Good morning, ladies and gentlemen, and welcome to Nexa Resources Third Quarter 2025 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. Written questions that are not addressed during the call will be answered afterward by the Investor Relations team. Questions from media outlets will be handled separately by our company 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.

Good morning, everyone, and welcome to Nexa Resources Third Quarter 2025 Earnings Conference Call. Thank you for joining us today. During the call, we will discuss Nexa's performance as per our earnings release issued yesterday. We encourage you to follow the on-screen presentation through the webcast. Before we begin, I would like to highlight Slide #2, which outlines forward-looking statements about our business. Please refer to the disclaimer regarding these statements and their conditions. Now it is my pleasure to introduce our speakers. Joining us today are: our CEO, Ignacio Rosado; our CFO, Jose Carlos del Valle; and our Senior VP of Mining Operations, Leonardo Coelho. I will now hand the call over to Ignacio for his comments. Ignacio, please go ahead.

Thank you, Rodrigo. Good morning, everyone, and thank you for joining us today. Before we dive into our third quarter results, I would like to highlight the strategic catalysts that are strengthening Nexa's competitive position and underpinning our long-term value creation. We are executing our strategy across five key business catalysts, building a more resilient portfolio for long-term sustainable cash generation. Starting with Aripuana, we are pleased to share that the fourth tailings filter is en route to the mine site. Installation begins in the fourth quarter of this year, enabling commissioning in early 2026. This is a critical step to achieving full production capacity. We will provide more details shortly. In Peru, the Cerro Pasco integration project advances on plan. It leverages a well-known high-potential mineral district with over 15 years of potential mine life and meaningful net smelter return uplift. Our integrated mine smelter model remains a core differentiator. It mitigates volatility during down cycles, captures stronger margins in supportive pricing environments, and enhances value retention across the zinc chain. Finally, our growth strategy involves actively evaluating accretive opportunities in mining-friendly jurisdictions. Any investment will be grounded in disciplined capital allocation, prioritizing returns, operational excellence, and sustainability. Together, these catalysts reinforce our strategic position and lay a strong foundation for long-term performance. Let's begin with a review of our strong third quarter performance on Slide #4. Nexa delivered robust operational and financial results this quarter, driven by disciplined execution, improved mining output, and a constructive price environment. Mining production reached 84,000 tons of zinc, a sequential and year-over-year increase. This was driven mainly by a record quarter at Aripuana and a solid recovery at Vazante following the disruptions at the beginning of the year. In Smelting, total zinc sales were 150,000 tons, reflecting a stronger performance across all units, with Cajamarquilla also achieving its highest quarterly output to date. Financially, this translates into net revenues of $764 million and adjusted EBITDA of $186 million, both improving in all comparable periods, supported by higher volumes and stronger byproducts prices. We recorded a net income of $100 million or $0.52 per share and a free cash flow of $52 million, up versus the previous quarter, strengthening our balance sheet with net leverage slightly decreasing to 2.2x. Now let's dive deeper into our mining performance on Slide #5. Our quarterly zinc production of 84,000 tons was up 14% from the second quarter. This was powered by a solid recovery at Vazante and a record quarter increase at Aripuana, which produced 10,000 tons of zinc, a 70% sequential increase. For the first nine months of 2025, zinc production reached 225,000 tons, reflecting lower treated volumes and grades in the first half of this year. Our consolidated mining cash cost net of byproducts strongly improved to minus $0.49 per pound, driven by higher byproduct credits and lower TCs. Year-to-date cash costs were minus $0.18 per pound, better than our guidance. Our cost per run of mine was $51 per ton, stable quarter-over-quarter and in line with our guidance. As we previously highlighted, the year-over-year increase mainly reflects conditions at Aripuana earlier in the year. Excluding Aripuana, costs were broadly in line with the prior year. Financially, the Mining segment delivered net revenues of $372 million and adjusted EBITDA of $164 million with a 44% EBITDA margin, supported by stronger prices and improved operational performance. With that, let's move to Slide #6 for more on Aripuana's quarterly milestone. Aripuana delivered its best performance since ramp-up, reflecting a more stable operation and a higher throughput in this period. The arrival of the fourth tailings filter is a critical step. We expect this upgrade to enable reaching nameplate capacity by the second half of 2026, securing long-term operational stability and cash generation. On cost performance, we saw a notable quarterly improvement, supported by higher treated ore volumes and ongoing optimization. And finally, exploration continues to enhance future potential. Recent drilling results confirmed new mineralized extensions, reinforcing our confidence in the geological upside and the potential to keep extending the life of the asset. Let's move to Slide #7 to review the latest developments on the Cerro Pasco integration project. In the third quarter, we made strong progress on Phase 1, which focuses on the new tailings pumping and piping system. Site mobilization is now complete, and we are progressing well with earthworks and civil construction on key areas, including the plant platform, tailings thickener, and drive pipe channel. Major procurement packages are secured with two key packages fully manufactured this quarter. In parallel, we are advancing with Phase 2 studies, which include technical assessment for the Picasso shaft and underground integration to define the most efficient long-term configuration. This project remains a strategic enabler for Cerro Pasco's long-term sustainability, supporting future production in this important mineral district.

