Good morning, ladies and gentlemen, and welcome to Nexa Resources First Quarter 2025 Earnings Conference Call. Please note that today's event is being recorded and broadcast live via Zoom, with access also available through Nexa's Investor Relations website. A slide presentation is accompanying today's webcast and is also accessible on our Investor Relations website. A replay of the conference call will be available following its conclusion. As a reminder, all participants are currently in a listen-only mode. Following today's presentation, we will open the floor for questions. 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, sir.

Good morning, everyone, and welcome to Nexa Resources first quarter 2025 earnings conference call. Thank you for joining us today. During this call, we will discuss the company's performance as outlined in our earnings release issued yesterday. We encourage you to follow along with the on-screen presentation through the webcast. Before we begin, I would like to draw your attention to Slide 2 where we outline our forward-looking statements about our business. Please refer to the disclaimer regarding these statements and their associated conditions. Now it is my pleasure to introduce our speakers. Joining us today are our CEO, Ignacio Rosado; our CFO, José Carlos del Valle; and our Senior Vice President of Mining Operations, Leonardo Coelho. I will turn the call over to Ignacio for his comment. Ignacio, please go ahead.

Thank you, Rodrigo, and good morning everyone. Thank you for joining us today. As we review our first quarter 2025 results, let's move to Slide 3 where we highlight our results for the quarter. Before discussing our quarterly performance, I want to briefly acknowledge the current macro environment. The past few months have been marked by significant volatility with concerns over global economic slowdown, geopolitical tensions, inflation and supply chain disruptions. While the environment remains challenging, we continue to see strong medium and long-term fundamentals for zinc, copper and other key metals supported by demand drivers like infrastructure development and industrial revitalization. Supply constraints and historically low zinc treatment charges persist, but we believe new demand opportunities will continue to emerge. Nexa is well positioned to navigate this environment focused on improving margins through disciplined operational performance and cost control. In the first quarter of 2025, we faced some operational challenges at certain sites, which led to production volumes slightly below our initial estimates. In the mine segment, this was mainly due to typically heavy rainfall in the Pasco region, impacting El Porvenir and Atacocha's performance, as well as Aripuanã, where precipitation levels were approximately 30% above historical averages. Although our smelters also operated slightly below our budget, we remain in line with our 2025 guidance, which anticipates a year-over-year reduction of approximately 15,000 tons to reflect a more volatile market environment and lower TCs. Despite these challenges, we deliver an adjusted EBITDA of $125 million with margins remaining within historical ranges. Our consolidated net revenues total $627 million, even with lower smelting sales volumes. Times at the end of the first quarter, temporarily impacted by seasonal working capital intensity, which is higher early in the year. We expect to normalize these variations over the coming quarters. Turning to Aripuanã, the heavy rains affected the performance of our tailings filters. I would like to confirm that the acquisition of the fourth filter has been completed. It is currently under construction. We are confident that this filter will pave the way to increased utilization capacity and better support the operation during the rainy season. In line with our growth strategy and commitment to extend the life of our assets, Phase 1 of the Cerro Pasco Integration project focused on the tailings pumping and piping system is progressing well. I will share more details later in this presentation. Now, let's move to Slide 4 to discuss our operating performance. Turning to the operating performance of our Mining segment, zinc production in the first quarter of 2025 reached 67,000 tons, down 23% year-over-year and 8% quarter-over-quarter. The year-over-year comparison was also impacted by the cessation of operations at Morro Agudo. In addition, lower output at El Porvenir, Atacocha, and Aripuanã, mainly due to heavy rainfall contributed to the decrease, while Vazante experienced restricted access to higher grade areas during this period. Looking at cash cost, our mining cash cost significantly dropped to $0.11 per pound compared to $0.26 per pound in the same period last year. This reduction was mainly driven by higher byproduct contributions, lower treatment charges and foreign exchange gains partially offset by lower zinc volumes. Compared to the previous quarter, the mining cash cost increased by $0.12 per pound due to lower zinc volumes, which was partially offset by higher byproduct prices and lower treatment charges. Our cost per run of mine in the quarter was $48 per ton, up 7% year-over-year and 8% quarter-over-quarter, mainly due to lower treated ore volumes and the inclusion of Aripuanã in the consolidated run of mine from the quarter. Excluding Aripuanã, run of mine costs remained flat in both comparisons. Now let's move to Slide 5. Turning to our Smelting segment, the