Thank you for your patience. This is the conference operator. Welcome to the Ero Copper Fourth Quarter 2025 Operating and Financial Results Conference Call. I will now hand the conference over to Farooq Hamed, VP of Investor Relations. Please proceed.

Thank you, operator. Good morning, and welcome to Ero Copper's Fourth Quarter and Full Year 2025 Earnings Call. Our operating and financial results were released yesterday afternoon and are available on our website along with our financial statements and MD&A for the 3 and 12 months ended December 31, 2025. Our corresponding earnings presentation can be downloaded directly from the webcast and is also available in the Presentations section of our website. Joining me on the call today are Makko DeFilippo, President and Chief Executive Officer; Wayne Drier, Executive Vice President and Chief Financial Officer; Gelson Batista, Executive Vice President and Chief Operating Officer; and Courtney Lynn, Executive Vice President, External Affairs and Strategy. Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially. For a detailed discussion of these risks and the potential impact on our business, please refer to our most recent annual information form available on our website as well as on SEDAR and EDGAR. Unless otherwise noted, all figures discussed today are in U.S. dollars. With that, I'll now turn the call over to Makko DeFilippo.

Thank you, Farooq, and thank you to everyone joining us this morning. As we pre-released our 2025 production results and 2026 guidance in early February, I'd like to take a step back here and explain why we believe Ero is extremely well positioned in the current market environment. Last week, as many of you would have seen, we released our maiden preliminary economic analysis on the Furnas project. This was an important milestone for the company and one of our key objectives this year. Over the past 18 months, our exploration and engineering work, combined with extensive historical technical programs completed by Vale on the project since the early 2000s, has enabled the design of an integrated open pit and underground mine expected to produce a total of more than 1.2 million tonnes of copper, 2 million ounces of gold and 9 million ounces of silver over an initial 24-year mine life. Highlighting the quality of Furnas and reinforcing why it is a cornerstone asset in our long-term growth strategy. Over the first 15 years of operation, Furnas is expected to produce approximately 70,000 tonnes of copper, 111,000 ounces of gold and more than 500,000 ounces of silver annually at first quartile C1 cash costs of approximately $0.24 per pound of copper produced. At long-term consensus metal prices, the PEA delivers an after-tax NPV of approximately $2 billion and an IRR of more than 27% on $1.3 billion of initial capital. Taken together, these metrics uniquely position Furnas from a capital intensity perspective relative to comparable projects while delivering strong economic outcomes across a wide range of commodity prices. Said differently, we see an exceptional project that is both financeable and buildable. As strong as it is, the PEA is just a starting point for us, and we are focused on maintaining momentum this year. In 2026, we plan to complete an additional 50,000 meters of exploration drilling, targeting extensions of high-grade mineralization around planned underground infrastructure. We will also continue pursuing opportunities we see to further strengthen economics, which include the addition of a magnetite recovery circuit to produce a high-grade magnetite concentrate as well as a gravity pre-concentration stage to enhance gold recoveries. Both initiatives offer potential to further increase byproduct revenue, and we are encouraged by the initial results we are seeing. Getting back to what differentiates Ero, we have clearly outlined a great long-term growth project in Furnas, and we are thrilled to be advancing it towards a construction decision over the coming years. Perhaps most importantly, the capital required to advance Furnas to that point is expected to remain relatively modest as we continue to advance technical studies, drilling and permitting work streams. At the same time, capital spending across our existing operations is projected to decline as we transition out of a multiyear investment phase that included the construction of Tucuma and major investments at Caraiba over the past several years. These investments are either complete or in the case of our new shaft project at Caraiba, are past peak capital spend. As a result, Ero is exiting a major investment cycle with an exceptional long-term growth asset, increasing cash generation capacity, declining consolidated capital requirements and three operating mines with the right mix of metals at exactly the right time in the commodity price cycle. When I look across the broader sector, many companies, including most of our peers, are jumping into major project builds within the next year. We like this dynamic. Switching gears slightly. I do want to touch on our 2025 results and '26 guidance. And I would start