exploration continued to deliver encouraging results in the quarter.

Speaker #4: At Mazarranduba, we hit a 16.6-meter intercept grading 9.6% zinc and 3% lead additional confirmation of the long-term potential of the district. Now to slide number 6 for the Cerro Pasco integration project.

Ignacio Rosado: At Mazarranduva, we hit a 16.6 m intercept, grading 9.6% zinc and 3% lead, additional confirmation of the long-term potential of the district. To slide number 6 for the Cerro Pasco Integration Project. Phase 1 of the Cerro Pasco Integration Project remained firmly on schedule during the quarter. We completed a slope stabilization at the construction site, started civil works and structural assembly of the pump building, and concluded the manufacturing, testing, and packaging of the main equipment, including the thickener and pumps, as you can see in the picture on the bottom of the slide. These are important technical milestones. Looking ahead, we expect civil works to be completed and electromechanical assembly to progress through 2026. Construction is targeted for completion in Q3 of this year, with full project finalization expected in Q4 of this year.

Speaker #4: Phase 1 of the Cerro Pasco integration project remained firmly on schedule during the quarter. We completed a slope stabilization at the construction site, started civil works, and structural assembly of the pump building.

Speaker #4: And concluded the manufacturing testing and packaging of the main equipment. Including the thickener and pumps. As you can see in the picture on the bottom of the slide.

Speaker #4: These are important technical milestones. Looking ahead, we expect civil works to be completed and electromechanical assembly to progress through the 2026. Construction is targeted for completion in the third quarter of this year, with full project finalization expected in the fourth quarter of this year.

Ignacio Rosado: These are important technical milestones. Looking ahead, we expect civil works to be completed and electromechanical assembly to progress through 2026. Construction is targeted for completion in Q3 of this year, with full project finalization expected in Q4 of this year. We begin the operating authorization process, which positions the start of the pumping for Q2 2027. On the broader regulatory front, the 2 MEIA for El Porvenir and the 3 for Atacocha are under evaluation by SENACE. We currently expect both approvals in Q1 2027.

Speaker #4: We then begin the operating authorization process, which positions the start of the pumping for the second quarter of 2027. On the broader regulatory front, the second MEA, for El Porvenir and the third for Atacocha, are under evaluation by SENASF.

Ignacio Rosado: We begin the operating authorization process, which positions the start of the pumping for Q2 2027. On the broader regulatory front, the 2 MEIA for El Porvenir and the 3 for Atacocha are under evaluation by SENACE. We currently expect both approvals in Q1 2027. Preparatory studies for phase 2, including the Picasso shaft assessment, also continued to advance during the quarter. This is one of the most important strategic levers in our portfolio. The integration extends life of mine at the Cerro Pasco complex beyond 15 years, lifts the average NSR of the life of the operation, and consolidates our position in one of Peru's most prospective polymetallic districts. Now, on slide number 7, I will talk about our smelting segment.

Speaker #4: And we currently expect both approvals in the first quarter of 2027. Preparatory studies for phase 2, including the Picasso shaft assessment, also continue to advance during the quarter.

Ignacio Rosado: Preparatory studies for phase 2, including the Picasso shaft assessment, also continued to advance during the quarter. This is one of the most important strategic levers in our portfolio. The integration extends life of mine at the Cerro Pasco complex beyond 15 years, lifts the average NSR of the life of the operation, and consolidates our position in one of Peru's most prospective polymetallic districts. Now, on slide number 7, I will talk about our smelting segment.

Speaker #4: This is one of the most important strategic levers. In our portfolio. The integration extends life of mine at the Cerro Pasco complex beyond 15 years.

Speaker #4: Lifts the average NSR of the life of the operation. And consolidates our position in one of Peru's most prospective polymetallic districts. Now, on slide number 7, I will talk about our smelting segment.

Ignacio Rosado: In smelting, zinc, metal and zinc oxide sales of 147,000 tons were up year-over-year and quarter-over-quarter. The Brazilian units are recovering their production pattern, with Juiz de Fora producing 56% more zinc than in the Q1 of last year, and Tres Marias 17%. Cajamarquilla continued to operate at solid levels. Cash cost net of by-products was $1.40 per pound, slightly above the upper end of our annual guidance, reflecting higher zinc LME prices and lower TC impacting concentrate purchases. We expect this to ease modestly over the next quarters as our Peruvian operations return to normal run rates, reducing third-party concentrate need. Conversion cost was $0.34 per pound, in line with our 2026 guidance.

Speaker #4: In smelting, zinc metal and oxide cells of 147,000 tons were up year over year, and quarter over quarter. The Brazilian units are recovering their production pattern, with USDEFORA A producing 56% more zinc than in the first quarter of last year, and Tres Marias 17%.

Speaker #4: Cajamarquilla continued to operate at solid levels. Cash cost net of byproducts was $1.40 per pound, slightly above the upper end of our annual guidance.

Speaker #4: Reflecting higher zinc LME prices, and lower TCs impacting concentrate purchases. We expect this to ease modestly over the next quarters, as our Peruvian operations return to normal run rates, reducing third-party concentrate need.

Ignacio Rosado: We expect this to ease modestly over the next quarters as our Peruvian operations return to normal run rates, reducing third-party concentrate need. Conversion cost was $0.34 per pound, in line with our 2026 guidance. Starting this quarter, we have expanded our earnings release to include by-product sales performance, sulfuric acid, silver content, and copper cement. As by-products become a more expressive part of segment economics, we want to make those drivers more transparent for the market.

Speaker #4: Conversion cost was $34 per pound in line with our 2026 guidance. Starting this quarter, we have expanded our earnings release to include byproduct sales performance, sulfuric acid, silver content, and copper cement.

Ignacio Rosado: Starting this quarter, we have expanded our earnings release to include by-product sales performance, sulfuric acid, silver content, and copper cement. As by-products become a more expressive part of segment economics, we want to make those drivers more transparent for the market. Net revenues for the segment were $609 million with Adjusted EBITDA of $51 million, an 8% margin. The margin reflects the structural pressure on global smelter economics from very low TCs. With that, I will hand the call over to José Carlos del Valle, our CFO, for the financial review.

Speaker #4: As byproducts become a more expressive part of segment economics, we want to make those drivers more transparent for the market. Net revenues for the segment were $609 million, with adjusted EBITDA of $51 million, an 8% margin.

Ignacio Rosado: Net revenues for the segment were $609 million with Adjusted EBITDA of $51 million, an 8% margin.The margin reflects the structural pressure on global smelter economics from very low TCs. With that, I will hand the call over to José Carlos del Valle, our CFO, for the financial review.

Speaker #4: The margin reflects the structural pressure on global smelter economics from very low TCs. With that, I will hand the call over to José Carlos del Valle, our CFO, for the financial review.

Speaker #5: Thank you, Ignacio, and good morning, everyone. Let's turn to slide number 8 for an overview of our financial performance. We started the year carrying momentum from our fourth quarter of 2025.

José Carlos del Valle: Thank you, Ignacio. Good morning, everyone. Let's turn to slide number 8 for an overview of our financial performance. We started the year carrying momentum from our Q4 of 2025, a favorable price environment combined with stronger operational execution. Net revenues totaled $888 million, up 42% year over year and down 2% sequentially. The year over year increase was driven by higher metal prices across our portfolio, evidencing a $158 million larger by-product contribution and improved performance in both the mining and smelting segments. The sequential decline reflects lower mining sales volumes, partially offset by higher smelting sales and stronger by-product pricing. Adjusted EBITDA came in at $283 million, up 126% year over year, with a margin of 31.8%.