total sales in the first quarter reached 130,000 tons, decreased by 6% year-over-year and 14% quarter-over-quarter. This reduction was primarily driven by lower production at Tres Marias and Juiz de Fora. The year-over-year decline was partially offset by better operational performance at Cajamarquilla. Our 2025 guidance has already anticipated a reduction in smelter volume to accommodate a more volatile market environment and overall lower treatment charges. Looking at costs, consolidated smelting cash cost in the quarter was $1.17 per pound, up from $0.98 per pound in the same period last year. This was mainly due to higher raw material costs driven by increased zinc prices and lower TCs. These impacts were partially offset by higher byproduct contributions and positive foreign exchange variations. Compared to the previous quarter, cash costs decreased by 7%, mainly reflecting lower zinc prices and reduced operational costs. However, these effects were partially offset by lower volumes and continued pressures from low TCs. Our conversion cost for the first quarter was $0.33 per pound compared to $0.30 per pound in the same period last year. This slight increase was mainly due to higher variable costs and maintenance expenses, partially offset by foreign exchange gains. Compared to the previous quarter, conversion costs rose by 11% driven by lower volumes and higher variable costs. Let's move to Slide 6 where we will begin discussing Aripuanã. In the first quarter, Aripuanã's production volume declined due to intense rainfall in the region, with precipitation volumes 30% higher than in previous years. This led to a temporary reduction in production to stabilize operations and prevent overloading the dry stacking process. Treated ore volumes also decreased quarter-over-quarter as plant downtime increased due to preventive and corrective stoppages carried out during this period. Concentrate quality remains stable and within commercial specifications, while metallurgical recoveries improve, performing at target levels. Regarding costs reported for the first time since the start of the operations, they stayed within the 2025 guidance range. We anticipate a reduction in unitary costs in the upcoming quarters as we enhance plant capacity and increase sales volume, thereby improving operational efficiency and cost effectiveness. As previously announced, Aripuanã's mine life increased to 15 years compared to 13 years in 2023. This reflects our successful efforts to replace and expand mineral reserves year-over-year, reinforcing the asset's strengths and sustainability. This year's exploration strategy for Aripuanã includes drilling programs to validate the continuity of mineralization and enhance geological confidence at the Massaranduba target located in the southeast area of the mine. As disclosed last quarter, we approved the acquisition of a fourth tailing new filter. This investment will improve operational efficiency by enhancing our filtering capacity and supporting full production. We expect the filter to be delivered and installed in 2025, with commissioning planned for the first quarter of 2026. We expect to deliver higher adjusted EBITDA and operating cash flow in 2025, supported by our ongoing efforts to reduce costs and improve margins. Let's move to Slide 7 to discuss the latest advancements in the Cerro Pasco Integration project. On this slide, I would like to highlight our progress with the Cerro Pasco Integration project. During the quarter, we advanced on Phase 1, which comprises the tailings pumping and piping system. Engineering activities for the tailings infrastructure at El Porvenir and Atacocha proceeded on schedule and major equipment manufacturing is underway with construction scheduled to commence during the second quarter of this year. Preparatory work for Phase 2, including technical assessments of the Picasso Shaft and the underground integration, is also progressing as planned. As mentioned before, Phase 1 involves the construction of a tailings treatment plant at El Porvenir along with a 6-kilometer tailings piping connecting the El Porvenir processing plant to the Atacocha tailings storage facilities. The primary goal is to significantly extend the operational capacity of the tailings and storage infrastructure, ensuring long-term sustainability at the Cerro Pasco Complex. This phase also lays the groundwork for subsequent stages of the project, which includes integrating the underground mines and upgrading the ore shaft at El Porvenir. Now, let's move to Slide 8 where we will discuss some of the key value drivers of the project. A key value driver is access to high-quality mineral resources in the underground section of Atacocha, unlocking its economic potential through a highly attractive net smelter return. Tapping into these resources will boost mineral resources and reserves, improve average head grades, and provide greater operational flexibility for the asset. Moreover, our exploration focus remains on the integration target, a region with exceptional geological potential and highly promising upside for the project. Ultimately, the combination of these levers adds substantial value and paves the way for long-term success at the Cerro Pasco Complex. We remain confident in the project's progress and most importantly, in its potential value addition. I will turn the call over to José Carlos del Valle, our CFO, who will walk us through our financial results. José, please go ahead.

