Good morning, and welcome to Nexa Resources First Quarter 2020 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] The presenters in this call are Mr. Tito Martins, CEO of Nexa Resources; Mr. Rodrigo Menck, CFO of Nexa Resources; and Ms. Roberta Varella, Head of Investor Relations. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Tito Martins. Please go ahead.

Thank you. Good morning, and good afternoon, everyone. I hope you and your families are doing fine in a time so complex for our lives. Thank you for being here in another Nexa’s earnings conference call. Today, we’ll be talking about our results for the first quarter of 2020. Please let’s move to Slide 3, where we will begin our presentation. On Slides 3, 4 and 5, I will comment on the measures we have taken in response to COVID-19 outbreak. We are living in unprecedented scenario that should not only affect the way we manage our business, but it will also affect our personal lives. What has not changed, and is part of our core value, with our commitment to protect and preserve the well-being of our people and our whole communities. We think our reaction to the COVID-19 escalation was actually quick, even before the authorities in Peru and Brazil started to take measures to deal with the coronavirus outbreak, we decided to set up a crisis committee to care about preventive procedures in our operations and offices. It was clear for us. We should look at the healthy and safety of our people and we needed to preserve the continuity of our business. A strong communication plan addressing our workers and the stakeholder was implemented, and we also decide for additional safety measures in our operations. Here we have some examples; social distance, increased site cleaning and hygiene services, health screening and fever monitoring, no official site personnel, risk group and corporate employees all working remotely, restriction of external visitors, suspension of non-essential business trips and events, health and well-being programs regarding to COVID-19 related issues, and the increase of the use of technology to manage our business. I’m sure everybody here tell us that we would…

Thank you, Tito, and good morning, everyone. I’m on Slide 6 now. As you know, prior to the COVID-19 escalation and taking into account our strong cash position, we approved in February, the payment of $50 million of dividends to shareholders. Also in February, taking the advantage of the capital market momentum then, we announced and completed a tender offer of our Nexa Peru 2023 notes in the amount of $215 million and completed this liability management exercise, entering into a new five-year term loan of $100 million, with lower costs. Moving forward, as a response to the worsening conditions of the COVID-19 global spread in March, we increased our liquidity position by adding almost $600 million to our cash balance through new debt being $250 million in March, and $44 million in April, both through our Brazilian subsidiary and also the drawdown of our revolving credit facility in the amount of $300 million in April, through Nexa Resources in Luxembourg. Therefore, our available liquidity is of approximately $1 billion and as such, we believe we have a strong balance sheet to navigate through uncertain scenario. We will continue to monitor the market development, as well as our capital structure, analyzing opportunities to support us in our deleveraging process in the future. In terms of leverage, measured by the net debt to EBITDA ratio, we ended the quarter at 3.3 times. Considering the current scenario and projections, it is likely that we will not comply with the maximum level of leverage allowed by our financial covenant clauses defined in some agreements. We are already discussing such situation with the interested counterparts to address it. Moving to Slide 7 and 8, I will comment on our revised guidance for 2020. But before discussing guidance, I would like to comment on our…

Thank you, Menck, and good morning everyone. Please let’s move to Slide 10. Beginning with the mining segment, as you can see in the first graph on the upper left, zinc production decreased by 14% year-over-year. The temporary suspension of our Peruvian mines required by the local government on its efforts to control COVID-19 spread, offset the performance of our Brazilian operations. In respect to our smelting segment, first quarter metal sales were relatively flat, reflecting the steel use demand by mid-March. Consolidated net revenue was $442 million, down 22% year-over-year, primarily driven by steep declines in LME price. Turning to Slide 11, we will comment on our consolidated EBITDA, compared to the fourth quarter of 2019, adjusted EBITDA decreased 59% to $44 million. This performance is primarily explained by, the negative price variation between lower LME prices and changes in market prices in respect of quotation period adjustments and the decrease in byproducts revenue, to lower volume and LME prices. This effect was partially offset by lower operating costs and expenses. The U.S. dollar appreciation against Brazilian real had a positive best of $14 million. Turning to Slide 12; we will comment on mining segment performance. In first quarter of 2020, adjusted EBITDA was negative $17 million, compared with $83 million a year ago. This decrease was primarily driven by, market-related factors such as lower LME prices and higher treatment charges, with a negative variation impact of $64 million and $9 million respectively. Lower volumes, which were impacted by the temporary suspension in Peru, with a negative impact of $29 million and lower by-product credit, particularly in Peru, totaling $4 million. This negative effect was partially offset by lower operating costs and a decrease in mineral exploration project development expense. Looking to the graph at the bottom right, we…

