Ero Copper Corp. (the “Company”)
(TSX:
ERO) today is pleased to announce its financial results
for the three months ended March 31, 2020. Management will host a
conference call tomorrow, Friday, May 8, 2020, at 11:30 a.m.
Eastern to discuss the results. Dial-in details for the call
can be found near the end of this press release.
HIGHLIGHTS
- First quarter copper production of
10,657 tonnes of copper;
- Record C1 cash costs* of $0.71 per
pound of copper produced contributing to record quarterly cash flow
from operations of $37.3 million during the three month period
ended March 31, 2020;
- First quarter gold and silver
production at the NX Gold Mine of 7,866 ounces of gold and 4,868
ounces of silver at C1 cash costs* of $594 per ounce of gold
produced;
- Generated $33.4 million in Adjusted
EBITDA* during the three month period ended March 31, 2020;
- Adjusted net income attributable to
owners of the Company* of $20.8 million ($0.23 per share on a
diluted basis) during the three month period ended March 31,
2020;
- Ended the first quarter with strong
liquidity position of $45.5 million;
- Reiterated full year production
guidance for 2020; and,
- Updated full-year capital and
operating cost guidance to reflect a weaker USD:BRL foreign
exchange rate, significantly reducing C1 cash cost* guidance and
the USD equivalent of the Company’s planned, and materially
unchanged, capital program by approximately $16 million, on
average, vs. original guidance.
Commenting on the results, David Strang,
President & CEO, stated, “Despite the significant global
macroeconomic headwinds and challenges that emerged during the
first quarter of 2020, our operations have and continue to perform
well thus far into 2020. I would like to recognize the tremendous
effort across our organization to mitigate the impacts of COVID-19.
Our mine-site management teams have worked tirelessly to support
the continuity and underlying performance of our operations and,
more importantly, ensure the health and well-being of our
employees, contractors, their families and local communities. Front
and center in these efforts entails the purchase and delivery of
over 5,000 COVID-19 testing kits, a portion of which have been
donated to regional hospitals and medical clinics across our
operational footprint along with critically needed PPE and medical
supplies. Corporately, the restructuring of our senior secured debt
which included the deferral of principal payments until March, 2022
and the draw-down of our lines of credit have well-positioned the
Company to withstand unforeseen challenges that may arise as a
result of COVID-19.
The underlying strength of our business, and its
benefit from the significant depreciation of the Brazilian Real
versus the U.S. Dollar is best reflected in our record quarterly
cash flow from operations of $37.3 million and record low C1 cash
costs of $0.71 per pound of copper produced. Our GAAP profitability
was adversely impacted by the requirement to provide a fair market
value assessment of our term foreign exchange contracts that have
remaining lives of up to two years. While the current
“mark-to-market” valuation is a reflection of the global
dislocation caused by COVID-19 impacting the pricing and volatility
of the Brazilian Real against the U.S. Dollar, the projected
benefits of a weaker Brazilian Real on our operating business
significantly outweigh these fair market value assessments.
While production guidance remains unchanged, we
have taken into consideration the significant devaluation of the
Brazilian Real with respect to revising operating and capital cost
guidance for the remainder of 2020. We have lowered our C1 cash
cost* guidance range to $0.70 to $0.85 per pound copper produced
from $0.85 to $0.95 per pound copper produced. We are also
providing a revised range of $56 million to $68 million for our
capital cost guidance at MCSA, excluding exploration. For NX Gold,
we have lowered our C1 cash cost* guidance range to $425 to $525
per ounce of gold produced from $475 to $575 per ounce of gold
produced and are providing a revised capital cost guidance range of
$7 million to $9 million, excluding exploration.”
*EBITDA, Adjusted EBITDA, Adjusted net income
(loss), C1 cash cost of copper produced (per lb) and C1 cash costs
of gold produced (per ounce) are non-IFRS measures – see the Notes
section of this press release for a discussion on non-IFRS
Measures
COVID-19 OPERATIONAL UPDATE
On March 11, 2020, the World Health Organization
declared the COVID-19 outbreak a global pandemic. The Company has
been closely monitoring developments of the COVID-19 outbreak since
February 2020. While the Company has had no material disruption to
operations, supply chains or sales channels as a result of the
COVID-19 pandemic to date, it has implemented preventative measures
and continues to engage in active operational and financial
contingency planning to prudently manage the potential impact of
the pandemic on its operations.
