ERO.TO · 2023-11-02 12:00:00

Ero Copper Reports Third Quarter 2023 Operating and Financial Results

Financials

November 2, 2023

(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, 2023 . Management will host a conference call tomorrow,

Friday, November 3, 2023 , at 8:30 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

• Copper production of 10,766 tonnes at C1 cash costs (*) of $1.82 per pound of copper

produced

• Gold production of 17,579 ounces at C1 cash costs (*) and All-in Sustaining Costs

("AISC")(*) of $371 and $844, respectively, per ounce of gold produced

• Record gold production and operating margins at the Xavantina Operations partially

offset lower copper production at the Caraíba Operations as well as the impact of a

stronger Brazilian Real ("BRL") relative to the U.S. dollar ("USD")

◦ Net income attributable to the owners of the Company of $2.5 million ( $0.03

per share on a diluted basis)

◦ Adjusted net income attributable to the owners of the Company (*) of $17.3

million ($0.18 per share on a diluted basis)

◦ Adjusted EBITDA(*) of $42.9 million

• Reaffirming full-year copper production guidance and providing updates to other 2023

guidance ranges to reflect YTD performance, including record operating results at the

Xavantina Operations

• Important milestones achieved in the execution of strategic growth initiatives during

the quarter

◦ Construction of the Tucumã Project reached over 70% physical completion as of

quarter-end. Total project capital estimate remains unchanged at approximately

$305 million

◦ At the Caraíba Operations, construction of the Pilar Mine's new external shaft

continued to progress on schedule. Planned capital expenditures under contract

or in the final stages of negotiation remain at approximately 80% with current

estimates within 5% of budget

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◦ Production from the new Matinha vein commenced at the Xavantina Operations,

contributing to a quarter-on-quarter increase of over 40% to both processed

gold grades and gold production as well as record-low unit operating costs

• Available liquidity at quarter-end of $237.6 million included cash and cash equivalents

of $44.8 million , short-term investments of $42.8 million, and $150.0 million of

undrawn availability under the Company's senior secured revolving credit facility

• Immediately prior to quarter-end and continuing into Q4 2023, the Company

opportunistically expanded its foreign exchange hedge program

◦ Of the $437 million foreign exchange derivative position as of October 2023,

$145 million is designated for major project capital expenditures with a

weighted average floor and ceiling of 5.10 and 5.23 BRL per USD, respectively

• Subsequent to quarter-end, the Company entered into a binding term sheet ("Term

Sheet") with Vale Base Metals ("VBM") to earn a 60% interest in the Furnas copper

project (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

◦ Offers opportunity to expand long-term growth pipeline within the Carajás

Mineral Province, home to the Company's Tucumã Project in Para State, Brazil

◦ Partnership expected to leverage the Company and VBM's collective strengths

while advancing Brazil's position as a leader in the global energy transition

◦ For more information on the Project and Term Sheet, please see the Company's

press release dated October 30, 2023

*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, 2023 and the Reconciliation of

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

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“2023 continues to be a pivotal year for Ero Copper as our near-term growth projects reach

critical milestones and we continue to define and broaden our long-term growth pipeline,”

said David Strang, Chief Executive Officer. “This strategic execution was evident at the

Xavantina Operations, where we successfully initiated production from the Matinha vein

during the quarter, resulting in record gold production and operating margins. We also made

substantial progress at our Tucumã Project, as announced earlier this month, and advanced

our Pilar 3.0 initiative at the Caraíba Operations, where we are nearing completion of the mill

expansion project and preparing to commence main sinking of the new external shaft."

"In parallel, we continue to advance on our medium- and longer-term growth pipeline

through ongoing regional copper and nickel exploration programs at the Caraíba Operations

and, more recently, the execution of a binding term sheet to earn a 60% in VBM's Furnas

copper project."