Thanks. Please turn to Slide 16 and 17. Here, we will comment the Aripuana project. As previously announced, we are working on a rebased line of the project. Production is now scheduled to start in the third quarter of 2021. Of course, the rebase line is subject to a successful execution of the updated plan, and it’s also subject to COVID-19 outbreak expense. For 2020 we’ve revised our CapEx plan and estimate to invest something close to $200 million. The updated CapEx contemplates a foreign exchange gain of $50 million, which offset the estimated increase in costs. In the first quarter of 2020, $29 million were invested in the project. Aripuana is a highly profitable project. And we will work in our capital allocation strategy to balance our resource and keep it developed unchanging. As you know, Aripuana is located in a remote area, and in light of the crisis we are facing, our stakeholder agenda has been upgraded. Awareness campaigns were made, we have provided antibody test and medical equipments and many other initiatives related to the combat the COVID-19 have been implemented in the city. A strong protocol for mobilization and incoming site personnel was also sent. Please move to Slide 18. I’m going to make some comments about our pipeline of projects. As I previously mentioned, in response to COVID-19, we reassessed our capital allocation strategy and decided to put on hold our greenfield projects and some exploration plans. Exemption for Magistral, which is in FEL3 stage. Its feasibility study work is advancing but may face delays due to the current conditions. Some of the needed work at site cannot be performed until the end of the restriction imposed by the lockdown in Peru. Anyway, we are still considering the conclusion of the FEL3 in the second…

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Carlos de Alba with Morgan Stanley. Please go ahead.

Yes. Good morning everyone. Hopefully, you guys and your families are safe and healthy. So my first question, if I may, has to do with the financial covenants. If you could maybe remind us what the current covenants are? And what are the – what is the status of the discussions that you’re having with the relevant parties in trying to structure them? And do you expect what is the amount, if any, of fees or penalties that you expect you may incur as you refinance or rearrange this covenant? And then given – well, your liquidity definitely has improved significantly. Your net debt also has increased. So the leverage has gone up. Are there any plans to either sell projects or potentially raise equity just to strengthen the balance sheet? Or you don’t think that is necessary given that the mines in Peru are starting to restart, are starting to produce again, as we speak. And then another part of my question, if I may, is related to the impact of the idle capacity. I noticed that in the cash cost guidance of $0.59 for the mining operation. This cost of idle capacity or the impact on cost of idle capacity is not included. Can you maybe talk about how much do you expect that impact to be? And if it is, what do you plan on book this? Is it going to be spread between COGS and expenses? Or it’s going to be mostly in COGS?