by recognizing the resilience and dedication of our teams that work through a number of challenges to deliver meaningful improvements across the business as the year progressed. These efforts resulted in sequential quarters of improving operational performance, the unlocking of a major new additional value driver for our business at Xavantina. Starting with Caraiba, Q4 represented our strongest operating quarter of the year. Mill throughput reached nearly 1.2 million tonnes, up 18% compared to Q3 and an all-time record for the operation. This drove copper production 15% higher quarter-on-quarter and contributed to C1 cash costs of $2.27 per pound. At Tucuma, copper production increased more than 22% quarter-on-quarter, representing another record for the operation. Higher process grades helped offset an extended period of unplanned downtime in December, driven by a pull forward of Q1 maintenance for an early mill liner replacement. This pull forward was due to an OEM wear part quality issue that impacted multiple operations in the region, including ours. C1 cash costs in Q4 were $1.75 per pound, which I would note approximately $0.10 of this was attributable to expensing the unamortized portion of the liners. Turning to Xavantina. Production increased 53% quarter-on-quarter, driven by higher grades and improved throughput as we began to see the benefits of our efforts transition the mine to mechanized mining. In addition, our gold concentrate program resulted in an incremental 15,000 ounces of gold in Q4. As a result, total gold from Xavantina, including mine production and concentrate shipments was nearly 20,000 ounces in the quarter and over 50,000 ounces for the full year. Behind these numbers, what makes 2025 one of our best on record, in my opinion, is that our operational teams delivered these results while achieving one of our best years ever in terms of consolidated safety performance. Whatever might be said about 2025, nothing matters to me more than this metric. As I look ahead to 2026, our guidance assumes the operational performance gains we achieved in the fourth quarter are effectively sustained through the year. While we continue to work on opportunities to further improve performance across the business, especially in the second half of this year at Tucuma, these are not reflected in our guidance. At Tucuma, we are well advanced on adding additional tailings filtration equipment this year to unlock additional throughput capacity for this operation. We have equipment being manufactured right now. And if all goes according to plan, we would expect this to benefit the operation in the fourth quarter. As I mentioned, the potential benefits here as well as the associated capital investment have not been reflected in our 2026 guidance. This was a deliberate decision for three reasons: First, guiding to steady state was important for us this year. Second, there is a lot of daylight between now and the fourth quarter. And perhaps most important, in the current metal price environment, we expect the payback on this investment to be 1 to 2 quarters. So while it is a very important objective, and we expect to complete it this year, it will not change our strategy or capital allocation decisions in 2026. At Xavantina, we are investing in our ventilation circuit, mine development and equipment to increase mine capacity and output. This is a low-hanging long-term value driver inherent to our business when we look at the available milling capacity we have there. Last but not least, at Caraiba, we are advancing the new shaft project for the Pilar mine and are pursuing several operational improvement initiatives that we hope to discuss later this year. To touch briefly on cadence for 2026, we are guiding consolidated copper production of between 67,500 to 77,500 tonnes. This reflects year-over-year growth driven primarily by higher sustained plant throughput at Caraiba and Tucuma, partially offset by lower planned grades. Copper production is expected to be weighted towards the second half of the year due to mine sequencing and a modest increase in throughput throughout the year. At Xavantina in 2026, we are guiding mine production of 40,000 to 50,000 ounces. We expect Q1 to be the softest production quarter of the year. This cadence reflects mine sequencing as well as a tie-in of a major ventilation upgrade during the quarter, including the completion of the new surface. Production is expected to be weighted towards the second half of the year as a result. Gold concentrate sales are expected to continue throughout the year, but we expect that to be relatively modest in Q1 due to the rainy season. For some additional context there, you'd be hard-pressed to find a more simple operation in our portfolio. There are only three steps. We remove the material from stockpile, we then spread it out in the sun to dry, then transport the material for shipment. As you can likely imagine, step two in that process is far less productive during the rainy season. With that, I will turn the call over to Wayne, who will walk through our financial results in more detail.