Thank you, Ignacio. Good morning, everyone. I will now continue with Slide 9. Starting with the chart on the upper left. Total consolidated net revenues for the first quarter increased by 8% year-over-year. This growth was mainly driven by higher metal prices, except for lead. These gains were partially offset by lower smelting sales volumes. However, compared to the fourth quarter of 2024, net revenues declined by 15%, mainly due to lower smelting sales volumes and decreased zinc and lead prices. Moving on to profitability. Our consolidated adjusted EBITDA for the first quarter reached $125 million, representing a 3% decrease year-over-year. This decline was primarily driven by lower smelting sales volumes, partially offset by higher zinc prices, increased byproduct contributions, and foreign exchange gains. Compared to the fourth quarter of 2024, adjusted EBITDA decreased by 36%, mainly due to lower sales volumes in both the Smelting and the Mining segments, higher costs and expenses and lower TCs paid by third-party concentrate suppliers. Finally, our consolidated adjusted EBITDA margin reached 20% in the period, two percentage points lower than in the same period a year ago. Let's move on to Slide 10. Looking at the top left of the slide. In the first quarter of 2025, we invested $50 million in CapEx, with nearly all of this amount directed toward sustaining activities including mine development, maintenance, and tailing storage facilities. Additionally, investments related to Phase 1 of the Cerro Pasco Integration project totaled $1 million in line with the project's execution plan. As previously disclosed in our annual guidance, the total investment expected for this project in 2025 is $44 million. Accordingly, our 2025 CapEx guidance for the year remains unchanged at $347 million, with disbursements expected to accelerate in the upcoming quarters. With respect to mineral exploration and project evaluation, we invested a total of $16 million. Of this amount, $12 million was specifically allocated to mineral exploration and mine development to support ongoing exploration activities. We expect investments in these areas to also accelerate in the upcoming quarters. This is why we are reaffirming our 2025 guidance for exploration and project evaluation at $88 million. Now let's move on to the next slide to discuss our cash flow generation for the quarter. Starting from the left with our $125 million of adjusted EBITDA net of non-operational items. Nexa generated a healthy operating cash flow before working capital variations of $158 million for the quarter. From this amount, we paid $76 million in interest and taxes and invested $51 million in CapEx across our operations. Additionally, loans and investments had a positive net impact of $4 million. We also saw a positive impact of $4 million related to foreign exchange variations primarily due to the appreciation of the Brazilian real against the U.S. dollar. Finally, we experienced a negative working capital impact of $265 million. This is in line with the typical payment cycle observed in the first quarter of each year, reflecting our established payment terms and annual tax and labor obligations in the jurisdictions where we operate. As in previous years, we reaffirm our focus on implementing initiatives to optimize Nexa's working capital cycle such as enhanced receivable and payments management. We expect this working capital position to gradually reverse in the following quarters. Combining all these factors, our total free cash flow in the first quarter of 2025 was negative at $226 million. Now, let's move to Slide 12. As you can see, our liquidity position remains healthy, allowing us to maintain a solid balance sheet and an improved and extended debt maturity profile. At the end of the first quarter of 2025, our available liquidity stood at approximately $721 million, including our undrawn $320 million sustainability-linked revolving credit facility. Looking at our debt profile, the average maturity at the end of the first quarter of 2025 was 5.3 years with an average cost of debt of 6.3%. Importantly, as of March 31, our total cash position was sufficient to cover all obligations maturing over the next three years. In terms of leverage, our net debt-to-adjusted EBITDA ratio increased from 1.7 times at the end of 2024 to 2.1x at the end of the first quarter of 2025. This increase was primarily due to the seasonal decrease of $226 million in our cash balance quarter-over-quarter and to a lesser extent to a slightly lower adjusted EBITDA over the last 12 months. As previously disclosed and in line with our proactive approach to liability management, in April, Nexa successfully extended its debt maturity profile from 5.3 years to approximately eight years through a new bond issuance and through tender offers for the existing notes due in 2027 and 2028. The new $500 million 12-year bond carries a 6.6% coupon and allowed us to repurchase around $105 million and $289 million of the existing 2027 and 2028 notes respectively. Additionally, as announced on April 23, the remaining 2027 notes of approximately $110 million are planned to be fully redeemed via a make whole call option to be executed on May 23rd. These transactions mark a significant milestone for the company extending Nexa's debt maturity profile, enhancing financial flexibility, reinforcing our solid credit metrics and our investors' confidence, and reducing near-term refinancing risk. We continue to evaluate opportunities to further optimize our capital structure, diversify our funding sources, and strengthen our liquidity. As I have mentioned before, maintaining a debt maturity profile that is aligned with the long life of our assets while securing the most competitive financing costs remains a top priority. In line with this, we consistently explore strategic initiatives to extend maturities, reduce our average cost of debt, and assess financing alternatives, all with the goal of enhancing our financial position and long-term resilience. Now moving to Slide 13. Regarding zinc market fundamentals, in the first quarter the LME zinc price averaged $2,838 per ton, reflecting a 16% increase year-over-year and a 7% decrease quarter-over-quarter. The quarter was marked by volatility driven by geopolitical tensions and macroeconomic uncertainties, including concerns over a potential global economic slowdown and speculation about the impact of tariffs. Despite this, zinc market fundamentals remain resilient and continue to support prices. On the supply side, concentrate inventory levels remain limited reflecting the ongoing tight market and even considering some restocking after the Chinese New Year, they still remain constrained, reinforcing expectations of lower refined metal production ahead. Spot TCs in China started to timidly recover from the negative territory seen last year, turning slightly positive in January and reaching $79 per ton in March, a sign of market improvement although the environment remains tight. Meanwhile, benchmarking negotiations resulted in a sharply lower TC of $80 per ton, down 52% from 2024. This level is critical for smelter margins and may lead to further constraints in the refined metal supply. Looking ahead, we maintain a positive mid-to-long term outlook with continued support for zinc prices. Moving now to Slide 14. During the first quarter, the LME copper price averaged $9,340 per ton, up 11% year-over-year and 2% quarter-over-quarter. The U.S. investigation on copper imports triggered accelerated buying and boosted premiums. Copper market fundamentals continue to be strong and prices are expected to remain supportive. As for silver, the LME price averaged $32 per ounce, up 37% year-over-year and 2% quarter-over-quarter. Short term fundamentals for silver remain positive, largely driven by concerns around future availability and supported by its role as a safe haven asset. Over the mid-to-long term, the outlook is expected to remain bullish as demand continues to outpace supply expectations. Looking ahead, metal prices in general are likely to remain volatile amid ongoing trade tensions and macroeconomic uncertainty. For base metals in particular, strong fundamentals are expected to continue to sustain prices in 2025, driven by low inventories, challenged smelter production, and their role in global energy transition. I will now hand the presentation back to Ignacio for his final remarks.