Hello, Carlos, it’s Rodrigo Menck here. Thank you for participating. I hope all of you in the call are safe and well with your families. Well, Carlos, first of all, financial covenants. We have in four agreements with nine counterparts. It’s equivalent to 25% of our debt. We have financial covenants of net leverage of 4 times net debt to EBITDA, right? So the capitalization ratio of minimum of 0.3 times and debt service ratio of minimum of 1 time, right? So we estimate that the net leverage one will be the ones that we probably will reach. We are talking with the banks and the counterparts. We are beginning this discussion, right? Sharing projections and all that. So we’ll be updating the markets when appropriate. I don’t know which fees they’re going to charge, but it’s market practice. This type of – the fees are pretty much standardized, and I don’t expect anything high. On terms of liquidity. We have been adding liquidity, both locally and also through the drawdown of our RCF. The debt profile that we have of our $2 billion debt is pretty comfortable, right? So we have increase in leverage, mainly due to the reduction of the last 12 months EBITDA. So what we understand is that once everything comes back to a normalized flow, this EBITDA denominator will be compounded back to other levels that will reduce naturally the leverage. Of course, we are also monitoring the market to take benefit of any opportunities that might arise in the coming months so that we can reprofile our debt or even deleverage using some other opportunities. To this extent, we don’t believe raising equity at this very moment is either necessary nor interesting. And also selling projects, it depends on the evolution of the market, certainly, at this point in time where you have a stress scenario, pricing projects to be sold is not necessarily interesting for the company, and provided that we have a good liquidity position with a long – I mean, well spread debt curve, we don’t see this as necessary in this point in time, but we are aware and we are alert to analyzing possibilities. On the idle capacity costs, I will pass to Roberta. She has more detail to show you.

Hey, Carlos. In terms of the idle cost, it is included in our cost of sales, we have a note in our earnings release. We exclude it from our cash cost guidance in order to better compare from the estimates that we provided in January. But we also add it in our earnings. So I would say almost 15 days that we have our mines suspended, it costs us around $11 million and $2 million for the smelter. So could be a good reference for you considering now that you have a month, a little bit more than a month, April until May 10. So can be a reference for you in terms of the cash cost.

Our next question comes from Isabella Vasconcelos with Bradesco BBI. Please go ahead.

Hi, good morning everyone. Can you hear me well?

Yes, go ahead, please.

Okay. Great. I hope you are all doing well. So I have two questions here. So first, could you please comment on how demand within the key end-use markets for zinc has been developing so far in the second quarter and also versus your initial expectations going into the crisis? And then my second question. On the lockdown in Peru, do you already have a time frame you’re working on to resume operations at Atacocha? Or is it still too early? These are my two questions.

Thank you for your questions, Isabella. We are fine. I hope you are also fine with your family. Regarding demand, what we are seeing so far, clearly, there was a major drop in demand in our home mark. By home mark, we mean everything below Mexico and LatAm. Brazilian customers, Argentinian customers, they are not doing well, they still make us do – we’re were almost completely closed for more than 45 days. That’s the reason why we decided actually to reduce production in Juiz de Fora for a couple of months exactly to monitor and see how the demand will behave, and being able actually to produce – to not produce in excess and generate more stocks in our facility in Brazil. In general, what we are seeing abroad, and I mean, in Asia, is there is an adjustment in the market right now. If you notice, the price of zinc is coming up in the last two weeks. Now it’s around $1,000 per ton already coming from almost $16.50 per ton, 45 days ago. Looks like the lockdown in Peru and associated with a recovery in China has been supporting the price to come up. And also, we’ve seen already a reduction in the stocks around the world, metal stocks around the world, which implies that the recovery in Asia is actually being able to demand more than has been supplied everywhere. Of course, a lot of uncertainties. We don’t know where it’ll be takings us. How it will move in the next few month, but we are paying a lot of attention to that. Regarding the second question, the operations in Peru. We are coming back with Cerro Lindo, El Porvenir, as was mentioned before. Atacocha, because of its size, will remain suspended at least for the next month. It’s going to be interesting to see how the return is done. A lot of protocol, a lot of arrangements to be made in order to have our people back to the site. And hopefully, we can return at that question next month.

Our next question comes from Orest Wowkodaw with Scotiabank. Please go ahead.

Hi, good morning. I’m curious if you can give us some insight into how Brazil is coping with COVID-19. And by that, I mean, do you see any risk factors of the mines or smelters having to close because of the increasing spread of the virus?

