Mining that changes with the world 4Q24 and FY2024 Results February 21, 2025 Três Marias Smelter, Minas Gerais - Brazil Disclaimer Important information concerning this presentation This presentation, prepared by Nexa Resources S.A. (herein referred to as "Nexa Resources", "Nexa", or the "Company"), is solely for informational purposes. Disclosure of this presentation, its contents, extracts or abstracts to third parties is not authorized without express and prior written consent from the Company. This Pres ...

Financial Data and Key Metrics Changes - In Q4 2024, adjusted EBITDA reached $197 million, a 79% increase from $110 million in the same period last year [9] - For the full year, adjusted EBITDA totaled $714 million, marking a significant 76% increase compared to 2023 [42] - Total consolidated net revenues for Q4 reached $741 million, an 18% increase year-over-year [11] - The net leverage ratio improved from 2.2 times in Q3 to 1.7 times [8][50] Business Line Data and Key Metrics Changes - Zinc production in Q4 2024 was 74,000 tons, down 19% year-over-year, primarily due to lower output at Cerro Lindo [16] - Lead and silver production increased by 2% and 1% respectively, driven by higher grades [11] - Smelting segment sales in Q4 reached 152,000 tons, a 6% increase year-over-year [21] - Consolidated smelting cost in Q4 was $1.26 per pound, up from $1.00 per pound in the same period last year [23] Market Data and Key Metrics Changes - The LME zinc price averaged $3,050 per ton in Q4, a 22% increase year-over-year [52] - The LME copper price averaged $9,193 per ton, up 13% from Q4 2023 [55] - The LME silver price averaged $31 per ounce in Q4, up 35% year-over-year [55] Company Strategy and Development Direction - The company is focusing on optimizing its portfolio and executing strategic divestments to concentrate on high-return assets [14] - The first phase of the Cerro Pasco integration project has been approved, which includes tailings pumping and piping systems [31] - The company aims to enhance production capacity and extend the life of its mines through disciplined capital allocation [57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive cash flow and higher EBITDA in 2025, despite challenges faced in 2024 [78] - The company remains committed to safety and operational efficiency as top priorities moving into 2025 [60] - Management highlighted the importance of maintaining a strong balance sheet and liquidity position to support growth [49] Other Important Information - The company reaffirmed its investment-grade rating with a stable outlook from both Standard & Poor's and Fitch [58] - A new dividend policy was adopted, ensuring a minimum payment of eight cents per share and 20% of free cash flow [57][85] Q&A Session Summary Question: Can you share any quantitative estimates on the tailing filter and its CapEx? - The total CapEx for the Cerro Pasco project is around $140 million, with $85 million for the tailings pumping system [68][69] Question: Do you expect Aripuanã to have positive EBITDA in 2025? - Yes, Aripuanã is expected to have positive EBITDA in 2025, higher than in 2024 due to increased production and lower costs [80][82] Question: Can you clarify the new dividend policy? - The new policy includes a minimum payment of eight cents per share and 20% of free cash flow after sustaining capital [83][85] Question: What is the expected sustaining CapEx for 2025? - The sustaining CapEx for 2025 is expected to be around $316 million [93] Question: What is the status of the Magistral project? - The Magistral project is still of interest, but it faces competition from other projects and is currently in negotiations with government authorities [111][113]

Core Viewpoint - Nexa Resources S.A. reported a quarterly loss of $1 per share, significantly worse than the Zacks Consensus Estimate of $0.35, marking an earnings surprise of -385.71% [1] - The company has consistently failed to surpass consensus EPS estimates over the last four quarters [2] Financial Performance - Nexa Resources posted revenues of $740.92 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 5.86%, compared to $629.9 million in the same quarter last year [2] - The current consensus EPS estimate for the upcoming quarter is $0.31 on revenues of $694.2 million, and for the current fiscal year, it is $1.04 on revenues of $2.85 billion [7] Stock Performance - Shares of Nexa Resources have declined approximately 39% since the beginning of the year, contrasting with a 4.5% gain in the S&P 500 [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations of outperforming the market in the near future [6] Industry Outlook - The Mining - Miscellaneous industry, to which Nexa Resources belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Nexa Resources may be influenced by the overall outlook for the industry, as empirical research indicates a strong correlation between stock movements and earnings estimate revisions [5][8]

