Nexa Resources Reports Strong 2024 Results with a 76% Increase in Annual Adjusted EBITDA

• Nexa achieved its second-highest annual Adjusted EBITDA, reaching US$714 million in 2024, including US$197 million in 4Q24.

• The company generated its first positive consolidated cash flow since the Aripuanã investments, reducing our gross debt and closed the year with a net leverage ratio of 1.7x.

• Annual production was delivered within guidance, with copper exceeding the upper range, while CAPEX and OPEX were below the lower range.

Luxembourg, Luxembourg--(Newsfile Corp. - February 20, 2025) - Nexa Resources (NYSE:NEXA), one of the world's leading zinc producers, reported a 76% increase in Adjusted EBITDA to US$714 million in 2024, up from US$406 million in 2023, marking the second-highest annual performance, driven by higher by-products contribution, stronger zinc prices, favorable foreign exchange variations, and reduced mineral exploration and project evaluation expenses.

In 4Q24, Adjusted EBITDA rose to US$197 million, up from US$110 million in 4Q23, supported by increased metal sales volumes, a cash dividend received from Enercan – a Brazilian energy company – and foreign exchange gains, partially offset by higher variable costs.

For the first time since the Aripuanã investments, Nexa generated positive consolidated cash flow in 2024, supported by strong operational performance and optimized working capital management, resulting in free cash flow of US$107 million in 4Q24. These improvements enabled the repayment of US$44 million in short-term debt. The company ended the year with total cash of US$640 million and a net leverage ratio of 1.7x, down from 3.3x at the end of 2023.

Net revenues grew steadily in 2024, totaling US$2,766 million — an 8% increase compared to the previous year. In 4Q24, net revenues reached US$741 million, up 18% compared to 4Q23, primarily driven by higher LME metal prices and increased smelting sales volume, partially offset by lower net premiums.

In 2024, net loss totaled US$187 million, a 36% reduction from the US$292 million loss recorded in the previous year, mainly attributed to higher operating income. This net loss includes foreign exchange losses and income tax provisions.

Total CAPEX for 2024 totaled US$277 million, well below the revised guidance of US$300 million. Nearly all investments were directed toward sustaining expenditures, including mine development and activities to maintain operational reliability. In 4Q24, CAPEX reached US$86 million, with a similar allocation. The depreciation of the Brazilian real against the U.S. dollar resulted in a positive impact of US$11 million over the year.

Ignacio Rosado, CEO of Nexa Resources, commented on the results: "Despite the challenges, we remained focused on operational efficiency and delivering production within annual guidance while maintaining CAPEX and OPEX below the lowered figure." Mr. Rosado added: "Looking ahead to 2025, we acknowledge the complexities of the global landscape, including increased volatility and the potential impact of tariffs on trade and supply chains. However, we are confident in the strong fundamentals of our metals – particularly zinc – along with our operational discipline, financial prudence and strategic focus on deleveraging and sustainable growth."

Operational Performance

In 2024, Nexa achieved its consolidated production guidance across all metals, with copper exceeding the upper range. Zinc production for the year totaled 327kt, a 2% decrease from 333kt in 2023. This reduction was primarily driven by lower output at Cerro Lindo, El Porvenir, and Vazante, along with the absence of contributions from Morro Agudo after its divestment in April 2024.

In 4Q24, zinc production was 74kt, down from 90kt in 4Q23, mainly due to lower volumes at Cerro Lindo, El Porvenir, and Vazante, in addition to the absence of Morro Agudo. Compared to 3Q24, production decreased, reflecting lower grades and throughput at Cerro Lindo, Vazante, and Atacocha, partially offset by improved performance at Aripuanã.

Copper production in 2024 reached 36kt, a 7% increase from 33kt in 2023, exceeding the upper end of the annual guidance. In 4Q24, copper production totaled 9kt, slightly below 9.5kt in 3Q24 and 2.5% lower than 9.4kt in 4Q23, primarily due to lower contributions from Aripuanã.

Lead production closed the year at 69kt, up from 65kt in 2023, in line with the mid-range of guidance. In 4Q24, production reached 17kt, slightly lower than 18kt in 4Q23, but higher than the previous quarter, driven by improved output at El Porvenir and Aripuanã.

Silver production in 2024 totaled 12 million ounces, up from 10 million ounces in 2023, meeting the mid-range of guidance. In 4Q24, production reached 3 million ounces, up from 2.7 million ounces in 4Q23 and similar to 3Q24.

In the smelting segment, total production of zinc metal and oxide reached 595kt in 2024, slightly above the 588kt recorded in 2023. This performance was driven by improved operational stability at the Cajamarquilla smelter in Peru, which offset reduced volumes at Três Marias due to weaker demand in the tire (pneumatic) sector.

In 4Q24, zinc metal and oxide production was 151kt, up from 144kt in 4Q23, primarily driven by higher volumes at Cajamarquilla. Compared to 3Q24, production remained stable, reflecting lower volumes from Três Marias.

Zinc metal and oxide sales for the year totaled 591kt, slightly above the 590kt in 2023, in line with the mid-range of annual guidance. In 4Q24, total sales were 152kt, up from 143kt in 4Q23, supported by higher production at Cajamarquilla and a sales backlog carried over from 3Q24 due to demand adjustments in our domestic market.

Growth strategy and asset portfolio

In 2024, Nexa advanced its portfolio optimization strategy, focusing on higher-return assets and disciplined capital allocation. The company successfully completed strategic divestments and project sales, while ensuring a responsible and respectful process for all stakeholders involved.