Orest, thanks for the question. Very good question. Brazil is having not a one case with COVID-19. And actually, we can split the country in many different areas. The impact of the outbreak is different from state to state. Of course, the big cities like Sao Paulo and Rio has been more affected. And we also saw some impact, a huge impact in the north of the country. Surprisingly, many of the states where we are located, have not been impacted yet. We are running a lot of different protocols. We’ve been in direct contact with the local authorities. We’ve been very supportive to the local authorities. Even some of our internal protocols, we are applying to the cities we are located. You have to remember that some of the things that are very small. So in some ways, you can actually control it. To say that we would not be impacted is very difficult now. What I can tell you, so far, in Brazil, we have within our sites and our operations, just one case of contamination, which actually was in Sao Paulo. So we haven’t had anybody in our operations – it’s usually Teresina, Rio, Barbacena and Paracatu, affected. With set protocols, they’re testing people regularly, but we haven’t seen anything yet. So we have to wait and see how the situation evolves along the next few months. Hopefully, we can control it. Risks for lockdowns may be in the big cities. There are rumors that Rio will implement it. Sao Paulo also may go for that. Some of the states in the north, as I mentioned, they have done already that. But not where we are, not yet. And even in Aripuana, which is very remote and isolated place, we have some cases in city, but they were controlled, and we have more than 1,500 people now at the site in Aripuana today and no case registered so far. So let’s wait and see. But we have to be optimists, right?

That’s right. And just following up on the previous question on demand. Can you give us a sense specifically in April? I mean you announced with this update that you’re going to pull back smelting capacity at one of the smelters for mid-May and June. But can you give us a sense of like how much are refined zinc sales down, say, in the month of April versus what they normally would be?

Specifically in April, I don’t have this number with me, but I can tell you the following: based on what we’ve seen so far, we saw a potential drop in demand in our home market, around 17% until the end of the year. Why we’re assuming that? Because we start to see some of our customers in the home market actually postponing some orders to the second half and even some of them to the beginning of 2021. So that was why we decided to stop for a couple of months to see if the situation will remain as it was or it could improve or become worse. So that’s where we are today. In May processing we produced, we were able to sell because we have the option to sell in the spot market. And assuming that we would reduce production,in May and June in Juiz de Fora, we are trying to balance how much we are producing, how much we are selling in the spot market and not taking the risk through action, producing more and be forced to sell with some losses in the spot market and the investing in working capital as well.

Okay. And just finally then, if you’re assuming a 17% demand reduction this year in your home market, does that leave the door open then to reduce smelting production even more?

We have to see. We have to see it. I hope no. If we calibrate with the reductions that we have implemented in Juiz de Fora, we should be able to deal with that. Once more, it will depend a lot in how much we will actually be able to shift to other markets. It’s unprecedented situation. Yes, we are leaving right now Juiz de Fora. And the decision was made basically to – actually to reduce production and evaluate how the market will behave in order to avoid an excess of production in the short-term. We may go for full production everywhere because as I said, we have the spot market, our traditional customers decide to delay and postpone some of the orders. But it was just a measure, a conservative approach in order to check what’s going on. It’s completely new for everybody. It’s the first time – I’ve been here for eight years, we never had to actually reduce production in the smelters. This is the first time. We always operate in full capacity. We are doing that because we are really afraid of having an excess of working capital.

Okay. Okay. And then just finally, though, the cost, the maintenance cost for the closed capacity, is that going to be put through as OpEx or CapEx in the second quarter in terms of these standby fees?

OpEx.

Thank you.

Our next question comes from Jackie Przybylowski with BMO. Please go ahead.

Hi, good morning Tito and team. I just wanted to ask you about the Aripuana project. I know in the release, you said you’re working on a new baselining for that project. Can you tell me what that means exactly? What is – what are you doing in terms of baselining? And maybe is there a time line where we can expect to hear the results of this study or review?

