- (all amounts in US dollars, unless otherwise noted)
Vancouver, British Columbia – Ero Copper Corp. (the “Company”) (TSX: ERO) today is pleased to announce its financial results for the three and nine months ended September 30, 2020. Management will host a conference call tomorrow, Friday, November 6, 2020, at 11:30 a.m. Eastern time to discuss the results. Dial-in details for the call can be found near the end of this press release.

HIGHLIGHTS
•Third quarter copper production of 10,961 tonnes of copper;
•New record quarterly C1 cash costs* of $0.63 per pound of copper produced ($0.65 per pound in Q2 2020) contributing to record quarterly cash flow from operations of $44.4 million during the three month period ended September 30, 2020;
•Increasing gold and silver production at the NX Gold Mine totalling 9,436 ounces of gold and 5,736 ounces of silver at new record quarterly C1 cash costs* of $421 per ounce of gold produced during the period ($437 per ounce in Q2 2020);
•Generated a new quarterly record $62.5 million in Adjusted EBITDA* during the three month period ended September 30, 2020 – a $20.1 million improvement over Q2 2020;
•Adjusted net income attributable to owners of the Company* of $36.7 million ($0.40 per share on a diluted basis) during the three month period ended September 30, 2020;
•Continued strong liquidity position at September 30, 2020 of $54.3 million; and,
•Reaffirm copper production guidance for the full year. While previously revised C1 cash cost ranges remain unchanged, the Company expects to be near or slightly below the low-end of the range for 2020. Capital guidance has been revised to incorporate continuity and expansions of the Company’s ongoing exploration programs into the fourth quarter.

Commenting on the results, David Strang, President & CEO, stated, “Firstly, I would like to congratulate all of our colleagues at our MCSA operations for achieving a full year without a lost-time-injury on September 30th. While we had to celebrate this accomplishment virtually, I am extremely proud of the team’s dedication and hard work that went into achieving this milestone, made more difficult this year by the additional challenges associated with mitigating the impact of COVID-19 on their families, community and our operations. On top of this, operations at MCSA have continued to perform well and we have continued to execute on key objectives in preparation of our updated life-of-mine plan, which remains on track for completion during the fourth quarter. These initiatives and objectives include near-mine exploration programs, our new HIG Mill installation and commissioning, integration and development of Platinum Group Metal (PGM) assay capability in-house and our recently completed ore-sorting trial campaign. We continue to have no disruption to our supply chains, sales channels or production to date as a result of COVID-19.

At MCSA on the operational side, we continued to see quarter-on-quarter increases in grades mined and processed, as well as improved metallurgical recoveries, as expected. Our newly commissioned HIG Mill was handed over to operations during the month of September, contributing to our best average monthly metallurgical recovery this year of 92.0% – a significant improvement over base-line recoveries at the same grade profiles. While a limited data set, and feed and control system work remain ongoing, the performance gains post-commissioning are an encouraging leading indicator, and we expect the HIG Mill to deliver as advertised once this work is complete. The combination of increased grades, metallurgical recoveries and continued weakness in the BRL contributed to another record quarter of C1 cash costs, averaging $0.63 cents per pound during the period. As a result of strong performance to date, we have reaffirmed our annual copper production guidance and are now guiding towards or slightly below the lower-end of our C1 cash cost guidance range of approximately $0.70 per pound of copper produced.

At NX Gold this quarter, we saw steady quarter-on-quarter increases in production volumes from the Santo Antonio Vein as well as significant improvement in metallurgical recoveries during the period, both contributing factors in our increased gold production of 9,436 ounces at another record quarterly C1 cash cost of $421 per ounce of gold produced. A portion of the Santo Antonio orebody we expected to mine this year has encountered sub-optimal ground conditions, and as a result, we have only achieved limited production in this area due to inherited constraints associated with the existing mining method and ground support capabilities. While we have been able to offset some of this decline in production by increasing production from other areas within Santo Antonio, we now expect slightly lower full year production and have revised our guidance accordingly. The team at NX Gold has recently completed engineering studies for the installation of a modular paste-fill plant to recover production from this area as well as enhance overall resource conversion and mine recovery in the future. While a modest investment of only US$2 million, we see this as a significant step towards securing long term production stability and extending the life of mine for NX Gold, which we expect to incorporate into our updated life-of-mine plan, also on track for completion during the fourth quarter.

As you will note in our revised capital guidance, we have increased our full year exploration spend as we continue to uncover both near-mine and regional opportunities at both MCSA and NX Gold. Exploration efforts during the fourth quarter will continue to focus on (i) the newly discovered mineralization between the Vermelhos Mine and the high-grade massive sulphide zones of the Siriema deposit, where we see continued evidence of “stacked” mineralized structures over a strike length of approximately 700 meters, (ii) the Deepening Extension which continues to remain wide open to depth and to the north and (iii) advancing our regional exploration programs.