Thank you, Makko. Our fourth quarter financial results were driven by record copper concentrate sales, a 59% increase in gold dore sales, the commencement of gold concentrate sales and stronger copper and gold prices during the period. All of these factors drove quarterly revenue to a record $320 million or $143 million higher compared to the third quarter. Consolidated C1 copper cash cost per pound were approximately 1.5% higher quarter-on-quarter with the increase predominantly coming from Tucuma, where we experienced higher transportation, demurrage and port costs in the quarter related to the COP30 activities in Para State. This had an impact of approximately $0.10 per pound on our Tucuma C1 costs, which were also impacted by the accelerated amortization of the mill liner Makko referenced earlier. Gold C1 cash cost per ounce declined by approximately 29% from the third quarter. As a result, the company delivered stronger operating margins, with adjusted EBITDA growing to $186.7 million in the fourth quarter and $409.7 million for the full year. Adjusted net income attributable to owners of the company was $108.4 million for the quarter and $220.4 million for the year or $1.04 and $2.12 per share, respectively. Our liquidity position at quarter end stood at $150.4 million, including $105.4 million in cash and cash equivalents and $45 million of undrawn availability under our revolving credit facility. We continue to deleverage our balance sheet with net debt declining to approximately $502 million at year-end from $545 million at the end of the third quarter. Combined with significantly higher 12-month trailing EBITDA, this resulted in a material improvement in our net debt leverage ratio, which decreased to 1.2x at the end of Q4 from 1.9x in Q3 and 2.6x at the end of 2024. With copper and gold production expected to grow in 2026 as well as the additional cash flow from Xavantina's gold concentrate sales, we intend for debt reduction and return to shareholders to be key elements of our midterm capital allocation strategy. At December 31, we had $155 million drawn on our revolver, which we intend to pay down fully in 2026. We would like to maintain a strong cash position on the balance sheet and target a net debt-to-EBITDA ratio below 1x ahead of commencing a return of capital program. I'll now pass the call back to Makko for some closing remarks.

Thank you, Wayne. Before we move into the Q&A session, let me recap the 3 key elements of Ero's value proposition. First, over the past decade, Ero has consistently unlocked value that wasn't fully recognized often through work supported by strong partners. Clear examples include our gold concentrate program and our broader partnership with Royal Gold at Xavantina and more recently, the advancement of the Furnas project with our partner, Valley Base Metals. Second, we've taken a disciplined countercyclical approach to capital allocation, investing in building projects during periods when development activity across the sector was limited. That strategy has positioned Ero favorably relative to our peer group that are now preparing to enter major capital investment phases. Third, Furnas represents a high-quality, long-life asset being advanced with a top-tier partner and we view it as a compelling cornerstone for Ero's long-term growth. With that, I will now turn the call back to the operator to open the line for questions.

First question comes from Orest Wowkodaw with Scotiabank.

Question around the gold concentrate stockpiles at Xavantina. You haven't issued any guidance for what those volumes could be this year. But with the 15,000 ounces you sold in the fourth quarter, is that a good guide for shipments in periods or quarters where there's no rainy season?

Thank you for the question, Orest. This is a challenging situation. We released initial resource estimates based on 20% of the volume we sampled, making exact guidance difficult. However, we do anticipate strong volumes and shipments. In Q4, we performed well despite being at the end of the rainy season, which typically runs from November through March or April, depending on the year. Some sales occurred at the start of the rainy season. We're currently working on several initiatives to boost volumes. As I mentioned earlier, Q1 is right in the middle of the rainy season. This year has been particularly rainy in Brazil, as reported in the news due to widespread flooding. Consequently, we expect very modest sales in Q1, followed by a significant increase in Q2 and Q3.

And in terms of the stockpile itself, have you seen anything that may suggest that the grade for the other 80% of the stockpile would be materially different than what you have sampled?

It's hard to say, Orest, but so far there’s nothing that indicates otherwise as we move forward, even though we don’t have samples from that portion yet.

The next question comes from Emerson Vieira with Goldman Sachs.