OPERATIONS & EXPLORATION HIGHLIGHTS
- Mining & Milling
Operations – 2020 off to a strong start
- 607,959 tonnes processed grading 1.95% copper producing 10,657
tonnes of copper in concentrate after metallurgical recoveries that
averaged 89.8% at the Company’s Curaçá Valley operations;
- The Company’s 97.6% owned NX Gold Mine processed 36,211 tonnes
of ore grading 7.76 grams per tonne gold, resulting in the
production of 7,866 ounces of gold and 4,868 ounces of silver as
by-product after metallurgical recoveries that averaged 87.1%
during the first quarter of 2020; and
- Exploration
Activities – continue to operate one of the most
comprehensive exploration programs globally, on schedule, at
significantly reduced USD cost
- Pilar District
- Exploration activity within the Pilar District, where twelve
drill rigs are currently operating, is focused on extending the
limits of high-grade ‘Superpod’ mineralization of the Deepening
Extension zone. The Company has now identified a mineralized target
area that extends over approximately 800 meters in strike length,
over a total depth of approximately 400 meters and over an average
thickness of approximately 15 to 20 meters with localized
thicknesses of up to 50 meters. Within the total strike length, a
higher-grade continuous zone with a strike-length of approximately
400 to 500 meters is emerging in the central and northern segments
of the target area. The zone remains open to the north and to
depth. Results during the period support the potential to
meaningfully extend the mine life while maintaining an elevated
grade profile from the Pilar Mine. Five drill rigs will continue to
systematically drill the Deepening Extension zone through the
balance of the year.
- Vermelhos District
- Exploration in the Vermelhos District, where eleven drill rigs
are currently operating, is focused on both near-mine extensional
drilling below the main Vermelhos orebodies, the extension of
massive-sulphide mineralization down-plunge within the Siriema
conduit and testing new regional targets identified during the
Company’s regional airborne survey and subsequent data compilation
work of the broader Vermelhos System – a north-south trend
encompassing the Vermelhos Mine, East Zone, Siriema N8/N9 deposit,
and several high priority targets that extends over ten kilometers
in strike length.
- NX Gold Mine
- At the NX Gold Mine, five exploration drill rigs are primarily
focused on extending mine life through resource upgrade programs
within the current inferred mineral resource as well as testing
down-plunge extensions of the Santo Antonio Vein.
- Regional Exploration
- Regional work at MCSA comprised of both exploration drilling
and ground-based geophysical work is focused on four newly
interpreted mineral systems within the portfolio of targets defined
by the Company’s comprehensive targeting work. Each of the new
systems has an average strike length of 5 kilometers and contain
multiple priority drill targets. While preliminary results are
encouraging, additional detail on these ongoing exploration
programs is expected during the second half of the year.
- In addition, the first regional exploration effort within the
broader NX Gold Mine property commenced during the
period.
- Growth Projects Remain
Largely on Track – on-schedule delivery and installation
of HIG Mill, ore-sorting project progression, Deepening Extension
drilling ongoing
- HIG Mill remains on schedule for delivery and installation by
the end of Q2 2020; however, the commissioning timeline remains
uncertain due to global travel restrictions as a result of
COVID-19.
- A six-month full-scale test of the Company’s recently installed
ore-sorting plant to evaluate the potential to improve mill
head-grades from a variety of deposits throughout the Curaçá Valley
remains ongoing. Results of the comprehensive test program are
expected during the second half of the year.
- Five drill rigs are systematically drilling the Deepening
Extension zone of the Pilar Mine, and a pre-feasibility study for
the inclusion of this zone into the Company’s updated mine plan
(expected Q4 2020) is progressing on schedule.
