Ero Copper Corp.

Revenue was $284.3 million in Q2, up 8% sequentially. Adjusted EBITDA was $144 million and cash flow from operations was about $138 million, both up meaningfully versus the prior quarter; for the first half, cash flow from operations was approximately $231 million versus $156 million in 1H25, and adjusted EBITDA was $269 million versus $146 million. Copper operations produced 17,315 tonnes in Q2 at a consolidated C1 cash cost of $2.42 per pound, while Xavantina produced more than 20,000 ounces of gold, including 8,693 ounces of mined gold at a C1 cash cost of $1,586 per ounce and 11,860 ounces recovered from historic concentrates at a C1 cash cost of $633 per ounce. Net debt declined by $38 million in Q2 to approximately $453 million, liquidity increased to $182 million, and net debt leverage improved to approximately 0.8x. Full-year consolidated capital expenditure guidance was raised to $285 million-$330 million, and Xavantina full-year C1 cash cost guidance was updated to $1,100-$1,350 per ounce with AISC guidance of $2,200-$2,700 per ounce. Management said the copper business is on track to meet full-year guidance with stronger second-half production, while Xavantina should see meaningfully higher second-half mining rates, throughput and mine gold production, though mine gold is now expected at the low end of the guided range.

Makko DeFilippo framed the quarter as evidence that the company’s OneEro operating initiative is working, saying progress is showing up in safer operations, stronger cash flow and balance sheet improvement. He emphasized that Ero is converting operational improvements into deleveraging while also advancing Furnas as the next major growth leg, with Phase 3 drilling on track to finish before year-end and a pre-feasibility study expected in 2027. His tone was confident but measured, repeatedly pointing to stronger second-half expectations while noting that some projects still need more time to fully show their benefits.

Wayne Drier said Q2 financial performance was supported by solid copper production, strong metal prices and a 65% quarter-on-quarter increase in gold sales, driving revenue to $284.3 million. He highlighted net debt falling $38 million in the quarter to about $453 million, liquidity rising $36 million to $182 million, and leverage improving to about 0.8x, with another $25 million revolver repayment completed in July. He also explained that the BRL hedge book generated $13 million of realized gains in Q2 and $20 million in the first half, and that if FX stays near $5.10, realized gains could reach about $40 million to $45 million for the full year, while reported unit costs and capex remain sensitive to local currency and inflation.

Analysts focused on Tucuma’s tailings filtration expansion, Xavantina’s second-half production outlook, updated reserve and technical reporting at Tucuma, TC/RC savings, the shaft sinking project at Caraiba/Pilar, and capital allocation as leverage falls. Management said Tucuma’s existing filtration circuit was expanded by adding plates to the three existing filters for about an 8% capacity improvement, while three modular filters are expected on site this quarter and operational in Q4. On Xavantina, management said June and July both exceeded 7,000 ounces of gold after the dryer and filter press came online, but they would not give formal forward guidance beyond saying second-half performance looks much better. On capital allocation, management said shareholder returns are still premature because the company wants to complete the next step of paying down the revolver first, with $95 million left after the July payment.