I would like to understand a little bit more on Tucuma Q3 press issue. So can you provide us an update here? Have you guys already ordered the mobile filter that is expected to increase the future availability? And any update on time could be very helpful. Also, how long should be the maintenance in the first quarter in order to advance with the new aligners replacement? And just a third one on Tucuma, can you please reconcile the production guidance for 2026? I mean, what are you guys expecting in terms of grades and throughput ramp-up throughout the year? Those are my questions.

Thank you for your questions. There's a lot to discuss, so if I miss anything, please feel free to ask again. Regarding the filter press capacity, that equipment has been ordered and is currently in manufacturing. As mentioned in my earlier comments, this is a key objective for us. However, it is not part of our guidance at this time. We anticipate a quick payback on this investment in the current market, and we expect it to be operational in the fourth quarter. The level of investment and the current copper price suggest that this project will have minimal impact on our business outlook for 2026. Also, we did not factor this into our guidance. Concerning the mill lining maintenance, we had planned for this to take place in the first quarter but moved it to the fourth quarter. This maintenance, which has already been completed, resulted in about 10 days of downtime in Q4 and affected our results for that quarter.

All right. So no more maintenance, downtown... for...

We have planned downtime every month. So that is still part of our team, but we have no extended period of downtime that we're planning in Q1 of this year.

All right. And just the last one on the reconciliation on grade and throughput comparing to the guidance, please?

Yes. Thank you for the question. We had a strong performance last year in terms of grade, but we do expect grades to decline. Currently, we are projecting just below 3 million tonnes of processed throughput throughout our guidance. I would estimate copper content to be between 1.3% and 1.4% for the full year.

The next question comes from Guilherme Rosito with Bank of America.

So I have two. The first is on Tucuma. I wanted to dive a bit deeper into the C1 cash cost guidance. I just wanted to understand how we could explain the cost increase throughout the year versus what we were in 4Q. I appreciate that there is lower grade and not including the feed. So with the feed there could be a change to guidance. But I'm just trying to understand as you have more fixed cost dilution as you increase processing and also the are higher than what you guys are currently doing at Caraiba. So I'm just trying to understand all these moving parts and what's driving costs higher this year? And second on Xavantina, I just wanted to explore a bit if you could talk about the benefits from the mechanization investments you guys did last year. How should we expect that to translate into the results this year? And what do you guys expect in terms of grades throughout the year? How this should fluctuate, what sort of volatility we should see throughout the year? So that's it.

Thank you for the questions. Starting with Tucuma, the main drivers for our guidance are the grade, as we're coming off a year of significantly higher grades that directly influence our first-quarter C1 costs. We're also increasing maintenance efforts to stabilize operations, which I consider nonstructural costs. Regarding TC/RC and shipment differences between Caraiba and Tucuma, two major factors are the lower grade of the concentrate, resulting in higher costs per pound of copper, and the longer transportation distance of that material. Together, these factors lead to increased TC/RCs. Currently, the TC/RC market appears favorable compared to our budget expectations, but most of our contracts are long-term, preventing us from fully benefiting from benchmark pricing. Additionally, we are facing a strong BRL headwind across our operations, which is reflected in our guidance. In summary, the primary cost drivers at Tucuma include the mining grade and the additional maintenance costs we are incurring, though we anticipate some benefit from these costs in Q4. As for your question about mechanization, there are two main benefits to highlight. First, reducing workforce exposure was a key factor in our investment, and we aim to minimize worker involvement in hazardous areas. Second, the mill at Xavantina operates only 15 to 20 days each month due to mine constraints. Looking ahead, we believe the ongoing ventilation circuit improvements will help better align mine output with mill capacity over time, which is not captured in our long-term guidance but represents significant potential value for our business. Gelson and the team are working hard on this, and we hope to provide more insight later in the year.

Your next question comes from Fahad Tariq with Jefferies.

There was a comment made earlier on the call about potential capital return once the net debt to EBITDA gets to the targeted levels below 1x. Maybe just any additional color on that, what form that would be in timing, et cetera?