Thank you, José Carlos. I would like to briefly highlight our key priorities for 2025 and where we are focusing our efforts. Starting with growth, the Cerro Pasco Integration project is moving forward as planned. Construction of the tailings pumping system should begin in the second quarter, and that project will support us in extending operations for over 10 years, adding substantial value. At Aripuanã, we are working to increase production, improve filter performance and make the mine more flexible while keeping our cost efficiency efforts in place. This will support better margins and a stronger cash flow going forward. Exploration remains a key pillar of our long-term strategy. We are working to extend the life of our assets, particularly by advancing geological studies in Aripuanã, progressing in the integration zone in Pasco, and deepening our efforts at Cerro Lindo. On the ESG front, we continue to track our progress toward public commitments actively. I want to mention that we have just published our 2024 annual report which brings a comprehensive view of our performance and progress on strategic fronts. The report is available on our Investor Relations website. Financially, we are continuing to execute our liability management and delivering strategy aiming to improve financial flexibility. A quick reminder that our Annual General Meeting will be held in Luxembourg on May 8. The convening notice and proxy card have already been made available to shareholders. Finally, we remain guided by financial and operating discipline, prioritizing cash generation and smart capital allocation in line with our long-term strategy in a dynamic and currently volatile environment. This disciplined approach continues to be the foundation of our strategy and resilience. Thank you all again for joining us today. We appreciate your continued support and confidence in Nexa. Operator, please open the line for questions.

