NEXA

• Core Q2 2026 Financial Results

  • Consolidated net revenues totaled $908 million, up 28% year-over-year and 2% quarter-over-quarter, driven by higher metal prices and a $99 million increase in by-product contribution, partially offset by lower smelting volumes
  • Adjusted EBITDA grew 78% year-over-year to $286 million, with a 31.5% margin; net income reached $98 million (52 cents per share); 12-month trailing adjusted EBITDA surpassed $1 billion
  • Net leverage fell to 1.4x, down from 1.59x last quarter and 2.28x year-over-year; total liquidity ended the quarter at $707 million, including an undrawn $320 million revolving credit facility
  • Free cash flow was slightly negative at -$10 million, due to a one-off $131 million tax settlement payment in Peru; excluding this payment, free cash flow would have been positive $120 million

• Key Operational Milestones

  • The fourth tailings filter at Aripuana is now operational, removing a key production bottleneck; the plant reached 86% capacity utilization in June, with peak daily utilization above 92%, reducing weather-related disruption risk
  • Block caving mining method was implemented at Cerro Lindo, expected to lower long-term unit costs and improve access to higher-grade ore zones
  • Production at Peruvian mines recovered to normal run rates after Q1 2026 operational setbacks; Cajamarquilla smelter operations returned to normal levels in June after the May casting house fire, with cathode production uninterrupted during repairs
  • The Cerro de Pasco integration project completed a scope review: Atacocha open pit will operate longer than originally planned, allowing Phase 2 to be deferred to 2032 and spreading capital expenditures over a longer timeline; total estimated project capex increased from $138 million to $180 million, all concentrated in Phase 1, with 2026 capex for the project unchanged at $31 million
  • Exploration drilling delivered positive high-grade results at Basante (zinc mineralization near existing infrastructure) and El Porvenir (extended high-grade polymetallic zones supporting the Cerro de Pasco project), supporting potential resource growth and life-of-mine extensions across the portfolio

• Capital Allocation Update

  • Q2 2026 total capex was $89 million, bringing first half total capex to $160 million (42% of full-year guidance); full-year 2026 total capex guidance remains unchanged at $381 million, with spending weighted to the second half
  • Exploration capex totaled $17 million in Q2, bringing first half exploration spending to 38% of the full-year $86 million guidance, which remains unchanged; spending is weighted to the second half for ongoing drilling programs
  • Priority capital allocation is deleverage, gross debt reduction, extending life of existing mines, advancing early-stage projects, with M&A limited to small, high-value opportunities until leverage falls further

• Production guidance for 2026 remains unchanged for both mining and smelting segments; management expects to recover all production lost to the Q1 Peruvian operational setbacks and the May Cajamarquilla fire in the second half of 2026
• Mining cash cost guidance remains on track, with first half 2026 cash costs well below the full-year guidance range; run-of-mine cost per tonne is in line with full-year guidance
• Smelting conversion costs are expected to return to the guidance range in the second half as production volumes recover at Cajamarquilla
• Full-year 2026 total capex and exploration capex guidance remain unchanged at $381 million and $86 million respectively
• Management targets net leverage close to 1.0x by the end of 2026, while maintaining an investment-grade credit rating
• Aripuana is expected to reach full nameplate capacity by the end of 2026, with higher production and cash flow in 2027

1. Mining Segment: Net revenues reached $524 million, with adjusted EBITDA of $220 million (42% adjusted EBITDA margin, representing 76.9% of total company adjusted EBITDA for the quarter). Zinc production totaled 79,000 tons, up 8% year-over-year driven by higher ore grades across key assets. Cash cost net of byproducts was 4 cents per pound for Q2, and negative 35 cents per pound for the first half of 2026. Run-of-mine cost per tonne was $57 per tonne for both Q2 and the first half, in line with full-year guidance.
2. Smelting Segment: Net revenues hit $584 million, with adjusted EBITDA of $66 million (11% adjusted EBITDA margin, representing 23.1% of total company adjusted EBITDA for the quarter), growing 162% year-over-year. Zinc metal and oxide sales totaled 134,000 tons, down 7% year-over-year and 8% quarter-over-quarter due to the May fire at Cajamarquilla. Cash cost net of byproducts was $1.44 per pound for Q2 and $1.42 per pound for the first half, above the upper end of annual guidance. Conversion cost was 36 cents per pound in Q2 and 35 cents per pound for the first half, slightly above guidance.

• Persistent tightness in zinc and copper concentrate markets has pushed spot treatment charges into negative territory, keeping smelter margins compressed
• Brazilian real appreciation against the US dollar increases dollar-denominated operating costs for Brazilian operations
• Labor and maintenance cost inflation is running above previous expectations, driven by high labor demand in both Peru and Brazil
• A strong El Niño event is expected in Q4 2026 in Peru, which could disrupt road infrastructure and impact concentrate shipments and consumables delivery, even with mitigation plans in place
• Geopolitical uncertainty could push energy prices higher, further constraining global smelter utilization and tightening refined metal supply
• The company is disputing a $131 million Peruvian tax assessment, though the outcome of the judicial challenge is uncertain

Q: First half production of copper, silver and lead was at the lower end of 2026 guidance, while zinc was at the midpoint. What should we expect for second half production, and what is the timeline for gross debt paydown now that leverage has fallen?

A: Q1 production setbacks in Peruvian mines have been fully recovered, and the new Aripuana tailings filter will support higher production in the second half. Full year production guidance for mining and smelting remains unchanged. Management's top priority continues to be gross debt reduction; any excess free cash flow beyond dividend commitments will be allocated to debt paydown, though the exact timeline depends on uncontrollable factors like metal prices.

Q: Smelting conversion costs ran above guidance in the first half, and cost inflation is elevated. Will costs return to guidance in the second half, and what is your 2027 inflation outlook? What is your current M&A appetite?

A: Higher conversion costs were driven by temporary lower throughput after the Cajamarquilla fire and minor FX impact; with full production resuming, conversion costs will return to guidance in the second half. 2026 cost inflation is driven primarily by higher labor and maintenance costs; management is targeting flat unit costs for 2027 through offsetting efficiency initiatives. Current M&A appetite is conservative; priority is given to extending existing mine lives and advancing internal early-stage projects, and large transformative acquisitions are not feasible at current leverage levels, with activity limited to small high-value opportunities until debt levels fall further over the next 3-4 years.

Q: Now that the fourth tailings filter at Aripuana is operational, what is your expected utilization and production run rate for the rest of 2026 and 2027?

A: The plant has already reached 260 tons per hour, near nameplate capacity. Operational adjustments and crew training will take 2-3 months, with full capacity expected by the end of 2026. Full capacity operation will drive significantly higher production and cash flow from Aripuana starting in 2027, with no major remaining bottlenecks.

Q: Given expected El Niño impacts in Q4 2026 Peru, how confident are you in meeting 2026 full-year guidance?

A: While a strong El Niño is expected that could disrupt road infrastructure, Nexa has decades of experience managing these events and has implemented full mitigation plans to avoid operational interruptions. Current projections do not expect material impact to 2026 production, and the full-year guidance remains unchanged, with management providing updates if conditions change.