ERO.TO · 2022-11-01 12:00:00

Ero Copper Reports Third Quarter 2022 Operating and Financial Results

Financials

November 1, 2022

(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 its operating and financial results for t he three and nine

months e nded September 30, 2022 . Management will host a conference call tomorrow,

Wednesday, November 2, 2022, at 11:30 a.m. Eastern time to discuss the results. Dial-in

details for the call can be found near the end of this press release.

HIGHLIGHTS

• Quarterly copper production of 11,189 tonnes at C1 cash costs(*) of $1.46 per pound of

copper produced;

• Quarterly gold production of 10,965 ounces at C1 cash costs (*) and All-in Sustaining

Costs ("AISC")(*) of $537 and $1,135, respectively, per ounce of gold produced;

• Adjusted EBITDA(*) of $32.1 million and adjusted net income attributable to owners of

the Company(*) of $4.0 million ($0.04 per share on a diluted basis);

• Strong quarterly cash flows from operations of $43.0 million;

• Financial results during the period were impacted by continued metal price weakness,

including the impact of $10.3 million in final settlements on provisionally priced copper

concentrate sales from the first half of 2022, combined with increased unit operating

costs at the Caraíba Operations;

• Capital expenditures accelerated during the quarter as construction activities related to

the Company's growth initiatives continued to progress;

◦ At the Tucumã Project, critical path work packages required ahead of the rainy

season have been completed. These include site access and haul road upgrades,

major drainage infrastructure, and advancing pre-stripping activities; and,

◦ At the Caraíba Operations, the Pilar 3.0 growth initiative continues to progress

with surface infrastructure for the new external shaft well-advanced, critical

equipment orders for the expansion of the mill contracted, and the integration of

Project Honeypot into the life-of-mine production plan completed. The updated

strategic life-of-mine production plan for the Caraíba Operations, inclusive of

Project Honeypot, is expected to be released ahead of the Company's Annual

Operational, Project and Exploration Update on November 8, 2022.

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• Available liquidity at quarter-end was $434.8 million, including cash and cash

equivalents of $210.2 million , short-term investments of $149.6 million, and $75.0

million of undrawn availability under the Company's senior revolving credit facility;

• 2022 production, operating cost, and capital expenditure guidance reaffirmed; and,

• The Company will host an Annual Operational, Project and Exploration Update on

November 8, 2022, during which a more detailed overview will be provided on the

Pilar 3.0 growth initiative, including the integration of Project Honeypot, the

Company's advancement of the Tucumã Project, and results from exploration

programs at each of the Company's operations.

*These are non-IFRS measures and do not have a standardized meaning prescribed by IFRS

and might not be comparable to similar financial measures disclosed by other issuers. Please

refer to the Company’s discussion of Non-IFRS measures in its Management’s Discussion and

Analysis for the three and nine months ended September 30, 2022 and the Reconciliation of

Non-IFRS Measures section at the end of this press release.

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“Our operations delivered solid third quarter operating performance against a challenging

macroeconomic backdrop that resulted in compressed operating margins during the period,”

said David Strang, Chief Executive Officer. “While near-term global economic conditions

remain dynamic, we are well-positioned with an experienced team, high-quality operations

and a solid balance sheet to continue making progress on our strategic growth initiatives.

"At our Tucumã Project, road upgrades and site drainage are now complete ahead of the rainy

season, and our mining contractor mobilized to site and commenced pre-stripping activities

and waste rock dump construction during the quarter. All activities on site are advancing in-

line with the Feasibility Study schedule. At our Caraíba Operations, shaft civil work, raise-

boring and underground development related to our Pilar 3.0 initiative are progressing well,

and an updated life-of-mine production plan reflecting the integration of Project Honeypot

has also been finalized.

"Despite strong operating performance and successful project execution during the period,

our operating costs remain higher than we had forecasted at the beginning of the year due to

inflationary pressures and the higher allocation of copper sales to international customers

that negate some of the tax benefits we receive when we sell to our domestic customer. As

we look ahead to the fourth quarter, we expect to be in line with our revised full-year

operating cost guidance but acknowledge we are tracking towards the higher end of the

range as a result of these impacts.

"While, like our peers, we continue to navigate challenging near-term market conditions, we

remain focused on advancing our growth strategy in anticipation of an unprecedented outlook

for copper. The timing of our growth initiatives, now well underway at Tucumã and Caraíba,

continues to align well with an expected surge in copper demand that is projected to far

outpace supply in the years ahead."

