Core Viewpoint - Nexa Resources has fully resumed operations at its Cerro Pasco Complex after resolving illegal protests, restoring access to the Atacocha and El Porvenir mines [1][2]. Group 1: Operational Updates - The temporary disruption led to an estimated zinc production loss of approximately 1.2 thousand tons, which is expected to be recovered in the upcoming month [2]. - Nexa's 2025 production guidance remains unchanged despite the recent disruptions [2]. Group 2: Company Overview - Nexa is a large-scale, low-cost, integrated polymetallic producer, primarily focused on zinc, with over 65 years of experience in mining and smelting in Latin America [3]. - The company operates four long-life underground polymetallic mines in Peru and Brazil, along with one low-cost open pit mine and three smelters [3]. Group 3: Market Position - In 2024, Nexa was among the top five producers of mined zinc globally and one of the top five metallic zinc producers according to Wood Mackenzie [4].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Last week, the main contract price of Shanghai zinc futures fluctuated slightly. Macroeconomically, the extension of Sino - US tariffs, the moderate growth of US CPI but the unexpected increase in PPI, and the changing expectations of the Fed's interest rate cut in September led to the stabilization of the US dollar. In China, the financial and economic data in July were weak, indicating a slow economic recovery, although the new fiscal policies for personal consumption loan subsidies were helpful for economic repair [3][12]. - Fundamentally, the temporary shutdown of Nexa's mines had no substantial impact on production. The recovery of zinc concentrates was smooth, and the processing fees improved, boosting refinery profits and maintaining a high supply of refined zinc. On the demand side, the approaching military parade in early September affected the black - metal industry, with some stocking behaviors. The start - up rates of different downstream industries varied. Overseas, LME continued to reduce inventories, which supported zinc prices [4][12][13]. - Overall, the fundamental contradiction is concentrated overseas. The LME inventory reduction strongly supports zinc prices, but the repeated interest - rate cut expectations and the digestion of the inventory - reduction benefits limit the upside of zinc prices. Considering the uncertainty of the Russia - Ukraine situation and the upcoming speech by Powell, zinc prices are expected to fluctuate this week [4][13]. 3. Summary According to Relevant Catalogs 3.1 Transaction Data | Contract | 8/8 | 8/15 | Change | Unit | | --- | --- | --- | --- | --- | | SHFE Zinc | 22515 | 22505 | - 10 | Yuan/ton | | LME Zinc | 2834 | 2796.5 | - 37.5 | US dollars/ton | | SHFE - LME Ratio | 7.94 | 8.05 | 0.10 | | | SHFE Inventory | 65917 | 76803 | 10886 | Tons | | LME Inventory | 81500 | 76325 | - 5175 | Tons | | Social Inventory | 11.69 | 10.37 | - 1.32 | Ten thousand tons | | Spot Premium | - 30 | - 50 | - 20 | Yuan/ton | [5] 3.2 Market Review - The main contract of Shanghai zinc (ZN2510) first rose and then fell last week. Market risk appetite changed with interest - rate cut expectations. The US dollar first fell and then rose, and zinc prices followed a similar trend. Eventually, it closed at 22505 yuan/ton, with a weekly decline of 0.04%. LME zinc fluctuated sideways, supported by continuous low - level inventory reduction but restricted by the rebound of the US dollar, closing at 2796.5 US dollars/ton, with a weekly decline of 1.32% [6]. - In the spot market as of August 15, prices in different regions varied, with downstream demand mainly for rigid needs, and spot transactions were mostly among traders, with a slight spot discount [7]. - In terms of inventory, as of August 15, LME zinc inventory decreased by 5175 tons, while SHFE inventory increased by 10886 tons. As of August 14, social inventory increased by 1.60 million tons compared with last Thursday, mainly due to low downstream提货 during the off - season and the impact of the upcoming military parade in Tianjin [8]. - Macroeconomically, in the US, the CPI in July increased moderately, but the PPI growth exceeded expectations. There were different views among Fed officials on interest - rate cuts. Sino - US tariffs were extended for 90 days. In China, the financial data in July were weak, but new fiscal policies for personal consumption loan subsidies were introduced [9][10][11]. 3.3 Industry News - As of August 15, the average weekly domestic TC price of SMM Zn50 remained unchanged at 3900 yuan/metal ton, and the SMM imported zinc concentrate index rose by 8.05 US dollars/dry ton to 90.3 US dollars/dry ton [14]. - According to 29Metals' second - quarter report, its zinc concentrate production in the second quarter was 12,300 tons, a 28% decrease from the previous quarter, mainly due to the decrease in zinc grade and recovery rate. Its production guidance for 2025 is 60,000 - 70,000 tons [14]. - On August 12, Nexa Resources' Cerro Pasco mining complex was partially shut down due to illegal blockades, but it had no substantial impact on production, and the production guidance remained unchanged [15].

