ERO.TO · 2019-10-10 12:00:00

Ero Copper announces greater than 100% increase in mineral reserves and provides pathway for mill expansion of the Vale do Curaçá Property

Resource Estimates Mine Development & Operations Metallurgy & Processing

TSX: ERO

Ero Copper Corp

OCTOBER 10, 2019 NR:19-14

Ero Copper announces greater than 100% increase in mineral reserves and provides pathway

for mill expansion of the Vale do Curaçá Property

Vancouver, British Columbia – Ero Copper Corp. (the “Company”) (TSX: ERO) is pleased to

announce the release of its 2019 updated National Instrument 43-101 Standards of Disclosure for

Mineral Projects (“NI 43 -101”) compliant m ineral reserve and resource e stimate along with

updated life of mine (“LOM”) production, capital and operating cost projections for a flexible and

phased plan to return the Caraíba Mill to its original design capacity of 5.5 million tonnes per

annum on its 99.6% owned Vale do Curaçá Property (herein referred to as the “Curaçá Valley”)

located in Bahia State, Brazil. Highlights of the 2019 mineral reserve and r esource estimate

include:

• A 106% increase in Proven and Probable mineral reserves to approximately 38 million

tonnes (containing 436,000 tonnes of copper) compared to the Proven and Probable mineral

reserves set out in the 2018 Technical Report (as defined below), using the same copper

price assumption of US$2.75 per pound;

• A 69% increase in Measured and Indicated mineral resources to approximately 72 million

tonnes (containing approximately 894,000 tonnes of copper), inclusive of mineral reserves,

as compared to the Measured and Indicated mineral resources set out in the 2018 Technical

Report at the same geological cut-off grades;

• Updated LOM production plan increasing copper production by approximately 140,000

tonnes of copper as compared to the LOM production plan set out in the 2018 Technical

Report;

• Pathway provided for a low-cost and phased mill expansion to return the mill to its original

design capacity of 5.5 million tonnes per annum with a preliminary capital expenditure

estimate of US$63 million.

Commenting on the update, David Strang, President and CEO stated , “We are very pleased with

the 2019 updated mineral resource and reserve estimate. Since acquiring the operations in the

Curaçá Valley in 2016, we have continued to significantly grow mineral resources and reserves

annually. Including mine depletion, we have added over 500,000 tonnes of containe d copper to

our measured and indicated resource base since 2017. In addition, our updated LOM plan

continues to increase the copper production profile over the prior year. In 2018, we set out a plan

TSX: ERO

Ero Copper Corp

to produce approximately 40,000 tonnes of copper annually for the following six years and in

2019, that plan has increased to approximately 50,000 tonnes of copper.

As we look to the future, and to support our continued growth, our exploration focus is moving

towards delineating new, higher grade mineral resources and reserves away from our existing

operations and portfolio of inherited projects. In order to support this strategy, we will be taking

a phased approach to investing capital in the Caraíba Mill to systematically return it to its original

design capacity of 5.5 million tonnes per annum , per prevailing copper prices and continued

exploration success. At the same time, we are evaluating the opportunity afforded by ore sorting,

which has the potential to increase mill head grades at reduced mill throughput given the

heterogenous nature of our deposits.

This is a very exciting, but busy, time for Ero Copper as our focus changes from mainly in- and

near-mine growth towards growth from discovery of new mineral resources in the Curaçá Valley,

such as Siriema, and with the additional value enhancing opportunities such as the phased

expansion of the mill and ore sorting. In summary, we have increased the number of options

available to continue to execute on our core objective of generating strong absolute return s on

invested capital for our shareholders in an uncertain macroeconomic environment.”

TSX: ERO

Ero Copper Corp

The 2019 updated mineral reserve and resource estimate is shown in the tables below:

Classification Tonnage

(000 tonnes)

Grade

(Cu %)

Cu Contained

(000 tonnes)

Reserves, Underground

Proven 12,001 1.77 212

Probable 9,126 1.35 123

Total Proven & Probable, Underground 21,127 1.59 335

M&I Resources (including Reserves), Underground

Measured 25,476 1.94 494

Indicated 19,239 1.29 249

Total Measured & Indicated, Underground 44,715 1.66 743

Inferred, Underground 22,079 0.99 219

Reserves, Open Pit

Proven 6,408 0.65 42

Probable 10,434 0.57 59

Total Proven & Probable, Open Pit 16,843 0.60 101

M&I Resources (including Reserves), Open Pit

Measured 9,522 0.64 61

Indicated 17,384 0.52 91

Total Measured & Indicated, Open Pit 26,907 0.56 151

Inferred, Open Pit 4,125 0.56 23

Mineral Reserve & Resource Notes:

1. Mineral reserve effective date of September 18, 2019.

2. Mineral resource effective date varies by deposit, with an effective date of July 9, 2019, except for Vermelhos

N8/N9 (July 31, 2019) and Baraúna and Siriema (September 15, 2019).