- Updated Capital and
Operating Cost Guidance – now reflecting a weaker
Brazilian Real
- While the Company’s capital programs for 2020 are materially
unchanged from prior guidance, the Company has revised its USD:BRL
foreign exchange rate assumption for the balance of 2020, reducing
the USD equivalent of these planned programs.
- Capital cost guidance has been revised to between $58 to $68
million at MCSA, excluding exploration, from previous guidance of
$74 million, with an additional revised exploration spend of
between $20 and $25 million through September of 2020 for the same
planned meterage as prior guidance of $28 million. NX Gold capital
guidance has been revised to between $9 to $12 million, including
exploration.
- Operating cost guidance has been lowered to between $0.70 and
$0.85 per pound of copper produced and $425 to $525 per ounce of
gold produced for MCSA and NX Gold, respectively.
- Corporate Highlights – Prudent capital
management and strong liquidity position
- Amended the Company’s senior
secured credit facilities during the period. Benefits of the
amendment include a 25 to 50 basis point reduction in the Company’s
cost of borrowing and the deferral of scheduled principal payments
for two years, now commencing March 2022.
- The Company bolstered its liquidity
position during the period by drawing down its existing USD and BRL
denominated credit facilities of $14.0 million and R$72.3 million,
respectively.
- Ended the quarter with strong
liquidity position of approximately $45.5 million in cash and cash
equivalents, including restricted cash.
OPERATING AND FINANCIAL HIGHLIGHTS
|
|
3 months endedMar. 31, 2020 |
|
3 months endedDec. 31, 2019 |
|
3 months endedMar. 31, 2019 |
Operating Highlights (MCSA Operations) |
Ore Processed (tonnes) |
|
|
607,959 |
|
|
|
589,065 |
|
|
|
530,133 |
|
Grade
(% Cu) |
|
|
1.95 |
|
|
|
2.16 |
|
|
|
2.19 |
|
Cu
Production (tonnes) |
|
|
10,657 |
|
|
|
11,526 |
|
|
|
10,645 |
|
Cu
Production (000 lbs) |
|
|
23,495 |
|
|
|
26,411 |
|
|
|
23,468 |
|
Cu Sold
in Concentrate (tonnes) |
|
|
10,432 |
|
|
|
11,595 |
|
|
|
10,033 |
|
Cu Sold
in Concentrate (000 lbs) |
|
|
22,999 |
|
|
|
25,562 |
|
|
|
22,118 |
|
|
|
|
|
|
|
|
C1 Cash
cost of copper produced (per lb)(1) |
|
|
0.71 |
|
|
|
0.80 |
|
|
|
0.91 |
|
|
|
|
|
|
|
|
Gold (NX Gold Operations) |
|
|
|
|
|
|
Au
Production (ounces) |
|
|
7,866 |
|
|
|
6,043 |
|
|
|
10,119 |
|
C1 Cash
cost of gold produced (per ounce) (1) |
|
|
594 |
|
|
|
980 |
|
|
|
486 |
|
|
|
|
|
|
|
|
Financial Highlights ($millions, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$67.7 |
|
|
$75.7 |
|
|
$72.0 |
|
Gross
profit (loss) |
|
$30.7 |
|
|
$31.1 |
|
|
$32.6 |
|
EBITDA(1) |
|
($50.6 |
) |
|
$34.3 |
|
|
$37.2 |
|
Adjusted EBITDA(1) |
|
$33.4 |
|
|
$31.2 |
|
|
$39.3 |
|
Cash
flow from operations |
|
$37.3 |
|
|
$35.9 |
|
|
$25.1 |
|
Net
income (loss) |
|
($53.0 |
) |
|
$16.3 |
|
|
$15.5 |
|
Net
income (loss) attributable to owners of the Company |
|
($52.8 |
) |
|
$45.2 |
|
|
$15.3 |
|
Net
income (loss) per share attributable to owners of the Company –
Basic |
|
($0.62 |
) |
|
$0.53 |
|
|
$0.18 |
|
Net
income (loss) per share attributable to owners of the Company –
Diluted |
|
($0.62 |
) |
|
$0.49 |
|
|
$0.17 |
|
Adjusted net income (loss) attributable to owners of the
Company(1) |
|
$20.8 |
|
|
$40.7 |
|
|
$15.7 |
|
