Core Insights - Nexa Resources reported a net income of US$100 million in 3Q25, a significant increase from US$13 million in 2Q25 and US$6 million in 3Q24, driven by a non-cash impairment reversal and stronger operational margins [2][3][4] Financial Performance - Adjusted EBITDA for the quarter was US$186 million, up from US$161 million in 2Q25 and US$183 million in 3Q24, primarily due to higher mining output and better metal prices [3] - Net revenues reached US$764 million, an 8% increase from US$708 million in 2Q25 and US$709 million in 3Q24, supported by higher smelting sales volume and operational improvements [4] Operational Highlights - Overall zinc production rose 14% quarter-over-quarter to 84kt, with Aripuanã achieving record production of 10.4kt, a 39% increase from 3Q24 [14] - Lead production increased 16% quarter-over-quarter to 18kt, while copper production decreased 6% quarter-over-quarter to 9kt [14] - The Cerro Pasco Integration Project is on schedule, with construction activities well underway and key equipment packages undergoing Factory Acceptance Tests [14] Capital Expenditure and Debt Management - CAPEX totaled US$90 million in 3Q25, with approximately US$12 million allocated to the Cerro Pasco Integration Project, maintaining full-year guidance at US$347 million [9] - Nexa's net debt decreased to US$1,479 million from US$1,515 million in the previous quarter, improving the Net debt/LTM Adjusted EBITDA ratio to 2.2x [9] ESG and Corporate Initiatives - Nexa advanced its commitment to sustainable mining through initiatives in safety, decarbonization, and community engagement, including health campaigns and educational support [12][15] - The company achieved full compliance with LME Responsible Sourcing standards and showcased its ESG strategy at various industry forums [21]

