Good morning, ladies and gentlemen, and welcome to NEXA Resources Second Quarter 2025 Earnings Conference Call. Please note that, today's event is being recorded and broadcasted live via Zoom, with access also available through NEXA's Investor Relations website. A slide presentation is accompanying today's webcast and is also available for download on our Investor Relations website. A replay of the conference call will be available following its conclusion. [Operator Instructions] Written questions that are not addressed during the call will be answered afterward by the Investor Relations team. Questions 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, sir.

Good morning, everyone, and welcome to NEXA Resources Second 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, Jose Carlos del Valle; and our Senior Vice President of Mining Operations, Leonardo Coelho. I will turn 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 second quarter and first half of 2025 financial results, I would like to begin by highlighting the key business catalysts driving NEXA's long-term growth and performance. Let's move to Slide #3. As we continue to execute our strategy, 4 major business catalysts are shaping the path towards sustainable cash generation and long-term value creation. Starting with Aripuana, which remains our top priority, the installation of the fourth tailings filter is progressing on schedule. Once operational, this will unlock the operation's full production capacity and improve both efficiency and cash flow. Aripuana is a cornerstone asset in our portfolio, with a mine life of 15 years based on reserves and over 25 years when including resources. It is a highly competitive asset and well positioned in the cash cost curve. The Cerro Pasco integration project is a key component of our strategy in Peru. With more than 15 years of life of mine and potential upside in net smelter return, it leverages the area's rich mineral endowment. In mineral exploration, in addition to the potential at Aripuana, we continue to achieve promising results at Cerro Lindo with extensions near its current infrastructure. At Pasco, drilling in the integration area reinforces our confidence in the mineral potential with attractive zinc grades. And at Vazante, Seccao Norte is also delivering promising results. Lastly, the integrated mine smelter business model continues to be a core competitive advantage. It reduces exposure to market volatility and enhances margins in positive price environments. With Aripuana Cerro Pasco under development, we are further strengthening our platform for sustainable cash flow. With that, let's now turn to Slide #4, where we will review our performance this quarter. Market conditions remain dynamic…

Thank you, Jose Carlos. Before we conclude, I would like to reflect on the broader context and reaffirm our priorities for 2025. We continue to make solid progress on our long-term strategy, guided by our business catalysts, the Cerro Pasco integration project is advancing well and is a key pillar of our growth plan with additional mine life and NAV upside potential. It represents a strong value creation opportunity. Aripuana still presents short-term challenges, but it remains a long-life, high potential asset positioned in the second quartile of the cost curve. Our ongoing efforts to increase production and reduce operating costs are expected to support NEXA's sustainable cash generation. On the exploration front, we have seen encouraging results in all our mines. These developments reinforce our zinc integration strategy and support life of mine extensions. In ESG, we are actively tracking our public commitments and making steady progress across multiple front. Financially, we continue to extend the maturity of our balance sheet through liability management and deleveraging to improve flexibility and resilience. Despite the current volatility in zinc prices, the long-term outlook is positive, supported by structural demand from sectors such as the energy transition and possible lack of mine supply. Recent U.S. tariffs may affect global trade flows, but NEXA's direct exposure remains very limited. Lastly, it is with great sadness that I acknowledge the loss of a senior colleague who passed away during the quarter. Although, the incident occurred outside of our operations and during a leisure weekend, our thoughts are with his family, friends and teammates. At NEXA, safety and care are core values. We remain deeply committed to fostering a respectful and supportive environment for all. Thank you all once again for joining us today. We appreciate your continued support and confidence in NEXA. Operator, please open the line for questions.

[Operator Instructions] Our first question comes from Lawson Winder from Bank of America.

Can you just confirm that you can hear me?

Yes. Yes, we can hear you.

Okay. Fantastic. If I may, I'd like to ask you about the guidance or the change in the guidance for several of your metals. And just asking from the point of view that a number of the issues that you highlighted that led to the downgrade in production actually occurred in Q1 and in April, so prior to the Q1 2025 result, at which time you obviously held your guidance at that point. So, when you look back, I mean, at that point, what held you back from reducing guidance in Q1? Was there some potential catch-up that you saw happening? Or is there something else that happened in the quarter that contributed to what it already was impacting the production in Q1 and April?