Thank you. We will now begin the question-and-answer session. Our first question comes from Hernán Kisluk with MetLife. You can open your microphone, sir.

Hello, good morning. Thank you for taking my question. I was wondering maybe if you can provide more color on what you mean by geotechnical issues that you're having at Vazante. And also we have been monitoring several indoor production levels and in the last two quarters, it has been below historical averages. So if you can also provide some color on what is happening there? So particularly focusing on the near term, if you think production will recover in upcoming quarters, and also particularly at Vazante, if these geotechnical issues have consequences for the medium- and long-term operations of the mine.

Yes, sure. No, the geotechnical issues related to a stope that we had that one of the pillars that support the stope collapsed. This was isolated. And what happened is that the mineral contained in that stope had a very high grade. So we had to isolate the zone and we couldn't extract the mineral to provide that in the coming months to the plant to have a higher grade that was anticipated in our mining plant. The idea is that we recover some of the production of Vazante. We are still working on recovering the mineral from this stock, but the idea is that we recover part of the production of Vazante in the year. Okay? And that is the main explanation. In the case of the other mines in Pasco, the rainy season, as we said, impacted the pit of Atacocha. It's not raining anymore, so the projections show that we will recover all of our production that we couldn't have in the first quarter through the year. And that is going to be the same for Porvenir. Porvenir is going to recover also full production through the year. In the case of Aripuanã, it's more difficult because this has been a very difficult project to build. And the only bottleneck that we have today are the tailings filters. And as I said in the last quarter, these tailings filters really perform, but it's difficult to maintain them. It's difficult to change parts when we have to change parts. So we have capacity constraints that with the rainy season deteriorate even more. The fourth filter will solve that problem. But it's coming in the first quarter of next year. So Aripuanã might be in the lower range of the guidance. So if you add Vazante mid-to-lower range of the guidance, achieving guidance in the other two mines, Cerro Lindo going very well and Aripuanã low range, the average should be that we will be around the mid-range of the guidance. So that's what we are expecting. I mean, we are putting all the measures to make sure that the second quarter is better and the rest of the year we will show this improvement.

Thank you, Ignacio.

I have Camilla Barder with Bradesco BBI here again on the line. Please, you can open your microphone.

Hello, can you hear me now?

Yes, Camilla.

Okay. So sorry for that. So, good morning and thank you for taking my questions. Two questions on my side. First on TC. I just wanted to hear a little bit about your views on the impact of the recent trends on TCRCs for Nexa. I know you have some fixed contracts for next years, but you still have some exposure. So I just wanted to get your thoughts on that? And the second question is about leverage. So Nexa has done a good job on its deleverage path over the past quarter, but last quarter leverage went up following a compressed free cash flow as you mentioned, should be reversed. So my question is, how do you see leverage evolving in the next quarters? And what would you consider as a reasonable target for the end of the year? Thank you.