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THIRD QUARTER REVIEW

• Mining & Milling Operations

◦ The Caraíba Operations processed 720,725 tonnes of ore grading 1.68% copper,

producing 11,189 tonnes of copper in concentrate during the quarter after

metallurgical recoveries of 92.2%.

◦ The Xavantina Operations processed 42,747 tonnes of ore grading 8.55 grams per

tonne gold, producing 10,965 ounces of gold after metallurgical recoveries of

93.3% and 7,487 ounces of silver as a by-product.

• Organic Growth Projects

◦ At the Tucumã Project, engineering, contracting efforts and construction activities

continued to progress during the quarter.

– Critical path earthworks, site drainage and road upgrades are finished. Mine

pre-stripping, waste and tailings dump construction, and plant site

earthworks are underway. Total project engineering and construction are

approximately 40% and 8% complete, respectively, on-track with the

Feasibility Study schedule;

– Approximately 30% of planned capital expenditures were under contract as

of quarter-end and within 10% of pre-contingency Feasibility Study

estimates; and,

– Approximately 80% of Feasibility Study capital expenditures have now

been contracted or are in various stages of tendering or negotiation. Based

upon prevailing foreign exchange rates, labour costs and diesel prices, and

subject to final contract negotiations, these expenditures are currently

forecast to be within 12% of pre-contingency Feasibility Study estimates.

◦ The Company continued to advance its Pilar 3.0 initiative, comprised of several

projects that together are expected to enable the creation of a two-mine system at

the Pilar Mine. These projects include (i) Project Honeypot, an engineering initiative

focused on recovering higher-grade material in the upper levels of the Pilar Mine,

(ii) construction of a new external shaft to access the Deepening Extension Zone,

and (iii) an expansion of the Caraíba Mill to 4.2 million tonnes per annum.

– Incorporation of Project Honeypot into the Caraíba strategic life-of-mine

production plan was completed subsequent to quarter-end and is expected

to be released ahead of the Company's Annual Operational, Project and

Exploration Update on November 8, 2022;

– Construction of the new external shaft is progressing well with physical

completion currently at approximately 10% with approximately 30% of

planned capital expenditures under contract as of quarter-end; and,

– Caraíba Mill expansion is advancing as planned with the ball mill

installation contract finalized during the quarter.

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Figure 1: Tucumã Project site in April 2022 (left) and August 2022 (right).

Figure 2: Tucumã Project mine access road and completed drainage infrastructure (left) and waste rock dump

with installation of HDPE liner underway in October 2022 (right).

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• Exploration Highlights

◦ In early 2022, the Company formed a dedicated nickel exploration team to

accelerate the identification and testing of nickel targets throughout the Curaçá

Valley. This effort resulted in the announced discovery of a new nickel sulphide

system, known as the "Umburana System", located approximately 20 kilometers

from the Caraíba processing facilities. The system, which has an initial strike length

of five kilometers, remains open in all directions and is highlighted by multiple

surface expressions of nickel mineralization. Drilling of additional targets within

the system remains ongoing with four dedicated drill rigs. For additional

information on the Umburana System, including drill results, please see the

Company's press release dated September 29, 2022.

◦ Exploration at the Tucumã Project during the quarter was focused on extensional

drilling of high-grade mineralization to depth in the south and southwestern

portions of the deposit, beneath the designed pit shell.

◦ Exploration activities at the Xavantina Operations during the quarter continued to

focus on testing extensions of the Matinha and Santo Antônio veins. Step-out

drilling continues to confirm thick, high-grade extensions at depth within the Santo

Antônio vein, which remains open.

◦ Highlights from these exploration programs will be announced as part of the

Company's Annual Operational, Project and Exploration Update planned for

November 8, 2022.

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OPERATING AND FINANCIAL HIGHLIGHTS

3 months

ended

Sep. 30, 2022

3 months

ended

June 30, 2022

3 months

ended

Sep. 30, 2021

9 months

ended

Sep. 30, 2022

9 months

ended

Sep. 30, 2021

Operating Highlights

Copper (Caraíba Operations)

Ore Processed (tonnes) 720,725 801,425 572,666 2,118,380 1,724,252

Grade (% Cu) 1.68 1.74 1.90 1.73 2.11

Cu Production (tonnes) 11,189 12,734 10,057 33,707 33,593

Cu Production (000 lbs) 24,669 28,073 22,170 74,312 74,059

Cu Sold in Concentrate (tonnes) 10,522 12,948 10,762 33,515 33,324

Cu Sold in Concentrate (000 lbs) 23,197 28,546 23,727 73,888 73,468

C1 cash cost of Cu produced (per lb)(1) $ 1.46 $ 1.24 $ 0.94 $ 1.34 $ 0.70

Gold (Xavantina Operations)