Yes. Thank you, Lawson. Very good question. If you look at the -- the guidance we are giving has been affected mainly by Aripuana, Vazante. So the sill pillar collapse in Vazante happened in March, which means that this tonnage that we lost with high grade was being affecting the second quarter. We didn't know until late in the second quarter how we were going to recover, if at all we were going to recover this tonnage and didn't happen. So later in the quarter was the case for Vazante. In the case of Aripuana, we told the market that at the end of the first quarter, we had this heavy rainy season and that impacted the filters. And we didn't expect the condition of the filters being in a very -- this very poor condition. So just in May, we made a diagnostic. And we decided, as we said in this call, to refurbish them and to give a general maintenance in June and July. So, with this with the result of these actions, we wanted to be careful in projecting the rest of the year. And that's why we are only forecasting for the rest of the year today. And that's why the guidance has changed a little bit, and that's why this is the time we want to tell the market for the rest of the guidance for the rest of the year. If you see that the other mines, the guidance has not changed. And the problem has been that given that Aripuana and Vazante provide for Tres Marias and also for Juiz de Fora in the case of Aripuana, the impact of them, we have also seen or was translated in the second quarter. So, this has been the case.

Okay. Understood. And then if I could drill down on Vazante a little bit. You mentioned geotechnical challenges that limited the grade. Could you just describe that in terms of whether that was unstable ground conditions that was impacting productivity. And so, you just weren't getting to high grades? Is it dilution or some combination of that and maybe some other factors? José Carlos del Valle Castro: Yes. I think Leonardo.

Yes. Can you hear me well? José Carlos del Valle Castro: Yes, yes, we can.

Yes. The pillar has constrained the mining-- production at the secondary lanes. So usually, we mine the second primary lanes and then you access the secondary lanes. And the constraint that brings the failure of a part of a pillar make us to decide to suspend the other areas until we realize, and we make sure that the conditions are safe for the other similar lanes. Unfortunately, we had put a lot of efforts to prepare some of those lanes that were higher-grade lanes. And as a cautious action, we decided to slow it down until we make sure that we are being able to produce. This is why we are forecasting by the second half of the year we're going to be able to increase production. If you look in the general overview of the mine, there is not an issue in terms of geotechnical conditions. This is an event that has occurred in a specific area, but we are taking cautions and actions to make sure that the mine is -- doesn't have such similar conditions for the coming year.

And then just looking at it from a cost point of view, it sounds like what you're saying is -- you're not anticipating any sort of increase in cost of mining associated with additional ground support like rock bolting, or shotcreting, or anything along those lines? José Carlos del Valle Castro: Yes. For short term, no. In Vazante:, we have -- we are shotcreting more or less 6% of the whole mine development. We are accessing if there is the need to increase this for the rest of the mine. It's not need yet, but we are not seeing any need for the short term yet.

Okay. Okay. I guess we'll watch that. And then just finally, I mean, on the exploration results that you put out earlier this week, there were some really spectacular intercepts at Aripuana and Vazante. Do you anticipate replacing reserves mine this year, first of all. But then when you think about those 2 assets, Aripuana and Vazante and vis-a-vis these exploration results, do you expect to incorporate those exploration results into your year-end resource? And what does it mean for the outlook for the year-end resource?

Yes. The -- let's say, the grades that you have seen in the presentation, I would say, are -- yes, they are not spectacular. But as we said, they showed potential for mineralized areas. If you look at the -- at Vazante, we have been replacing the life of the mine every year, okay, at least in some here -- the last 3 years, but I've seen also in the past. And the idea is that we start mining an area that is called BBMG. I think we mentioned this to you before. This is an area that is projected in the high grade. So, we are aiming to do in general in Vazante is to increase the 7 years to more than 9 to 10 and start replacing them from there, okay? The fact that Seccao Norte, which is what we are presenting is showing these results. Actually, we wanted only to highlight that mineralization is extended. We might -- based on your comment, what we are going to do is we're going to make sure that we flag more on this process of replacing reserves, okay? In the case of Aripuana, as we said, 15 years, it's the same comment. I mean, we don't need to drill Aripuana a lot because 15 years in the short term is enough, and we are restricted on CapEx. But what we will do is show these intersects that also bring more mineralization. And that's why we're saying that at least we have 25 years based on the resources. The conversion of resources into reserves is very high. So, what we're going to do is we're going to show you how this process goes and make sure that we are clear in terms of replacing reserves and extending reserves, okay?

[Operator Instructions] Our next question comes from Stefan Wintels from Citi.

Yea, thanks for taking my question. So my first question regarding Aripuana for filter installation. How long it should take for the ramp-up or initial estimates after the commissioning on the first half of next year? And regarding my second question, despite the first half lower production impacted by rains and also lower zinc prices impacted by Liberation Day, leverage remaining pretty much under control at 2.2x average for the first half. And with free cash flow expected to improve going forward on improving production and higher zinc prices, how do you guys are seeing the balance between deleveraging dividends and product disbursement going and ?