Core Viewpoint - Nexa Resources has announced a partial and temporary suspension of mining activities at its Atacocha and El Porvenir mines due to illegal access blockades by a small group from the San Juan de Milpo community, although there has been no material impact on production to date [1][2]. Group 1: Operational Update - The company is currently limiting operations to critical activities to ensure safety and proper maintenance amid the protests [2]. - Nexa's 2025 production guidance remains unchanged, with the Cerro Pasco Complex contributing approximately 1.2kt of zinc per week [3]. Group 2: Community Engagement - Nexa is committed to constructive dialogue with the community and authorities to achieve a peaceful resolution and reaffirms its dedication to the social and economic development of its host communities [3]. Group 3: Company Overview - Nexa is a large-scale, low-cost, integrated polymetallic producer, primarily of zinc, with over 65 years of experience in mining and smelting in Latin America [4]. - The company operates four long-life underground polymetallic mines and one low-cost open pit mine in Peru, along with three smelters in Brazil and Peru [4]. - In 2024, Nexa was among the top five producers of mined zinc globally, according to Wood Mackenzie [5].

Financial Data and Key Metrics Changes - The company reported net revenues of $708 million, a 13% increase compared to the previous quarter, and adjusted EBITDA of $161 million, reflecting a 28% sequential increase driven by higher sales volumes and stronger byproduct prices [11][26] - Free cash flow improved to $17 million, supported by better working capital management [11][30] - The consolidated adjusted EBITDA margin for the quarter was 23%, up three percentage points from the previous quarter [28] Business Line Data and Key Metrics Changes - The mining segment produced 74,000 tonnes of zinc, a 9% increase quarter over quarter, while total zinc sales in the smelting segment reached 145,000 tonnes, a 12% increase compared to the first quarter [11][16] - Consolidated mining cash cost net of byproducts decreased to -$0.11 per pound, a significant improvement from $0.11 per pound in the first quarter [14] - The smelting conversion cost stood at $0.39 per pound, up 19% quarter over quarter, primarily due to higher maintenance expenses [17] Market Data and Key Metrics Changes - The average LME zinc price during the second quarter was $2,641 per ton, marking a 7% decline both year over year and quarter over quarter [14] - The average LME copper price was $9,524 per ton, down 2% year over year but up 2% quarter over quarter [38] - The average LME silver price reached $34 per ounce, representing a 17% increase both year over year and quarter over quarter [39] Company Strategy and Development Direction - The company is focused on the Aripuana project, which is expected to unlock full production capacity and improve cash flow once the fourth tailings filter is operational [7][21] - The Cerro Del Pasco integration project is progressing well, with key milestones achieved, which is critical for long-term sustainability and production expansion [22] - The integrated mine smelter business model continues to be a core competitive advantage, reducing exposure to market volatility [9] Management Comments on Operating Environment and Future Outlook - Management acknowledged operational challenges in the first quarter but expressed confidence in the recovery and long-term fundamentals of the Aripuana asset [41][87] - The company remains positive on the medium to long-term outlook for zinc, driven by structural demand from sectors such as energy transition [37][44] - Management emphasized the importance of maintaining a solid balance sheet and improving financial flexibility through proactive liability management [33][34] Other Important Information - The company invested $137 million in CapEx during the year, with a significant portion allocated to sustaining activities [28][29] - The liquidity position remains healthy, with available liquidity of approximately $738 million [33] Q&A Session Summary Question: Guidance changes for metals production - Management explained that guidance changes were primarily due to challenges at Aripuana and Vasante, which impacted production forecasts [50][51] Question: Geotechnical challenges at Vasante - Management clarified that the geotechnical issues were related to a specific area, and they are taking precautions to ensure safe production [56][59] Question: Exploration results and reserve replacement - Management indicated that they expect to replace reserves mined this year and will incorporate positive exploration results into year-end resources [62][64] Question: Timing for filter installation at Aripuana - Management confirmed that the commissioning of the new filter is on track for March-April next year, with no expected delays [70][81] Question: Balance between deleveraging, dividends, and CapEx - Management stated that they prioritize extending mine life and reducing gross debt, aiming for a leverage level around one time [74][75] Question: Negative working capital changes - Management expects to reverse the negative working capital trend by the end of the year, similar to previous years [82][85]