"Despite these important strategic advancements as well as solid operating performance at

our Caraíba Operations during the quarter, our financial results were impacted by broader

economic conditions that drove weaker metal prices and a stronger BRL against the U.S.

dollar. In response, and in addition to the protection provided by the copper price hedges we

established earlier this year, we elected to opportunistically expand our foreign exchange rate

hedge program to cover a significant portion of projected operating costs and capital

expenditures through the end of 2024."

"While we continue to navigate near-term economic and market uncertainty, we remain

optimistic about the long-term demand outlook for copper and are committed to the

execution of our strategy as we position Ero Copper to create sustainable, long-term value for

all stakeholders."

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THIRD QUARTER REVIEW

• Mining & Milling Operations

◦ The Caraíba Operations processed 806,096 tonnes of ore grading 1.46% copper,

producing 10,766 tonnes of copper in concentrate during the quarter after

metallurgical recoveries of 91.6%

– Lower mill throughput volumes, as well as lower mined and processed

copper grades due to mine sequencing, resulted in decreased copper

production quarter-on-quarter

◦ The Xavantina Operations processed 31,446 tonnes of ore grading 18.72 grams

per tonne, producing 17,579 ounces of gold production after metallurgical

recoveries of 92.9%

– Initial production from the new Matinha vein contributed to a quarter-on-

quarter increase of over 40% in both processed gold grades and gold

production

• Organic Growth Projects

◦ The Company made significant progress on the construction of its Tucumã Project,

which reached over 70% physical completion at quarter-end, up from

approximately 45% at the end of Q2 2023. The first phase of plant commissioning

is expected to commence by year-end 2023. First production remains on track to

begin in H2 2024

– Significant advancement in mine pre-stripping, with first sulphide ore on

track to be reached in early November

– All earthworks are now completed, including the water storage reservoir,

site drainage and run-of-mine stockpiles

– Over 15,000 cubic meters of concrete have been poured (over 65%

complete), concluding all major foundation requirements

– Steel structure pre-assembly and erection are tracking ahead of schedule

with approximately 1,000 tonnes of steel already in place

– Key pieces of processing equipment are on site with installations either

concluded or ongoing, including the primary crusher, ball mill, secondary

and tertiary crushers, vibrating screen decks and flotation cells

– Main electrical substation installed on site with construction of power line

tracking ahead of schedule; tie-in to national power grid scheduled for Q4

2023

– Project capital estimate remains unchanged at approximately $305 million

– For additional information on the Tucumã Project, including recent images of

construction progress, please see the Company's press release dated

October 19, 2023

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◦ At the Caraíba Operations, the Company is focused on advancing its Pilar 3.0

initiative, designed to support sustained annual ore production levels of 3.0 million

tonnes. The components of Pilar 3.0 include (i) Project Honeypot, an engineering

initiative focused on recovering higher-grade material in the upper levels of the

Pilar Mine, (ii) an expansion of the Caraíba mill from 3.0 to 4.2 million tonnes of

annual throughput capacity, and (iii) construction of a new external shaft to enable

the creation of a two-mine system at the Pilar Mine

– Construction of the new external shaft remains on schedule. Headframe

erection, stage winder installation and several key underground

infrastructure installations were completed during the quarter. Main shaft

sinking remains on track to commence prior to year-end. Planned capital

expenditures under contract or in the final stages of negotiation remain at

approximately 80% with current estimates within 5% of budget

– At the Caraíba mill, installation of the new ball mill, Jameson cell and

associated electrical installations were nearly completed during the period.

The mill expansion project remains on schedule for physical completion

prior to year-end

– Greenfield exploration of regional nickel targets continued during the

quarter; the identification of new copper targets within the Vermelhos

district warrants further investigation during the coming year

◦ Please see recent images from construction on the Caraíba Operations' new

external shaft below

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Figure 1: October 2023 aerial view of the Caraíba Operations shaft project, including (A) the permanent rock

and personnel winders, (B) the completed shaft headframe, (C) the stage winder foundation, and (D)

engineering and administrative buildings.

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Figure 2: Progress on erection of the permanent rock and personnel winder building (October 2023).

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Figure 3: Progress on erection of the stage winder building (October 2023).

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