Speaker #5: A favorable price environment combined with stronger operational execution. Net revenues totaled $888 million, up 42% year over year, and down 2% sequentially. The year-over-year increase was driven by higher metal prices across our portfolio, evidencing a 158 million larger byproduct contribution, an improved performance in both the mining and smelting segments.

José Carlos del Valle: The year over year increase was driven by higher metal prices across our portfolio, evidencing a $158 million larger by-product contribution and improved performance in both the mining and smelting segments. The sequential decline reflects lower mining sales volumes, partially offset by higher smelting sales and stronger by-product pricing. Adjusted EBITDA came in at $283 million, up 126% year over year, with a margin of 31.8%.

Speaker #5: The sequential decline reflects lower mining sales volumes, partially offset by higher smelting sales and stronger byproduct pricing. Adjusted EBITDA came in at $283 million.

Speaker #5: Up 126% year over year, with a margin of 31.8%. The year-over-year improvement reflects price realization, operational leverage from higher volumes in both segments, and stronger byproduct credits.

José Carlos del Valle: The year-over-year improvement reflects price realization, operational leverage from higher volumes in both segments, and stronger by-product credits. Sequentially, EBITDA was 6% lower, driven mainly by higher unit costs from increased third-party concentrate consumption required to compensate for the temporarily lower output at our own Peruvian mines this quarter. We expect this to normalize as those operations return to full run rates. Now to investments on slide number 9. We invested $72 million in CapEx during the Q1, about 19% of our full year guidance, in line with a typical 20% to 25% Q1 pace. The bulk went into sustaining activities, mine development, and tailing storage facilities. Phase 1 of the Cerro Pasco Integration Project accounted for $8 million in the quarter versus a $31 million guidance for the full year.

Speaker #5: Sequentially, EBITDA was 6% lower, driven mainly by higher unit costs from increased third-party concentrate consumption, required to compensate for the temporarily lower output at our own Peruvian mines this quarter.

Speaker #5: We expect this to normalize as those operations return to full run rates. Now to investments on slide number 9. We invested $72 million in CapEx during the first quarter, about 19% of our full year guidance, in line with the typical 20 to 25% first quarter pace.

José Carlos del Valle: Now to investments on slide number 9. We invested $72 million in CapEx during the Q1, about 19% of our full year guidance, in line with a typical 20% to 25% Q1 pace. The bulk went into sustaining activities, mine development, and tailing storage facilities. Phase 1 of the Cerro Pasco Integration Project accounted for $8 million in the quarter versus a $31 million guidance for the full year.

Speaker #5: The bulk went into sustaining activities, mine development, and tailing storage facilities. Phase 1 of the Cerro Pasco integration project accounted for $8 million in the quarter, versus a $31 million guidance for the full year.

Speaker #5: We reaffirm our total 2026 CapEx guidance of $381 million. With disbursements weighted toward the back of the year, as project execution intensifies, particularly for Cerro Pasco phase 1.

José Carlos del Valle: We reaffirm our total 2026 CapEx guidance of $381 million, with disbursements weighted toward the back of the year as project execution intensifies, particularly for Cerro Pasco phase 1. On exploration and project evaluation, we invested $60 million in the quarter, mainly in exploration, drilling, and mine development. We also reaffirm our full year guidance of $86 million. With that, let's turn to slide number 10 to review our cash flow for the quarter. Starting with our Adjusted EBIT of $283 million and adjusting for non-operational items, our operating cash flow before working capital was strong at $308 million. From there, $72 million went to CapEx and $81 million went to pay interest and taxes.

Speaker #5: On exploration and project evaluation, we invested $16 million in the quarter, mainly in exploration drilling and mine development. We also reaffirm our full year guidance of $86 million.

Speaker #5: With that, let's turn to slide number 10 to review our cash flow for the quarter. Starting with our adjusted EBITDA of $283 million, and adjusting for non-operational items, our operating cash flow before working capital was strong at $308 million.

Speaker #5: From there, $72 million went to CapEx, and $81 million went to pay interest and taxes. Working capital and other variations were negative, $283 million in the quarter.

José Carlos del Valle: From there, $72 million went to CapEx and $81 million went to pay interest and taxes. Working capital and other variations were -$283 million in the quarter, in line with what we typically see in Q1 of every year. Furthermore, this quarter we made significant tax payments related to the stronger results we had in 2025, paid out annual bonuses, and settled year-end confirming payables across our jurisdictions. As before, we expect this to reverse substantially over the coming quarters, both as part of a natural intra-year seasonality and as we push initiatives to continue to improve our cash conversion cycle.

José Carlos del Valle: Working capital and other variations were -$283 million in the quarter, in line with what we typically see in Q1 of every year. Furthermore, this quarter we made significant tax payments related to the stronger results we had in 2025, paid out annual bonuses, and settled year-end confirming payables across our jurisdictions. As before, we expect this to reverse substantially over the coming quarters, both as part of a natural intra-year seasonality and as we push initiatives to continue to improve our cash conversion cycle. Moving along, we also see that FX added +$6 million. On the financing side, in Brazil, we drew a new $40 million 6-month loan at a very competitive interest rate. This was partially offset by regular debt service and lease payments, resulting in a net cash inflow of $21 million.

Speaker #5: In line with what we typically see in the first quarter of every year. Furthermore, this quarter we made significant tax payments related to the stronger results we had in 2025.

Speaker #5: Paid out annual bonuses and settled year-end confirming payables across our jurisdictions. As before, we expect this to reverse substantially over the coming quarters. Both as part of the natural intra-year seasonality and as we push initiatives to continue to improve our cash conversion cycle.

Speaker #5: Moving along, we also see that foreign exchange added a positive $6 million. And on the financing side, in Brazil, we drew a new $40 million six-month loan at a very competitive interest rate.

José Carlos del Valle: Moving along, we also see that FX added +$6 million. On the financing side, in Brazil, we drew a new $40 million 6-month loan at a very competitive interest rate. This was partially offset by regular debt service and lease payments, resulting in a net cash inflow of $21 million. In addition, we distributed $25 million in dividends to non-controlling interest. With that, free cash flow for the Q closed at -$126 million. Let's move to slide number 11 to discuss liquidity, indebtedness, and credit rating. Our liquidity position remains healthy.

Speaker #5: This was partially offset by regular debt service and lease payments, resulting in a net cash inflow of $21 million. In addition, we distributed $25 million in dividends to non-controlling interest.

José Carlos del Valle: In addition, we distributed $25 million in dividends to non-controlling interest. With that, free cash flow for the Q closed at -$126 million. Let's move to slide number 11 to discuss liquidity, indebtedness, and credit rating. Our liquidity position remains healthy. We ended the Q with $716 million in total liquidity, including the undrawn $320 million sustainability-linked revolving credit facility. As you can see, our cash on hand alone is enough to cover pretty much all financial commitments over the next 4 years. Average debt maturity stood at 7.2 years at Q end, with an average cost of debt of 6.27%, an improvement from the 6.49% at the end of 2025.

Speaker #5: With that, free cash flow for the quarter closed at negative $126 million. Let's move to slide number 11 to discuss liquidity, indebtedness, and credit rating.

Speaker #5: Our liquidity position remains healthy. We ended the quarter with $716 million in total liquidity, including the underwritten $320 million sustainability-linked revolving credit facility. As you can see, our cash on hand alone is enough to cover pretty much all financial commitments over the next four years.

José Carlos del Valle: We ended the Q with $716 million in total liquidity, including the undrawn $320 million sustainability-linked revolving credit facility. As you can see, our cash on hand alone is enough to cover pretty much all financial commitments over the next 4 years. Average debt maturity stood at 7.2 years at Q end, with an average cost of debt of 6.27%, an improvement from the 6.49% at the end of 2025. Net leverage continued to come down at 1.59x versus 1.69x in the prior quarter and 2.09x a year ago. The improvement was driven primarily by stronger last 12 months EBITDA of $929 million.