Adjusted net earnings (loss) per share attributable to owners of
the Company(1) – Basic |
|
$0.24 |
|
|
$0.47 |
|
|
$0.19 |
|
Adjusted net earnings (loss) per share attributable to owners of
the Company(1) – Diluted |
|
$0.23 |
|
|
$0.44 |
|
|
$0.17 |
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents |
|
$44.3 |
|
|
$21.5 |
|
|
$19.5 |
|
Working
Capital (Deficit)(1) |
|
($12.4 |
) |
|
($4.9 |
) |
|
($0.7 |
) |
Net
Debt(1) |
|
($140.1 |
) |
|
($136.4 |
) |
|
($133.1 |
) |
Footnotes[1] EBITDA, Adjusted
EBITDA, Adjusted net income (loss) attributable to owners of the
Company, Adjusted earnings (loss) per share, Net Debt,
Working Capital, C1 Cash Cost of copper produced (per lb) and C1
Cash Cost of gold produced (per ounce) are non-IFRS measures – see
the Notes section of this press release for a discussion on
non-IFRS Measures.
ADJUSTED EBITDA & NET INCOME (LOSS)
RECONCILIATION
|
|
2020– Q1 |
|
|
|
|
Adjusted EBITDA |
|
$ |
33,404 |
|
Adjustments: |
|
|
Unrealized foreign exchange loss on USD denominated debt in
MCSA |
|
|
(26,873 |
) |
Unrealized foreign exchange loss on derivative contracts |
|
|
(52,655 |
) |
Realized foreign exchange loss on derivative contracts |
|
|
(2,651 |
) |
Share based compensation and other |
|
|
(1,792 |
) |
EBITDA |
|
$ |
(50,567 |
) |
|
|
|
Adjusted net income
(loss) |
|
$ |
20,834 |
|
Adjustments for non-cash items
(attributable to owners of the Company): |
|
|
Unrealized foreign exchange loss on USD denominated debt in
MCSA |
|
|
(26,766 |
) |
Net unrealized foreign exchange loss on derivative contracts |
|
|
(43,081 |
) |
Share based compensation |
|
|
(2,049 |
) |
Unrealized loss on interest rate derivative |
|
|
(1,691 |
) |
Reported net income attributable to owners of the Company |
|
$ |
(52,753 |
) |
2020 OUTLOOK
While the Company’s production guidance for 2020
remains unchanged, cash cost and capital expenditure guidance for
2020 has been updated to reflect the significant change in USD:BRL
foreign exchange rates and precious metal prices as a result of the
COVID-19 pandemic. Additional information is outlined below and
further detailed in the Company’s press release dated January 15,
2020.
Production Guidance
Production guidance remains unchanged from prior
guidance. Copper production from the Curaçá Valley operations for
2020 is expected to come from ore mined from the Pilar and
Vermelhos underground mines. Production from the Pilar Mine is
expected to contribute a total of approximately 1.4 million tonnes
grading 1.40% copper while production from the Vermelhos Mine is
expected to contribute a total of approximately 750,000 tonnes
grading 3.50% copper resulting in a blended mill head grade of
approximately 2.15% copper.
|
2020[1] |
|
Curaçá Valley
Operations |
|
|
Tonnes Processed |
2,150,000 |
|
Copper Grade (% Cu) |
2.15% |
|
Copper Recovery (%) |
91.0% |
|
Cu Production Guidance (tonnes) |
41.0 – 43.0 |
|
|
|
|
NX Gold
Operations |
|
|
Tonnes Processed |
150,000 |
|
Gold Grade (gpt) |
9.00 |
|
Gold Recovery (%) |
90.0% |
|
Au Production Guidance (000 ounces) |
38.0 – 40.0 |
|
Footnotes:[1] Guidance is based
on certain estimates and assumptions, including but not limited to,
mineral reserve estimates, grade and continuity of interpreted
geological formations and metallurgical performance. Please refer
to the Company’s SEDAR filings for complete risk factors.
