ERO.TO · 2023-10-30 12:00:00

Ero Copper Agrees with Vale Base Metals to Enter into Earn-in Agreement

Mergers & Acquisitions Property Options & Staking

October 30, 2023

for a 60% Interest in the Furnas Copper Project

(all amounts in US dollars, unless otherwise noted)

Vancouver, British Columbia – Ero Copper Corp. (TSX: ERO, NYSE: ERO) ("Ero" or the

“Company”) is pleased to announce it has entered into a binding term sheet ("Term Sheet")

with Salobo Metais S.A, part of the Vale Base Metals business ("VBM") to advance its Furnas

copper project ("Furnas" or the "Project") located in the Carajás Mineral Province in Pará

State, Brazil. The Term Sheet contemplates Ero Copper earning a 60% interest in the Project

upon completion of several exploration, engineering and development milestones over a

period of five years from the execution of a definitive earn-in agreement. In exchange for its

60% interest, Ero will solely fund a phased exploration and engineering work program during

the earn-in period and grant VBM up to an 11.0% free carry on future Project construction

capital expenditures (see "Summary of Key Terms").

"We are delighted for the opportunity to partner with VBM to advance the Furnas copper

project. We are fully committed to unlocking value for all stakeholders by accelerating what

we believe is a world-class project," said David Strang, Chief Executive Officer. "This

partnership will leverage VBM and Ero's collective strengths as well as our shared vision for

sustainable mine development."

"As construction of our Tucumã Project approaches completion in the coming year, we look

forward to Furnas further contributing to the growth of copper production within the broader

Carajás region and solidifying Brazil's position as a leader in low carbon-intensity production

of critical minerals."

Furnas is an IOCG project located approximately 50 kilometers southeast of VBM's Salobo

operations and approximately 190 kilometers northeast of Ero's Tucumã Project. Covering an

area of approximately 2,400 hectares, the Project sits within fifteen kilometers of extensive

regional infrastructure, including paved roads, an industrial-scale cement plant, a power

substation and Vale's railroad loadout facility. A map of the Carajás Mineral Province and

Project location is shown in Figure 1.

Ero's exploration and development efforts will focus on two discrete high-grade zones

identified within the overall mineralized body, known as the SE and NW Zones, that extend

over a combined strike length of approximately five kilometers. The Company's initial work

program will include infill drilling to increase confidence around, and continuity of, these two

high-grade zones, as well as extensional drilling to depth where limited prior drilling

suggests increasing grades and thickness. Known high-grade mineralization ranges between

approximately 20 to 60 meters in thickness and has been drilled to a general depth from

surface of approximately 300 meters (vertical). A plan view map of the Project is shown in

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Figure 2. Cross-sections of the high-grade SE and NW Zones are shown in Figures 3 and 4,

respectively. Drill intercepts within these zones are highlighted by:

• SE Zone

◦ PKC-FURN-FD024:

▪ 59.0 meters grading 2.11% Cu and 0.54 gpt Au (2.48% CuEq) from 58.0

meters, including 5.0 meters grading 15.24% Cu and 0.06 gpt Au

(15.28% CuEq) from 99.0 meters

◦ FUR-FURN-DH00170:

▪ 8.6 meters grading 10.20% Cu and 0.06 gpt Au (10.24% CuEq) from

81.0 meters

◦ PKC-FURN-DH00036:

▪ 36.0 meters grading 1.04% Cu and 0.94 gpt Au (1.69% CuEq) from

236.0 meters, including 20.0 meters at 1.25% Cu and 1.59 gpt Au

(2.34% CuEq) from 242.0 meters

• NW Zone

◦ FUR-FURN-DH00102:

▪ 32.0 meters grading 1.22% Cu and 0.64 gpt Au (1.67% CuEq) from

293.5 meters, including 14.0 meters grading 1.98% Cu and 0.68 gpt Au

(2.45% CuEq) from 297.4 meters

◦ FUR-FURN-DH00177:

▪ 54.9 meters grading 0.88% Cu and 0.63 gpt Au (1.31% CuEq) from

381.1 meters, including 12.9 meters grading 1.28% Cu and 0.63 gpt Au

(1.72% CuEq) from 381.1 meters

As part of its overall work program, Ero intends to validate the historical exploration drill

database, develop block models incorporating planned infill and extensional drilling to

prepare a mineral resource estimate that complies with NI 43-101 (as defined below),

generate selective mine designs, perform confirmatory metallurgical test work, develop

process flow sheet designs, undertake geotechnical and environmental studies, and advance

various community and social programs.

Where applicable, copper equivalent ("CuEq") in this press release has been calculated using

the following formula: CuEq = Cu + (Au x 0.687) based on long-term copper and gold prices

of $3.50 per pound and $1,650 per ounce, respectively. No adjustment for metallurgical

recoveries has been made when calculating CuEq.