Hello, Jack. Thank you for the question. Basically, what we did, first, we reprogrammed the project based on the impacts we suffered at the end of last year. We mentioned in the call the first of 2019, that we have been impacted by an excess of rains in late 2019 and also a delay in the rebuild of important bridge for access to the project. And because of that, we knew that we need to change the schedule of the project. It has been done already. So when we say that production should be started at beginning of the third quarter 2021, has to do with that. And some of the impacts we already saw coming from the COVID-19. Just to give an example, we have to set up protocols to bring in more people, to mobilize more people to our – to the construction. Nowadays we have to bring in people and keep them, for a couple of weeks, in quarantine before they can actually be in the site. Then we have – given the change in the schedule, we need also to change, we revise the budget for the CapEx, right, for the project. We are doing that, but given the uncertainties we are faced with the COVID, we decided not actually to set a precise value for the project. And we should have this on the second half of the year. We are still working with the same budget between $100 million and $92 million, assuming that beyond the contingencies, there will be an increase that may be in between 10% and 25%. I could provide a number today, but we decided not to do so – we do not because the level of uncertainty we are following. There is also the fact that FX has been offsetting the CapEx. I don’t know if you are following up, but exchange rates in Brazil, they moved really fast along the last four months. Now real against U.S. dollars are almost $6. So the – most of the projects we are running are in real with Brazilian currency. So the combination of those factors – we believe, we would use guide anybody looking at the projects. So we decided to let’s wait and see how the productivity in the site moves on given the impact of COVID-19. How the exchange rate will impact it in order to be able to come up with a new number. That’s why we’ve decided not to set up where we – when we’ll be able to give it. The second half will be very important for us because of the productivity of the sites of the construction. And hopefully, the exchange rate will have more stability sometime after this momentum has passed, right?

Absolutely. Yes. Okay. That makes sense. Can I ask also about your cost savings program, Nexa Way? I know the last quarter, you’d given us an update on how much that program has cost you. Are you able to give an update on how much the cost savings program has cost you so far in consultant fees and things? And how much you’ve realized in savings so far beyond what you highlighted in the release for things like FX or reduced travel because of COVID? Is there anything that’s more specific to the...

No, no, no. Correction, Jackie. The extra savings are not related with the Nexa Way, the additional $20 million are not related. We have had some gains, and those gains are not specifically related with the cost savings, they also are related with some KPIs and performance improvement. That’s why we are saying that the $120 million, we were expecting to see along 2020, may not be reach – achieved until 2021 because of this – the parameters we were using, they were effective. When you calculate the potential gain, you’re going to make improving the – for example, recovery in one of your plants has to do with the price you’re using to define that. As prices dropped dramatically, and some of the external factors are affecting our results, the numbers beginning a little bit massive. We still assume that we can get – reach $120 million in gains with Nexa Way, but not only with cost savings and not necessary only in 2020. In the first quarter, those gains were $21 million. They are embedded in the results of the first quarter. The savings we’ll have within SG&A, the $20 million will happen along the year. And we are not expecting to pay additional fees until the end of the year. The reason for that, let’s deal with the problem. The definition of the fees is based on where you identify, you characterize the gains you may have. So last year, we paid a significant amount, but we generate – we almost match the amount paid. This year, almost everything that will be generated will be – will go to the company without any fee being paid because we paid already last year.

Okay, thank you. That’s all I had. Thanks.

Thank you.

Our next question comes from Oscar Cabrera with CIBC. Please go ahead.

Thank you, operator. Good morning, everyone. Best wishes for you and your families to stay healthy during these abnormal times. I have three questions. And let me start with just smelting segment. Approximately 46% of the seed for the smelters come from third parties. And with elevated treatment charges, have you had any discussions with companies that may not be able to continue operations, and therefore, you may have lower fee for your smelters?

Hi Oscar, thank you for asking this. Yes, we are monitoring most of – all of our suppliers. We have long – as you know, we have long-term contracts with the main suppliers. Our acquisition in short in this spot market is very small. Actually, if we were operating in normal times, we would not need to actually to buy anything from the spot market. We did that last month because of the shutdown in Peru. So some of our suppliers were not able to supply. So we had to look for stocks available for other sources. We are pretty comfortable about our raw material. We are not expecting to see – even if there is a disruption in one of the main suppliers, we already had – get assurance from others that we should have the concentrate available. Regarding the TCs. All contracts, they cover the year supply. No, we have not had any discussion about the change in TCs. Our average TC is around $300 for the year and should remain that. There is no apparent concern about it. Even when we talk – because we deal with the big – the larger producers, right? So not at all. Nothing about that motivation so far.