Speaker #5: Average debt maturity stood at 7.2 years at quarter end, with an average cost of debt of $6.27%. An improvement from the $6.49% at the end of 2025.

Speaker #5: Net leverage continued to come down at 1.59 times, versus 1.69 times in the prior quarter, and 2.09 times a year ago. The improvement was driven primarily by stronger last 12 months EBITDA of $929 million.

José Carlos del Valle: Net leverage continued to come down at 1.59x versus 1.69x in the prior quarter and 2.09x a year ago. The improvement was driven primarily by stronger last 12 months EBITDA of $929 million. Looking ahead, we remain committed to disciplined deleveraging, focusing on reducing gross debt over time, lowering interest expense, and maintaining net leverage below 1.7x throughout 2026 while preserving our investment-grade rating and competitive cost of capital. With that, I'll hand it back to Rodrigo for the market fundamentals section.

Speaker #5: Looking ahead, we remain committed to disciplined deleveraging, time, lowering interest expense, and maintaining net leverage below 1.7 times throughout 2026, while preserving our investment great rating and competitive cost of capital.

José Carlos del Valle: Looking ahead, we remain committed to disciplined deleveraging, focusing on reducing gross debt over time, lowering interest expense, and maintaining net leverage below 1.7x throughout 2026 while preserving our investment-grade rating and competitive cost of capital. With that, I'll hand it back to Rodrigo for the market fundamentals section.

Speaker #5: With that, I'll hand it back to Rodrigo for the market fundamentals section.

Speaker #1: Thank you, Jose Carlos. Turning now to zinc and copper markets on slide number 12. Zinc prices remain supported by persistent concentrate tightness and low LMA refined inventories.

Rodrigo Cammarosano: Thank you, Jose Carlos. Turning now to zinc and copper markets on slide number 12. Zinc prices remain supported by persistent concentrate tightness and low LME refined inventories. The LME zinc price was up 4% during the period, closing at $3,185 per ton. At the same time, smelter margins remain compressed. Spot treatment charges in China, both domestic and imported, continue at historically low levels, which highlights how acute the concentrate shortage is. While key smelting byproducts such as sulfuric acid have provided some partial relief to margins, they have not been sufficient to fully offset the impact of lower TCs. Looking into 2026, we do not expect a material recovery in TCs, particularly given that the annual benchmark has been settled at $85 per ton. As a result, the smelter margins are likely to remain under pressure.

Speaker #1: The LMA zinc price was up 4% during the period, closing at $3,185 per ton. At the same time, smelter margins remain compressed, spot treatment charges in China, both domestic and imported, continue at historically low levels, which highlights how acute the concentrate shortage is.

Speaker #1: While key smelting byproducts, such as sulfuric acid, have provided some partial relief to margins, they have not been sufficient to fully offset the impact of lower TCs.

Rodrigo Cammarosano: While key smelting byproducts such as sulfuric acid have provided some partial relief to margins, they have not been sufficient to fully offset the impact of lower TCs. Looking into 2026, we do not expect a material recovery in TCs, particularly given that the annual benchmark has been settled at $85 per ton. As a result, the smelter margins are likely to remain under pressure. On the price front, zinc should continue to find support from solid fundamentals, including tight concentrate availability, low exchange inventories, and resilient demand from galvanizing and infrastructure-related end users.

Speaker #1: Looking into 2026, we do not expect a material recovery in TCs, particularly given that the annual benchmark has been settled at $85 per ton.

Speaker #1: As a result, smelter margins are likely to remain under pressure. On the price front, zinc should continue to find support from solid fundamentals including tight concentrate availability, low exchange inventories, and resilient demand from galvanizing and infrastructure-related end uses.

Rodrigo Cammarosano: On the price front, zinc should continue to find support from solid fundamentals, including tight concentrate availability, low exchange inventories, and resilient demand from galvanizing and infrastructure-related end users. On copper, supply fundamentals remain tight with ongoing concentrate scarcity and negative spot TC and RCs. Copper price presented some short-term volatility in the quarter linked to trade policies and inventory dynamics, but a structural setup remains constructive over the medium to long term, supported by bullish demand expectations. Let's turn to slide number 13 for a look at precious metals. Silver prices reached multi-year high during the quarter, briefly trading above $120 per ounce before retracting. The fundamentals continue to be supportive. A sixth consecutive year of structural deficit combined with strong industrial demand from solar PV, electric vehicles, AI infrastructure, and data center build-out.

Rodrigo Cammarosano: On copper, supply fundamentals remain tight with ongoing concentrate scarcity and negative spot TC and RCs. Copper price presented some short-term volatility in the quarter linked to trade policies and inventory dynamics, but a structural setup remains constructive over the medium to long term, supported by bullish demand expectations. Let's turn to slide number 13 for a look at precious metals. Silver prices reached multi-year high during the quarter, briefly trading above $120 per ounce before retracting.

Speaker #1: On copper, supply fundamentals remain tight, with ongoing concentrate scarcity and negative spot TC and RCs. Copper price presented some short-term volatility in the quarter, linked to trade policies and inventory dynamics, but a structural setup remains constructive over the medium to long term, supported by bullish demand expectations.

Speaker #1: Now, let's turn to slide number 13 for a look at precious metals. Silver prices reached multi-year high during the quarter, briefly trading above $120 per ounce, before retracting.

Rodrigo Cammarosano: The fundamentals continue to be supportive. A sixth consecutive year of structural deficit combined with strong industrial demand from solar PV, electric vehicles, AI infrastructure, and data center build-out. This carries greater significance for Nexa as we produce roughly 11 million ounces of silver per year, making us a meaningful player in the global silver market. Furthermore, in April, we reached a delivery threshold under our Cerro Lindo silver streaming agreement.

Speaker #1: The fundamentals continue to be supportive. A sixth consecutive year of structural deficit combined with strong industrial demand from solar PV, electric vehicles, AI infrastructure, and data center buildouts.

Rodrigo Cammarosano: This carries greater significance for Nexa as we produce roughly 11 million ounces of silver per year, making us a meaningful player in the global silver market. Furthermore, in April, we reached a delivery threshold under our Cerro Lindo silver streaming agreement. As a result, the streamed share of Cerro Lindo production stepped down from 65% to 25%, with the remaining 75% now to be sold at prevailing market price. At current silver levels, this represent an important recurring additional contribution to our cash generation from the Q2 onward. Gold prices also remain well-supported through the quarter, driven by safe haven flows, sustained central bank purchases, a weaker US dollar, and elevated geopolitical uncertainty. Looking ahead, both metals should continue to contribute strongly to our cash generation and to provide diversification and countercyclical support to our polymetallic portfolio.

Speaker #1: This carries greater significance for NASA, as we produce roughly $11 million ounces of silver per year, making us a meaningful player in the global silver market.

Speaker #1: Furthermore, in April, we reached a delivered threshold under our Cerro Lindo silver streaming agreement. As a result, the streamed share of Cerro Lindo's production stepped down from 65 to 25%, with the remaining 75% now to be sold at prevailing market prices.

Rodrigo Cammarosano: As a result, the streamed share of Cerro Lindo production stepped down from 65% to 25%, with the remaining 75% now to be sold at prevailing market price. At current silver levels, this represent an important recurring additional contribution to our cash generation from the Q2 onward. Gold prices also remain well-supported through the quarter, driven by safe haven flows, sustained central bank purchases, a weaker US dollar, and elevated geopolitical uncertainty.

