Mr. David Strang reports

ERO COPPER REPORTS SECOND QUARTER 2023 OPERATING AND FINANCIAL RESULTS

Ero Copper Corp. has released its operating and financial results for the three and six months ended June 30, 2023. Management will host a conference call tomorrow, Friday, Aug. 4, 2023, 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 (all amounts in United States dollars, unless otherwise noted).

Highlights

• Copper production of 12,004 tonnes at C1 cash costs of $1.52 per pound of copper produced;
• Gold production of 12,333 ounces at C1 cash costs and all-in sustaining costs (AISC) of $492 and $1,081, respectively, per ounce of gold produced;
• Meaningful quarter-on-quarter increase in copper production offset lower realized copper prices and a stronger Brazilian real (BRL) during the period:
  • Net income attributable to the owners of the company of $29.6-million (32 cents per share on a diluted basis);
  • Adjusted net income attributable to the owners of the company of $22.3-million (24 cents per share on a diluted basis);
  • Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $49.1-million.
• Available liquidity at quarter-end of $330.4-million included cash and cash equivalents of $124.4-million, short-term investments of $56.0-million, and $150.0-million of undrawn availability under the company's senior secured revolving credit facility;
• Major strategic initiatives continue to progress on schedule, positioning the company for significant near-term growth:
  • Construction of the Tucuma project reached approximately 45-per-cent physical completion as of quarter-end. Total project capital estimate remains unchanged at approximately $305-million;
  • At the Caraiba operations, the presink phase of development at the new external shaft was completed during the quarter with the headgear and winder installation on track to commence main sinking prior to year-end. Approximately 80 per cent of planned capital expenditures were under contract or in the final stages of negotiation at quarter-end and remain within 5 per cent of budget;
  • At the Xavantina operations, horizontal development into the new Matinha vein was completed during the quarter with first production expected in H2 2023.
• Reaffirming 2023 production and C1 cash cost guidance; increasing full-year capital expenditure guidance by $15-million to $20-million to reflect proactive investments at the Caraiba operations:
  • After conducting a detailed review of major projects and support infrastructure at the Caraiba operations during the quarter, including infrastructure related to the Deepening, underground paste fill and tailings, the company has elected to invest in various upgrades throughout H2 2023. These enhancements aim to bolster the Caraiba operations' continuing projects and support expanded life-of-mine operating plans at the Pilar mine.

"We continued to deliver on our full-year operating plan during the second quarter while making significant progress on our organic growth initiatives," said David Strang, chief executive officer. "Despite softer copper prices and a significant strengthening of the BRL, excellent performance at our operations translated into solid operating margins and financial results for the quarter.

"Looking ahead, we anticipate a stronger second half of 2023 as we target commissioning of the new ball mill for our plant expansion project at the Caraiba operations during the fourth quarter, and produce first ore from the recently developed Matinha vein at the Xavantina operations.

"Construction of the Tucuma project continues to advance on schedule and is nearing the halfway mark at approximately 45-per-cent physical completion. Electromechanical assembly of the process plant is now under way, and mine prestrip remains on track to reach first sulphide ore in the fourth quarter of this year, as planned. At the Caraiba operations, we completed the presink phase of development at the new external shaft, achieving approximately 25 per cent physical completion as of quarter-end. We are now in the process of hoisting the preassembled headframe to commence main shaft sinking activities prior to year-end.

"As the world's focus on security of critical minerals supply chains grows more urgent, the timing of our growth trajectory appears increasingly favourable. We are proud to produce some of the lowest carbon-intensity metals in the world and remain on track to double copper production to over 100,000 tonnes in 2025 and achieve higher sustained gold production levels of 55,000 to 60,000 ounces per year beginning in 2024."

2023 production and cost guidance

The company is reaffirming its 2023 copper production guidance for the Caraiba operations of 44,000 to 47,000 tonnes of copper in concentrate. Mill throughput volumes are expected to be slightly lower in Q3 2023 compared with Q2 2023 and higher in Q4 2023 due to the anticipated commissioning of the new ball mill. Combined with expected copper grade variations related to planned stope sequencing, copper production is expected to decrease slightly in Q3 2023 before increasing in the last quarter of the year.

The company is also maintaining its full-year C1 cash cost guidance for the Caraiba operations of $1.40 and $1.60 per pound of copper produced. Unit operating costs are expected to be slightly higher in Q3 2023 compared with Q2 2023 and lowest in the last quarter of the year due to anticipated variations in quarterly mined and processed copper grades as well as total copper production.

At the Xavantina operations, the company is reaffirming its 2023 gold production guidance range of 50,000 to 53,000 ounces with slightly higher gold production expected in H2 2023 due to increased mill throughput volumes following the expected commencement of production from the Matinha vein.

The company is also maintaining its full-year C1 cash cost guidance for the Xavantina operations of $475 and $575 per ounce of gold produced and adjusting its AISC guidance range to $1,000 to $1,100 per ounce of gold produced to reflect the inclusion of sustaining lease payments and other miscellaneous sustaining expenses.

The company's cost guidance for 2023 assumes a U.S. dollar: BRL foreign exchange rate of 5.30, a gold price of $1,725 per ounce and a silver price of $20.00 per ounce.

2023 capital expenditure guidance

After conducting a detailed review of major projects and support infrastructure at the Caraiba operations during the quarter, including infrastructure related to the Deepening, underground paste fill and tailings, the company has elected to invest in various upgrades throughout H2 2023. These enhancements aim to bolster the Caraiba operations' continuing projects and support expanded life-of-mine operating plans at the Pilar mine. As a result, the company is increasing its full-year capital expenditure guidance by $15-million to $20-million.

The company's capital expenditure guidance for 2023 assumes a U.S. dollar: BRL foreign exchange rate of 5.30 and has been presented herein in U.S. dollars (millions).

Conference call details

The company will hold a conference call on Friday, Aug. 4, 2023, at 11:30 a.m. Eastern Time (8:30 a.m. Pacific Time) to discuss these results.

Date:  Friday, Aug. 4, 2023

Time:  11:30 a.m. Eastern Time (8:30 a.m. Pacific Time)

Dial in:   North America: 1-800-319-4610, international: 1-604-638-5340; please dial in five to 10 minutes prior and ask to join the call

Replay:  North America: 1-800-319-6413, international: 1-604-638-9010

Replay pass code:  0319

About Ero Copper Corp.

Ero Copper is a high-margin, high-growth, clean copper producer with operations in Brazil and corporate headquarters in Vancouver, B.C. The company's primary asset is a 99.6-per-cent interest in the Brazilian copper mining company, MCSA, 100-per-cent owner of the company's Caraiba operations (formerly known as the MCSA mining complex), which are located in the Curaca Valley, Bahia state, Brazil, and include the Pilar and Vermelhos underground mines, the Surubim open-pit mine, and the Tucuma project (formerly known as Boa Esperanca), an IOCG-type (iron ore, copper and gold) copper project located in Para, Brazil. The company also owns 97.6 per cent of NX Gold S.A., which owns the Xavantina operations (formerly known as the NX gold mine), namely comprising an operating gold and silver mine located in Mato Grosso, Brazil. Additional information on the company and its operations, including technical reports on the Caraiba operations, Xavantina operations and Tucuma project, can be found on the company's website, on SEDAR and on EDGAR. The company's shares are publicly traded on the Toronto Stock Exchange and the New York Stock Exchange under the symbol ERO.

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