ERO.TO · 2020-03-12 12:00:00

Ero Copper reports record revenue, cash flow from operations and net income resulting in

Financials

TSX: ERO

Ero Copper Corp

MARCH 12, 2020

record earnings per share of $1.01 in 2019

(all amounts in US dollars, unless otherwise noted)

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

today is pleased to announce its financial results for the three and twelve-months ended December

31, 2019. Management will host a conference call tomorrow, Friday, March 13, 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

• Record annual copper production in 2019 with 42,318 tonnes of copper produced – a 39%

year-on-year increase in production at the Curaçá Valley operations;

• Record C1 cash costs* of $0.80 and $0.93 per pound of copper produced during the three

and twelve-month periods ended December 31, 2019, respectively;

• Record $31.2 and $134.1 million in Adjusted EBITDA* during the three and twelve-month

periods ended December 31, 2019, respectively;

• Record cash flow from operations of $35.9 and $127.8 million during the three and twelve-

month periods ended December 31, 2019, respectively;

• Record n et income attributable to owners of the Company of $45.2 and $ 91.9 million

($0.49 and $1.01 per share on a diluted basis) during the three and twelve -month periods

ended December 31, 2019; respectively;

• Record adjusted net income attributable to owners of the Company* of $40.7 and $86.3

million ($0.44 and $0.94 per share on a diluted basis) during the three and twelve -month

periods ended December 31, 2019, respectively;

• 6,043 ounces of gold produced at C1 cash costs* of $980 per ounce during the fourth quarter

resulting in full-year production of 30,434 ounces of gold at C1 cash costs* of $691 per

ounce at the NX Gold Mine; and,

• Reiterate previously announced full-year production, operating cost and capital guidance

for 2020.

TSX: ERO

Ero Copper Corp

Commenting on the 2019 results, David Strang, President and CEO, stated, “2019 was a fantastic

year for the Company and the financial results highlight the extraordinary quality of our assets

and people. Execution of our business plan over the past several years has continued to translate

to significant year-on-year growth in production and profitability – a trend we see continuing with

the support of our exploration programs underway both within and around our existing operations

and regionally throughout the Curaçá Valley.

Our results are highlighted by full year C1 cash costs of $0.93 per pound of copper produced in

2019 – well below our long- term target of $1.00 per pound, and significantly improved when

compared to the 2018 result of $1.19 per pound of copper produced. Similarly, net income of $91.9

million in 2019 ($1.01 per share on a fully diluted basis) and cash flow from operations of $127.8

million reflect a significant year-on-year improvement when compared to our 2018 results (net

loss of $3.2 million and cash flow from operations of $82.9 million, respectively).

Despite entering a period of global macroeconomic uncertainty in early 2020, our business is as

well positioned as ever to continue to execute our business plan and long-term growth strategy.

Supported by low-cost, highly profitable operations, we are successfully running one of the most

comprehensive exploration programs globally. At each of our operations, e xcess mill capacity

paired with low capital intensity, supported by first-quartile operating costs continues to translate

into high returns on this invested capital.”

*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

OPERATIONS & EXPLORATION HIGHLIGHTS

 Mining & Milling Operations – another year of record copper production

• 589,065 tonnes of ore grading 2.16% copper processed during the fourth quarter

producing 11,526 tonnes of copper in concentrate after metallurgical recoveries of

90.7%.

 Total of 2.4 million tonnes of ore processed grading 1.93% copper

producing 42,318 tonnes of c opper in concentrate after metallurgical

recoveries that averaged 90.5% during the twelve -month period ended

December 31, 2019.

• Strong operating performance from Pilar and Vermelhos, highlighted by significant

quarter-on-quarter increases in grades and tonnes mined with 433,258 tonnes grading

1.73% copper and 185,045 tonnes grading 3.39% copper mined during the period,

TSX: ERO

Ero Copper Corp

respectively – an increase of approximately 1,500 tonnes of contained copper mined

as compared to prior quarter.

• The NX Gold Mine processed 158,275 tonnes of ore grading 6.98 grams per tonne

gold, resulting in the production of 30,434 ounces of gold and 19,641 ounces of silver

as by-product after metallurgical recoveries that averaged 85.7% during the twelve

month period ended December 31, 2019.