Speaker #1: At currently silver levels, this represents an important recurring additional contribution to our cash generation from the second cart Walmart. Gold prices also remain well supported through the quarter, driven by safe-haven flows, sustained central bank purchases, a weaker US dollar, and elevated geopolitical uncertainty.

Speaker #1: Looking ahead, both metals should continue to contribute strongly to our cash generation and to provide diversification and counter-cyclical support to our polymetallic portfolio. Now, on slide 14 on ESG, we have made progress across our main priorities during the quarter.

Rodrigo Cammarosano: Looking ahead, both metals should continue to contribute strongly to our cash generation and to provide diversification and countercyclical support to our polymetallic portfolio. Now on slide 14, on ESG, we have made progress across our main priorities on the quarter.

Rodrigo Cammarosano: Now on slide 14, on ESG, we have made progress across our main priorities on the quarter. We expanded community and inclusion programs in Brazil and Peru, advanced education and infrastructure projects with local communities near Cajamarquilla and Aripuanã, and continued our operational efficiency and low carbon initiatives across the operations, including a backfill optimization project at Cerro Lindo that delivered meaningful reductions in cement and water consumption. We also strengthened HSEC and ESG governance, including leadership-level engagement, and continued progress on environmental permitting at our Peruvian assets. Finally, in late April, we published our 2025 Annual Sustainability Report, our most comprehensive disclosure to date on environmental, social, and governance performance. It is available on our investor relations website. With that, I will hand it back to Ignacio for the closing remarks.

Rodrigo Cammarosano: We expanded community and inclusion programs in Brazil and Peru, advanced education and infrastructure projects with local communities near Cajamarquilla and Aripuanã, and continued our operational efficiency and low carbon initiatives across the operations, including a backfill optimization project at Cerro Lindo that delivered meaningful reductions in cement and water consumption. We also strengthened HSEC and ESG governance, including leadership-level engagement, and continued progress on environmental permitting at our Peruvian assets.

Speaker #1: We expanded community and inclusion programs in Brazil and Peru, advanced education and infrastructure projects with local communities near Cajamarquilla and Aripuana, and continued our cooperation on efficiency and low-carbon initiatives across the operations, including a backfill optimization project at Cerro Lindo that delivered meaningful reductions in cement and water consumption.

Speaker #1: We also strengthened HS&E and ESG governance, including leadership-level engagement, and continued progress on environmental permitting at our Peruvian assets. Finally, in late April, we published our 2025 annual sustainability report—our most comprehensive disclosure to date—on environmental, social, and governance performance, which is available on our Investor Relations website.

Rodrigo Cammarosano: Finally, in late April, we published our 2025 Annual Sustainability Report, our most comprehensive disclosure to date on environmental, social, and governance performance. It is available on our investor relations website. With that, I will hand it back to Ignacio for the closing remarks.

Speaker #1: With that, I will hand it back to Inasu for the closing remarks.

Speaker #2: Thank you, Rodrigo. Before we open for questions, let me close on slide number 15 with a quick recap of our priorities and key business drivers.

Ignacio Rosado: Thank you, Rodrigo. Before we open for questions, let me close on slide number 15 with a quick recap of our priorities and key business drivers. First, Aripuanã. The fourth filter commissioning is being completed this month, which positions us to reach full production capacity in H2 2026. Combined with our long reserve life, the asset is one of the central pillars of our long-term cash flow generation. Second, Cerro Pasco integration. Phase 1 is on schedule for project finalization in Q4, setting up the start of pumping in Q2 2027. The project extends the life of the mine beyond 15 years and improve the profitability of the complex. Third, exploration. The 2025 reserve update extended life of mine across all of our operations. We are not just replacing depletion, we are growing the reserve and resource base.

Speaker #2: First, Aripuana. The fourth filter commissioning is being completed this month. With positions asked to reach full production capacity in the second half of 2026.

Speaker #2: Combined with our long reserve life, the asset is one of the central pillars of our long-term cash flow generation. Second, Cerro Pasco integration. Phase one is on schedule for project finalization in the fourth quarter.

Speaker #2: Setting up the start of pumping in the second quarter of 2027. The project extends the life of the mine beyond 15 years, and improves the profitability of the complex.

Ignacio Rosado: The project extends the life of the mine beyond 15 years and improve the profitability of the complex. Third, exploration. The 2025 reserve update extended life of mine across all of our operations. We are not just replacing depletion, we are growing the reserve and resource base. This year, on back of strong drilling results, we have revised our 2026 program upwards to nearly 67,000 meters, about 12% above the original plan, with the increase concentrated at the Cerro Pasco complex and other exploration projects.

Speaker #2: Third, exploration. The 2025 reserve update extended life of mine across all of our operations. We are not just replacing depletion; we are growing the reserve and resource base.

Speaker #2: And this year, on back of a strong drilling results, we have revised our 2026 program upwards. To nearly 67,000 meters. About 12% above the original plan.

Ignacio Rosado: This year, on back of strong drilling results, we have revised our 2026 program upwards to nearly 67,000 meters, about 12% above the original plan, with the increase concentrated at the Cerro Pasco complex and other exploration projects. Fourth, growth. We continue to evaluate value-accretive opportunities in mining-friendly jurisdictions. Underlying all of this is a consistent set of priorities: financial and operational discipline, a stronger balance sheet, balanced capital allocation that includes shareholders' returns, and an active ESG strategy. Most importantly, our absolute commitment to safety for our people and our communities. Before we move to questions, I would like to take a moment to recognize Mauro Boletta, our Senior Vice President of Smelting and Commercial, who is retiring at the end of this month after more than 40 years with the Votorantim Group.

Speaker #2: With the increased concentrated at the Cerro Pasco complex and other exploration projects. Fourth, growth. We continue to evaluate value-accretive opportunities in mining-friendly jurisdictions. Underlying all of this is a consistent set of priorities.

Ignacio Rosado: Fourth, growth. We continue to evaluate value-accretive opportunities in mining-friendly jurisdictions. Underlying all of this is a consistent set of priorities: financial and operational discipline, a stronger balance sheet, balanced capital allocation that includes shareholders' returns, and an active ESG strategy. Most importantly, our absolute commitment to safety for our people and our communities.

Speaker #2: Financial and operational discipline, a stronger balance sheet, balanced capital allocation that includes shareholders' returns, and an active ESG strategy. And most importantly, our absolute commitment to safety for our people and our communities.

Speaker #2: Before we move to questions, I would like to take a moment to recognize Mauro Boleta, our Senior Vice President of Smelting and Commercial. Who is retiring at the end of this month after more than 40 years with the Votorantim Group.

Ignacio Rosado: Before we move to questions, I would like to take a moment to recognize Mauro Boletta, our Senior Vice President of Smelting and Commercial, who is retiring at the end of this month after more than 40 years with the Votorantim Group. Mauro has been instrumental in shaping our smelting and commercial operations.

Speaker #2: Mauro has been instrumental in shaping our smelting and commercial operations, and, on behalf of the entire NEXA team, I want to thank him for his contribution and wish him the very best.

Ignacio Rosado: Mauro has been instrumental in shaping our smelting and commercial operations. On behalf of the entire Nexa team, I want to thank him for his contribution and wish him the very best. With the Q1 Peruvian constraints behind us, the Aripuanã filter commission underway, and the Cerro Lindo silver streaming transition now in effect, we are entering the rest of the year with a strong momentum and a clear set of priorities. With that, let's open the line for questions.