Financial Data and Key Metrics Changes - The company reported net revenues of $708 million, a 13% increase compared to the previous quarter, and adjusted EBITDA of $161 million, reflecting a 28% sequential increase driven by higher sales volumes and stronger byproduct prices [11][25][26] - Free cash flow improved to $17 million, supported by better working capital management [11][30] - The consolidated mining cash cost net of byproducts decreased to -$0.11 per pound, a significant improvement from $0.11 per pound in the previous quarter [14][15] Business Line Data and Key Metrics Changes - The mining segment produced 74,000 tonnes of zinc, up 9% quarter over quarter, with the smelting segment achieving total zinc sales of 145,000 tonnes, a 12% increase compared to the first quarter [11][16] - The smelting conversion cost stood at $0.39 per pound, up 19% quarter over quarter, primarily due to higher maintenance expenses [16][17] Market Data and Key Metrics Changes - Zinc prices averaged $2,641 per ton, marking a 7% decline both year over year and quarter over quarter, while copper prices averaged $9,524 per ton, down 2% year over year but up 2% quarter over quarter [34][37] - Silver prices increased by 17% both year over year and quarter over quarter, averaging $34 per ounce [38] Company Strategy and Development Direction - The company is focused on the Aripuana project, which is expected to unlock full production capacity with the installation of a fourth tailings filter scheduled for commissioning in 2026 [7][21] - The Cerro Del Pasco integration project is progressing well, with key milestones achieved, enhancing long-term sustainability and production capacity [22][40] Management's Comments on Operating Environment and Future Outlook - Management acknowledged operational challenges in the first quarter but expressed confidence in the fundamentals of the Aripuana asset and the overall growth strategy [21][41] - The company remains optimistic about the medium to long-term outlook for zinc, driven by structural demand from sectors such as energy transition [36][42] Other Important Information - The company invested $137 million in CapEx during 2025, with a significant portion allocated to sustaining activities and the Cerro Pasco integration project [27][28] - The liquidity position remains healthy, with available liquidity of approximately $738 million, including a $320 million undrawn revolving credit facility [31][32] Q&A Session Summary Question: Can you confirm the guidance changes for several metals? - Management explained that the guidance was affected mainly by operational challenges at Aripuana and Vasante, which were not fully anticipated earlier in the year [49][50] Question: What are the geotechnical challenges at Vasante? - Management clarified that the challenges were due to a pillar constraint affecting production, but they are taking precautions to ensure safety and productivity [54][56] Question: Will exploration results be incorporated into year-end resources? - Management indicated that they expect to replace reserves mined this year and will highlight the potential for mineralized areas in future reports [59][63] Question: What is the timeline for the commissioning of the new filter at Aripuana? - Management confirmed that the commissioning is expected in March-April 2026, with no anticipated delays [66][76] Question: How will the company balance deleveraging, dividends, and capital expenditures? - Management stated that they aim to reduce gross debt while investing in mine life extensions, with a target leverage level around one time [71][72]