Operating Cost Guidance
The Company’s original guidance for 2020 had
assumed a USD:BRL foreign exchange rate of 4.00, gold price of
$1,450 per ounce and silver price of $17.00 per ounce. In
recognition of the significant change in foreign exchange rates and
precious metals during the first quarter of 2020, the Company has
updated its operating cost guidance assuming a USD:BRL foreign
exchange rate of 4.90, gold price of $1,700 per ounce and silver
price of $15.00 per ounce.
|
|
2020 Guidance |
|
|
2020 Revised Guidance |
|
Curaçá Valley C1 Cash Cost Guidance
(US$/lb)[1] |
|
$0.85 - $0.95 |
|
|
$0.70 - $0.85 |
|
NX Gold Mine C1 Cash Cost Guidance
(US$/oz)[1] |
|
$475 - $575 |
|
|
$425 - $525 |
|
Footnotes:[1] C1 Cash Costs of
copper produced (per lb.) and C1 Cash Costs of gold produced (per
oz.) are non-IFRS measures – see the Notes section of this press
release for a discussion of non-IFRS measures.
Capital Expenditure
Guidance
The Company’s original capital expenditure
guidance for 2020 had assumed a USD:BRL foreign exchange rate of
4.00. In recognition of the significant change in foreign
exchange rates during the first quarter of 2020, the Company has
updated its operating cost guidance assuming a USD:BRL foreign
exchange rate of 4.90. Capital expenditures are presented below in
USD millions.
Curaçá Valley Operations |
2020 Guidance |
|
|
2020 Revised Guidance |
|
Pilar Mine and Caraíba Mill Complex[1] |
58.0 |
|
|
45.0 – 55.0 |
|
Vermelhos Mine |
16.0 |
|
|
11.0 – 13.0 |
|
Boa Esperanҫa Project |
0.2 |
|
|
0.2 – 0.2 |
|
Capital Expenditure Guidance |
74.2 |
|
|
56.2 – 68.2 |
|
Curaçá Valley Exploration[2] |
28.0 |
|
|
20.0 – 25.0 |
|
|
|
|
|
|
|
NX Gold Operations |
2020 Guidance |
|
|
|
|
Capital Expenditure Guidance |
5.7 |
|
|
7.0 – 9.0 |
|
Exploration[2] |
3.5 |
|
|
2.0 – 3.0 |
|
Total, NX Gold |
9.2 |
|
|
9.0 – 12.0 |
|
Footnotes:[1] Pilar Mine and
Caraíba Mill Complex capital expenditure guidance for 2020 includes
completion of the high-intensity grinding mill and operation of the
ore-sorting pilot plant.[2] Exploration capital
expenditure guidance for 2020 has been forecast through September
of 2020 and, as with prior guidance, is dependent, in part, on
future exploration success and subject to further review and
revision.
NOTES
Non-IFRS measures
Financial results of the Company are prepared in
accordance with IFRS. The Company utilizes certain non-IFRS
measures, including C1 cash cost of copper produced (per lb), C1
cash costs of gold produced (per ounce), EBITDA, Adjusted EBITDA,
Adjusted net income (loss) attributable to owners of the Company,
Adjusted earnings (loss) per share, net debt and working capital,
which are not measures recognized under IFRS. The Company believes
that these measures, together with measures determined in
accordance with IFRS, provide investors with an improved ability to
evaluate the underlying performance of the Company. Non-IFRS
measures do not have any standardized meaning prescribed under
IFRS, and therefore they may not be comparable to similar measures
employed by other companies. The data is intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS.
C1 cash cost of copper produced (per
lb.)
C1 cash cost of copper produced (per lb) is the
sum of production costs, net of capital expenditure development
costs and by-product credits, divided by the copper pounds
produced. C1 cash costs reported by the Company include treatment,
refining charges, offsite costs, and certain tax credits relating
to sales invoiced to the Company’s Brazilian customer on
sales. By-product credits are calculated based on
actual precious metal sales (net of treatment costs) during the
period divided by the total pounds of copper produced during the
period. C1 cash cost of copper produced per pound is a
non-IFRS measure used by the Company to manage and evaluate
operating performance of the Company’s operating mining unit, and
is widely reported in the mining industry as benchmarks for
performance, but does not have a standardized meaning and is
disclosed in addition to IFRS measures.