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SUMMARY OF KEY TERMS

• To earn a 60% interest in the Project, the Term Sheet requires Ero to complete three

phases of work:

◦ Phase 1: Ero to conduct a minimum of 28,000 meters of exploration drilling and

produce a scoping study within 18 months of signing a definitive earn-in

agreement

◦ Phase 2: Ero to conduct an additional minimum of 17,000 meters of exploration

drilling and produce a pre-feasibility study within 18 months of completing

Phase 1

◦ Phase 3: Ero to conduct an additional minimum of 45,000 meters of exploration

drilling, unless otherwise mutually agreed, and produce a definitive feasibility

study ("DFS") within 24 months of completing Phase 2

• Following the completion of a DFS, subject to customary technical review periods, and

with Ero positive investment approval, the parties will enter into a joint venture

agreement whereby VBM will transfer 60% of the equity interest in the Project to Ero,

and Ero will grant VBM a "free carry" on certain capital expenditures related to Project

development(1)

◦ Ero to grant VBM an initial 11% free carry, funding 71% of the first $1.0 billion

of Project capital expenditures(1)

◦ If applicable, Ero to grant VBM a subsequent 5.5% free carry, funding 65.5% of

the next $1.0 billion of Project capital expenditures(1)

◦ If applicable, each party to fund its then pro rata share of capital expenditures (1)

beyond $2.0 billion

• As long as VBM maintains greater than 30% ownership, it will have 100% offtake

rights on the copper concentrate produced by the Project

• Prior to a positive Ero investment decision and the formation of a joint venture, VBM

will retain 100% ownership of the Project with Ero solely responsible for funding the

phased exploration and engineering work programs related to the Project as well as

ongoing payments to maintain the property in good standing. Failure of Ero achieving

the prescribed milestones within the earn-in period, will have the earn-in option drop

away

(1) The free carry will apply only to initial capital expenditures and future growth capital related to the expansion

of mining and milling capacities, and will not apply to any sustaining capital required for the operations. The

applicable capital will be inflation-adjusted based on a US-Dollar denominated benchmark inflation index

with reference to the month in which the definitive earn-in agreement is signed.

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Figure 1: Map of the Carajás Mineral Province, highlighting the location of Furnas as well as the Tucumã Project.

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Figure 2: Furnas Plan View Map, including drill collar locations. Rock types include:

HCS Calco-sodic hydrothermal rock

GRA Granite

DIO Diorite

RCL HD Chlorite-rich hydrothermal rock

GMF HD Grunerite-garnet-magnetite hydrothermal rock

GMF HD-2 Grunerite-garnet-magnetite hydrothermal rock

XTA Aluminous schist

RSL Host Quartz-rich rock

GMF RSL Magnetite-rich hydrothermal rock / quartz-rich rock

Abbreviation Rock Type

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Figure 3: Cross section within the high-grade SE Zone of Furnas. Rock types include:

XTA Aluminous schist

GMF HD Grunerite-garnet-magnetite hydrothermal rock

RCL HD Chlorite-rich hydrothermal rock

RSL Host Quartz-rich rock

Abbreviation Rock Type

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Figure 4: Cross section within the high-grade NW Zone of Furnas. Rock types include:

HCS Calco-sodic hydrothermal rock

GRA Granite

RCL HD Chlorite-rich hydrothermal rock

GMF HD Grunerite-garnet-magnetite hydrothermal rock

XTA Aluminous schist

RSL Host Quartz-rich rock

GMF RSL Magnetite-rich hydrothermal rock / quartz-rich rock

Abbreviation Rock Type

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QUALIFIED PERSONS

Mr. Cid Gonçalves Monteiro Filho, SME RM (04317974), MAIG (No. 8444), FAusIMM (No.

3219148) has reviewed and approved the scientific and technical information contained in

this press release. Mr. Monteiro is Resource Manager of the Company and is a “qualified

person” within the meanings of NI 43-101.

QUALITY ASSURANCE & QUALITY CONTROL

Four diamond exploration drilling campaigns were previously carried out on Furnas, with

control sample protocols applied to each campaign. Historical quality assurance and quality

control (QA/QC) data were evaluated, including duplicates, blanks and standard samples

from the most recent drilling campaign.

In all drilling campaigns, a quarter of the recovered core sample was collected. In the first

three exploration campaigns, one-meter sampling intervals were used. In the fourth

exploration campaign one-meter sampling intervals were used in the mineralized zone and

two-meter sampling intervals were used in the weathered zone and in waste rock.

Physical preparation of the quarter-core samples was performed in the following

laboratories: Vale/Carajás, Intertek-Parauapebas-PA, Intertek-Nova Lima-MG, SGS GEOSOL,

or Lakefield-Geosol. Chemical analysis was performed by ACME, Lakefield-Geosol in Belo

Horizonte/MG, and SGS Geosol Laboratories in Vespasiano/MG. The selection of analytical

methods and the number of elements analyzed varied across exploration campaigns.

To verify the accuracy of older sampling campaigns, a re-analysis program was performed on

Cu and Au for select assay intervals. The reanalysis program demonstrates good

performance, particularly for Cu and Au, allowing for the inclusion of historical campaign data

for the purposes of this press release.

The Company intends to validate the entirety of the historical exploration database as part of

its Phase 1 work program.

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