3. Presented mineral resources inclusive of m ineral reserves. All figures have been rounded to the relative

accuracy of the estimates. Summed amounts may not add due to rounding.

4. Mineral resources have been modeled within a 0.20% copper grade shell using a 0.68% copper cut-off grade

for underground deposits and a 0.18% copper cut-off grade for open pit deposits. Mineral resources ha ve

been estimated using ordinary kriging inside 5m by 5m by 5m block sizes. The mineral resource estimates

were prepared in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”)

Definition Standards for Mineral Resources and Mineral Reserves, adopted by the CIM Council on May 10,

2014 (the “CIM Standards”) , and the CIM Estimation of Mineral Resources and Mineral Reserves Best

Practice Guidelines, adopted by CIM Council on November 23, 2003 (the “CIM Guidelines”) , using

geostatistical and/or classical methods, plus economic and mining parameters appropriate to the deposit.

TSX: ERO

Ero Copper Corp

Please see “Technical and Scientific Information” below for additional information on the stated mineral

resources.

5. Mineral reserve estimates were prepared in accordance with the CIM Standards and the CIM Guidelines,

using geostatistical and/or classical methods, plus economic and mining parameters appropriate for the

deposit. Mineral reserves are based on a long -term copper price of US$2.75 per pound (“lb”), and a

USD:BRL foreign exchange rate of 3. 70. Mineral reserves are the economic portion of the Measured and

Indicated mineral resources. Mining dilution and recovery factors vary for specific mineral reserve sources

and are influenced by fact ors such as deposit type, deposit shape, stope orientation and selected mining

method. Inferred resource blocks, where unavoidably mined, were assigned zero grade. Dilution occurring

from Measured & Indicated resource blocks w as assigned grade based upon the current mineral resource

grade of the blocks included in the dilution envelope . Please see “Technical and Scientific Information” for

additional information on the stated mineral reserves.

Mineral resources which are not mineral reserves do not have demonstrated economic viability.

UPDATED PRODUCTION PLAN

The Company’s updated production plan, prepared in conjunction with the mineral resource and

mineral reserve update, provides a road map for a low-cost, flexible and phased approach to return

the Caraíba Mill to its original design capacity of 5.5 million tonnes per annum , with a timeline

and three -year capital outlay that can be paired alongside continued exploration success and

prevailing copper prices . This plan will allow the Company to capitalize on future discoveries

within the Curaçá Valley as they are drilled and developed.

The table below outlines the updated production plan for the Curaçá Valley. The plan is centered

upon increasing plant capacity and throughput to 5.5 million tonnes of capacity with a three -year

phased capital plan , resulting in production of approximately 48,000 tonnes of copper in

concentrate per annum, on average, over the next 6 years based on current reserves.

TSX: ERO

Ero Copper Corp

2019

(Guidance) 2020e 2021e 2022e 2023e 2024e 2025e 2026e 2027e 2028e

Ore Mined

Underground

(000 tonnes)

- 2,138 2,234 2,599 2,765 3,097 2,641 1,725 2,172 2,034

Grade (% Cu) - 2.15 1.96 1.67 1.55 1.35 1.29 1.38 1.29 1.22

Ore Mined Open

Pit (000 tonnes) - 566 1,785 1,887 1,917 2,261 2,339 1,950 1,950 1,160

Grade (% Cu) - 0.45 0.53 0.58 0.65 0.57 0.65 0.54 0.54 0.59

Ore Processed

(000 tonnes) 2,250 2,638 3,806 4,173 4,788 5,352 5,457 3,686 4,118 3,252

Grade (% Cu) 1.95% 1.84% 1.37% 1.26% 1.16% 1.01% 0.96% 0.94% 0.94% 0.99%

Recovery (%) 90.0% 92.1% 91.4% 91.1% 90.9% 90.0% 89.5% 90.0% 90.5% 91.1%

Copper in

Concentrate

(000 tonnes)

38.0-40.0 44.7 47.5 48.0 50.4 48.8 47.0 31.0 34.9 29.2

Please refer to the Company’s press release dated August 8, 2019 for complete 2019 revised guidance information.