Thank you, Ignacio, and good morning, everyone. Let's turn to Slide #9 for a summary of our financial performance. We saw strong momentum this quarter. Starting with the chart on the upper left, net revenues reached $764 million, up 8% sequentially and year-over-year, driven by higher zinc prices, byproduct credits, and stronger operational performance. Year-to-date, net revenues reached $2.1 billion, an increase of 4% versus the first nine months of 2024. Moving to adjusted EBITDA. We reported $186 million in the quarter, a 16% increase from the last quarter and a 2% increase year-over-year with a healthy margin of 24%. This performance was supported by higher sales volumes and improved byproduct revenues. For the first nine months of the year, adjusted EBITDA totaled $472 million, 9% lower than last year, primarily due to lower sales volumes in the first half of the year, lower TCs and higher operating costs. Now turning to Slide #10 for some detail on our investments. In the first nine months of 2025, we invested $227 million in CapEx, with the majority allocated to sustaining activities, including mine development, maintenance, and tailings storage facilities, fully aligned with our operational priorities. In the quarter alone, CapEx totaled $90 million, in line with our expectations. For the Cerro de Pasco integration project, Phase 1 investments reached $12 million in the quarter and $30 million year-to-date, keeping us firmly on track with our full-year guidance of $44 million. As such, our total 2025 CapEx guidance remains unchanged at $347 million. Moving to the lower part of the slide, exploration and project evaluation investments totaled $53 million in the first nine months of the year, of which $21 million was in the third quarter. These investments were primarily directed towards exploration drilling and mine development across our portfolio, supporting long-term optionality and value creation. We also reaffirm our $88 million guidance for exploration and project evaluation for the year as we continue to invest in our long-term pipeline. Let's look at our cash flow generation for the quarter on Slide #11. We generated $196 million in operating cash flow before working capital, starting from $186 million of adjusted EBITDA and after excluding non-operational items. From this amount, we paid $48 million in interest and taxes and invested $91 million in CapEx across our operations. Loans and investments required $10 million, reflecting regular payments of financing and lease liabilities, partially offset by dividends received and the net sales of financial investments. We also paid $16 million in dividends to noncontrolling interests. Foreign exchange gains contributed $2 million, mainly due to the continued depreciation of the Brazilian real. Finally, working capital posted a positive impact of $19 million as we continue to prioritize initiatives to optimize our cycle and strengthen our liquidity. Looking ahead, we expect working capital to remain positive in the fourth quarter, bringing the full-year position closer to neutral. Combining these effects, free cash flow in the quarter totaled $52 million. With that, let's move to Slide #12. As you can see, our liquidity position remains healthy, supporting a solid balance sheet and an extended debt maturity profile. We ended the quarter with a solid liquidity of $790 million, including our undrawn $320 million sustainability-linked revolving credit facility. Our average debt maturity stands at 10.4 years with an average cost of 6.2%. Importantly, our available liquidity, excluding the RCF, comfortably covers all of our financial commitments through the next four years. Net leverage improved to 2.2x, down from 2.3x at the end of last quarter, reflecting higher EBITDA for the last 12 months and a reduction in net debt. Furthermore, we continue to optimize our capital structure by diversifying funding sources and enhancing liquidity. A key priority is maintaining a debt maturity profile that is aligned with the long life of our assets while preserving our investment-grade rating and guaranteeing competitive financing costs. We remain committed to deleveraging and reducing gross debt. Additionally, in the fourth quarter, we expect working capital normalization and stronger cash generation to further support our financial flexibility.