Okay. So I will talk about TCs and then I will let José Carlos answer the question on leverage. So TCs, it was a surprise to have this $80 TC agreed between Teck and Korea Zinc. Yes. We, as you said, we closed most of our contracts already for the year. And one thing that we have is that we have bridge contracts, which account that the conditions of our TCs have a three-year program. So we have conditions on TCs of the previous two years that were better and we will be affected by this year's TCs. Having said that, between our mines, we use a benchmark. So the benchmark we used before was above $100, today is $80, but among our mines, it doesn't matter because it will go from one packet to another packet. So the mines will benefit and the smelters will be hit by this $40 difference that we have. In the case of the rest of the concentrate that we buy for Cajamarquilla and the smelters in Brazil, as I was saying, we already have closed contracts, so they are not exposed, most of them are not exposed to the benchmark. So we believe that in that regard for us this year, that this is sort of under control. We don't have a lot of spot sales or purchasing concentrate for our smelters this year. Having said that, I would like to comment that with this TC of $80, with prices of zinc today at 2,600 and premiums that were already low last year and this year as well, the smelters' profitability in the world is going to suffer. Stocks are low today. So we will see that evolution during the first half of this year and we expect to see a reduction in metal as well because these are very low numbers for the market. We don't know what will happen with the supply, and that's also something that we will have to wait for, because we don't know what will happen. But in any case, with this context, smelters are going to be hurt by profitability. Our view is that if the supply remains, in the second quarter, the zinc price is going to go up substantially because otherwise, there won't be metal, won't be inventories and the market will react and have an impact on prices. So that's more or less the context. That's more or less the context on our smelters and mines. José Carlos, please go ahead with the leverage.

Yes, thank you, Ignacio, and thank you for the question. In terms of leverage, you're right, we have seen an increase in leverage from 1.7x at the end of 2024 to 2.1x at the end of the first quarter. This is something that we expected because of the seasonality that we have in our first quarters related mostly to working capital. However, we do expect that we will, as we have done in the last couple of years, that this trend will reverse throughout the year. And the expectation is that at prices similar to the ones we had in the first quarter, we should have leverage at the end of the year that is equal to or slightly lower than what we had at the end of 2024. So we continue to believe that will be the case. Hope that answers your question.

Very clear. Thank you very much.

Sure.

Our next question comes from Carlos de Alba with Morgan Stanley. You can open your microphone.

Yes. Good morning. Thank you very much for the comments. Just following up on the prior comment on working capital. Yes, so look, the negative working capital in the quarter was $265 million. I understand the seasonality of the first quarter, but this was like twice as negative as we have seen in the first quarter of prior years. And as you have been mentioning, the market is challenging with prices and TCRCs. So do you expect at this point in time to fully reverse that $265 million net working capital in the year and finish 2025 with a cash inflow from working capital?

Thank you, Carlos. I can comment on that. For planning purposes, what we normally assume is that working capital should be flat on an annual basis. So despite these fluctuations within the year that we see, that we have been seeing in the last few years, our assumption is that it will be flat. So it should be net zero. One particular aspect that affected the working capital in the first quarter, I would say, is related to taxes. Taxes because we had better profitability in 2024 compared to prior years, we had to pay more taxes. And this all happens in the first quarter. And there was one non-recurring item that is mentioned in an earnings release. We paid $61 million related to some of the tax contingencies that we had to take advantage of discounts on interests and penalties. And there was an amnesty related to one of the years that we also had pending related to Atacocha and El Porvenir. So this was a one-off effect of $61 million that by itself is already a significant difference. So the combination of those two factors is what has in a way enhanced this volatility that we see in the first quarter. So we continue to expect that throughout the year we will be able to reverse that and then close to flat.

All right, thank you. And my second question is, so if during the remainder of the year, seeing prices don't improve too much, but the way the market works out, the current tough situation for smelters is for TCs to improve, spot to improve and the benchmark contract next year to improve and therefore that improves the profitability of smelters. That would be not the best scenario for Nexa. Am I right on this view? You would benefit more if you see prices go up than if only TCs go up, right?