Core Viewpoint - Nexa Resources reported a strong financial performance in 2024, with a 76% increase in Adjusted EBITDA to US$714 million, driven by higher by-products contribution, stronger zinc prices, favorable foreign exchange variations, and reduced expenses [3][10]. Financial Performance - Adjusted EBITDA for 4Q24 rose to US$197 million, up from US$110 million in 4Q23, supported by increased metal sales volumes and foreign exchange gains [4]. - Net revenues for 2024 totaled US$2,766 million, an 8% increase from the previous year, with 4Q24 net revenues reaching US$741 million, up 18% compared to 4Q23 [6]. - The net loss for 2024 was US$187 million, a 36% reduction from the US$292 million loss in 2023, mainly due to higher operating income [7]. - Total CAPEX for 2024 was US$277 million, below the revised guidance of US$300 million, with nearly all investments directed toward sustaining expenditures [8]. Operational Performance - Zinc production for 2024 totaled 327kt, a 2% decrease from 333kt in 2023, primarily due to lower output at several mines [11]. - Copper production in 2024 reached 36kt, a 7% increase from 33kt in 2023, exceeding the upper end of the annual guidance [13]. - Lead production closed the year at 69kt, up from 65kt in 2023, while silver production totaled 12 million ounces, up from 10 million ounces in 2023 [14]. Growth Strategy and Asset Portfolio - Nexa advanced its portfolio optimization strategy in 2024, focusing on higher-return assets and disciplined capital allocation, including strategic divestments [18][19]. - The company approved the first phase of the Cerro Pasco Integration Project, aimed at extending the life of the mine and improving profitability [20]. - In December 2024, Nexa increased its ownership in Tinka Resources to approximately 19.86%, which holds the Ayawilca zinc-silver project [21]. ESG Initiatives - Safety remains a top priority for Nexa, with robust measures implemented to enhance accident prevention and protect the well-being of its workforce [23]. - Nexa advanced several ESG-related initiatives in 4Q24, including the commercialization of jarosite residue and the installation of Hydragen™ technology at the Vazante mine [25]. - The company was recognized as the Americas winner of the Gartner Eye on Innovation Awards for its application of Digital Twin technology at the Cerro Lindo mine [25]. Credit Ratings and Financial Policies - S&P and Fitch reaffirmed Nexa's 'BBB-' investment grade rating with a 'stable' outlook in 2024, while S&P assigned a 'brAAA' rating to its Brazilian subsidiary [26]. - A new dividend policy was announced to provide greater transparency and consistent shareholder returns while maintaining financial flexibility [26].

Nexa Resources S.A. Consolidated financial statements at December 31, 2024 and report of independent registered public accounting firm | C o n e t | s | t | n | | | | | --- | --- | --- | --- | --- | --- | --- | | Consolidated financial statements | | | | | | | | Consolidated income statement | | | | | 3 | | | Consolidated statement of comprehensive income | | | | | 4 | | | Consolidated balance sheet | | | | | 5 | | | Consolidated statement of cash flows | | | | | 6 | | | Consolidated statement of changes in ...

Core Viewpoint - The market anticipates Nexa Resources S.A. (NEXA) to report a significant year-over-year increase in earnings driven by higher revenues for the quarter ending December 2024, with actual results being crucial for stock price movement [1][3]. Earnings Expectations - Nexa Resources is expected to post quarterly earnings of $0.35 per share, reflecting a year-over-year change of +3600%, with revenues projected at $699.9 million, an increase of 11.1% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that analysts have not significantly altered their initial projections during this period [4]. Earnings Whisper and ESP - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Nexa is lower than the consensus estimate, resulting in an Earnings ESP of -11.43%, indicating a bearish outlook from analysts [10]. Zacks Rank - Despite the negative Earnings ESP, Nexa Resources holds a Zacks Rank of 2 (Buy), complicating the prediction of whether the company will beat the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, Nexa was expected to earn $0.08 per share but only achieved $0.02, resulting in a surprise of -75%. Over the past four quarters, the company has only beaten consensus EPS estimates once [12][13]. Conclusion - While Nexa Resources may not be a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [16].

Core Insights - The article emphasizes the importance of the Zacks Rank system, which focuses on earnings estimates and revisions to identify strong stocks [1] - Value investing is highlighted as a favored strategy that seeks to find undervalued companies in the market [2] - Zacks has developed a Style Scores system to identify stocks with specific traits, particularly in the Value category [3] Company Analysis: Nexa Resources (NEXA) - Nexa Resources currently has a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential [4] - The stock's Forward P/E ratio is 5.68, significantly lower than the industry average of 13.32, suggesting it may be undervalued [4] - NEXA's Forward P/E has fluctuated between 41.29 and -113.19 over the past year, with a median of 12.59 [4] - The company has a PEG ratio of 0.34, which is lower than the industry average of 0.73, further indicating potential undervaluation [5] - NEXA's PEG ratio has ranged from 0.42 to 0.11 in the past year, with a median of 0.25 [5] - Overall, the metrics suggest that Nexa Resources is likely undervalued and stands out as one of the strongest value stocks in the market [6]