Thank you, Jose Carlos. Moving to Slide #13. Let's start with the zinc market, where we see the backdrop continuing to evolve in a more constructive direction. During the quarter, LME prices trended higher, closing September at around USD 3,010 per ton. This strength was primarily supported by low exchange inventories and a weaker U.S. dollar. On the supply side, while concentrate availability is gradually improving, utilization across the Smelting segment remains uneven. We believe seasonal and logistical factors will likely keep the market relatively tight in the near term, supporting prices. This is reflected in treatment charges. In China, imported spot TCs rose to about USD 110 per ton, reflecting increased concentrate availability. Meanwhile, Chinese domestic TCs eased toward the quarter's end as local supply restricted against steady smelter demand. Looking ahead, we see the market moving toward a balance. Galvanization demand remains robust, supported by global infrastructure and renewable energy investments. On the other hand, supply growth continues to face structural headwinds from declining ore grades and mine depletion, particularly in the Western Hemisphere. Now turning to Slide 14 for a look at copper and silver. The copper market remains well supported by strong fundamentals. Supply disruptions and slower-than-expected mine ramp-ups have restricted balances, helping to keep prices at around USD 10,300 per ton. Demand continues to be driven by electrification, infrastructure spending, and the rapid expansion of AI-related infrastructure, such as data centers. Silver also performed strongly, up roughly 58% year-over-year. This reflects its dual role as both a key industrial metal for the energy transition and a safe haven asset supported by the monetary dynamics. Our outlook for both is constructive. Copper fundamentals are solid with structural demand from electrification, EVs, and grid investment expected to outpace new supply, which remains constrained by permitting and project delays. For silver, industrial demand, particularly from solar, electronics, and electric vehicles continues to grow, while investment demand benefits from global monetary uncertainty. This combination should help sustain prices at elevated levels relative to historical averages. Finally, on Slides 15 and 16, I want to summarize our key takeaways from the LME Week held in London in mid-October. The sentiment was notably constructive. Despite global macro volatility, there was a broad bullish consensus on base metals and a strong recognition of zinc's essential role in decarbonization, especially in galvanizing steel for renewables, EVs, and infrastructure. This aligns perfectly with our earlier discussions and reinforces that Nexa is well positioned to capture value as the market rebalances. Looking forward, there are a few key factors we are watching closely: treatment charges benchmarks for the next year, Chinese export flows, mine output in the Western Hemisphere, and trade policy developments. The 2026 forecasted TC benchmark is currently trending around USD 130 to USD 180 per ton, which points to a gradual recovery in smelter margins. We see zinc prices holding near USD 3,000 per ton with limited downside given the tightening supply outside China. Furthermore, potential export restrictions and logistical issues in China could redirect material flows to other markets. This would favor producers like Nexa with our regionally integrated low-carbon operations in the Americas. As major mines in the Western world approach depletion and our Aripuana mine advances towards full capacity, Nexa's reliable and sustainable asset base is a key differentiator, strengthening our leadership position. In summary, we see a highly supportive backdrop across our key commodities, resilient demand, tightening supply, and a growing recognition of zinc's strategic importance. Now moving to our final slide, our focus and priorities. I will now hand it back to Ignacio for his comments. Ignacio, the floor is yours.