Yes, I'll start, and Wayne can add if needed. There are three key steps we believe are essential for driving that decision and its timing. First, as Wayne noted, we want to see our net debt leverage ratio drop below 1x. Our Q4 results show that we're quickly approaching this target, currently at 1.2x. The market is unpredictable, so we’ll monitor developments over the next few quarters. Second, we plan to pay down our revolver, which had $155 million drawn at year-end. This is a logical step in reducing our debt, and we recognize that paying down debt, including our revolver, effectively returns value to shareholders, which is integral to our strategy. Lastly, we are actively discussing potential plans and timing with our major shareholders. I recommend staying tuned, and let's focus on completing the first two steps before getting too excited about the third.

Sounds good. Regarding Furnas, as you enter a period where some peers are starting a build cycle, it appears that Furnas is on a much longer timeline. Is there any chance or interest in trying to speed that up? Or is that even feasible considering the current stage, the earnings agreement terms, and what still needs to be accomplished?

Yes. We're very excited about Furnas as you probably heard in our prepared remarks and saw in our webcast materials. The reality is it's a few years out. We like that positioning. We need to do work to advance through a prefeasibility study execute on some of those value drivers that we see as low-hanging fruit to increase the value of the project, increased byproduct revenue. And then we still need to do advance several permitting work streams. The reality, I think, is we do have the appetite to advance that project as fast as possible. I would say that we're already doing that. And we still expect modest capital spend over the next few years as a result of the acceleration there.

Next question comes from Stefan Ioannou with ATB Cormark.

I'm curious about the gold concentrate sales. Initially, it was suggested that the entire stockpile could be sold down over a period of about 12 to 18 months. Now that we have a better understanding of the rainy season, should we expect that timeline to be extended?

Yes. Looking at the timeframe of 12 to 18 months we discussed last November, if you consider the guidance we provided this year, we indicated that through mid-2027, those timelines, more or less, are fairly well aligned from our perspective. It is a great question. Yes, the lion's share of that is at Furnas. I would say that we're still advancing some opportunities throughout the portfolio, both at Tucuma and at Tucuma, Xavantina, and Caraiba at various stages of development. Again, I think the best guidance I can give you at this point is that we're excited about what we're doing there. We expect to give an update at our Investor Day later in the year.

The next question comes from Craig Hutchison with TD Cowen.

I was just wondering if the heavy rainfalls, will that have any impacts on concentrate shipments or timing of shipments from Tucuma as well? Or is it just isolated to Xavantina?

Yes, great question. We plan for cadence across our operations for a normal amount of operational disruption. I would say that what we've seen to date at our other operations is in line with what we expected and built into our budget and guidance for the year. So we're not seeing anything out of the ordinary in terms of operational disruption. There is operational disruption across all our operations due to the rainy season. That's been reflected in our guidance and how we think about cadence for the full year.

Okay. Great. And then just TC/RCs in terms of your C1 cash costs, are you able to provide what you're assuming for TCRs for the year?

Those are based on long-term contracts that are commercially sensitive, but what we've heard in the market is well below zero. We're not reflecting that at either of our operations. Still, it remains very low in a historical context. When considering the main headwinds and tailwinds for our business, at Caraiba, we have a significant tailwind from byproduct gold prices, which is apparent when looking at how that line item has tracked over the last several years. However, we are facing headwinds due to seaborne shipping freight amid current global developments. Additionally, the Brazilian Real has been a significant factor; last year, it was one of the top performing currencies against the U.S. dollar, presenting a headwind for us. There are definitely some trade-offs involved. We feel content with our guidance at this point in light of these factors, but we will keep everyone informed if we observe any substantial changes.

Next question comes from Anita Soni with CIBC World Markets.

I wanted to follow up on Furnas and inquire about the exploration drilling in relation to the PEA. Can you discuss how much of the drilling conducted was included in this PEA? Additionally, was there any drilling that was outlined but not included?