C1 cash cost of gold produced (per
ounce)
C1 cash cost of gold produced (per ounce) is the
sum of production costs, net of capital expenditure development
costs and silver by-product credits, divided by the gold ounces
produced. By-product credits are calculated based on actual
precious metal sales during the period divided by the total ounces
of gold produced during the period. C1 cash cost of gold
produced per pound is a non-IFRS measure used by the Company to
manage and evaluate operating performance of the Company’s
operating mining unit and is widely reported in the mining industry
as benchmarks for performance but does not have a standardized
meaning and is disclosed in addition to IFRS measures.
Earnings before interest, taxes,
depreciation and amortization (EBITDA) and Adjusted
EBITDA
EBITDA represents earnings before interest
expense, income taxes, depreciation, and amortization.
Adjusted EBITDA includes further adjustments for non-recurring
items and items not indicative to the future operating performance
of the Company. The Company believes EBITDA and adjusted
EBITDA are appropriate supplemental measures of debt service
capacity and performance of its operations.
Adjusted EBITDA is calculated by removing the
following income statement items:
- Foreign exchange loss (gain)
- Loss on gold hedge contracts
- Share based compensation
Adjusted Net Income (Loss) attributable
to owners of the Company and Adjusted Earnings (Loss) Per Share
attributable to owners of the Company
The Company uses the financial measure “Adjusted
net income (loss) attributable to owners of the Company” and
“Adjusted earnings (loss) per share attributable to owners of the
Company” to supplement information in its consolidated financial
statements. The Company believes that, in addition to conventional
measures prepared in accordance with IFRS, the Company and certain
investors and analysts use this information to evaluate the
Company’s performance. The Company excludes non-cash and unusual
items from net earnings to provide a measure which allows the
Company and investors to evaluate the operating results of the
underlying core operations.
During the period, the following non-cash or
unusual adjustments to calculated adjusted net income (loss):
- Share based compensation
- Unrealized foreign exchange loss on USD denominated debt in
MCSA
- Net unrealized foreign exchange loss on foreign exchange
derivatives contract
- Unrealized loss on gold hedge contracts
- Unrealized loss on interest rate derivative
Net Debt
Net debt is determined based on cash and cash
equivalents, restricted cash and loans and borrowings as reported
in the Company’s consolidated financial statements. The Company
uses net debt as a measure of the Company’s ability to pay down its
debt.
Working capital
Working capital is determined based on current
assets and current liabilities as reported in the Company’s
consolidated financial statements. The Company uses working capital
as a measure of the Company’s short-term financial health and
operating efficiency.
CONFERENCE CALL DETAILS
The Company will hold a conference call on
Friday, May 8, 2020 at 11:30 am Eastern time (8:30 am Pacific time)
to discuss these results.
Date: |
Friday, May 8, 2020 |
Time: |
11:30 am Eastern time (8:30 am Pacific time) |
Dial in: |
North America: 1-800-319-4610, International: +1-604-638-5340please
dial in 5-10 minutes prior and ask to join the call |
|
|
Replay |
North America: 1-800-319-6413, International: +1-604-638-9010 |
Replay Passcode: |
4372 |
This press release should be read in conjunction
with the unaudited condensed consolidated interim financial
statements and management’s discussion and analysis (“MD&A”)
for the three month period ended March 31, 2020 available on the
Company’s website www.erocopper.com and on SEDAR
(www.sedar.com).