Okay. So I'm going to go through the Aripuana question, and then I'll let Jose Carlos and Rodrigo Cammarosano go through the other part. So, in the case of the filter, as we said, it's right on track. The filter is being fabricated now and it's going to be ready before the year-end. All civil works are also on time and on budget as well. So, the commissioning should happen towards the end of March and April. We expect that the new filter will have -- will be up and running in the second quarter of next year. So, it shouldn't be a lot of time. We have made a lot of tests, and we have done a lot of work in order to make sure that we speed up all this process. So with these 3 filters with a limited capacity that as we know, and we know them better now, and we are maintaining them better now, and that's why we are reflecting a better production for the second half with these filters accommodating 70% of the capacity and the new filter accommodating the rest, we should be able to have a full run rate in the second quarter of 2026. We don't expect any delays on that. And we will keep you updated on the advancements from now since -- to the date of commission, okay? The other questions, please, Jose? José Carlos del Valle Castro: Thank you, Ignacio. Can you hear me well?

Yes. José Carlos del Valle Castro: Excellent. So on the second question, you asked about how we see deleveraging evolving with the expectation that our second half will be better than the first half in terms of results and cash flow generation. That is true. We expect more stable performance, more favorable prices and also taking into consideration the typical seasonality, we see higher cash generation towards the end of the year compared to the first half of the year. So, we would expect an improvement in terms of our deleveraging. Obviously, unless something unexpected happens in terms of prices or in the macroeconomic environment, so that we will -- we see a favorable trend. Our priorities continue to be the ones we have mentioned before as part of our capital allocation framework, obviously, extending the life of mine of our mines, so investing in our own operating units, which is the most efficient way of using our capital. Then reducing gross debt. We would like to have a lower leverage level that gives us more of a buffer to go through the different cycles, and also to recover some of the financial flexibility that we had in the past, also thinking about what growth opportunities that we may have in the future. So first, before that, we need to lower our gross debt, reduce the amount of interest expense that we pay every year. So, we would feel more comfortable with leverage levels in the neighborhood of around -- so I'm not sure if I missed something, but I think that answers the bulk of our question. If I miss something, please let me know.

Our next question comes via phone. Please state your name and company before asking your question [Operator Instructions]

This is Orest Wowkodaw from Scotiabank. Can you hear me?

Yes.

Just a follow-up on Aripuana. I feel like your languaging around the timing for the commissioning around the filter press is a little bit later than previous. And I'm wondering if this current timing will impact your '26 guidance at Aripuana 50,000 to 65,000 tonnes of zinc? Or should we start thinking that, that may have to come down to accommodate the commissioning timing, which I think you said is March, April time frame for the new equipment?

No, no, thank you for the question. No, no. The dates are the same. March, April is the case. I mean, April is in the second quarter. So that's why I'm saying that. But I mean, we are very confident that those dates are not going to move and the guidance on 2026 hasn't been moved is the same. So, we can reiterate that, Orest.

Okay. And just as a follow-up, I mean, there was a very significant negative working capital change in the first quarter. How many quarters -- like based on where we are now, how many quarters do you think it's going to take to make meaningful progress to reverse that? José Carlos del Valle Castro: I can answer that, Orest. This is an ongoing cycle that we see. I think we've seen this, at least since I joined the company. Typically, there's a negative working capital impact in the first quarter that has to do with a number of large payments that have to be made in -- mainly in Peru, but also some of them in Brazil and as a result of also of the high level of investment that typically takes place in the fourth quarter and that has to -- and that is paid in the first quarter. So that's -- those are probably the 2 main drivers. So, we see that typical cycle repeating itself year after year and then gradually recovering throughout the rest of the year. So, nothing different this year. On average, though, for the year as a whole, we expect to have a stable level of working capital. So not an investment, not a disinvestment, just on average, give or take, it should be 0 impact on working capital going forward. That's what you can expect.

So are you suggesting you think you can reverse the entire negative from Q1 by the end of the year? José Carlos del Valle Castro: Yes, that is correct, just as it happened in 2024 and in 2023.

[Operator Instructions] This does conclude our Q&A session. I would now like to hand the call over to Mr. Ignacio Rosado for his closing remarks. Please, Mr. Rosado, please go ahead.

Thank you. Thank you all for attending. We are aware that we had a very difficult first quarter impacted by Aripuana. That is still a challenge and that we are working on that and making sure that the 3 filters that we have today work properly and the fourth filter comes right on time, on budget. We are confident that happening this, the fundamental value of Aripuana is going to come, and we are working very hard towards that. We are also working hard on our Pasco project, and making sure that we deliver this pumping and piping system towards next year. And then that we work on the other fronts to make sure that this Pasco region also projects a long life of mine and good profitability. With that, we would like to thank you for the time. We will keep you posted in any changes. We look forward to speaking to you at the end of the first -- third quarter. Thank you very much and have a good day.

Thank you. This concludes today's conference call. We appreciate your participation and interest in NEXA. You may now disconnect, and have a wonderful day.