Thank you, Rodrigo. Now turning to Slide #18 to explain our focus and priorities. We delivered a strong third quarter and continue to execute our strategy with discipline. At Aripuana, while some short-term challenges remain, the asset is demonstrating its long-term strength. Our record quarterly production reinforces its potential and sustainable cash generation. At Cerro Pasco, execution continues to move forward, unlocking a significant value creation opportunity in a Peruvian district. Exploration results across our portfolio indicate potential further mine life extensions and greater mine smelter integration, reinforcing our business model. From a financial perspective, our balance sheet remains solid, supported by disciplined capital allocation and a clear commitment to deleveraging. Most importantly, our unwavering commitment to safety for our people and communities remains the foundation of everything we do. This is all underpinned by our ESG leadership exemplified by our Cajamarquilla smelter, one of the world's largest zinc smelters, which is now powered by 100% renewable energy. In closing, we thank you again for the time and continued confidence in Nexa. Operator, we are now ready to take questions.

Our first question comes from Gabriel Barra from Citi.

I have two questions here from my side and mostly focused on capital allocation. You guys have mentioned about the working capital relief in the fourth quarter. We believe, and we are seeing the results of the company; we expect the company to have a stronger free cash flow from now on. How should we see the leverage level of the company behaving in the short to medium term? And what's the level of leverage that the company is targeting for next year? I know that you guys cannot give a kind of guidance, but I want to understand the trend here for the leverage? Additionally, on this question, is there any other way here to decrease gross debt faster in the short term? How do you see this liability management given this comfortable level of liquidity in the short term of the company?

Gabriel, thank you for the question. Yes, I think this is an important topic and one that has come up in previous meetings as well. And I think we can reinforce our commitment to deleveraging. Obviously, the speed at which we can do that will rely on, first of all, our discipline in achieving our operational results, which we are on track for. The expectation that we have on operational results going forward. That's key, and that's something that we can control. Something that we don't control, but that is showing favorable tailwinds is the current level of prices, which will obviously help us to achieve better free cash flow and to reduce leverage faster as well. Going forward, we continue to see that operational results and free cash flow generation should improve, subject to what prices are going to be. Ideally, we would like to reduce our gross debt by about $500 million to $600 million in the next four years or so, but we have to take this one year at a time, obviously. We would like to bring down our net leverage to levels closer to one-time, so that we have more flexibility because we will continue to see volatility, and we know we are in a cyclical industry, so conditions can change. This is all in parallel to our constant efforts to control costs despite inflation, our aspiration is to keep costs at least at the level of what we had the prior year despite inflation. So that's a continuous effort, and I don't see that changing in the short to medium term. So our goals continue to be the same. Our priorities, as we have mentioned before, are the same. Deleveraging is key. And in line with that, also maintaining our investment grade. Hope I answered your question. Please let me know if there's anything I missed.

No, really clear.

Our next question comes via phone.

Can you hear me?

Perfectly.

I have two questions. First, regarding Aripuana, could Ignacio or Leonardo provide more details on the next steps for installing the fourth filter? Ignacio, you mentioned we should expect this to be operational in the second half of the year. What are the critical steps we need to take before then? My second question is about free cash flow generation. Can you confirm, Jose Carlos, that you anticipate working capital in the fourth quarter will generate cash, making the full-year working capital neutral in cash contribution? Also, do you have any early insights on CapEx for 2026?

Thank you, Carlos, for the questions. Regarding Aripuana, the project is on track to begin commissioning in April next year. The filter has arrived in Brazil and will be in operation next week. We are making good progress on the infrastructure needed to accommodate the filter, including the piping system and earthworks. We expect to start commissioning by the end of the first quarter, specifically in April. The commissioning process should be quick since we have addressed all construction details necessary for a swift start. We anticipate that the full benefits will be realized by mid-next year. It's worth noting that currently, our three filters have limited capacity in terms of managing humidity for our stockpiles, but we are performing well, achieving close to 80% of the plant's capacity. The fourth filter will add around 75,000 to 80,000 tons of capacity, bringing the total plant capacity to 180,000 tons. This means we can expect to operate at 35% to 40% of capacity. With the existing three filters and the incoming fourth filter, we should reach full production capacity once we begin commissioning in April, and we expect to operate at full speed in the second half of the year. We are confident that the project is progressing as planned and that our capital expenditure estimates are being met. Now, Jose Carlos, regarding working capital?

