Nexa Resources S.A. Q2 FY2025 earnings call

• Key Business Catalysts: Aripuana's fourth tailings filter installation progressing on schedule, Cerro Pasco integration project progress, positive exploration results across mines, and the integrated mine-smelter model as a core competitive advantage.
• Second Quarter Performance: Net revenues were $708 million, up 13% compared to the first quarter of 2025; adjusted EBITDA was $161 million, a 28% sequential increase; free cash flow was $17 million.
• Aripuana Progress: Tailings filters refurbished and in maintenance, ongoing production improvement, fourth tailings filter procurement with commissioning expected in first half of 2026.
• Cerro Pasco Integration: Phase 1 of the Cerro Pasco integration project making significant progress, including detailed engineering completion and construction start.
• Exploration Achievements: Positive results at Cerro Lindo, Aripuana, Vazante, and Cerro Pasco, reinforcing mineral potential.

Mining Segment

• Second quarter 2025 zinc production was 74,000 tonnes, up 9% quarter-over-quarter. Consolidated mining cash cost net of byproducts decreased to minus $0.11 per pound in the second quarter. For the first half of 2025, cost per run of mine stood at $50 per tonne, slightly below revised guidance.

Smelting Segment

• Total sales reached 145,000 tonnes in the second quarter of 2025, up 12% quarter-over-quarter. Consolidated smelting conversion cost stood at $0.39 per pound, and cash cost was $1.23 per pound. For the first half of 2025, conversion cost was $0.36 per pound, and cash cost was $1.20 per pound, both within revised full year guidance.

• Revised 2025 production and cost guidance due to operational challenges in the first quarter at Aripuana and Vazante.
• Fourth tailings filter at Aripuana expected to be commissioned in first half of 2026 to unlock full capacity.
• Cerro Pasco Phase 1 on track to expand tailings storage capacity and support future production plans.

• Market volatility affecting metal prices, with zinc and lead under pressure while copper and silver showed mixed trends.
• Operational challenges at Aripuana and Vazante impacting production, such as tailings filter capacity issues at Aripuana and geotechnical challenges limiting grade at Vazante.
• Geotechnical risks at Vazante causing caution in accessing higher-grade zones.

Q: Can you confirm the reason for changing guidance due to Q1 issues and if there was potential catch-up expected?

A: Guidance was affected by Aripuana and Vazante. Vazante had a sill pillar collapse in March, and Aripuana had filter issues from heavy rain. Later in Q2, it was clear recovery wouldn't happen as expected, leading to guidance changes.

Q: Regarding Aripuana filter installation timing and impact on 2026 guidance?

A: Commissioning of the new filter is expected in March-April 2026, and 2026 guidance for Aripuana remains unchanged.

Q: How many quarters to reverse significant negative working capital from Q1?

A: Negative working capital in Q1 is a typical cycle, and we expect to see meaningful progress to reverse it gradually, with average stable working capital expected for the year as a whole.