 Successfully commenced mining of the high-grade Santo Antonio vein

prior to year-end.

 Exploration Activities – focus on regional exploration in 2020 with 26 drill rigs operating

at MCSA and 4 at NX Gold

• Vermelhos District

 Drilling within the Vermelhos District, where 12 drill rigs are operating

(including four drill rigs operating on regional targets) , is currently targeting

several high -priority exploration targets identified during the Company’s

comprehensive targeting wor k. These targets extend over approximately 10

kilometers of anomalous soil geochemistry and induced polarization (“IP”)

anomalies known as the Vermelhos System targets.

• Pilar District

 Exploration activity within the Pilar District, where 1 1 drill rigs a re currently

operating, continues to focus on infill and extensional drilling of high- grade

zones that the Company has yet to fully delineate within the Pilar underground

mine. These zones are highlighted by recent drill results from the Deepening

zone, located down-plunge to the north and along strike to the south of known

mineralization where a new “Super Pod” of mineralization was discovered .

Additionally, drilling at Pilar will seek to further delineate the up-dip extension

of the Baraúna zone , which extends from the upper levels of the Pilar

underground mine towards surface south of the historic open pit.

• Surubim District

 There are three drill rigs operating on regional exploration targets within the

Surubim District.

• NX Gold Mine

 At the NX Gold Mine, four exploration drill rigs are currently operating on

extensions of the recently announced Santo Antonio vein and testing for

continuity of the Brás vein. Additionally, the first comprehensive regional

exploration program is underway.

TSX: ERO

Ero Copper Corp

 Corporate Highlights – strong overall liquidity, well positioned for 2020 plans

• Total cash and cash equivalents and available liquidity at December 31, 2019 was

$21.5 million and $25.1 million compared to $18.9 million and $4.7 million,

respectively, at the end of 2018.

• As at the end of 2019, the Company had $14.0 million undrawn on its secured,

revolving credit facility in Canada, plus an additional R$64.8 million in available

undrawn lines of credit in Brazil.

TSX: ERO

Ero Copper Corp

OPERATING AND FINANCIAL HIGHLIGHTS

3 months

ended

Dec. 31,

2019

3 months

ended

Sep. 30,

2019

12 months

ended

Dec. 31,

2019

3 months

ended

Dec. 31,

2018

12 months

ended

Dec. 31,

2018

Operating Highlights (MCSA Operations)

Ore Processed (tonnes) 589,065 587,915 2,424,592 777,480 2,257,917

Grade (% Cu) 2.16 1.84 1.93 1.77 1.56

Cu Production (tonnes) 11,526 9,674 42,318 12,104 30,426

Cu Production (000 lbs) 25,411 21,327 93,296 26,685 67,077

Cu Sold in Concentrate (tonnes) 11,595 10,200 42,759 12,900 30,107

Cu Sold in Concentrate (000 lbs) 25,562 22,487 94,267 28,440 66,375

C1 Cash Cost of copper produced (per lb)(1) 0.80 1.01 0.93 0.99 1.19

Gold (NX Gold Operations)

Au Production (oz) 6,043 4,356 30,434 10,008 39,808

C1 Cash Cost of gold produced (per ounce)(1) $980 $1,169 $691 $540 $520

Financial Highlights ($millions, except per share amounts)

Revenues $75.7 $60.6 $284.8 $85.1 $233.1

Gross profit $31.1 $21.3 $117.1 $39.0 $82.2

EBITDA(1) $34.3 $35.1 $141.4 $40.2 $70.5

Adjusted EBITDA(1) $31.2 $27.3 $134.1 $39.0 $99.9

Cash flow from operations $35.9 $29.5 $127.8 $24.0 $82.9

Net income (loss) $45.4 $16.3 $92.5 $11.3 ($3.0)

Net income (loss) attributable to owners of the

Company

$45.2 $16.3 $91.9 $11.2 ($3.2)

Net income (loss) per share attributable to

owners of the Company (Basic)

$0.53 $0.19 $1.08 $0.13 ($0.04)

Net income (loss) per share attributable to

owners of the Company (Diluted) $0.49 $0.18 $1.01 $0.13 ($0.04)

Adjusted net income (loss) attributable to

owners of the Company(1)

$40.7 $10.2 $86.3 $7.9 $10.9

Adjusted net income (loss) per share

attributable to owners of the Company(1)