Yes, I will address that. You're right. As we have seen in previous years, there is intra-year seasonality that has persisted quarter after quarter this year. We expect to see a positive contribution from working capital in the fourth quarter as well. The goal remains that for the entire year, the impact should be close to zero. For planning purposes, we use the same assumption: we anticipate some seasonality throughout the year. However, barring any surprising developments, we should anticipate that working capital will have a neutral effect on the company's cash flow generation year-over-year. Regarding capital expenditure for next year, we are still in the budgeting process, so it’s premature to provide guidance. We will make that information public once we finalize our figures. However, I don’t anticipate any significant changes in 2026 compared to 2025, so for practical purposes, you can expect it to be in the same range. We will finalize the details soon and share them as quickly as possible.

Our next question comes from Tathiane Candini from JPMorgan.

My question is a little bit of a follow-up for my colleagues. And I would just like to understand a little bit your perspective when it comes to 2026. I think we are a little bit more conservative on zinc prices with some rise in supplies, demand, which is not following up that fast. We know that prices have been pretty resilient. But my question for you guys is the CapEx, and I understand that you still budgeted this, but does the CapEx for next year have flexibility to adjust in case of lower zinc prices? We know that Pasco complex has some development to happen. We know that Aripuana also, as you mentioned, is working on the fourth filter. So my question here is just to understand a little bit on how flexible do you feel that you have for CapEx if needed?

Thank you for the question. We have some flexibility regarding our capital expenditures. We have three main areas for CapEx. The first is projects that are vital for us, like the Cerro Pasco project, which are necessary for long-term value creation. The second area is sustaining CapEx, which is essential to maintain our production levels for the year and ensure we meet our financial expectations. While there’s some flexibility here, it’s crucial to stay on track to avoid operational issues in 2027, as we need to develop the mine and procure equipment. We approach this with discipline. The third area consists of various projects that follow our capital allocation strategy. This portion, which represents about 20% to 25% of total CapEx, is more flexible for 2026. Regarding zinc prices, we take a conservative approach since zinc is our primary metal. We believe it's important to operate under a conservative price scenario for zinc next year. This allows us to challenge our operations to meet production targets, manage costs effectively, and achieve our CapEx goals. Additionally, we produce other metals, including 70,000 tons of lead and 12 million ounces of silver, as well as nearly 30,000 tons of copper. The value of these byproducts may remain strong, potentially similar to current levels by 2026. With that, by managing the variables we can control and staying conservative on zinc, we may benefit from the other metals and could see stronger cash flow.

Clear, guys.

Our next question comes from Lawson Winder with Bank of America.

Can you hear me okay?

Yes.

Okay, fantastic. My screen was just showing that I was muted. If I could turn the attention back to Aripuana and dig in a bit more on the workforce turnover issues that you had. Of course, on recent calls, you've spoken to some of the efforts to address those. But where is that today? And where is the turnover versus recent peaks? And then some of the programs that you've spoken to in the past to address the issue, how are those proceeding?

Yes, your question about Aripuana is very important because it has been a challenging project to build. We faced a tough two years during the commissioning phase. One of the key factors for us is the turnover rate. Initially, our turnover was between 35% and 40%, which was quite high due to the location being very remote from the rest of Brazil. We are developing this small town for the long term, working on establishing schools, hospitals, and family-oriented entertainment, all of which are important to us. So, you are correct that the turnover is improving. Currently, the average turnover stands between 18% and 20%, which is still high. The most crucial measure we are implementing is to ensure that families have a long-term perspective on staying in that town. This encompasses schools, health programs, and community-building initiatives. We are also focusing on retention programs for key personnel. We need to attract senior staff because they are vital for managing the plant, mine, and main facilities. Given the turnover, we have to continually train new hires. Therefore, we are introducing programs for senior personnel that include retention bonuses and offer flexibility for fly-in, fly-out arrangements. We are coordinating efforts to reduce turnover to normal levels of 8% to 10%. We have experienced similar challenges in the past in Vazante, so we are aware of the process needed. As a precaution, instead of assigning a maintenance shift of 20 people, we are increasing that number to ensure we have a fully trained team available whenever needed. We also have backup plans that come at a cost. The current expenses at Aripuana are high, but this investment is crucial for building the team we aspire to have. We have capable and talented individuals, but they face difficulties due to the full employment situation in Brazil. We are competing with other industries and mining companies for talent, necessitating significant efforts for retention. However, we believe we are on the right track and have the correct strategy. Consequently, while turnover is declining, we recognize that there is still much work ahead.