Core Viewpoint - Nexa Resources reported its fourth quarter and full year exploration results for 2024, highlighting a focus on near-mine expansion, brownfield and infill drilling, and promising greenfield projects [2][3]. Exploration and Drilling Results - Cumulative drilling at the end of Q4 2024 totaled 229,148 meters, consisting of 63,779 meters of exploration drilling and 165,369 meters of mining infill drilling. Exploration drilling fell approximately 8% short of the annual target due to operational challenges and heavy rainfall [3][5]. - In Q4 2024, exploration drilling amounted to 19,121 meters, with 12,910 meters in Peru, 4,937 meters in Brazil, and 1,273 meters in Namibia. This included 7,204 meters for early-stage greenfield projects in Brazil and Peru [3][5]. - For Q1 2025, exploration drilling plans include 7,050 meters in Peru and 6,310 meters in Brazil, totaling 13,360 meters [3]. Achievements and Future Plans - In 2024, the company achieved 92% of its planned drilling activities, completing 63,779 meters out of a target of 69,200 meters. The brownfield exploration programs progressed well, focusing on expanding the portfolio and extending the life of mines [5]. - Significant mineralization was confirmed at various targets, including Orebodies 8B and 8C at Cerro Lindo, the Massaranduba target at Aripuanã, and the Lumiadeira and Sucuri targets at Vazante. Exploration at the Pasco complex also confirmed the expansion of the mineralized zone at the Integración target [5]. - A total of 82,340 meters of drilling is planned for 2025, with 62% allocated to Peru [5]. Company Profile - Nexa is a large-scale, low-cost integrated zinc producer with over 65 years of experience in mining and smelting in Latin America. The company operates five long-life mines and three smelters, with significant production capabilities [6][7]. - In 2024, Nexa was among the top five producers of mined zinc globally and one of the top five metallic zinc producers worldwide, according to Wood Mackenzie [8].

Group 1 - Nexa Resources S.A. (NEXA) has experienced a downtrend with a stock decline of 5.7% over the past four weeks, indicating significant selling pressure [1] - The stock is currently in oversold territory, with an RSI reading of 28.96, suggesting that the heavy selling may be exhausting itself and a potential bounce back could occur [5][6] - Wall Street analysts have raised earnings estimates for NEXA by 9% over the last 30 days, indicating a positive outlook for the company's earnings and potential price appreciation [6] Group 2 - NEXA holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [7]

Core Viewpoint - Nexa Resources has successfully achieved its 2024 production and cost guidance, with copper production exceeding expectations and a detailed outlook provided for 2025-2027 [1][2]. Production and Sales - Consolidated mining production guidance was met, with zinc, lead, and silver production aligning with annual targets, while copper production reached 36kt, surpassing the upper guidance range [2][4]. - Zinc production totaled 327kt, with Cerro Lindo, El Porvenir, Vazante, and Aripuanã mines achieving their respective production targets [2][4]. - Metal sales reached 591kt, driven by increased production at Cajamarquilla and Juiz de Fora smelters, supported by operational stability and enhanced logistics [5][6]. - Zinc metal sales were 557kt, while zinc oxide sales totaled 35kt, reflecting reduced demand in the pneumatic segment [6][7]. Cost Management - Consolidated run-of-mine mining costs were successfully managed, with cash costs reduced by 65% in October 2024, attributed to operational efficiencies and effective cost management [2][12]. - Smelting conversion costs and cash costs were achieved due to lower operational costs and higher throughput at Cajamarquilla [12][40]. - CAPEX and other operating expenses were significantly below the revised guidance, highlighting the company's commitment to financial discipline [2][3]. Future Guidance (2025-2027) - Zinc production is projected to slightly increase in 2025, with further growth expected in 2026 and 2027, primarily from Aripuanã and El Porvenir [22][24]. - Copper production is anticipated to decline by 10% in 2025, with a slight recovery expected in 2027 [22][28]. - Lead and silver production are forecasted to decrease slightly in 2025, with expectations of stability in subsequent years [22][26]. - Total metal sales are expected to decrease by 3% in 2025, with a projected increase in 2026 [23][30]. Financial Overview - For 2025, CAPEX guidance is set at US$347 million, with a significant portion allocated to sustaining investments [44][45]. - Exploration investments are planned at US$70 million, focusing on mineral exploration and project evaluation [51][52]. - The company aims to enhance operational efficiency through technology investments and community support initiatives [53][54].