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| Statement |
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| Both targets have solid indications of potential resource addition with attractive content |
| As I said, we believe that we are in the bottom of the cycle and we are confident that this year is going to be better |
| In the mid to long-term, the fundamental outlook for both zinc and copper prices remains positive |
| Additionally, investments in construction infrastructure and in the automotive sector will continue to have a positive impact on demand expectations for base metals |
| So we are confident that in the second quarter, we will be able to achieve that target |
| Copper production increased 31% while lead and silver production grew up 49% and 42% respectively |
| This achievement positions Nexa as one of the global leaders in carbon reduction within the zinc industry |
| So now that Aripuanã is being completed and is going to start generating cash flow, and with a combination of cash flow for the other mines, we believe that with some help on prices, the company is really in a good position to generate cash |
| These improvements show that we are in the right direction to achieve nameplate capacity in the second quarter of this year |
| The 2023 plan shows indications of positive results for both brownfield and greenfield activities |
| Copper and lead recoveries also improved significantly in January, showing a strong positive trend |
| Nonetheless, I would like to highlight the dedication and professionalism of our team, which supported us in improving efficiency across our organization, which enabled us to deliver solid operational results and also to mitigate in part the negative impacts of lower zinc prices in our 2023 cash flow |
| It was something that we feel proud of |
| Our operational and cost discipline, together with the improvements in working capital throughout the year enabled us to generate positive cash flow in the last three quarters of 2023, despite the external and internal challenges we faced |
| In the last quarter, we also saw improvements in zinc recovery while concentrate grades and quality were stable |
| We started 2024 with positive progress that keep us confident in estimating the completion of the ramp up in the second quarter of this year |
| Our exploration plan in Aripuanã in the fourth quarter also progressed as expected and the results confirmed the continuity of mineralization with high polymetallic contents, showing that we have a robust mining asset with the potential to operate for many years |
| On a Slide number 8, you can see that due to all the improvements mentioned above, compared to the third quarter of 2023, zinc production was 27% higher, reaching 7,400 tonnes in the fourth quarter |
| I am pleased to report that we achieved our guidance for the year with metal production at the high end of guidance and total smelting sales at the midrange, while mining and smelting costs were in line with guidance |
| On this slide, you can see that our liquidity remains healthy and that we continue to present a sound balance sheet with an extended debt maturity profile |
| Quality of concentrate is also stable and good |
| We are in good shape in terms of what we can control in our mines and smelters |
| And if you see that, and if you see the cash flow generation that we had in the third last quarter, that was positive |
| Regarding the operating performance of the Mining segment, you can see that zinc production increased to 90,000 tonnes in the fourth quarter of 2023, up 21% year-over-year, mainly explained by higher production at the Aripuanã mine, combined with higher production from the Cerro Lindo mine |
| In the lower left side, we can see the progress of the zinc recovery which reached 66% in December versus 59% in September when compared looking at the January 2024 number, we see that the recovery ratio improved even further reaching 73% |
| Additionally, we had a positive contribution of $101 million in working capital as a result of the efforts deployed throughout 2023 which focus on shortening our working capital cycle |
| The evolution of Aripuanã and all the measures that we have taken will help us generating cash flow for this year |
| So hopefully – and we are confident that they will recover in the following quarter |
| In the fourth quarter, activities in Aripuanã have progressed as planned with our efforts concentrated on further improving plant stabilization and reliability as well as increasing metallurgical performance |
| This is important for the company because it will unlock a lot of value, more life of mine, for sure, because of all these resources that are in the underground part, but also more profitability, given the economies of the scale of the two assets |
| Statement |
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| For the full year, total consolidated net revenues amounted to $2,573 million, down by 15% year-over-year, mainly due to lower zinc prices and lower metal sales |
| This driven by persistent high interest rates in key economies and lower than expected performance of key Chinese zinc consuming sectors like the property market |
| For the full year, adjusted EBITDA amounted to $391 million, down 49% year-over-year, primarily driven by lower LME metal prices, in addition to lower smelting sales volume |
| As you can see, beginning with the chart on your upper left, total consolidated net revenues for the fourth quarter decreased by 19% year-over-year, mainly due to lower sync LME prices and lower smelting sales volumes |
| This performance was mainly driven by lower smelting sales volumes and zinc prices |
| In 2023, consolidated net revenues reached $2.6 billion, down by 15% compared to 2022 |
| On the supply side for both copper and zinc, we anticipate that we will continue to see challenges to renew significant production online to fulfill expected demand |
| Now moving to Slide number 5, regarding the operating performance of this smelting segment, metal sales total 143,000 tonnes in the third – of last year, down 14% from the fourth quarter of 2022 and 7% compared to the third quarter of 2023, mainly impacted by lower volumes in Cajamarquilla and Três Marias |
| This was $8 million below our guidance as we deprioritized some activities as a result of the cash optimization program that we developed throughout the year |
| This lower performance was mainly explained by lower smelter sales volumes and lower zinc prices |
| Compared to the third quarter of 2023, net revenues decreased by 3%, also as a result of lower smelter sales volumes, but partially offset by higher zinc prices and higher production in the mining segment |
| As many of you are aware, 2023 posed persistent challenges to our business, particularly due to zinc prices and the delay in the ramp-up of Aripuanã |
| In 2023, consolidated adjusted EBITDA reached $391 million, down 49% from 2022 |
| So for us to keep the cost of raw mat – cost per tonne below $40 is a challenge |
| As we look ahead to this year, we anticipate that volatility across commodities may persist for a while and continue to put pressure on our business |
| Regarding market fundamentals, it is worth noting that in the fourth quarter of 2023, LME zinc price averaged $2,498 per ton, down by 17% from the fourth quarter of 2022 |
| This is mainly because of lower adjusted EBITDA in the last 12 months, driven by the prevailing trend of lower zinc prices year-over-year |
| In 2023, total sales were down 4% compared to 2022 |
| Zinc was down 17% year-over-year |
| So – and we have pressures on a given that the mine is extending, we have pressures on all of this |
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