*EBITDA, Adjusted EBITDA, Adjusted net income (loss), C1 cash cost of copper produced (per lb) and C1 cash costs of gold produced (per ounce) are non-IFRS measures – see the Notes section of this press release for a discussion on non-IFRS Measures

OPERATIONS & EXPLORATION HIGHLIGHTS
•Mining & Milling Operations – tracking copper production guidance, increasing grades and recoveries into Q4 2020, no COVID-19 disruptions to date ?553,148 tonnes processed grading 2.18% copper producing 10,961 tonnes of copper in concentrate after metallurgical recoveries that averaged 90.8% at the Company’s Curaçá Valley operations; and
?The Company’s 97.6% owned NX Gold Mine processed 41,749 tonnes of ore grading 7.64 grams per tonne gold, resulting in the production of 9,436 ounces of gold and 5,736 ounces of silver as by-product after metallurgical recoveries that averaged 92.0% during the third quarter of 2020.

•Exploration Activities – Completion of priority near-mine programs during the period for inclusion in upcoming mine plan updates, continued to shift to more regional focus ?Pilar District ?Exploration activity within the Pilar District, where nine drill rigs are currently operating, is focused on extending the limits of high-grade ‘Superpod’ mineralization of the Deepening Extension zone. The Company has now identified a mineralized target area that extends over approximately 900 meters in strike length, over a total depth of approximately 525 meters and over an average thickness of ranging from 10 to 20 meters with localized thickening throughout the zone. The zone remains open to the north and to depth. Results during the period continue to support the potential to meaningfully extend the mine life while maintaining an elevated grade profile from the Pilar Mine and demonstrate that zone remains open to the north and to depth.

?Vermelhos District ?Exploration in the Vermelhos District, where eleven drill rigs are currently operating, is focused on further demonstrating continuity between two newly discovered zones of mineralization between Vermelhos and the Siriema deposit. These new zones, when viewed in context with the previously announced high-grade massive sulphide Keel Zone of Siriema and prior Siriema conduit drill results suggest that multiple “stacked” mineralized structures may be present between the Siriema deposit and the Vermelhos Mine, a distance of approximately 700 meters in strike-length. Down-hole electromagnetic (“EM”) work and further drilling is ongoing to evaluate the full potential of these stacked structures. There are currently seven drill rigs focused on this area.

?NX Gold Mine ?Exploration at the NX Gold Mine is primarily focused on testing down-plunge extensions of the Santo Antonio Vein. Drill results during the period continued to extend the known extent of mineralization within the Santo Antonio Vein down-plunge and are highlighted by the best results drilled to date by the Company at NX Gold on a grade-meter intercept basis as well as the deepest intercept within the Santo Antonio Vein drilled to date.

?Regional Exploration ?Regional work at MCSA comprised of both exploration drilling and ground-based geophysical work is focused on four new and recently interpreted mineral systems within the portfolio of targets defined by the Company’s comprehensive targeting work. Each of these new systems has an average strike length of five kilometers and contain multiple priority drill targets. The majority of the Company’s drill meterage is expected to be allocated to regional exploration during the fourth quarter.
?In addition, the first regional exploration effort within the broader NX Gold Mine property continued to progress during the period.


•Execution of Growth Projects – HIG Mill commissioning complete, ore-sorting project test-work complete, PGM assay capability in-house near-completion and updated life-of-mine plans on track for Q4 2020 ?The Company’s new HIG Mill installation was completed in July and hand-over to operations was completed in the middle of September. While feed and control system integration and optimization work remain ongoing, monthly recoveries in September achieved a record for this year, averaging 92.0%. This represents a significant improvement over the Company’s baseline recoveries at similar grade profiles, and is a positive, albeit preliminary, technical leading indicator. The Company continues to expect that the HIG Mill will contribute to improved metallurgical performance during the fourth quarter and in the future.
?The full-scale testing of the Company’s ore-sorting plant was completed during the period, and while confirmatory testing remains ongoing, excellent upgrade ratios at minimal copper losses were achieved. The Company expects that ore-sorting will be an integral component of the Company’s upcoming life-of-mine update, currently expected during the fourth quarter.
?Five drill rigs continue to systematically drill the Deepening Extension zone of the Pilar Mine, in continued support of ongoing engineering studies for the inclusion of this zone into the Company’s updated mine plan. Due to the limits of drilling underground infrastructure to the north, additional surface and underground drill programs utilizing directional drilling technology were introduced to better evaluate the mineralized potential of the Deepening Project further to the north than is currently possible using conventional drilling methods.
?The Company’s multi-element inductively coupled plasma mass spectrometry (“ICP”) unit is operational and is in the process of ramping up daily sample volumes and ensuring quality-assurance quality-control (“QA/QC”) with third-party umpire assays, as scheduled. Once fully integrated, the addition to the laboratory is expected to significantly reduce cost and, more importantly, turn-around time for PGM assay results.
?Updated life-of-mine plans for both the Company’s Curaçá Valley Operations and NX Gold Mine remain on track for completion during the fourth quarter.

•Corporate Highlights – Continued capital management and improved liquidity position ?Ended the third quarter with strong liquidity position of approximately $54.3 million in cash and cash equivalents.

OPERATING AND FINANCIAL HIGHLIGHTS
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