Financial Performance - Net revenues for 2Q25 were US$708 million, a 13% increase compared to 1Q25 (US$627 million) but a 4% decrease compared to 2Q24 (US$736 million)[14] - Adjusted EBITDA for 2Q25 was US$161 million, a 28% increase compared to 1Q25 (US$125 million) but a 22% decrease compared to 2Q24 (US$206 million)[14] - The company's net leverage ratio was 23x in 2Q25, compared to 21x in 1Q25 and 27x in 2Q24[14] - Free cash flow for 2Q25 was US$17 million, compared to US$(226) million in 1Q25 and US$149 million in 2Q24[14] Operational Highlights - Zinc production (mining) reached 74kt in 2Q25, up 9% from 1Q25 (67kt) but down 12% from 2Q24 (83kt)[14] - Total zinc sales (smelting) were 145kt in 2Q25, up 12% from 1Q25 (130kt) but down 2% from 2Q24 (148kt)[14] - Mining segment cash cost net of by-products was US$(011)/lb in 2Q25[19] - Smelting segment cash cost net of by-products was US$123/lb in 2Q25, a 5% increase QoQ and a 3% increase YoY[26] Strategic Initiatives and Outlook - The Cerro Pasco Integration Project is progressing, with Phase I execution advancing and technical studies for Phase II underway, aiming for a 15+ year LoM extension[34, 84] - Exploration efforts continue to reinforce geological potential, with promising intercepts at Cerro Lindo, Aripuanã, Vazante, and Cerro Pasco Complex[41, 42, 43, 44, 45] - The company expects higher Adjusted EBITDA in 2H25, driven by operational improvements and cost optimization initiatives[31]

Group 1 - Nexa Resources S.A. reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of a loss of $0.05 per share, representing an earnings surprise of +320.00% [1] - The company posted revenues of $708.42 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 7.36%, although this is a decrease from year-ago revenues of $736.3 million [2] - Over the last four quarters, Nexa Resources has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Group 2 - The stock has underperformed, losing about 46.1% since the beginning of the year, compared to the S&P 500's gain of 8.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.08 on revenues of $699.31 million, and for the current fiscal year, it is $0.09 on revenues of $2.7 billion [7] Group 3 - The Zacks Industry Rank indicates that the Mining - Miscellaneous sector is currently in the bottom 31% of over 250 Zacks industries, suggesting potential underperformance compared to higher-ranked industries [8] - The estimate revisions trend for Nexa Resources was unfavorable ahead of the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6]

Core Insights - Nexa Resources reported an Adjusted EBITDA of US$161 million in 2Q25, a 29% increase from US$125 million in 1Q25, driven by higher smelting and by-products sales volumes and prices [2][9] - The company experienced a net income of US$13 million in 2Q25, down from US$29 million in 1Q25, primarily due to increased financial expenses related to a liability management initiative [3] - Net revenues for 2Q25 reached US$708 million, a 13% increase from US$627 million in 1Q25, attributed to higher smelting sales volume and by-products contribution [4] Financial Performance - Adjusted net income for the quarter was US$37 million, totaling US$72 million for the first half of 2025 [3] - CAPEX for 2Q25 was US$87 million, primarily for sustaining investments, with a full-year guidance of US$347 million remaining unchanged [5] - The company issued a US$500 million bond to fund early redemption of existing notes, enhancing its financial flexibility [6] Operational Highlights - Treated ore volume in 2Q25 was 3,285kt, remaining flat year-over-year, reflecting recovery from previous challenges [10] - Zinc production reached 74kt, a 9% increase quarter-over-quarter, while copper production was 9kt, up 20% from 1Q25 [11][12] - Zinc metal and oxide production totaled 139kt, a 5% increase quarter-over-quarter, while sales amounted to 145kt, up 12% from 1Q25 [13][14] Growth Strategy - Nexa advanced on Phase I of the Cerro Pasco Integration Project, achieving key milestones such as securing construction permits and initiating site preparation [16] - The company maintains a disciplined capital allocation framework, focusing on sustaining investments and enhancing operational resilience [17] ESG and Corporate Initiatives - Nexa reaffirmed its commitment to sustainability and responsible governance, implementing initiatives focused on decarbonization and stakeholder engagement [18] - The company published its 2024 Annual Sustainability Report and engaged in community initiatives to promote social inclusion and financial autonomy [19][20]

[Report Overview](index=1&type=section&id=Report%20Overview) [CEO Message](index=1&type=section&id=CEO%20Message) The CEO highlighted solid quarterly results, reflecting a measured recovery from earlier weather disruptions - Nexa demonstrated a measured recovery and strategic progress, regaining momentum after weather-related disruptions earlier in the year[2](index=2&type=chunk) - **Full-year production and cost guidance has been revised** to prioritize operational stability, margin protection, and cash flow generation[2](index=2&type=chunk) - Proactive liability management **extended debt maturities at competitive rates**, enhancing financial strength and flexibility[3](index=3&type=chunk) - Key project milestones were achieved: **Cerro Pasco Phase I** saw engineering finalized and permits secured, while the **Aripuanã tailings filter installation remains on track for H2 2025** to unlock full capacity[4](index=4&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Nexa reported Q2 2025 net revenues of US$708 million, net income of US$13 million, and Adjusted EBITDA of US$161 million Q2 2025 Key Financial Metrics | US$ million (except per share amounts) | 2Q25 | 1Q25 | 2Q24 | | :--- | :--- | :--- | :--- | | Net revenues | 708 | 627 | 736 | | Net income (loss) | 13 | 29 | (70) | | Adjusted EBITDA | 161 | 125 | 206 | | Basic and diluted EPS | 0.01 | 0.09 | (0.58) | | Free cash flow | 17 | (226) | 149 | Balance Sheet and Leverage Metrics (as of June 30, 2025) | US$ million (except ratio) | 2Q25 | 1Q25 | 2Q24 | | :--- | :--- | :--- | :--- | | Total cash | 418 | 401 | 474 | | Net debt | 1,515 | 1,488 | 1,450 | | Net Debt/LTM Adj. EBITDA | 2.3x | 2.1x | 2.7x | [Executive Summary](index=2&type=section&id=Executive%20Summary) The company saw sequential increases in zinc production and smelting sales, driving higher revenues and Adjusted EBITDA - **Zinc production reached 74kt**, up 9% QoQ, driven by improved performance in Peru, but down 12% YoY[12](index=12&type=chunk) - **Smelting sales totaled 145kt**, up 12% QoQ, due to higher production at Cajamarquilla and Juiz de Fora[12](index=12&type=chunk) - **Adjusted EBITDA for Q2 2025 was US$161 million**, up from US$125 million in Q1 2025 but down from US$206 million in Q2 2024[15](index=15&type=chunk) - **Total available liquidity stood at US$738 million**, including an undrawn US$320 million revolving credit facility[19](index=19&type=chunk) - Strategic portfolio optimization continued with the **sale of the Otavi Project** in Namibia for up to US$10 million plus royalties[25](index=25&type=chunk) [2025 Outlook](index=7&type=section&id=2025%20Outlook) [Production, Sales and Cash Cost Guidance](index=7&type=section&id=Production%2C%20Sales%20and%20Cash%20Cost%20Guidance) Nexa revised its 2025 mining production guidance downwards while updating cash cost forecasts for both mining and smelting Revised 2025 Mining Production Guidance (kt, unless noted) | Metal | Previous Guidance (Mid-point) | Revised Guidance (Mid-point) | Change | | :--- | :--- | :--- | :--- | | Zinc | 331 | 318 | -4% | | Lead | 64.5 | 60.5 | -6% | | Silver (MMoz) | 11.6 | 11.3 | -3% | | Copper | 32 | 32 | Unchanged | - Smelting sales guidance for zinc metal and oxide remains unchanged at **560-590kt**[32](index=32&type=chunk) Revised 2025 Cash Cost Guidance (US$/lb) | Segment | Cost Metric | Previous Guidance (Mid-point) | Revised Guidance (Mid-point) | Change | | :--- | :--- | :--- | :--- | :--- | | Mining | C1 Cash Cost | 0.12 | 0.06 | -48% | | Smelting | Conversion Cost | 0.31 | 0.385 | +24% | | Smelting | C1 Cash Cost | 1.245 | 1.235 | -1% | - Guidance revisions are based on updated assumptions for commodity prices and a **lower zinc TC benchmark of US$80/t**[35](index=35&type=chunk) [Capital Expenditures ("CAPEX")](index=12&type=section&id=Capital%20Expenditures%20%28%22CAPEX%22%29) The company maintains its full-year 2025 CAPEX guidance at US$347 million, with US$137 million invested in the first half - Full-year 2025 CapEx guidance is reaffirmed at **US$347 million**[49](index=49&type=chunk) CAPEX Summary (US$ million) | Period | Investment | Guidance 2025 | | :--- | :--- | :--- | | 1H25 | 137 | 347 | | 2Q25 | 87 | N/A | - Investment in Phase I of the Cerro Pasco Integration Project amounted to **US$17 million in Q2 2025**, totaling US$18 million for the first half of the year[49](index=49&type=chunk) [Exploration & Project Evaluation](index=12&type=section&id=Exploration%20%26%20Project%20Evaluation) Guidance for 2025 exploration and project evaluation expenses remains unchanged at US$88 million - Full-year 2025 guidance for exploration and project evaluation is unchanged at **US$88 million**[50](index=50&type=chunk) Exploration & Project Evaluation Expenses (US$ million) | Period | Investment | Guidance 2025 | | :--- | :--- | :--- | | 1H25 | 32 | 88 | | 2Q25 | 16 | N/A | - Other expenses, including technology and community initiatives, are guided at **US$20 million** for the full year[50](index=50&type=chunk)[51](index=51&type=chunk) [Consolidated Performance](index=15&type=section&id=Consolidated%20performance) [Financial Results Analysis](index=15&type=section&id=Financial%20Results%20Analysis) Q2 2025 net revenues fell 4% YoY to US$708 million, while Adjusted EBITDA decreased 22% YoY to US$161 million - Net revenues decreased 4% YoY to **US$708 million**, primarily due to reduced smelting sales volume and lower metal prices[59](index=59&type=chunk) - Compared to Q1 2025, **net revenues increased by 13%**, driven by higher smelting sales volume and stronger copper and silver prices[60](index=60&type=chunk) - Adjusted