Okay. That’s great to hear, Tito, because this shows the countercyclicality of your smelting business in these tough times. Second question, can you please remind us – I mean a lot of companies are benefiting from depreciation of local currencies. Can you remind us the amount of cost or the percentage of cost on currency for your Peruvian and Brazilian operations, please?

Hi Oscar, it’s Rodrigo here. We have around 80% of our costs in Brazil dominated in real, right? And we have been sharing with you all the sensitivity analysis we periodically do. We have approximately a $7 million to $8 million EBITDA impact for each $0.10 of FX in the Brazilian real, the variation in the FX rate approximately. Does that cover anything what you were asking?

Yes. That’s for Brazil. For Peru?

In Peru, it’s a – it’s the other way around. It’s approximately 80% in U.S. dollars. As you know, the Peruvian economy is much more dollarized than Brazilian one. So in Peru, we have less impact of the FX because of the FX rate. And the FX rate there varies a lot less just to have a comparison. Ever since the beginning of this more volatile times, the Peruvian currency has varied like $0.15 from PEN 3.30 to PEN 3.45, approximately. On the other hand in Brazil, you have seen where we are. So we are coming up to those levels to BRL 6 per $1. So it’s really different by the mechanics.

Right. Yes. Then on the sustained capital deferrals of around $40 million. Can you just give us an idea of where those savings are coming from? And how should we think about the – when you’ll be spending this capital if things return to normal in the second half of this year?

Hi, Oscar. All we did was a broad exercise to maintain everything that is essential, right? So everything that is legally – where it binds – binding to us such as tailing dams, such as other investments to maintain the main operations at a safe level in all of our units. So everything that relates to increasing capacity or expansion besides Aripuana and also the final investments of the beginning of the Vazante mine, we have postponed all the investments with regard to growth we have postponed. We are maintaining, for example, immune operation we’re maintaining what the fees for mineral rights and things that are unavoidable, and we’ll maintain our business healthy. But in the plants, we are – the teams have reassessed all of the investments. And we are maintaining things for basic maintenance in all lines. We increased health and safety expenditures, of course, for the new protocols. So everything is being brought down to the minimum level that we should preserve cash with. That did cover?

I should say minimal, but enough to keep the stability of the operations, right?

Yes.

This is one more concern we have, yes.

All that is essential.

Correct. But I mean – so can I assume from your comment that the amount that you have outlined on Slide number 14 is mostly for maintenance of all the operations?

Yes, it is. The maintenance and operations.

Okay. Thank you very much, and best of luck.

Thank you.

Next question comes from Lucas Yang with JPMorgan. Please go ahead.

Hi, this is Lucas. I hope you and your family are doing well. I have just one question on by-products. We noticed that the majority of the by-products production in 2019 came from your Peruvian operations. So besides lowing production, is it fair to assume a very sharp decrease in by-products volumes in the second quarter? Or is there inventories that can compensate that? Thank you.

I would say that what happened is, the most – the base impact in the first quarter about by-product has to do all. We had a reduction in copper production and selling, yes. But the most – the significant impact came actually from price, right? So the production in terms of volumes was less impacted than the reduction in price. Menck, do you want to add anything? Roberta?

No.

No. Demand impact. Yes.

My fear was that like 98% of the – like the side lower prices – like almost all your by-product production will be halted for the period of the lockdown, right? Is it like a correct assumption?

Yes, it is.

I’m not sure I understand the...

For the Brazilian property will remind yet.

Okay, very clear. Thank you.

Our next question is a follow-up from Carlos de Alba with Morgan Stanley.