Yes, yes. As I was saying, we already closed our TCs. So we will have a lot of impacts if the spot price improves. We won't have a lot of impact this year. However, we start negotiating. As I was saying, we have bridge contracts. So we will start negotiating for next year and next year will be a net benefit. But for this year we will mostly benefit from better prices. Okay? Having said that, Carlos, you see that we also produce silver and copper, and the price of silver today is at $33, and we produce 12 million ounces of silver and then almost 30,000 tons of copper. And the price of copper is also up. So that is something that is going to help us mitigate these price levels of zinc that we have today. In any case, we are concentrating our efforts on what we can control, which is the operational improvement of our mines. We are aware that this quarter was really bad, and we acknowledge that, and we believe that we have the rest of the year to show the market that most of our operations are going to improve. And Aripuanã, we have to wait for the fourth filter, but still, it's going to improve because in the dry season the filters will perform as expected.

Thank you very much, Ignacio.

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

Thank you, operator. So thank you everybody for the questions. So I will start with a question. Actually, it was a question from Henrique Braga from Morgan Stanley about the impacts on working capital. But I believe that it was already addressed by José Carlos and also about the production, which was also addressed by Ignacio. The second question comes from Declan Hanlon from Santander. And it's basically the first part of the question, which is in regards to the working capital that was already answered. And the second part is still an expectation, the reversing the majority of this working capital in the following quarters already addressed. And the second part of the question is, if the company can talk about the tariffs risks and how the company is managing the expectations over those risks and contingency plans that the company may have if the scenario deteriorates?

Yes. So about tariffs, as we have been saying this, we are not exposed to tariffs in terms of zinc today. As I was saying, most of our contracts are already closed and the relationship we have with the states is mainly through Cajamarquilla in Peru. The U.S. has applied a 10% tariff on Peru, but there is an exception on zinc. The zinc market in the U.S. is around 1 million tons. They demand 1 million tons. Most of it comes from Canada and Mexico. Okay? And we provide the states with almost 8% of what they demand. So we are not expecting a drop in our demand for our zinc there. Having said that, we don't know what will happen. But the comment that I can make is that if there is no recession this year in the U.S., this 1 million tons demand is going to be there and they will demand that they will have to pay more. And given that Mexico has a tariff today on zinc, I believe it's 25%, and Canada as well, I don't see American companies buying zinc from other parts of the world because, as I was saying, there is no zinc available. So most of the measures that stay put is hurting the customers in the U.S. in terms of, let's say, consumables at the mines. We don't have tariffs; we are not importing most from the states and we don't have tariffs there. So all the logistics chain hasn't been interrupted. So for this year we are only tracking, I would say, expectations, which is something that is influenced by the zinc price mainly. And so far, there is resistance for the zinc at 2,600. We'll see what happens in the rest of the year, and we are monitoring that. Monitoring that means that we want to accomplish our operational budgets, but we are aware of cash flow as well. So we will benefit from probably better prices on silver and copper, but we will be hurt by prices on zinc. So the idea is we take measures to try to stabilize our cash flow and reach levels that will help us with the leverage that José Carlos has been explained. So this is more or less what we do through the year. We keep control every two weeks of what is going on. We make sure that our mines are always being tracked on production costs and CapEx. So this is the only thing we can do. So we'll see what happens in the coming months. And yes, we are aware of all of that.

Thank you. This concludes the question-and-answer session. I would now like to hand the call over to Mr. Ignacio Rosado for his closing remarks. Please go ahead, sir.

Okay, thank you very much for attending the call. As I said before, we are aware that we had a tough quarter in terms of our operations. We are working on the measures to make sure that we recover most of the production for the rest of the year. We are also aware that we have a volatile environment and we are prepared to face that environment in the coming months. We are very proud that the Cerro Pasco project is going as expected, on time and on CapEx. And also we are confident that we will have the S4 filter of Aripuanã in the first quarter of next year. Even if this year has this volatility and this uncertainty as Nexa, we work on the long-term and what we want to make sure is that we finish the expansion CapEx of the projects, we extend the life of the mines. So in the coming years, given the fundamentals of zinc, we start bringing the cash flow to start lowering the debt, to start giving dividends and also to start looking for other acquisitions as well. Thank you very much for attending. We look forward to having this call in three months. Have a good day.

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