ABOUT ERO COPPER CORP
Ero Copper Corp, headquartered in Vancouver,
B.C., is focused on copper production growth from the Vale do
Curaçá Property, located in Bahia, Brazil. The Company’s primary
asset is a 99.6% interest in the Brazilian copper mining company,
MCSA, 100% owner of the Vale do Curaçá Property with over 40 years
of operating history in the region. The Company currently
mines copper ore from the Pilar and Vermelhos underground mines. In
addition to the Vale do Curaçá Property, MCSA owns 100% of the Boa
Esperanҫa development project, an IOCG-type copper project located
in Pará, Brazil and the Company, directly and indirectly, owns
97.6% of the NX Gold Mine, an operating gold and silver mine
located in Mato Grosso, Brazil. Additional information on the
Company and its operations, including Technical Reports on the Vale
do Curaçá, Boa Esperanҫa and NX Gold properties, can be found on
the Company’s website (www.erocopper.com) and on SEDAR
(www.sedar.com).
The disclosure of scientific or technical
information in this press release was reviewed and approved by
Emerson Ricardo Re, MSc, MBA, MAusIMM (CP) (No. 305892), Registered
Member (No. 0138) (Chilean Mining Commission) and Resource Manager
of the Company who is a “qualified person” within the meanings of
National Instrument 43-101, Standards of Disclosure for Mineral
Projects (“NI 43-101”).
ERO COPPER CORP. |
|
|
|
Signed: “David Strang” |
For further information contact: |
|
|
David Strang, President &
CEO |
Makko DeFilippo, Vice President, Corporate Development |
|
(604) 429-9244 |
|
info@erocopper.com |
CAUTION REGARDING FORWARD LOOKING INFORMATION
AND STATEMENTS This Press Release contains “forward-looking
information” within the meaning of applicable Canadian securities
laws. Forward-looking information includes statements that use
forward-looking terminology such as “may”, “could”, “would”,
“will”, “should”, “intend”, “target”, “plan”, “expect”, “budget”,
“estimate”, “forecast”, “schedule”, “anticipate”, “believe”,
“continue”, “potential”, “view” or the negative or grammatical
variation thereof or other variations thereof or comparable
terminology. Such forward-looking information includes, without
limitation, statements with respect to the Company's expected
operations at the Vermelhos and Pilar Mines as well as at the NX
Gold Property, drilling plans, plans for the Company's exploration
program, timing of any updated mineral resource and reserve updates
and technical reports, the Company's ability to service its ongoing
obligations, the Company's future production outlook, cash costs,
capital resources, expenditures, the impact of new accounting
standards and amendments on the Company's financial statements, and
current global macroeconomic uncertainty stemming from the onset of
the COVID-19 pandemic and its impact on the Company’s business,
financial condition, results of operations, cash flows and
prospects.
Forward-looking information is not a guarantee
of future performance and is based upon a number of estimates and
assumptions of management in light of management’s experience and
perception of trends, current conditions and expected developments,
as well as other factors that management believes to be relevant
and reasonable in the circumstances, as of the date of this Press
Release including, without limitation, assumptions about:
favourable equity and debt capital markets; the ability to raise
any necessary additional capital on reasonable terms to advance the
production, development and exploration of the Company’s properties
and assets; future prices of copper and other metal prices; the
timing and results of exploration and drilling programs; the
accuracy of any mineral reserve and mineral resource estimates; the
geology of the Vale do Curaçá Property, NX Gold Mine and the Boa
Esperanҫa Property being as described in the technical reports for
these properties; production costs; the accuracy of budgeted
exploration and development costs and expenditures; the price of
other commodities such as fuel; future currency exchange rates and
interest rates; operating conditions being favourable such that the
Company is able to operate in a safe, efficient and effective
manner; work force continues to remain healthy in the face of
prevailing epidemics, pandemics or other health risks, political
and regulatory stability; the receipt of governmental, regulatory
and third party approvals, licenses and permits on favourable
terms; obtaining required renewals for existing approvals, licenses
and permits on favourable terms; requirements under applicable
laws; sustained labour stability; stability in financial and
capital goods markets; availability of equipment and critical
supplies, spare parts and consumables; positive relations with
local groups and the Company’s ability to meet its obligations
under its agreements with such groups; and satisfying the terms and
conditions of the Company’s current loan arrangements. While the
Company considers these assumptions to be reasonable, the
assumptions are inherently subject to significant business, social,
economic, political, regulatory, competitive and other risks and
uncertainties, contingencies and other factors that could cause
actual actions, events, conditions, results, performance or
achievements to be materially different from those projected in the
forward-looking information. Many assumptions are based on factors
and events that are not within the control of the Company and there
is no assurance they will prove to be correct.