Yes, thanks, again. Tito, I wanted to explore a little bit in more detail the 17% decline, potential decline that you see in demand in Nexa’s home market. Could you maybe elaborate if this 17% applies to all of those end markets? Or is it more – you see differences between auto sector and construction or some of the other important relevant...

All sectors, all sectors. Because what happened is, mostly our main customers are the steelmakers, right? And they’re the suppliers to the different sectors, automakers and construction and so on. All of them were, in some way, affected. For sure, automakers were the main ones because almost 100% of the Brazilian production was shut down for at least a month. I was reading yesterday, sales in April in auto business were down 98%. They went back in 1954, the year of 1954, it’s amazing. But we know for sure that the other steel makers also closed, those who supply to construction or infrastructure. So – and the direct use of zinc was also affected. I mean by die-casting and everything was affected everywhere, I mean through LatAm, everywhere.

Okay. And then Nexa continue to pay dividends in this past quarter. How should we think about dividends in the – for the remainder of the year given the situation in which we are all living, I mean which the company is operating?

Hi Carlos, this is Rodrigo. For this year, no more payments. We usually pay once a year in March. So when we had this deliberation by the Board in February, we were far from this volatile times that engulfed us. And once we disclosed it, it was already a commitment to the market, right? So we paid it. And now we don’t have any more expectations of paying in the rest of the year.

And then we have to see what’s going to happen along into 2020, right? The year that should never happen.

Right, exactly.

It’s not on my calender anymore.

I know. So just two final questions very quickly. What is the average CapEx of Aripuana that is exposed to BRL? And second, we saw a big decline in El Porvenir cash cost in the second quarter. How do you see that in the coming quarters?

Okay. First of all, Aripuana. The expenditures are mainly in real. So overall, in the project, we had approximately 20% of the overall costs exposed to dollar. At that point in time when we began the project, we hedged the flow of the dollar disbursements, right? So this is – it’s pretty much – what remains is pretty much in real, okay? On the El Porvenir cash cost, I’ll pass it to Roberta, she has more detail.

So Carlos, we provide information in terms of the cash cost for the year. And so we are not seeing in terms of year-over-year, not so many changes. In terms of the first quarter, as we mentioned, so it excludes the item for Porvenir, and we also have by-product here that affected our cash cost. But year-over-year should be aligned with the guidance that we – sorry, for the year should be aligned with the guidance that we provided. And for the year that actually see a little bit of increase because of the – what we are considering in terms of the higher treatment charges and lower by-product credits as well – because of the lower metal price.

Yes, excellent. Thank you very much, everyone. Stay safe.

Thank you.

Thank you, Carlos.

Thank you.

This concludes our question-and-answer session. We will now hand over to Tito for his final remarks. Mr. Martins, please go ahead.

Thank you. Before we end this call, I would like to call your attention for three important points, some of them were kind of mentioned here today already, but I think it’s very important to call your attention to that. The first one is, our mine costs they were effected, they’ve been effected into 2020, mostly because of the TCs. It is very important to note that. It looks like that the integration we have with the smelters not necessarily turns to being important. When you look at picture, the TCs had a huge impact to the mines. But on the other hand, they were benefiting these smelters, and we hope it would keep it. As I said before, the TCs should – the TCs were in the best shape at the beginning of the year, they should remain to the rest of the year. It’s around $300 per ton. The second point has to do with the guidance, the new guidance we are providing. We actually decided to be very conservative, as was said today. And it has to do with the level of uncertainty we still have in terms of how many people will be able to return to the operations in Peru, how long we’ll be able to operate, how fast we reach the full capacity. There was an interview given by the Head of the Mining Association Peru, a couple of days ago, saying that most of the mines are coming back, assuming that they will be producing around with 80% capacity. We did pretty much that. I mean we wanted to be conservative instead of action. Throwing numbers that we don’t know today, if they will be achievable or not. I hope we can make more than as in using the guidance exactly because of…

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.