Vancouver, British Columbia – Ero Copper Corp. (TSX: ERO, NYSE: ERO) (“Ero” or the “Company”) is pleased to announce its operating and financial results for the three months ended March 31, 2022. Management will host a conference call tomorrow, Tuesday, May 10, 2022, 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

Copper production of 9,784 tonnes at C1 cash costs(*) of $1.31 per pound of copper produced;
Gold production of 8,796 ounces at C1 cash costs(*) and All-in Sustaining Costs ("AISC")(*) of $638 and $1,092, respectively, per ounce of gold produced;
Strong net income attributable to the owners of the Company of $52.1 million ($0.57 per share on a diluted basis), adjusted net income attributable to owners of the Company(*) of $33.0 million ($0.36 per share on a diluted basis), and adjusted EBITDA(*) of $62.4 million;
Quarterly cash flows from operations of $44.0 million offset capital expenditures related to advancing the Company's key growth projects. Combined with net proceeds of approximately $392.0 million from the Company's issuance of $400 million of senior unsecured notes due 2030, less the repayment of approximately $50 million in outstanding borrowings under the Company's senior secured revolving credit facility, available liquidity at the end of the period was a record $540.5 million;
Reaffirming 2022 production, operating cost and capital expenditure guidance:
Full-year copper production currently expected to be at the high-end of the guidance range;
Based upon the impact of inflation and exchange rate volatility in the first quarter, the Company is currently guiding to the higher end of its 2022 operating cost ranges; and,
Capital projects remain on schedule and on budget.
Advanced the Company's organic growth strategy through the execution of several critical milestones during the period including:
Bolstered balance sheet with the issuance of $400 million senior unsecured notes offering;
Received approval from the Company's Board of Directors to construct Boa Esperança and subsequently executed the critical-path power transmission line contract; and,
Secured several long-lead items related to the new external shaft and mill expansion at the MCSA Mining Complex.
“Our vision of high-return organic growth took several critical steps forward during the first quarter," said David Strang, Chief Executive Officer. "Following the announcement of our strategy to double copper production by 2025, we successfully bolstered our liquidity position to support the execution of these growth plans and received Board approval to construct the Boa Esperança Project. During the period, we made significant progress at the MCSA Mining Complex on our Pilar 3.0 initiative, which included securing key long-lead items such as the third ball mill and shaft winder, advancing shaft construction and new surface installations, and completing the installation of our Cooling Project. Successful execution of these initiatives is expected to allow us to increase mining and processing capacity to accommodate significantly higher planned throughput in the years ahead.

"Despite these significant positive developments, the first quarter was not without challenges. In addition to an underlying strengthening of the Brazilian Real during the first quarter, our operating costs faced the same inflationary headwinds experienced globally across all industries. While many of the challenges related to costs are externally driven, we are focused on continuing to improve our operating efficiencies through existing programs and by investing in new technologies applicable across all areas of our business. At the same time, we are taking a cautious approach and currently guiding to the higher end of our full-year operating cost guidance ranges.

"Highlighting our pursuit of continuous improvement, we commenced an engineering initiative last year, known as Project Honeypot, that is already delivering significant near-term value for our operations. Through this initiative our engineering teams, supported by our geology and exploration group, have developed a comprehensive program to identify and recover high-grade stopes at the Pilar Mine that were left behind by previous operators decades ago. While the addition of Project Honeypot stopes to the mine plan are expected to be gradual, we anticipate a positive impact on mined copper grades commencing in the second quarter of 2022. These contributions are expected to drive higher copper production through the remainder of the year and, as a result, we are currently guiding to the high-end of our full-year production guidance range."

*Earnings before interest, taxes, depreciation and amortization (“EBITDA”), Adjusted EBITDA, Adjusted net income attributable to owners of the Company, Adjusted net income per share attributable to owners of the Company, C1 cash cost per pound of copper produced, C1 cash cost per ounce of gold produced and All-in Sustaining Costs (“AISC”) per ounce of gold produced are non-IFRS measures – see the Notes section of this press release for additional information. C1 cash cost per pound of copper produced are net of by-product credits from metal produced at the MCSA Mining Complex. AISC per ounce of gold produced are net of by-product credits from metal produced at the NX Gold Mine.

FIRST QUARTER REVIEW

Mining & Milling Operations
The MCSA Mining Complex processed 596,230 tonnes of ore grading 1.78% copper, producing 9,784 tonnes of copper in concentrate during the quarter after metallurgical recoveries of 92.2%.
The NX Gold Mine processed 49,990 tonnes grading 5.93 grams per tonne, producing 8,796 ounces of gold after metallurgical recoveries of 92.3% and 6,042 ounces of silver as a by- product.
Organic Growth Projects
At the MCSA Mining Complex, construction of the new external shaft in support of the "Pilar 3.0" initiative continued to progress during the quarter while efforts on ancillary related projects delivered important milestones. Together, the existing and new shaft currently under construction are expected to increase total hoisting capacity of the Pilar Mine to approximately 5.7 million tonnes per annum, an increase of over 60% compared to current hoisting capacity of 3.5 million tonnes per annum, offering flexibility for future mine expansions.
Construction of the new external shaft continues to progress on schedule and on budget with excavation for the head-frame and two winder foundations completed during the first quarter.
Expansion of the Caraíba Mill to 4.2 million tonnes per annum is underway with a third ball mill ordered during the period for which commissioning is expected in Q2 2023.
Significant progress has been made in defining opportunities in the upper levels of the Pilar Mine that have the potential to add near-term value through an initiative known as "Project Honeypot". This engineering initiative is focused on recovering high-grade stopes, ribs and sill pillars left behind by previous operators during the late 1990s due to the under-capitalized nature of operations at the time. The first Project Honeypot stope (RC03) is approximately 130,000 tonnes grading approximately 4.00% copper and is expected to commence mining in Q2 2022.
The second and final phase of the Cooling Project was completed subsequent to quarter-end at the Pilar Mine with hand-over to operations occurring at the end of April 2022. The Cooling Project is expected to support expansions at depth and has the potential to drive meaningful operating efficiencies.
Important advances on key workstreams at Boa Esperança included:
Execution of the critical-path power transmission line contract;
Mobilization of the first earth works package, including new access road construction and road upgrades;
Completion of Gap Zone and condemnation drilling; and,
Market tendering for key contracts completed subsequent to quarter-end. Contractor and supplier selections remain ongoing.
OPERATING AND FINANCIAL HIGHLIGHTS
see & read more on
https://erocopper.com/news/2022/ero-copper-reports-first-quarter-2022-operating-and-financial-results/