Furthermore, such forward-looking information
involves a variety of known and unknown risks, uncertainties and
other factors which may cause the actual plans, intentions,
activities, results, performance or achievements of the Company to
be materially different from any future plans, intentions,
activities, results, performance or achievements expressed or
implied by such forward-looking information. Such risks include,
without limitation the risk factors listed under the heading “Risk
Factors” in the Annual Information Form of the Company for the year
ended December 31, 2019, dated March 12, 2020.
Although the Company has attempted to identify
important factors that could cause actual actions, events,
conditions, results, performance or achievements to differ
materially from those described in forward-looking information,
there may be other factors that cause actions, events, conditions,
results, performance or achievements to differ from those
anticipated, estimated or intended.
The Company cautions that the foregoing lists of
important assumptions and factors are not exhaustive. Other events
or circumstances could cause actual results to differ materially
from those estimated or projected and expressed in, or implied by,
the forward-looking information contained herein. There can be no
assurance that forward-looking information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information. Accordingly,
readers should not place undue reliance on forward-looking
information.
Forward-looking information contained herein is
made as of the date of this press release and the Company disclaims
any obligation to update or revise any forward-looking information,
whether as a result of new information, future events or results or
otherwise, except as and to the extent required by applicable
securities laws.
Unless otherwise stated, information of a
scientific or technical nature in respect of the Vale do Curaçá
Property included in this press release is based upon the Vale do
Curaçá technical report entitled “2019 Updated Mineral Resources
and Mineral Reserves Statements of Mineração Caraíba’s Vale do
Curaçá Mineral Assets, Curaçá Valley”, dated November 25, 2019 with
an effective date of September 18, 2019, prepared by Rubens Jose De
Mendonça, MAusIMM, of Planminas – Projectos e Consultoria em
Mineração Ltd. (“Planminas”), Porfirio Cabaleiro Rodrigues, MAIG,
Leonardo de Moraes Soares, MAIG, and Bernardo Horta de Cerqueira
Viana, MAIG, all of GE21 Consultoria Mineral Ltda. (“GE21”), and
each a “qualified person” and “independent” of the Company within
the meanings of NI 43-101. Information of a scientific or technical
nature in respect of the NX Gold Mine included in this press
release is based upon the NX Gold technical report entitled
“Mineral Resource and Mineral Reserve Estimate of the NX Gold Mine,
Nova Xavantina”, dated February 3, 2020 with an effective date of
September 30, 2019, prepared by Porfirio Cabaleiro Rodrigues, MAIG,
Leonardo de Moraes Soares, MAIG, and Paulo Roberto Bergmann,
FAusIMM, each of GE21 and a “qualified person” and “independent” of
the Company within the meanings of NI 43-101.
Cautionary Notes Regarding Mineral Resource and
Reserve Estimates In accordance with applicable Canadian securities
regulatory requirements, all mineral reserve and mineral resource
estimates of the Company disclosed or incorporated by reference in
this press release have been prepared in accordance with NI 43-101
and are classified in accordance with the CIM Standards.
Mineral resources which are not mineral reserves
do not have demonstrated economic viability. Pursuant to the CIM
Standards, mineral resources have a higher degree of uncertainty
than mineral reserves as to their existence as well as their
economic and legal feasibility. Inferred mineral resources, when
compared with Measured or Indicated mineral resources, have the
least certainty as to their existence, and it cannot be assumed
that all or any part of an Inferred mineral resource will be
upgraded to an Indicated or Measured mineral resource as a result
of continued exploration. Pursuant to NI 43-101, Inferred mineral
resources may not form the basis of any economic analysis.
Accordingly, readers are cautioned not to assume that all or any
part of a mineral resource exists, will ever be converted into a
mineral reserve, or is or will ever be economically or legally
mineable or recovered.
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