Ignacio Rosado: On behalf of the entire Nexa team, I want to thank him for his contribution and wish him the very best. With the Q1 Peruvian constraints behind us, the Aripuanã filter commission underway, and the Cerro Lindo silver streaming transition now in effect, we are entering the rest of the year with a strong momentum and a clear set of priorities. With that, let's open the line for questions.

Speaker #2: With the first quarter Peruvian constraints behind us, the Aripuana filter commission is underway, and the Cerro Lindo silver streaming transition now in effect, we are entering the rest of the year with a strong momentum and a clear set of priorities.

Speaker #2: With that, let's open the line for questions.

Operator 2: Thank you. We will now begin the question-and-answer 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 at the bottom of the screen. Please include your name and company when typing 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. The first question comes from Pedro Melo with Citi. Please go ahead.

Operator: Thank you. We will now begin the question-and-answer 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 at the bottom of the screen. Please include your name and company when typing 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. The first question comes from Pedro Melo with Citi. Please go ahead.

Speaker #3: Thank you. We will now begin the question-and-answer session. To ask a question, if you are joining via Zoom, please click the Raise Hand button.

Speaker #3: You may also submit your question using the Q&A icon at the bottom of the screen. Please include your name and company when typing your question.

Speaker #3: For participants joining by phone, press star followed by 9 to raise or lower your hand. Once announced, press star followed by 6 to mute or unmute your microphone.

Speaker #3: The first question comes from Pedro Mello, with Citi. Please go ahead.

Pedro Melo: Good morning to you, Amos.

Speaker #4: Good morning to James.

Ignacio Rosado: Morning.

Speaker #5: Good morning.

Rodrigo Cammarosano: Morning. We can hear you, Pedro.

Speaker #6: Morning. We can hear you, Pedro.

Speaker #4: Okay. Thank you. My first question is regarding Cerro Pasco integration project. So phase one of the project remains on shadow with tails pumping started smelted for to quilt 27.

Pedro Melo: Okay. Thank you. My first question is regarding Cerro Pasco Integration Project. Phase 1 of the project remains on schedule, with tails pumping study start estimated for Q2 2027. However, the two environmental approvals for El Porvenir and Atacocha are only expected for Q1 next year, leaving a very tight window. My question is: What are the key execution and permitting risks that could delay the Q2 2027 start? Regarding phase 2, when do you expect to have a clear investment decision on the Picasso shafts and underground integration alternatives? This is the first one. The second one relates to smelting segments, where we saw a great improve of results.

Speaker #4: However, the two environmental approvals for El Provenir and Atacocha are only expected for next year's first quilt leaving a very tight window. So my question is, what are the key execution and permitting risks that could delay the two key quilts 27 start?

Speaker #4: And regarding phase two, when do you expect to have a clear investment decision on the Picasso shafts and underground integration alternatives? So this is the first one.

Speaker #4: And the second one relates to smelting segments, where we saw a great improvement of results. So could you give us more clarity on what to expect in terms of drivers for this segment's results in the next quarters, and why?

Pedro Melo: The second one relates to smelting segments, where we saw a great improve of results. Could you give us more color in what to expect in terms of driver for this segment results in the next quarters, and why? If we should expect this level of expenditure to $50 million per quarter. Go ahead. Thank you.

Pedro Melo: Could you give us more color in what to expect in terms of driver for this segment results in the next quarters, and why? If we should expect this level of expenditure to $50 million per quarter. Go ahead. Thank you.

Speaker #4: And if we should expect this level of it by near to 50 million per quarter, go ahead. Thank you.

Speaker #5: Okay. No, thank you for the questions. Regarding Cerro Pasco, what we said is the pumping system is going to finish this year. So December this year, the pumping will be up and operational.

Ignacio Rosado: Okay. No, thank you for the questions. Regarding Cerro Pasco, what we said is the pumping system is gonna finish this year. December this year, the pumping will be up and operational. The permits, the modification on the environmental impact studies for Atacocha and El Porvenir will be ready in H1 of next year. Okay? There is gonna be an overlap. What is key here is that we have more than 1 year of life of mine of our tailings capacity. We keep track of the permits permanently, and we are very confident that the permits are gonna come in Q1 of next year. Given that we finish the construction and we have this cushion on capacity, it shouldn't be a problem for us to continue operating El Porvenir and Atacocha. Okay?

Speaker #5: And the permits that the modification on the environmental impact studies for Atacocha and El Porvenir will be ready in the first half of next year.

Speaker #5: Okay? So there is going to be an overlap, and what is key here is that we have more than a year of life of mine of our tailings capacity.

Speaker #5: So we keep track of the permits, permanently, and we are very confident that the permits are going to come in the first quarter of next year.

Speaker #5: And given that we finished the construction and we have this cushion on capacity, it shouldn't be a problem for us to continue operating El Porvenir and Atacocha.

Ignacio Rosado: Given that we finish the construction and we have this cushion on capacity, it shouldn't be a problem for us to continue operating El Porvenir and Atacocha. Okay? We don't see any issues in that regard. Regarding smelting, it's a very important question because what happened last year is that we have some problems in with the operational problems in Juiz de Fora and in Tres Marias in Brazil that impacted their production. We started an assessment and a fast-track improvement on operations during the last Q of last year.

Speaker #5: Okay? So we don't see any issues in that regard. Regarding smelting, it's a very important question because what happened last year is that we have some problems in the operational problems in the fora and in Tres Marias, in Brazil.

Ignacio Rosado: We don't see any issues in that regard. Regarding smelting, it's a very important question because what happened last year is that we have some problems in with the operational problems in Juiz de Fora and in Tres Marias in Brazil that impacted their production. We started an assessment and a fast-track improvement on operations during the last Q of last year. Now, we are producing more because recoveries are high, because we're making sure that this, all these bottlenecks in the operation are being taken care of. The operation is gonna evolve in the next 3 quarters, probably a little bit better than what we had in Q1.

Speaker #5: That impacted their production. We started an assessment and a fast-track improvement on operations during the last quarter of last year. And now we are producing more because recoveries are high, because we're making sure that all these bottlenecks in the operation are being taken care of.

Ignacio Rosado: Now, we are producing more because recoveries are high, because we're making sure that this, all these bottlenecks in the operation are being taken care of. The operation is gonna evolve in the next 3 quarters, probably a little bit better than what we had in Q1. We believe that this is a continuous improvement to come back to KPIs, operational KPIs that we had in 2024 and 2023. Having said that, it's important to mention that all smelters, Cajamarquilla is performing really well.

Speaker #5: So the operation is going to evolve in the next three quarters. Probably a little bit better than what we had in the first quarter.

Speaker #5: So we believe that this is a continuous improvement to come back to KPIs, operational KPIs that we had in 2024 and 2023. Having said that, it's important to mention that all smelters Cajamarquilla is performing really, really well.

Ignacio Rosado: We believe that this is a continuous improvement to come back to KPIs, operational KPIs that we had in 2024 and 2023. Having said that, it's important to mention that all smelters, Cajamarquilla is performing really well. As we were saying in the call, and I think in our press release, all of our smelters are facing a profitability problems in terms of the TC, you know. China is demanding a lot of concentrates. Even if we are improving operations, negative TCs or very low TCs are affecting all of our operations. Which, and this is very important for us as well, is being compensated by by-products, no. The sulfuric acid market is very tight today.

Speaker #5: But as we were saying in the call, and I think in our press release, all of our smelters are facing a profitability performance in terms of the TCs.

Ignacio Rosado: As we were saying in the call, and I think in our press release, all of our smelters are facing a profitability problems in terms of the TC, you know. China is demanding a lot of concentrates. Even if we are improving operations, negative TCs or very low TCs are affecting all of our operations. Which, and this is very important for us as well, is being compensated by by-products, no. The sulfuric acid market is very tight today.