(Basic)

$0.47 $0.12 $1.01 $0.09 $0.13

Adjusted net income (loss) per share

attributable to owners of the Company(1)

(Diluted)

$0.44 $0.11 $0.94 $0.09 $0.12

Cash and Cash Equivalents $21.5 $21.7 $21.5 $18.9 $18.9

Working Capital (Deficit)(1) ($4.9) $6.4 ($4.9) ($9.3) ($9.3)

Net Debt(1) ($136.4) ($133.4) ($136.4) ($130.3) ($130.3)

TSX: ERO

Ero Copper Corp

Footnotes

[1] EBITDA, Adjusted EBITDA, Adjusted net income (loss), Adjusted net income (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

2019 – Q4

Adjusted EBITDA $ 31,152

Adjustments:

Unrealized foreign exchange loss on USD denominated debt in MCSA 3,753

Unrealized foreign exchange loss on derivative contracts 1,410

Realized foreign exchange loss on derivative contracts (462)

Share based compensation and other (1,582)

Loss on gold hedge contracts (15)

EBITDA $ 34,256

Adjusted net income attributable to owners of the Company $ 40,654

Adjustments for non-cash items (attributable to owners of the Company):

Unrealized foreign exchange loss on USD denominated debt in MCSA 3,738

Unrealized loss on gold hedge contracts 677

Unrealized foreign exchange loss on derivative contracts 1,404

Shared based compensation (1,304)

Reported net income attributable to owners of the Company $ 45,169

2020 PRODUCTION OUTLOOK

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.

Curaçá Valley Operations

2019 Original

Guidance

2019 Revised

Guidance

2019 Result 2020

Guidance[1]

Tonnes Processed 2,050,000 2,350,000 2,424,592 2,150,000

Copper Grade (% Cu) 2.00% 1.95% 1.93% 2.15%

Copper Recovery (%) 88.0% 90.0% 90.5% 91.0%

Cu Production (000 tonnes) 36.0 – 38.0 40.0 – 42.0 42.3 41.0 – 43.0

TSX: ERO

Ero Copper Corp

NX Gold Operations

2019 Original

Guidance

2019 Revised

Guidance

2019 Result 2020

Guidance[1]

Tonnes Processed - - 158,275 150,000

Gold Grade (gpt) - - 6.98 9.00

Gold Recovery (%) - - 85.7% 90.0%

Au Production (000 ounces) - - 30.4 38.0 – 40.0

Ag Production (000 ounces) - - 19.6 n/a

[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.

2020 CASH COST GUIDANCE

The Company’s guidance for 2020 assumes a USD:BRL foreign exchange rate of 4.00, gold price

of $1,450 per ounce and silver price of $17.00 per ounce.

2019 Revised

Guidance

2019 Result 2020 Guidance

Curaçá Valley C1 Cash

Cost Guidance (US$/lb)[1]

$1.00 - $1.10 $0.93 $0.85 – $0.95

NX Gold Mine C1 Cash

Cost Guidance (US$/oz)[1]

n/a $691 $475 - $575

[1] C1 Cash Costs are a non-IFRS measures – see the Notes section of this press release for additional information.

2020 CAPITAL EXPENDITURE GUIDANCE

The Company’s capital expenditure guidance for 2020 assumes a USD:BRL foreign exchange rate

of 4.00 and has been presented below in USD millions. Capital expenditure guidance, including

discretionary capital for 2020, is based on a budgeted copper price of US$2.65 per pound of

copper.

TSX: ERO

Ero Copper Corp

Curaçá Valley / Copper Operations 2019 Revised Guidance 2020 Guidance

Pilar Mine and Caraíba Mill Complex[1] $45.0 $58.0

Vermelhos Mine $20.0 $16.0

Boa Esperanҫa Project $1.0 $0.2

Capital Expenditure Guidance $66.0 $74.2

Curaçá Valley Exploration[2] $30.0 $28.0

NX Gold Operations 2019 Guidance 2020 Guidance

Capital Expenditure Guidance n/a $5.7

Exploration[2] n/a $3.5

Total, NX Gold n/a $9.2

[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 e arnings (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 evaluat e 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 Compa ny’s Brazilian

customer on sales. By-product credits are calculated based on actual precious metal sales

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