EBITDA for Q2 2025 was **US$161 million**, a 22% decrease from Q2 2024, mainly due to a US$62 million negative impact from higher costs and lower TCs[67](index=67&type=chunk) - Sequentially, **Adjusted EBITDA increased by 28%** from Q1 2025, attributed to higher by-products contribution and increased smelting sales volume[71](index=71&type=chunk) [Net Income (Loss) and Financial Results](index=18&type=section&id=Net%20Income%20%28Loss%29%20and%20Financial%20Results) The company reported a net income of US$13 million in Q2 2025, a significant turnaround from a US$70 million loss in Q2 2024 Net Income (Loss) Summary (US$ million) | Metric | 2Q25 | 1Q25 | 2Q24 | | :--- | :--- | :--- | :--- | | Net Income (loss) | 13.3 | 28.7 | (70.0) | | Adjusted net income | 37.4 | 34.2 | 41.7 | - Net financial results were a **loss of US$28 million**, a significant increase from a US$0.6 million loss in Q1 2025, driven by higher financial expenses from bond repurchases[82](index=82&type=chunk) - Adjusted Net Income attributable to shareholders was **US$15 million**, leading to an adjusted basic and diluted EPS of US$0.11 for the quarter[90](index=90&type=chunk) [Business Performance – Mining](index=21&type=section&id=Business%20performance%20%E2%80%93%20Mining) [Mining Segment Overview](index=21&type=section&id=Mining%20Segment%20Overview) The mining segment's zinc production was 74kt, down 12% YoY but up 9% QoQ, with an improved cash cost of US$(0.11)/lb Q2 2025 Mining Production | Metal | Production | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Zinc (kt) | 73.5 | -11.7% | +9.2% | | Copper (kt) | 9.1 | -6.5% | +19.7% | | Lead (kt) | 15.2 | -9.1% | +19.7% | | Silver (MMoz) | 2.7 | -5.6% | +12.5% | - Consolidated run-of-mine mining cost was **US$50/t**, up 4% YoY and QoQ, primarily due to stabilization efforts at Aripuanã[12](index=12&type=chunk) - Consolidated mining cash cost net of by-products improved to **US$(0.11)/lb** from US$0.11/lb in Q1 2025, due to higher by-product contributions and sales volume[12](index=12&type=chunk) [Cerro Lindo, Peru](index=22&type=section&id=Cerro%20Lindo%2C%20Peru) Cerro Lindo's treated ore volume increased 11% YoY, though zinc production fell 4% due to lower grades - Treated ore volume was **1,630kt**, up 11% YoY and 9% QoQ[103](index=103&type=chunk) - Zinc production of **23kt** was down 4% YoY due to lower grades (1.60% vs 1.86% in 2Q24), but up 37% QoQ[105](index=105&type=chunk) - Run-of-mine mining cost **decreased 17% YoY to US$38/t** due to higher throughput and lower fixed costs[108](index=108&type=chunk) [El Porvenir, Peru](index=23&type=section&id=El%20Porvenir%2C%20Peru) El Porvenir's operations normalized, with zinc production rising 12% YoY to 14kt and costs decreasing - **Zinc production increased 12% YoY to 14kt**, driven by higher throughput and grades[113](index=113&type=chunk) - Run-of-mine mining cost was **US$63/t**, a 4% decrease YoY, reflecting lower operating expenses[115](index=115&type=chunk) - Sustaining CAPEX was **US$26 million**, largely for mine development and the Cerro Pasco Integration Project[117](index=117&type=chunk) [Atacocha, Peru](index=25&type=section&id=Atacocha%2C%20Peru) Atacocha recovered from weather issues with a 23% QoQ increase in treated ore and a 29% YoY surge in zinc production - Treated ore volume was **383kt**, up 1% YoY and 23% QoQ, showing recovery from Q1 disruptions[120](index=120&type=chunk) - **Zinc production increased 29% YoY to 3.1kt**, supported by higher volumes and a better average grade of 0.98%[120](index=120&type=chunk)[121](index=121&type=chunk) - Run-of-mine mining cost was **US$35/t**, up 7% YoY due to higher maintenance and service costs[124](index=124&type=chunk) [Vazante, Brazil](index=26&type=section&id=Vazante%2C%20Brazil) Vazante's zinc production fell 22% YoY to 27kt due to geotechnical constraints limiting access to higher-grade zones - **Zinc production totaled 27kt**, a 22% decrease YoY, due to mining in lower-grade areas following geotechnical constraints[131](index=131&type=chunk) - The average zinc grade fell to **7.69%** from 9.18% in Q2 2024[131](index=131&type=chunk) - Run-of-mine mining cost **increased 5% YoY to US$51/t**, attributed to higher maintenance and variable costs[133](index=133&type=chunk) [Aripuanã, Brazil](index=27&type=section&id=Aripuan%C3%A3%2C%20Brazil) Aripuanã's performance was hampered by plant downtime, leading to an 18% YoY decrease in treated ore - **Zinc production was 6.1kt**, down 20% YoY, reflecting increased plant downtime and operational constraints[138](index=138&type=chunk)[139](index=139&type=chunk) - Run-of-mine mining cost was high at **US$109/t**, driven by higher operational costs for maintenance and plant stabilization[142](index=142&type=chunk) - A