Speaker #5: China is demanding a lot of concentrates. And even if we are improving operations, negative TCs or very low TCs are affecting all of our operations.

Speaker #5: Which, and this is very important for us as well, is being compensated by products. The sulfuric acid market is very tight today. We are in a very good position for our production.

Ignacio Rosado: We are in a very good position for our production, especially for 2027, because 2026 has already been sold a high part, and we close our spot sale in a very, very important terms. Silver and copper, no. This by-products more than offset the problem that we have in the TC front. We, it's difficult to see how the smelting market is going to perform in 2027 or in the next few months, because I believe that profitability drivers are going to change. In any case, what we can be focused is only on operational improvements that are happening.

Speaker #5: Especially for '27, because '26 is already being sold at a high part. And we closed a spot sale on very, very important terms. And silver and copper.

Speaker #5: So this byproducts more than offset the problem that we have in the TC front. We it's difficult to see how the smelting market is going to perform in 2027 or in the next few months.

Speaker #5: Because I believe that profitability drivers are going to change. But in any case, what we can be focused is only on operational improvements that are happening and as I was saying, the second quarter is going to be better than the first one.

Ignacio Rosado: As I was saying, Q2 is going to be better than Q1, we will come back to normal levels, the ones that you have been seeing in 2024. Okay?

Speaker #5: And we will come back to normal levels the ones that you have been seeing in 2024. Okay?

Speaker #4: Thank you.

Pedro Melo: Thank you.

Operator 2: Our next question comes from Sathish Kasinathan with Bank of America. Please go ahead.

Operator: Our next question comes from Sathish Kasinathan with Bank of America. Please go ahead.

Speaker #3: Our next question comes from Satish Kazinatan, with Bank of America. Please go ahead.

Ignacio Rosado: Hi, Sathish. We cannot hear you. It's still, we still cannot hear you, Sathish. I saw that you unmute your microphone, but we are not able to hear you.

Speaker #5: Hi, Satish. We cannot hear you. It's still we still cannot hear you, Satish. I saw that you unmute your microphone, but we are not able to hear you.

Operator 2: It seems that Sathish is having some technical problems. Once again, if you would like to ask a question, please click raise hand button at the bottom of the screen. If you are joining via Zoom, click the Raise button. If you may also submit your question using the Q&A icon at the bottom of the screen, please include your name and company when typing 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. Our next question comes from Adam Smiransky. Please go ahead.

Operator: It seems that Sathish is having some technical problems. Once again, if you would like to ask a question, please click raise hand button at the bottom of the screen. If you are joining via Zoom, click the Raise button. If you may also submit your question using the Q&A icon at the bottom of the screen, please include your name and company when typing 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. Our next question comes from Adam Smiransky. Please go ahead.

Speaker #6: It seems that Satish is having some technical problems. Once again, if you would like to ask a question, please click raise hand button at the bottom of the screen.

Speaker #6: If you are joining via Zoom, click the raise button. If you may also submit your question using the Q&A icon at the bottom of the screen, please include your name and company when typing your question.

Speaker #6: For participants joining by phone, press star followed by 9 to raise or lower your hand. Once announced, press star followed by 6 to mute or unmute your microphone.

Speaker #3: Our next question comes from Adam Smierowski. Please go ahead.

Adam Smiransky: Hi.

Adam Smiarowski: Hi. With- silver stream at Cerro Lindo. Sorry, can you hear me now?

Speaker #7: Hi. With the silver stream at Cerro Lindo—sorry, can you hear me now?

Adam Smiransky: With-

Adam Smiransky: silver stream at Cerro Lindo. Sorry, can you hear me now?

Rodrigo Cammarosano: Yes.

Speaker #4: Yes.

Rodrigo Cammarosano: Perfect. Yeah, perfect.

Speaker #5: Perfect. Yeah. Perfect.

Speaker #7: Okay. Perfect. Thank you. Okay. The lower silver stream at Cerro Lindo. I was just going to see maybe how some of that extra revenue is going to be reinvested, whether you're looking at capital returns or M&A or other sort of changes in capital allocation.

Adam Smiransky: Perfect. Thank you. The lower silver stream at Cerro Lindo, I was just going to see maybe how some of that extra revenue is going to be reinvested, whether you're looking at capital returns or M&A or other sort of changes in capital allocation. Are you able to comment on that?

Adam Smiarowski: Perfect. Thank you. The lower silver stream at Cerro Lindo, I was just going to see maybe how some of that extra revenue is going to be reinvested, whether you're looking at capital returns or M&A or other sort of changes in capital allocation. Are you able to comment on that?

Speaker #7: Are you able to comment on that?

Speaker #4: Thank you for the question. To give some context, as you rightly mentioned, starting in the second quarter, we will begin to see the impact of the step-down in the silver stream.

José Carlos del Valle: Thank you for the question. To give some context, as you rightly mentioned, starting in the second quarter, we will begin to see the impact of the step down in the silver stream, which is going from 65% to 25% of the Cerro Lindo production. To give you a sense of the impact, this is assuming Cerro Lindo produces, I would say, 3.6 million ounces per year. At current prices, that's about $100 million more per year of cash generation, just to give you a sense of the magnitude of the impact. Having said that, this does not change our capital allocation strategy.

Speaker #4: Which is going from 65% to 25% of the Cerro Lindo production. And to give you a sense of the impact, this is assuming Cerro Lindo produces I would say 3.6 million ounces per year.

Speaker #4: At current prices, that's about 100 million dollars more per year of cash generation. Just to give you a sense of the magnitude of the impact.

Speaker #4: Having said that, this does not change our capital allocation strategy. As we have mentioned a number of times, our key goal is to reduce our gross debt so this will help us to accelerate that process.

José Carlos del Valle: As we have mentioned a number of times, our key goal is to reduce our gross debt, so this will help us to accelerate that process. The idea is that any excess cash that we generate in this favorable price scenario will allow us to do this in a faster timeframe. This is consistent with our overall strategy that we have been communicating to the market in the past, and there's no change to that.

Speaker #4: And the idea is that any excess cash that we generate in this favorable price scenario will allow us to do this in a faster time frame.

Speaker #4: So this is consistent with our overall strategy that we have been communicating to the market in the past. And there's no change to that.

Adam Smiransky: No changes there. Okay. Thank you very much.

Adam Smiarowski: No changes there. Okay. Thank you very much.

Speaker #7: No changes there. Okay. Thank you very much.

Operator 2: Our next question comes from Péter Varga with AAM. Please go ahead.

Operator: Our next question comes from Péter Varga with AAM. Please go ahead.

Speaker #3: Our next question comes from Peter Varga. With AAM, please go ahead.

Speaker #8: Hello. Can you hear me? Yeah. Okay. Hi. Thank you very much for the presentation. A couple of questions. Do you have an explicit leverage target do you want to reach and over what time frame?

Péter Varga: Hello, can you hear me?

Ignacio Rosado: Yeah, we can hear you.

Péter Varga: Oh. Yeah, okay. Hi. Thank you very much for the presentation. A couple of questions. Do you have an explicit leverage target you want to reach and over what timeframe? Also would like to ask your CapEx plan and maintenance and extension CapEx in details for the coming quarters and how that can be influenced by smelting margins and tin prices and basically, and metal prices.

Speaker #8: And also would like to ask your CapEx plan and maintenance and expansion CapEx in details for the coming quarters. And how that can be influenced by smelting margins and think prices and basically end metal prices.

Speaker #4: Yes. Our capital allocation strategy has not changed. Despite the silver streaming step-down. In terms of CapEx, we are reaffirming our guidance. So the fact that we are generating higher cash flow in this favorable price scenario is not going to change that.