Okay, fantastic. I also wanted to just say thank you for providing specific Q4 guidance. And then on Cerro Lindo, you didn't mention silver, but the guidance and nine months results imply flat silver production in Q4 versus Q3. Is that accurate?

Lawson, this is Rodrigo. Thanks for the question. You're right. We expect Cerro Lindo to perform slightly better in Q4 versus Q3 in terms of zinc production and lead production. Silver may be flat quarter-over-quarter. This is basically driven by the current mine plan. But as we move forward with the fourth quarter reaching the end of the year, we're going to revise the very short-term mine plan to see if we can eventually access higher silver grades. But so far, we are planning to have a flat quarter-over-quarter in terms of silver.

Okay. And then just finally, Ignacio, a question for you, just given where you come from. There's a national election just around the corner in Peru. What is your view right now on the mood in the country? And is there any risk of a potential material change in direction post elections, particularly as it pertains to mining?

Yes, it's an important question. We have a new President who took office two weeks ago. For those not close to Peru, the political situation may seem quite challenging, and it is. However, I want to emphasize that the mining sector operates based on relationships with communities and authorities concerning permits and projects. If you maintain strong connections with communities, implement a win-win strategy, and advance your projects, the political climate shouldn't pose a significant issue. The political environment is somewhat disconnected from the daily operations of mining companies and other industries. It's difficult to predict the new election outcome, as we currently have many candidates, which has been the case for the past 15 to 20 years. As we approach the first round, scheduled for April next year, we'll know a few days in advance which candidates will move on to the second round. Presently, that's uncertain. This is a long journey until April. However, it seems that most Presidents understand that the revenue from the mining sector is crucial, making it unlikely for them to negatively impact mining companies and the industry. This understanding has been seen with Las Bambas, Cerro Verde, and other mining companies, as mining contributes about 12% to 15% of Peru's GDP. I believe there’s a collective recognition of the importance of sustaining the mining sector. This relates to new projects, obtaining permits, and fostering relationships with authorities, while also continuously building ties with communities. That is the context, Lawson. I expect that there will be much more to discuss in the coming months, and we will need to be patient.

Now I'll turn the call over to Mr. Rodrigo Cammarosano for reading questions. Please go ahead, sir. Thank you, operator. We have one initial question from an investor. So the question is, with an increased silver price, is Nexa pursuing any opportunities to increase silver production? I will hand this discussion to Jose Carlos.

Thank you, Rodrigo. The short answer is no, and I wish we had that flexibility. As you may know, silver is a byproduct for us, produced alongside other metals that have a defined mining plan. It is challenging to prioritize it, even though it would be advantageous given current prices. However, the good news is that we have a silver streaming agreement from 2016 or 2017 related to the silver production of Cerro Lindo. Sixty-five percent of the Cerro Lindo silver production goes to the silver streamer, but the contract specifies that once we reach a threshold of 90 million ounces, this will decrease to 25%. We expect this to occur toward the end of the second quarter next year. Cerro Lindo produces close to 4 million ounces of silver, which means this is about 1.6 million ounces. At current prices, this could generate an additional cash flow of $70 million to $75 million. This is significant and represents good news for Nexa in 2026, even though our silver production is not very flexible.

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

Thank you for joining us again. I want to emphasize our commitment to strong production in the fourth quarter of this year. At current price levels, we anticipate generating additional cash flow. This year has been quite challenging, particularly due to the weak performance in the first half, which was impacted by issues at Aripuana and geotechnical problems at Vazante, as well as poor market conditions for smelters, resulting in very low and sometimes negative treatment charges affecting cash flows. Despite these difficulties, we experienced a strong third quarter and believe we are on track to build upon this momentum in the fourth quarter. Looking ahead to next year, we are dedicated to ensuring that Aripuana reaches full production, completing the piping system in Pasco, and securing better commercial terms at our smelters, especially in Brazil. Thank you all for your attention, and we look forward to discussing our year-end results with you.