In April, Nexa signed a definitive agreement to sell the Morro Agudo Complex. The transaction concluded on July 1, 2024, transferring all rights, titles, and interests to the buyer. Later, in September, the company announced the sale of the Pukaqaqa greenfield project and its non-operational Peruvian subsidiary, Minera Pampa de Cobre S.A.C., which owns the Chapi mine. Both transactions were completed in December 2024.

During the fourth quarter, Nexa's Board of Directors approved the first phase of the Cerro Pasco Integration Project, which includes the construction of a tailings pumping and piping system to extend the life of mine and improve profitability. The detailed engineering work was completed, and construction is set to begin in 2Q25. Additionally, Nexa reinforced its financial position through a capital increase of to US$37 million at its subsidiary, Nexa Resources Atacocha S.A.A., to support investments related to the Cerro Pasco Integration Project.

In December 2024, Nexa increased its ownership in Tinka Resources to approximately 19.86% by subscribing 9.86 million common shares. Tinka holds 100% of the Ayawilca zinc-silver project, one of the largest zinc deposits in Peru.

"Our Board of Directors approved the first phase of the Cerro Pasco Integration Project – a strategic milestone to extend the life of this mining complex. At Aripuanã, we are finalizing the purchase of a fourth tailings filter, further strengthening our operational capacity. In line with our strategy to optimize our portfolio and focus on higher-return-generating assets, we streamlined our asset base through select divestments and project sales, reinforcing focus and capital allocation discipline," Mr. Rosado concluded.

ESG

Safety remains Nexa's top priority, serving as the foundation for the company's ESG initiatives across all operations. Throughout 2024, Nexa implemented robust measures to strengthen its safety culture and enhance accident prevention, reaffirming its commitment to protecting the well-being of its workforce and communities.

"2024 was marked by profound loss. We are deeply saddened by the fatalities that occurred in our operations, and our hearts go out to the families, friends, and colleagues of those we lost. We remain steadfast in providing them with our full support. Nothing is more important than the safety and well-being of our people. I reaffirm our unwavering commitment to strengthening our safety culture, continuously improving our protocols, and ensuring that every worker leaves our operations safely at the end of their work schedules," said Mr. Rosado.

In 4Q24, Nexa advanced several ESG-related initiatives:

• During the quarter, as part of Nexa's circular economy initiatives, we advanced the commercialization of jarosite residue by producing eco-friendly blocks. These blocks have demonstrated both safety and mechanical resistance, showcasing Nexa's ability to transform waste into valuable, sustainable products.

• In October 2024, Nexa inaugurated two suspension bridges in Peru and restored school spaces at Cajamarquilla, promoting safer transit and healthy living conditions for local communities.

• In November 2024, as part of our ongoing decarbonization efforts, we installed Hydragen™ technology at the Vazante mine. This innovative technology, designed to reduce carbon emissions in diesel engines and improve fuel efficiency, has shown promising preliminary results. Notably, it has led to fuel savings, a reduction in greenhouse gas emissions, and significant decreases in carbon monoxide, particulate matter, and temperature levels at the mining fronts.

• In December 2024, we completed a comprehensive study on the Life Cycle Assessment ("LCA") of Nexa's products. This analysis evaluated the environmental impact at every stage of the value chain, from raw material extraction to production, use, and disposal, following the cradle-to-gate approach. By assessing the inputs (materials and energy) and outputs (emissions and waste), the LCA process provides valuable insights into opportunities for improvement, supports sustainable decision-making, ensures compliance with regulations, and enhances our corporate reputation. Beyond serving as an internal benchmark for comparing our three smelters, our commercial team is exploring the best strategy to leverage this data to meet customer demands for a lower carbon footprint in the supply chain.

• In December 2024, Nexa was honored as the Americas winner of the Gartner Eye on Innovation Awards for Advanced Manufacturing for our pioneering application of Digital Twin technology and predictive maintenance at the Cerro Lindo mine in Peru. This pilot project has delivered significant operational improvements, including a 7% increase in milling capacity, a 10% reduction in water consumption, and a 10% decrease in crusher downtime. Additionally, it has reduced annual waste by 340 tons, contributing to our broader sustainability goals.

• In December 2024, we completed the reengineering of 12 zinc oxide roasters to operate using bio-oil, a significant milestone in advancing our sustainability targets. This initiative is expected to reduce our annual CO2 emissions by approximately 6.44 thousand tons, starting in 2025.

• Also in December 2024, Nexa successfully completed its semi-annual fauna monitoring in Aripuanã, going beyond regulatory requirements to deepen the understanding and preservation of local biodiversity. During the monitoring, more than 500 species were identified, including 18 classified as threatened and the endemic Aripuanã marmoset ("Mico de Aripuanã"). This initiative highlights the vital connection between responsible mining and biodiversity conservation, providing essential data to support ecosystem restoration and ensure long-term ecological health.

Additionally, 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 Nexa Recursos Minerais, its Brazilian subsidiary. In early 2025, the company announced a new dividend policy to provide greater transparency and consistent shareholder returns, while maintaining financial flexibility.

About Nexa

Nexa Resources is one of the world's leading zinc mining companies. Operating for over 65 years in the mining and metallurgy segments, with locations in Brazil and Peru and offices in Luxembourg and the United States, supplying its products to every continent. Every day, its employees work with a commitment to building the mining that changes with the world, aiming for sustainability, innovation, and upholding the best safety practices, respect for people, and the environment. Since 2017, its shares have been traded on the New York Stock Exchange, with its majority shareholder being Votorantim S.A. For more information about Nexa and its ESG strategy and commitments, please visit our website.

For a full version of the 4Q24 and FY2024 Earnings Release document, please go to our Investor Relations website at: http://ir.nexaresources.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/241717