fourth tailings filter is scheduled for installation in H2 2025 and commissioning in H1 2026 to enhance operational stability[141](index=141&type=chunk) [Mining Segment Financial Performance](index=29&type=section&id=Mining%20Segment%20Financial%20Performance) The mining segment's net revenues were US$353 million, with Adjusted EBITDA stable YoY at US$135 million Q2 2025 Mining Segment Financials (US$ million) | Metric | 2Q25 | 1Q25 | 2Q24 | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | 353.3 | 313.2 | 377.3 | -6.4% | | Adjusted EBITDA | 135.0 | 93.7 | 136.2 | -0.9% | | Adjusted EBITDA Mrg. | 38.2% | 29.9% | 36.1% | +2.1pp | - YoY Adjusted EBITDA was nearly flat as positive impacts from lower TCs and higher by-products contribution were offset by a negative net price effect and lower sales volume[152](index=152&type=chunk) [Business Performance – Smelting](index=32&type=section&id=Business%20performance%20%E2%80%93%20Smelting) [Smelting Segment Overview](index=32&type=section&id=Smelting%20Segment%20Overview) Total smelting production was 139kt, down 9% YoY, while sales totaled 145kt, down 2% YoY but up 12% QoQ Q2 2025 Smelting Production & Sales (kt) | Metric | 2Q25 | 1Q25 | 2Q24 | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Total Production | 138.9 | 132.8 | 152.4 | -8.8% | | Total Sales | 145.1 | 130.1 | 148.0 | -1.9% | - The YoY production decrease is consistent with 2025 sales guidance, which anticipates an annual reduction to adjust for market volatility and lower TCs[163](index=163&type=chunk) - The **12% QoQ sales increase** was driven by higher production at Cajamarquilla and Juiz de Fora, plus increased zinc oxide output at Tres Marias[164](index=164&type=chunk) [Cajamarquilla, Peru](index=32&type=section&id=Cajamarquilla%2C%20Peru) Cajamarquilla's production was 84kt, down 2% YoY due to a scheduled shutdown, but sales increased 4% YoY - Production reached **84kt**, a 2% decrease YoY due to a 15-day scheduled maintenance shutdown[168](index=168&type=chunk) - Metal sales were **87kt**, up 4% YoY and 8% QoQ, driven by higher production and demand[169](index=169&type=chunk) - Conversion cost increased to **US$0.36/lb** from US$0.27/lb in Q2 2024, primarily due to maintenance expenses[170](index=170&type=chunk) [Três Marias, Brazil](index=33&type=section&id=Tr%C3%AAs%20Marias%2C%20Brazil) Total production at Três Marias fell 16% YoY to 38kt, affected by hydrometallurgical challenges - Total production (zinc metal + oxide) was **38kt**, down 16% YoY, due to ongoing hydrometallurgical challenges and concentrate supply issues[175](index=175&type=chunk) - Conversion cost rose to **US$0.38/lb**, a 29% increase from Q2 2024, driven by higher maintenance and input costs[179](index=179&type=chunk) [Juiz de Fora, Brazil](index=35&type=section&id=Juiz%20de%20Fora%2C%20Brazil) Juiz de Fora's production was 17kt, down 23% YoY due to a prior fire incident but up 51% QoQ as operations recovered - Production of **17kt** was down 23% YoY due to the lingering effects of a fire, but up 51% QoQ as operations recovered[183](index=183&type=chunk) - The unit resumed its planned production capacity as of **mid-2025**[183](index=183&type=chunk) - Conversion cost rose to **US$0.58/lb**, primarily due to lower sales volume and higher energy costs[186](index=186&type=chunk) [Smelting Segment Financial Performance](index=36&type=section&id=Smelting%20Segment%20Financial%20Performance) The smelting segment's Adjusted EBITDA dropped 63% YoY to US$25 million, impacted by lower TCs and higher costs Q2 2025 Smelting Segment Financials (US$ million) | Metric | 2Q25 | 1Q25 | 2Q24 | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | 489.5 | 453.6 | 507.6 | -3.6% | | Adjusted EBITDA | 25.3 | 31.3 | 68.6 | -63.1% | | Adjusted EBITDA Mrg. | 5.2% | 6.9% | 13.5% | -8.3pp | - The **63% YoY decline in Adjusted EBITDA** was primarily driven by lower TCs and a negative US$23 million impact from higher costs[199](index=199&type=chunk) - Nexa sourced **50% of its zinc concentrate** from its own mines, with only about 30% of 2025 purchases subject to the new, lower US$80/t benchmark TC[197](index=197&type=chunk)[198](index=198&type=chunk) [Liquidity and Indebtedness](index=39&type=section&id=Liquidity%20and%20Indebtedness) [Debt Profile and Financing Activities](index=39&type=section&id=Debt%20Profile%20and%20Financing%20Activities) Nexa's total debt was US$1.82 billion with an average maturity of 7.7 years, and net debt increased slightly to US$1.52 billion Debt and Liquidity (US$ million) | Metric | Jun 30, 2025 | Mar 31, 2025 | | :--- | :--- | :--- | | Gross Debt | 1,819.6 | 1,781.9 | | Total Cash | 418 | 401 | | Net Debt | 1,515.1 | 1,488.2 | - The Net Debt/LTM Adj. EBITDA ratio was **2.28x**, up from 2.09x at