Financial Performance - Net revenues for Q3 2025 totaled US$764 million, an 8% increase from US$708 million in Q2 2025 and also up 8% year-over-year from Q3 2024[11]. - Net income reached US$100 million in Q3 2025, significantly up from US$13 million in Q2 2025 and US$6 million in Q3 2024, resulting in earnings per share of US$0.52 for the quarter[15]. - Adjusted EBITDA for Q3 2025 was US$186 million, up from US$161 million in Q2 2025 and US$183 million in Q3 2024, with a consolidated Adjusted EBITDA margin of 24%[15]. - Free cash flow for Q3 2025 was positive at US$52 million, primarily due to higher operating cash flow and lower interest payments[15]. - Total cash at the end of Q3 2025 was US$470 million, up from US$418 million at the end of Q2 2025, with total available liquidity of US$790 million[15]. - For the first nine months of 2025, net revenues totaled US$2.1 billion, up 4% compared to the same period in 2024, primarily due to higher by-products contribution[53]. - Cost of sales in Q3 2025 amounted to US$610 million, a 5% increase year-over-year, attributed to lower TCs and higher zinc LME prices[54]. - SG&A expenses in Q3 2025 totaled US$37 million, up 27% year-over-year, mainly due to higher personnel costs and legal expenses[60]. - In 9M25, net income totaled US$142 million compared to a net loss of US$76 million in 9M24, indicating a strong recovery[78]. Production and Operations - Zinc production in Q3 2025 was 84kt, a 14% increase quarter-over-quarter and a 1% increase year-over-year, driven by improved performance at Vazante and record production at Aripuanã[12]. - The mining segment delivered Adjusted EBITDA of US$164 million in Q3 2025, a 28% increase year-over-year, supported by higher by-products prices[15]. - Zinc equivalent production increased by 9% to 164kt in 3Q25, reflecting improvements across various mining assets[89]. - Treated ore volume in 3Q25 was 3,382kt, remaining stable year-over-year, with notable performances at Aripuanã, Cerro Lindo, and El Porvenir[85]. - In 3Q25, treated ore volume at Cerro Lindo was 1,586kt, up 1.6% year-over-year and down 3% quarter-over-quarter[92]. - Zinc production at Cerro Lindo was 22.3kt, a decline of 3.5% year-over-year and 9.7% quarter-over-quarter, attributed to lower-grade zones[93]. - At El Porvenir, zinc production reached 14.4kt in 3Q25, up 12.1% year-over-year and 5.9% quarter-over-quarter, driven by higher ore processing volumes[101]. - In 3Q25, Vazante's ore mined increased by 6.6% year-over-year to 410kt, while treated ore decreased by 2.3% to 439kt[114][116]. - Zinc production at Vazante totaled 33.7kt, down 7% from 3Q24, but increased by 23% compared to 2Q25 due to improved access to higher-grade zones[117]. - In 3Q25, Aripuanã's ore mined was 365kt, a significant decrease of 28.9% year-over-year, while treated ore increased by 2.3% to 420kt[122]. Cost Management - Net debt to last twelve months Adjusted EBITDA ratio improved to 2.2x at the end of Q3 2025, down from 2.3x at the end of Q2 2025[15]. - The consolidated run-of-mine mining cost for 9M25 was US$49.5/t, at the lower end of the 2025 guidance, while the C1 cash cost was US$(0.18)/lb, significantly below the expected range due to increased by-products contribution[35]. - Nexa's C1 cash cost for the smelting segment was US$1.24/lb in 9M25, consistent with the 2025 guidance, while the smelting conversion cost was US$0.34/lb[37]. - The average run-of-mine mining cost was US$87.3/t in 3Q25, down 20% from US$109/t in 2Q25, due to higher treated ore volume and lower operational costs[129]. - Cash cost net of by-products at Cerro Lindo improved to US$(0.98)/lb in 3Q25 from US$(0.36)/lb in 3Q24, reflecting higher by-products contribution[96]. - Cash cost net of by-products at El Porvenir significantly decreased to US$(0.49)/lb in 3Q25 from US$0.18/lb in 3Q24, primarily due to higher by-products contribution[103]. - The cash cost net of by-products at Atacocha was US$(2.37)/lb in 3Q25, improving significantly by US$1.44/lb from 3Q24[112]. - Cash cost net of by-products decreased to US$(0.20)/lb in 3Q25, down US$0.13/lb from 2Q25, attributed to higher by-products prices and increased sales volumes[130]. - Cash cost net of by-products was US$1.55/lb in 3Q25, up 18.4% from US$1.31/lb in 3Q24[175]. Sustainability and Initiatives - The company is advancing its sustainability initiatives, including operating the Cajamarquilla smelter entirely on renewable hydroelectric energy, reinforcing its commitment to low-carbon production[6]. - In Q3 2025, Nexa Resources achieved significant progress in the Cerro Pasco Integration Project, with construction on track and key milestones reached, including earthworks and procurement of major equipment[23]. - Nexa's exploration and project evaluation guidance for 2025 remains unchanged at US$88 million, with other expenses expected to total approximately US$20 million[45]. - The fourth tailings filter is expected to enhance operational stability once commissioned in 1H26, addressing seasonal rainfall challenges[128]. Debt and Financial Position - As of September 30, 2025, Nexa's total debt reached US$1,834 million, reflecting a 1% increase from June 30, 2025[198]. - The average maturity of total debt is 7.4 years with an average interest rate of 6.32% per year[199]. - 5% (US$85 million) of total debt is maturing in 2025, while 2% (US$31 million) is maturing in 2026[199]. - 30% (US$551 million) of total debt is set to mature between 2027 and 2031[199]. - 35% (US$638 million) of total debt will mature between 2032 and 2036[199]. - 29% (US$529 million) of total debt is maturing in and after 2037[199]. - 82% (US$1,511 million) of total debt is denominated in U.S. dollars, while 18% (US$322 million) is in Brazilian reais[199]. - Fitch Ratings reaffirmed Nexa's 'BBB-' investment grade rating with a 'Stable' Outlook, highlighting the company's solid financial position[25].

Core Insights - Nexa Resources S.A. is a significant player in the mining and smelting industry, focusing on zinc, copper, and lead production in Latin America, particularly Brazil and Peru [1] - The consensus price target for Nexa has increased from $4.75 to $5.50 over the past year, indicating a positive sentiment from analysts [2][6] - The company reported quarterly earnings of $0.11 per share, exceeding expectations of a $0.05 loss, showcasing strong financial performance [2][6] Price Target Trends - Three months ago, the average price target was $4.75, showing a notable increase to $5.50 recently, reflecting improved analyst outlook [3][6] - Analyst Jackie Przybylowski from BMO Capital has set a higher price target of $6.5, reinforcing the optimistic sentiment surrounding Nexa [3][6] - A year ago, the average price target was also $4.75, indicating stability, but recent developments have led to a more favorable view [4] Market Performance - Nexa's stock price recently increased by 5.1% in a trading session, accompanied by higher-than-average trading volume, suggesting positive market reception [4] - Despite the positive trends, analysts predict a potential decline in earnings, which could affect future price targets [4][5] - The upward trend in price targets is attributed to improved financial performance and strategic initiatives, which investors should monitor closely [5]