José Carlos del Valle: Yes. Our capital allocation strategy has not changed despite the silver streaming step down. In terms of CapEx, we are reaffirming our guidance. You know, the fact that we are generating higher cash flow in this favorable price scenario is not going to change that. That's something to keep in mind. In terms of leverage, as we have mentioned before, well, we want is to have the flexibility so that we can go through different cycles. Part of the strategy of reducing the debt on one hand is to reduce interest expense, which is high for a company of the size of Nexa.

Speaker #4: So that's something to keep in mind. And in terms of leverage, as we have mentioned before, well, we want this to have the flexibility so that we can go through a different cycles.

Speaker #4: So part of the strategy of reducing the debt on one hand is to reduce interest expense, which is high for a company of the size of Nexa.

Speaker #4: But we want to have this financial flexibility because prices can change, and we want to have that additional buffer. We don't know how fast we will be able to do this because we don't control prices.

José Carlos del Valle: We want to have this financial flexibility, because, you know, prices can change, and we want to have that additional buffer. We don't know how fast we will be able to do this because we don't control prices. We are certainly optimistic in this price scenario that we will be able to achieve this faster. I would say that, you know, reaching an overall net leverage of 1x would give us a lot of comfort, so that we would have that buffer to go through to the different cycles. It will depend again on prices, but we are, you know, confident that we will look to accelerate this, with this stable production performance that we're having and with this supportive prices that we're seeing.

Speaker #4: But we are certainly optimistic in this price scenario that we will be able to achieve this faster. I would say that reaching an overall net leverage of one time would give us a lot of comfort so that we would have that buffer to go through the different cycles.

Speaker #4: So it will depend again on prices, but we are confident that we will be able to accelerate this with this stable production performance that we're having and with the supportive prices that we're seeing.

Péter Varga: Okay. Thank you very much. Also probably one question. We have seen some market rumors that your parent is looking to divest the company, and there were rumors that some European buyers are around. Can you comment on this, please?

Speaker #8: Okay, thank you very much. And also, probably one question—I have seen some market rumors that your parent is looking to divest the company, and there were rumors that some European buyers are around.

Speaker #8: Can you comment on this, please?

Speaker #5: Yeah. I mean, we have rumors all the weeks, every week. And actually, we don't comment on rumors. What I can emphasize is that we are very active on looking for opportunities to grow Nexa.

José Carlos del Valle: Yeah. I mean, we have rumors all the weeks, every week. Actually we don't comment on rumors. What I can emphasize is that we are very active on looking for opportunities to grow Nexa. We have a very dedicated team to make sure that we grow the company, not only in reserves and resources that we are being very successful, but also on opportunities that are in the market, especially in copper.

Speaker #5: And we have a very dedicated team to make sure that we grow the company. Not only in research and resources that we are being very successful, but also on opportunities that are in the market, especially in copper.

Speaker #8: So that means that you are looking for M&A. But I mean, you already mentioned your net leverage goal. I mean, this one times to reach over time, you mentioned.

Péter Varga: That means that you're looking for M&A, but I mean, you already mentioned your net leverage goal. I mean, this 1x to reach over time you mentioned, but how can fit that M&A goal into the deleveraging goal? I mean, you want to finance that probably issuing new shares or what kind of financing can we expect if there's an M&A?

Speaker #8: But how can fit that M&A goal into the deliverage goal? I mean, you want to finance that probably issuing new shares. Or what kind of financing can we expect if there's an M&A?

Speaker #5: Yeah. With this pricing environment, as Jose Carlos was saying and some internal action that are happening, which is the Cerro Lindo stream, we might expedite reducing the debt at the level that we are comfortable.

José Carlos del Valle: Yeah. With this pricing environment, as José Carlo was saying and some internal actions that are happening, which is the Cerro Lindo stream.

Ignacio Rosado: Yeah. With this pricing environment, as José Carlo was saying and some internal actions that are happening, which is the Cerro Lindo stream.

Ignacio Rosado: We might expedite reducing the debt at the level that we are comfortable. In the interim, the strategy is gonna be looking for these accretive opportunities in the market. The timing depends on how much we reduce the debt and how fast and how what opportunities we find in the market. We keep track. We have in our radar a lot of opportunities. It's a difficult market today because it's very expensive. I would say it will be a combination of reducing the debt and making sure that we can use our balance sheet, mainly our balance sheet, to start looking for these opportunities. Given that could be an overlap, we are, we have to be creative, and we have been doing that.

Speaker #5: And in the interim, the strategy is going to be looking for this accretive opportunities in the market. The timing depends on how much we reduce the debt.

Speaker #5: And how fast. And how—what opportunities we find in the market. We keep track. We have on our radar a lot of opportunities. It's a difficult market today because it's very expensive.

Speaker #5: So I would say it will be a combination of reducing the debt and making sure that we can use our balance sheet, mainly our balance sheet, to start looking for these opportunities.

Speaker #5: And given that could be an overlap, we are we have to be creative. And we have been doing that. So I believe that it could be done.

Ignacio Rosado: I believe that it could be done, and we'll see what happens in the coming months.

Speaker #5: And we'll see what happens in the coming months.

Speaker #8: Okay. Thank you. And probably the last question. What do you expect from the new Peruvian government? I mean, we have heard some I mean, it depends which party or which president will be at the end.

Péter Varga: Okay. Thank you. Probably the last question. What do you expect from the new Peruvian government? I mean, we have heard some. I mean, it depends which party or which president we will be at the end. How do you expect the licensing, and especially the environmental licensing, for the operations going forward? I mean, do you have any view how a left-wing presidency can affect operation? Then do you have any plans for that scenario?

Speaker #8: But how do you expect the licensing, and especially the environmental licensing, for the operations? Going forward, I mean, do you have any view on how a left-wing presidency can affect the operation?

Speaker #8: And then do you have any plans for that scenario?

Speaker #5: Yeah. I guess it's early days. We are not even in the second round today. And they're still debating who is going to go. With the Fujimori party to the second round.

Ignacio Rosado: Yeah. I guess it's early days. We're not even in the second round today, and they're still debating who's gonna go with the Fujimori party to the second round. In any case, the way we see it is that we were already exposed to President Castillo. I think they realize that two things. One is that the central bank is independent, and changing that, you will need to change the constitution. To change the constitution you will have to go to the Diputados' camera and Senadores' camera, and it's gonna be very difficult for them to approve any change. This is a lockup that we have.

Speaker #5: But in any case, the way we see it is that we were already exposed to President Castillo. And I think they realize that two things.

Speaker #5: One is that the central bank is independent. And changing that, you will need to change the constitution. And to change the constitution, you will have to go to the diputados camera.

Speaker #5: And Senators' camera, and it's going to be very difficult for them to approve any change. So this is a lockup that we have. So, the economy—and if you see that—the political noise is very difficult to affect the economy.

Ignacio Rosado: The economy, you see that the political noise is very difficult to affect the economy. That's one thing. The second one that is very important is that any president, regardless of their views on how they manage the country, starts to know that most of the income that comes through taxes are from the mining sector. If they really want to finance some, let's say projects or activities or actions that are against the mining sector, they will start losing this income, and they cannot afford to this happen to Castillo.

Speaker #5: That's one thing. The second one, that is very important, is that any president, regardless of their views on how they manage the country, start to know that most of the income that comes through taxes are from the mining sector.

Speaker #5: So if they really want to finance some let's say projects or activities or actions that are against the mining sector, they will start losing this income.

Speaker #5: And they cannot afford to do that. This happened to Castillo. So the Ministry of Finance or the Ministry of Economy is very robust in that regard.