the end of Q1 2025[220](index=220&type=chunk) - In April 2025, Nexa issued a **US$500 million 12-year bond at 6.600%** to refinance existing debt, extending its maturity profile[214](index=214&type=chunk) [Cash Flows](index=41&type=section&id=Cash%20flows) [Cash Flow Analysis](index=41&type=section&id=Cash%20Flow%20Analysis) Net cash from operating activities was US$100 million, resulting in a US$17 million increase in cash for the quarter Q2 2025 Cash Flow Summary (US$ million) | Cash Flow Activity | 2Q25 | 2Q24 | | :--- | :--- | :--- | | Operating activities | 99.9 | 81.3 | | Investing activities | (71.1) | (56.5) | | Financing activities | (14.2) | 129.7 | | Increase in cash | 17.5 | 148.7 | - Cash provided by operating activities before working capital was **US$175 million**, with a positive working capital impact of US$3 million[223](index=223&type=chunk) - Investing activities were primarily driven by **US$87 million in CapEx investments**[224](index=224&type=chunk) - Financing activities included payments for bond redemptions, partially offset by the new **US$500 million bond offering**[225](index=225&type=chunk) [Market Scenario](index=43&type=section&id=Market%20scenario) [Commodity Market Analysis](index=43&type=section&id=Commodity%20Market%20Analysis) The zinc market faced pressure from tight supply and subdued demand, while the copper market was volatile - The LME zinc price averaged **US$2,641/t**, down 7% YoY, reflecting a market with tightening supply but soft global demand expectations[231](index=231&type=chunk) - LME refined zinc inventories declined to **117kt** by the end of June, the lowest level since October 2023[234](index=234&type=chunk) - The LME copper price averaged **US$9,524/t**, down 2% YoY, with high volatility driven by tariff proposals and a severe short squeeze[240](index=240&type=chunk) - LME copper inventories **fell 57% to 91kt** during the quarter, reflecting extreme concentrate market tightness and smelter bottlenecks[242](index=242&type=chunk) [Risks and Uncertainties](index=46&type=section&id=Risks%20and%20Uncertainties) [Key Risk Factors](index=46&type=section&id=Key%20Risk%20Factors) Nexa's operations are exposed to risks including volatile commodity prices, geopolitical instability, and operational challenges - The company's results are subject to **cyclical and volatile commodity prices**, changes in supply and demand, and foreign exchange rate fluctuations[251](index=251&type=chunk) - Risks include economic and political conditions in operating countries and changes in global market conditions, such as **international trade tariffs and geopolitical conflicts**[251](index=251&type=chunk) - Operational risks encompass environmental and safety challenges, natural disasters, **supply-chain interruptions**, and labor disputes[254](index=254&type=chunk) - Emerging risks include evolving **ESG expectations**, the impact of severe weather events, and cybersecurity threats[251](index=251&type=chunk)[254](index=254&type=chunk) [Appendix](index=51&type=section&id=Appendix) - The appendix provides detailed financial statements and reconciliations for non-IFRS measures, including a quarterly income statement, free cash flow reconciliation, detailed CAPEX breakdowns, and All-in Sustaining Cost (AISC) calculations for both the mining and smelting segments[275](index=275&type=chunk)

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Nexa Resources S.A. due to lower revenues, with a focus on how actual results will compare to estimates impacting stock price [1][3]. Earnings Expectations - Nexa Resources is expected to report a quarterly loss of $0.05 per share, reflecting a year-over-year change of -133.3% [3]. - Revenues are projected to be $659.88 million, down 10.4% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 65.22% lower in the last 30 days, indicating a significant reassessment by analysts [4]. - The Most Accurate Estimate matches the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [10]. Earnings Surprise Prediction - A positive or negative Earnings ESP reading indicates the likely deviation of actual earnings from the consensus estimate, with positive readings being more predictive of earnings beats [6][7]. - Nexa Resources currently holds a Zacks Rank of 4, making it challenging to predict an earnings beat [10]. Historical Performance - In the last reported quarter, Nexa Resources exceeded expectations with earnings of $0.16 per share against an estimate of $0.09, resulting in a surprise of +77.78% [11]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [12]. Conclusion - Nexa Resources does not appear to be a strong candidate for an earnings beat, and investors should consider other factors when evaluating the stock ahead of the earnings release [15].