Au Production (oz) 10,965 11,122 9,426 30,883 29,254

C1 cash cost of Au Produced (per oz)(1) $ 537 $ 643 $ 538 $ 604 $ 508

AISC of Au produced (per oz)(1) $ 1,135 $ 1,169 $ 741 $ 1,135 $ 681

Financial Highlights ($ in millions, except per share amounts)

Revenues $ 85.9 $ 114.9 $ 111.8 $ 309.7 $ 355.0

Gross profit 22.8 50.7 68.0 134.5 234.5

EBITDA(1) 27.9 53.9 48.5 159.9 215.7

Adjusted EBITDA(1) 32.1 55.8 72.9 150.3 245.1

Cash flow from operations 43.0 22.4 150.7 109.4 297.9

Net income 4.0 24.1 26.4 80.6 142.4

Net income attributable to owners of the Company 3.7 23.8 26.1 79.7 141.2

Per share (basic) 0.04 0.26 0.29 0.88 1.60

Per share (diluted) 0.04 0.26 0.28 0.87 1.52

Adjusted net income attributable to owners of the

Company(1) 4.0 24.4 41.2 61.3 154.4

Per share (basic) 0.04 0.27 0.47 0.68 1.75

Per share (diluted) 0.04 0.27 0.44 0.67 1.66

Cash, cash equivalents, and short-term investments 359.8 429.9 119.1 359.8 119.1

Working capital(1) 343.2 417.7 81.4 343.2 81.4

Net (cash) debt(1) 51.5 (10.2) (63.7) 51.5 (63.7)

(1) EBITDA, Adjusted EBITDA, Adjusted net income (loss) attributable to owners of the Company, Adjusted net

income (loss) per share attributable to owners of the Company, Net (Cash) Debt, Working Capital, C1 cash

cost of copper produced (per lb), C1 cash cost of gold produced (per ounce) and AISC of gold produced (per

ounce) are non-IFRS measures. These measures do not have a standardized meaning prescribed by IFRS and

might not be comparable to similar financial measures disclosed by other issuers. Please refer to the

Company’s discussion of Non-IFRS measures in its Management’s Discussion and Analysis for the three and

nine months ended September 30, 2022 and the Reconciliation of Non-IFRS Measures section at the end of

this press release.

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2022 GUIDANCE(*)

The Company is reaffirming its full-year production guidance as well as its revised 2022

operating cost and capital expenditure guidance. At the Caraíba Operations, copper

production in Q4 2022 is expected to be similar to Q3 2022 production levels. At the

Xavantina Operations, the Company also expects to achieve similar Q4 2022 gold production

levels relative to Q3 2022, resulting from higher anticipated gold grades and lower expected

tonnes processed.

Due primarily to a higher allocation of concentrate sales to the international market and the

continued influence of inflation on the cost of key consumables, C1 cash costs at the Caraíba

Operations are trending towards the high-end of the guidance range of $1.20 to $1.35 per

pound of copper produced. At the Xavantina Operations, costs are trending towards the low-

end of the full-year C1 cash cost guidance range of $600 to $700 per ounce of gold produced

and the high-end of the 2022 AISC range of $1,000 to $1,100 per ounce of gold produced.

2022 PRODUCTION AND COST GUIDANCE(*)

The Company's cost guidance for 2022 assumes a USD:BRL foreign exchange rate of 5.30, a

gold price of $1,725 per ounce and a silver price of $20.00 per ounce for Q4 2022.

2022 Guidance

Caraíba Operations

Copper Production (tonnes) 43,000 - 46,000

C1 Cash Cost Guidance (US$/lb)(1)

$1.20 - $1.35

Xavantina Operations

Gold Production (ounces) 39,000 - 42,000

C1 Cash Cost Guidance (US$/oz)(1)

$600 - $700

All-in Sustaining Cost (AISC) Guidance (US$/oz)(1)

$1,000 - $1,100

(1) These are non-IFRS measures and do not have a standardized meaning prescribed by IFRS and might not be

comparable to similar financial measures disclosed by other issuers. See the Reconciliation of Non-IFRS

Measures section at the end of this press release for additional information.

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