Ignacio Rosado: The Ministry of Finance or the Ministry of Economy is very robust in that regard, and it is very clear that if income comes down, they won't have anything to do different actions that differ from making sure that the country is growing. Okay. That's the second one. The last one is that we mining companies are used to this, these sort of situations. The most important part here is that you have good relations with your communities. Having good relations with them means that you have good agreements that benefit them, that benefit you, that are long-term, and that create an economic scenario for the two of us that is not affected by that political environment. We don't see. This has been the case for the last years, you know.

Speaker #5: And it's very clear that if income comes down, they won't have anything to do different actions that differ from making sure that the country is growing.

Speaker #5: Okay? So that's the second one. And the last one, is that we mining companies are used to this sort of situations. And the most important part here is that you have good relations with your communities.

Speaker #5: So having good relations with them means that you have good agreements that benefit them, that benefit you, that are long-term. And that create an economic scenario for the two of us that is not affected by that political environment.

Speaker #5: So we don't see this has been the case for the last years. Many presidents have been in pitch which is a shame for Peruvians, for we Peruvians.

Ignacio Rosado: Many presidents have been impeached, which is a shame for Peruvians, for we Peruvians. If you can see that and you can see there is no link to the economic performance of the country, you can see that the mining sector managing communities effectively, it won't be affected that much by this noise in the political arena. Okay? That's more or less where we are. We'll see what happens. We have to be prepared to any scenario, and this has been the case for many years.

Speaker #5: But if you can see that, and you can see that there is no link to the economic performance of the country, you can see that the mining sector managing communities effectively won't be affected that much by this noise in the political arena.

Speaker #5: Okay, so that's more or less where we are. We'll see what happens, and we have to be prepared for any scenario. This has been the case for many years.

Péter Varga: Okay. Thank you.

Speaker #8: Okay. Thank you.

Operator 2: Now I would like to turn the call over to the company for the written questions. Please go ahead.

Operator: Now I would like to turn the call over to the company for the written questions. Please go ahead.

Speaker #2: Now I would like to turn the call over to the company for the written questions. Please go ahead.

Speaker #9: Thank you, operator. We have one question from the audience. The question is, is there any estimated date for a construction decision for the stage two or phase two of the Cerro de Paz integration project?

Rodrigo Cammarosano: Thank you, operator. We have 1 question from the audience. The question is, Is there any estimated date for a construction decision for the stage 2 or phase 2 of the Cerro Pasco Integration Project? Will this phase 2 require additional permitting?

Speaker #9: And will this phase two require additional permitting?

Speaker #5: Yeah. Very important question. I think that was a question that was asked before. I apologize for not answering that. Very important question. The phase two question the phase two part of the project is integrating the two mines.

Ignacio Rosado: Yeah. Very important question. I think that was a question that was asked before. I apologize for not answering that. Very important question. The phase II part of the project is integrating the two mines and making sure that we produce more ore. As we were saying in the presentation, we have a very dedicated team of in the exploration that started a strategy some years ago to start drilling heavily our mines.

Speaker #5: And making sure that we produce more ore. As we were saying in the presentation, we have a very dedicated team of in exploration that started a strategy some years ago to start drilling heavily our mines.

Speaker #5: So we set many times that we are finding a lot of resources that have higher NSR and very important opportunities in the intersection and in Atacacha and El Porvenir in the underground parts.

Ignacio Rosado: We said many times that we are finding a lot of resources that have higher NSR and very important opportunities in the intersection and in Atacocha and El Porvenir in the underground parts. The reason why we decided to delay the phase II is because we are trying to make sure that we build a life of mine plan that is more effective and is more profitable for these two mines. This is gonna take some time. I would say, we might be able to tell the market, I would say, in the next, in H2 of this year, how are we gonna manage that. Our board is also waiting for that, and this is a priority.

Speaker #5: The reason why we decided to delay the phase two is because we are trying to make sure that we build a minor a life of mine plan that is more effective and is more profitable for these two mines.

Speaker #5: And this is going to take some time. So I would say we might be able to tell the market, I would say, in the next in the second half of this year how are we going to manage that.

Speaker #5: Our board is also waiting for that. And this is a priority. And the good will have for Benín and Atacacha that will be approved in the first half of next year also apply for this integration.

Ignacio Rosado: The good thing is that the permits that we will have for Venado and Atacocha, that will be approved in H1 of next year, also apply for this integration. We won't have a bottlenecking problems in these approvals. I think we are right on track. We have a very good problem because the endowment that we used to approve the phase II has been increased significantly. That's why we are saying that we have more than 15 years. Today is a matter of how are we going to build this new life of mine plans to make sure that profitability or NAV drives this evaluation. Okay? We'll keep you posted in what are we going to do in the following months.

Speaker #5: So we won't have a bottlenecking problem in this approvals. So I think we are right on track. And we have a very good problem because the endowment that we use to approve the second phase has been increased significantly.

Speaker #5: That's why we are saying that we have more than 15 years. And today is a matter of how are we going to build this new life of mine plants to make sure that profitability or NAV drives the evaluation.

Speaker #5: Okay? So we'll keep you posted in what are we going to do in the following months.

Operator 2: This concludes our question and answer session. I would now like to hand the call over to Mr. Ignacio Rosado for his closing remarks. Mr. Rosado, please go ahead.

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

Speaker #2: This concludes our question and answer session. I will now like to hand the call over to Mr. Ignacio Rosado for his closing remarks. Mr. Rosado, please go ahead.

Ignacio Rosado: Thank you. I would like to emphasize that the closing of last year, we had very strong results, and we were exposed to prices, to very good prices. This has been the case for Q1 of this year. Unfortunately, we had some problems in our Peruvian operations that already have been resolved. The message I would like to convey is that for the rest of the year, we are very committed to have very stable operations. We are very committed to offset some problems that we have in costs regarding oil, regarding inflation in the market, regarding the FX in Brazil. Try to make sure that we sort of offset those with productivity measures.

Speaker #5: Thank you. I would like to emphasize that the closing of last year, we had a very strong result. And we were exposed to prices, to very good prices.

Speaker #5: This has been the case for the first quarter of this year. Unfortunately, we had some problems in our Peruvian operations that already have been resolved.

Speaker #5: But the message I would like to convey is that for the rest of the year, we are very committed to have very stable operations.

Speaker #5: We are very committed to offset some problems that we have in costs regarding oil, regarding inflation in the market, regarding the effects in Brazil.

Speaker #5: We try to make sure that we sort of offset those with productivity measures, so we build a very robust operating profit from our mines and smelters in the rest of the year.

Ignacio Rosado: We build a very robust operating profit from our mines and smelters in the rest of the year. Not only because we have these very good prices, because we take care of the main variables of the mines and smelters. We look forward to speaking to you towards the end of Q2, and we are confident that we're gonna deliver on our commitments and our guidance. Thank you very much for attending the call. Again, we look forward to speak to you in a few months.

Speaker #5: Not only because we have this very good prices, variables of the mines and smelters. So we look forward to speaking to you towards the end of the second quarter.

Speaker #5: And we are confident that we're going to deliver on our commitments and our guidance. So thank you very much for attending the call.

Speaker #5: And again, we look forward to speak to you in a few months.

Speaker #2: Thank you. This concludes today's conference call. We appreciate your participation and interest in Nexa. You may now disconnect.

Operator 2: Thank you. This concludes today's conference call. We appreciate your participation and interest in Nexa. You may now disconnect. Goodbye.

Operator: Thank you. This concludes today's conference call. We appreciate your participation and interest in Nexa. You may now disconnect. Goodbye.