Processed tonnes may not sum mined totals due to intermediate mine stockpiles.

UPDATED OPERATING & CAPITAL COSTS

The updated production plan has resulted in change s to the forecast operating and capital cost

estimates. The table s below show the operating and capital costs for the updated production

schedule.

2019

(Guidance) 2020e 2021e 2022e 2023e 2024e 2025e 2026e 2027e 2028e

C1 Cash Cost

(US$ per lb) $1.00 - $1.10 $0.98 $1.14 $1.25 $1.17 $1.39 $1.38 $1.40 $1.28 $1.38

C1 Cash Cost Notes:

1. Assumes USD:BRL FX rate of 3.80.

2. Assumes gold price of US$1,400 per ounce and silver price of US$17.00 per ounce.

3. C1 Cash Cost of copper produced is a non-IFRS measure, as more particularly discussed under the “Technical

and Scientific Information” section of this press release.

4. Please refer to the Company’s press release dated August 8, 2019 for complete guidance information.

TSX: ERO

Ero Copper Corp

2019

(Guidance) 2020e 2021e 2022e 2023e 2024e 2025e 2026e 2027e 2028e

Capital

Expenditures[1]

(US$M)

$100.0 $78.5 $67.6 $68.8 $56.5 $43.1 $32.2 $17.9 $3.6 $1.5

Mill Expansion

Capex[2] (US$M) - $16.7 $25.7 $20.7 $1.6 $1.1 $1.5 $1.4 $1.1 $1.1

Capital Expenditure Notes:

1. Excluding mill expansion capital

2. Preliminary mill expansion capital plan shown estimated based on +/- 30% accuracy, pending completion of

detailed engineering and integration costing.

3. Assumes USD:BRL FX rate of 3.80.

4. Please refer to the Company’s press release dated August 8, 2019 for complete guidance information.

5. Capital expenditures shown do not include discretionary greenfield or brownfield exploration in years 20 20

to 2028.

MINERAL RESOURCE GROWTH

The following section discusses the updated mineral reserve and resource estimates as they relate

to each of the three mineral districts of the Curaçá Valley. Detailed information with respect to

tonnes, grade and contained copper for the mineral reserve and resource estimates for each mineral

district can be found at the end of this press release. Relative comparisons of 2019 to 2018 refer to

the 2019 updated mineral resource and reserve estimate discussed herein and the 2018 Technical

Report, respectively. A more fulsome discussion of the installed infrastructure within each of the

mineral districts of the Curaçá Valley can be found in the 2018 Technical Report.

Vermelhos District

The Vermelhos District encompasses the Vermelhos underground mine, the N8/N9 open pit

deposit and the recently announced Siriema discovery, which i s currently envisioned as an open

pit mine. The Company commenced construction of the Vermelhos mine during the second quarter

of 2017, and declared commercial production during the third quarter of 2018, approximately 16

months after construction began and approximately 4 months ahead of schedule. Ore mined from

the Vermelhos District is hauled to the Caraíba Mill, located approximately 80 kilometers south

of Vermelhos, via the Curaça Valley haul road.

Contained copper within the Measured and Indicated mi neral resource increased by 23% in the

Vermelhos District. This increase, on a contained copper basis, was primarily attributable to

significant increases at the N8/N9 open pit deposit and Siriema, which more than off-set depletion

at the Vermelhos Mine, for a total net increase of approximately 46,000 tonnes of contained copper

TSX: ERO

Ero Copper Corp

(Vermelhos District total of approximately 250,000 tonnes in 2019 vs. 204,000 tonnes in 2018).

Approximately 37,000 tonnes and 16,000 tonnes , respectively are attributable to N8/N9 and

Siriema. At the Vermelhos underground mine, approximately 630,000 tonnes of ore was mined

grading 3.00% copper prior to the July 9, 2019 effective date of the 2019 updated mineral resource

and reserve estimate. Despite this depletion of approximately 19,000 tonnes of contained copper,

the updated Measured and Indicated mineral resource of the mine only resulted in a net decline of

6,000 tonnes of contained copper due to off-setting increases, primarily from the Vermelhos East

Zone extension to depth.