Thank you for the question. You're correct. We began drilling at the end of 2024. The PEA incorporates 28,000 meters of the 50,000 meters we drilled last year, and we anticipate completing another 50,000 meters this year. Looking ahead, we expect to finish all drilling phases outlined in the earn-in agreement by the end of 2026, although the PEA currently includes only 28,000 meters of drilling. Our drilling program objectives from the second half of last year and the beginning of this year are twofold. First, as we progress toward the pre-feasibility study, we need to convert the inferred mineralization stated in the PEA into measured and indicated resources suitable for our mine plan. Second, as indicated by the production profile, there is a noticeable decline in years 16 through 24, which correlates with the extent of drilling we've conducted. Therefore, we've targeted key step-outs around some planned underground infrastructure that, if successful, could enhance the production profile later in the mine's life. We still need to complete the necessary drilling and mine planning to support these statements, but we're eager to advance this initiative and incorporate it into the pre-feasibility study.

Yes. That was the second question. I would like to explore the inferred category further. What is your current drill density, and what do you need to achieve for the M&I?

Well, I don't have that right off the top of my head. We can circle back on that one. What I can tell you is that about 60% of the material that we have, including the PEA is inferred. I will follow up with you just after this call on drill spacing. Obviously, that will be outlined in the technical report that will be filed here shortly. I just don't have that information right at my fingertips.

That's fine. If you're going to file the technical report, that was my third question when you're going to file that because I'd like to get into the weeds on that. And then I would also then want to figure out some of the dilution questions as well because I noticed your M&I and inferred does not have any dilution at all. But that's it for my question.

Yes. Just to clarify there, it's an important point on dilution. You're correct. The resource statement doesn't include dilution. The mine plan has been fully diluted and you'll see that reflected around the assumptions that are outlined in the technical report.

The next question comes from Dalton Baretto with Canaccord Genuity.

I just want to follow up on some of that Furnas drilling there, but from a different perspective. Makko, you talked about all the drilling that was done last year that was not included in a lot of the drilling this year. My understanding was that sort of the high-grade cores of the deposit, they extend down deeper and possibly deeper than Vale had anticipated. And I'm just trying to understand how much of your drilling is chasing that higher-grade material and whether we could see some sort of a grade bump on the next resource update.

Good questions. I think the current state of the project is solid on its own. We are working on additional value drivers to improve the production profile and enhance the economics. The numbers clearly indicate that it stands independently. If you examine the last drill hole we completed as part of the PEA, it measured approximately 150 meters at about 0.8% copper and 0.5 gram of gold. This was the last hole included in the PEA from that 28,000-meter program, and it was 600 meters below the surface. We see significant potential to extend the deposit, both in depth and laterally. We plan to include these findings in future studies and will be progressing with these drill programs. Regarding grade improvements, we still need to conduct infill drilling for the pre-feasibility study, which involves several stages of technical studies. The work we've done, alongside the excellent technical contributions from Vale over the years that have established a solid foundation, highlights the project's quality. Our technical team works closely together, and we are collaborating effectively to maximize value. We've significantly enhanced underground production, and the mine plans to repurpose around 30% of its expected tailings production back underground as paste backfill. We have jointly made efforts to reduce the environmental footprint, setting ourselves up for a fast-track project.

Makko. And then can you remind me, is there some sort of a mechanism in your agreement with Vale that gives you the option to buy the piece that you currently won't earn into?

No. We're very happy to be pursuing this project in partnership with Vale Base Metals.

This concludes the question-and-answer session. I would like to turn the conference back over to Makko DeFilippo for any closing remarks. Please go ahead.

Yes. Thank you, everyone, for joining us today. Obviously, we're always available for follow-up questions. I appreciate the robust discussion on the Q&A side as usual. I think one last bit of housekeeping here shortly on our website, for those of you who are interested, we will be hosting a Capital Markets Day in mid-September. That will be physically in person in Sao Paulo and obviously, virtually. And as I said, that information will be on our website shortly. Thank you all very much. Have a great weekend. Thank you. Bye-bye.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.