Summary of Key Takeaways from Brazilian Corporates Conference Call Industry Overview - **Investor Trip**: BofA's 12th Brazil investor trip highlighted a stark sectoral divide and a defensive corporate posture among Brazilian corporates, with a focus on deleveraging and liquidity preservation in a challenging environment [1][2][3] - **Corporate Bond Performance**: Brazilian corporate bonds (EBRZ index) have underperformed with a total return of +3.5% YTD compared to LatAm (+8.9%) and EM (+7.5%) [1] Core Themes - **Deleveraging Strategy**: Companies are prioritizing deleveraging due to increased leverage and high local interest rates (15%), leading to postponed investments and accelerated asset sales [3][4] - **Sectoral Divide**: Sectors like Oil & Gas services, protein, and logistics are performing well, while industrial sectors such as steel and petrochemicals face margin compression due to low-cost imports, particularly from China [4][11] Credit Events and Market Sentiment - **Contagion Fears**: Recent credit events at Ambipar and Braskem have heightened investor scrutiny on balance sheets, potentially leading to a broader repricing of risk [2][4] - **Investor Preferences**: There is a growing emphasis on transparent governance and conservative financial policies among investors [2] Sector-Specific Insights - **Pulp & Paper**: The sector is navigating a downturn in pulp prices, with Suzano taking a leadership role through capacity cuts and diversification into consumer tissue [10] - **Metals & Mining**: The steel market is under pressure from Chinese oversupply, impacting CSN and Gerdau, while Vale remains focused on shareholder returns [11] - **Banking**: A bifurcation in credit quality is evident, with Itaú managing risks effectively while Banco do Brasil faces challenges in its agribusiness portfolio [12][51] - **Oil & Gas**: Petrobras is balancing investments with shareholder returns amid volatile Brent prices, while companies like Acelen are experiencing operational momentum [13][26] - **Agribusiness**: Adecoagro is facing significant margin squeezes despite high production volumes, with a focus on strategic acquisitions [19][37] Financial Health and Projections - **Banco do Brasil**: NPLs in agribusiness have reached 3.5%, prompting increased provisions to R$56 billion, with government intervention expected to stabilize the situation [51][52] - **Braskem**: The company is in crisis management mode, facing a prolonged downturn and cash burn estimated at $1 billion for 2025 [55][57] - **Acelen**: The refinery reported a significant reduction in operating costs from over $12/bbl in 2022 to $7.8/bbl in 1H25, with a positive outlook for diesel prices [26][27][33] Strategic Initiatives - **Acelen Renewables**: Plans for a $3 billion refinery project to produce sustainable aviation fuel and hydrotreated vegetable oil are underway [36] - **Adecoagro's Acquisition**: The acquisition of a stake in Profertil is seen as strategically beneficial despite potential near-term credit pressures [39][40] Conclusion - The Brazilian corporate landscape is characterized by a defensive posture, aggressive deleveraging strategies, and a clear sectoral divide influenced by both domestic and global economic factors. Investors are increasingly cautious, focusing on governance and financial health as key determinants for future investments.

Core Viewpoint - Nexa Resources S.A. (NEXA) shares have experienced a significant rally, attributed to rising metal prices and strong trading volume, indicating potential investor interest and market momentum [1][2]. Group 1: Stock Performance - Nexa Resources shares increased by 5.1% to close at $5.37, with a notable trading volume exceeding typical levels [1]. - Over the past four weeks, the stock has gained 6.5% [1]. Group 2: Metal Prices Impact - Zinc prices have surged above $3,000 per ton due to supply concerns, contrasting with year-to-date losses [2]. - Copper prices are currently above $5 per pound, influenced by mine disruptions in Chile and Indonesia [2]. - Silver is trading around $49 per ounce, supported by political and economic uncertainties and expectations of U.S. rate cuts [2]. Group 3: Earnings Expectations - Nexa Resources is expected to report quarterly earnings of $0.10 per share, reflecting a year-over-year increase of 400% [3]. - Revenue projections stand at $699.31 million, a decrease of 1.4% from the same quarter last year [3]. - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in earnings expectations [4]. Group 4: Industry Context - Nexa Resources holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [5]. - The company is part of the Zacks Mining - Miscellaneous industry, which includes other stocks like McEwen (MUX), that has shown a significant increase of 30.6% over the past month [5]. - McEwen's EPS estimate has changed by +95.2% over the past month, indicating strong growth potential within the industry [6].

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]