During the fourth quarter, near -mine exploration drilling will continue to focus on the recently

announced Siriema discovery, where drilling continues to highlight a shallow -plunging east -

dipping zone of high- grade massive sulphide breccia mineralization. This zone was highlighted

recently by drill hole FSI -42 that intersected 31.8 meters grading 2.22% copper including 5.0

meters grading 5.56% copper. In addition, follow-up drilling from underground drill-stations will

target a newly identified zone of high- grade mineralization approximately 70 meters below the

main Vermelhos orebodies, as highlighted by hole FVS-465 that intersected 13.4 meters grading

5.86% copper including 8.4 meters grading 7.04% copper ( please refer to the Company’s pres s

releases dated June 20, 2019 and September 12, 2019 for complete Vermelhos mine and Siriema

drill results).

Regional greenfield drilling within the Vermelhos District is currently targeting several high-

priority exploration targets identified during the Company’s comprehensive targeting work. These

targets extend over approximately 10 kilometer s of anomalous soil geochemistry and induced

polarization (“IP”) anomalies along the Paredao Antiform as shown in Figure 1. A long- section

and cross-section of the Vermelhos mine, including Siriema and N8/N9 mineral resources are

shown in Figure 2.

Pilar District

The Pilar District encompasses the Pilar underground mine (which includes the zones of: Baraúna,

the Deepening, East Limb, MSB South, the West Limb, P1P2 W, R22 and P1P2 West) as well as

the open pit deposits of R75, and Suçuarana. With the exception of a brief period in 2016, mining

within the Pilar District has been continuous since 1979. The Pilar District includes the Caraíba

Mill, which currently receives and processes ore mined by the Company from deposits throughout

the Curaçá Valley including those within the Vermelhos and Surubim Districts.

Contained copper within the Measured and Indicated mineral resource category increased by 19%

in the Pilar District. This increase in contained copper was primarily attributable to a significant

74,000 tonne increase in the Pilar underground mine (total of approximately 546,000 tonnes

TSX: ERO

Ero Copper Corp

contained copper in 2019 vs. 472,000 tonnes in 2018), as well as 16,000 tonnes of contained copper

combined between the R75 and Suçuarana open pit deposits.

During the fourth quarter, i nfill and extensional drilling in the Pilar underground mine will

continue to focus on high-grade zones that the Company has yet to fully delineate. These include

recent drill results from the Deepening zone, located down-plunge to the north and along strike to

the south of known mineralization. Recent drill results in the Deepening are highlighted by drill

hole FC47142 that intersected 34.7 meters grading 2.29% copper including 18.6 meters grading

3.15% copper and hole FC47139 that intersected 23.3 meters including 3.68% copper.

In addition to the Deepening z one, drilling during the fourth quarter at Pilar will seek to further

delineate the area surrounding recent results in the South Extension zone located at higher levels

of the mine south of the planned mining blocks of MSB South. Drilling in the South Extension

from a new exploration drift located on level -300 is highlighted by hole FC34100 that intersected

25.5 meters grading 1.47% copper including 2.0 meters grading 5.85% copper (please refer to the

Company’s press release dated September 12, 2019 for complete Deepening and South Extension

results). A long-section and cross-section of the Pilar underground mine are shown in Figure 3.

Surubim District

The Surubim District encompasses the Surubim underground mine, a neighboring deposit to the

south known as C12, currently envisioned as an open pit mine, and several historic previously

known resources that have been validated for the purposes of the 2019 updated mineral resource

reserve estimate. These historic projects include: Cercado Velho, Lagoa da Mina and Terra do Sal,

which are located in the vicinity of the Surubim mine. The open pit portion of the Surubim mine

was mined by the Company from the first quarter of 2018 to the first quarter of 2019.

Contained copper within the Measured and Indicated mineral resource estimate increased by 69%

in the Surubim District (approximately 82,000 tonnes in 2019 vs. 49,000 tonnes in 2018). This

increase in contained copper is attributable to the historic validated deposit s which collectively

added approximately 16,000 tonnes of contained copper in 2019 with Cercado Velo, Lagoa da

Mina Terra do Sal each contributing approximately 3,100 tonnes, 10,600 tonnes and 1,800 tonnes

of contained copper , respectively . In addition, t he contribution from the C12 deposit is

approximately 32,000 tonnes. Offsetting these gains, approximately 12,000 tonnes of contained

copper was mined from the Surubim open pit mine prior to the July 9, 2019 effective date of the

2019 updated mineral resource and reserve estimate, resulting in a net gain of approximately

34,000 tonnes of contained copper.

← Back to feed