Ero Delivers Record Q4 Production and Strong Year-End Liquidity; Gold Concentrate Sales to Continue Through Mid-2027, Positioning for Next Phase of Step-Change Growth

The most recent news release (February 5, 2026) reports record production for Q4 2025 and preliminary full-year 2025 results. Key highlights include: - Consolidated copper production for 2025 reached 64,307 tonnes, with a record quarterly performance in Q4 (19,706 tonnes). - Gold production and concentrate sales totaled 52,290 ounces, significantly boosted by the commencement of gold concentrate sales from historical stockpiles at Xavantina. - Year-end liquidity improved to approximately $150 million, a $40 million increase over the previous quarter. - 2026 Guidance: Copper production is projected to rise to 67,500–77,500 tonnes; gold production is projected at 40,000–50,000 ounces. - Growth Outlook: A three-year outlook targets copper production of 80,000–90,000 tonnes by 2028. - Exploration: Furnas Project PEA is on track for H1 2026.

The impact is material and positive, but requires a critical look at the history of projections: - Delivery vs. Guidance: While 2025 ended with record production, the 64,307 tonnes of copper actually missed the original February 2025 guidance (75,000–85,000 tonnes) and fell slightly below the revised July 2025 guidance (67,500–80,000 tonnes). This indicates that the Tucumã ramp-up was more difficult than management initially communicated. - Liquidity and Deleveraging: The "hidden" value of the Xavantina gold concentrate is the primary catalyst for the stock's recent performance. By selling stockpiled material at a $300–$500/oz cost basis in a high-price environment, Ero is successfully accelerating its deleveraging strategy. - Operational Pivot: The transition to mechanized mining at Xavantina and the debottlenecking at Caraíba appear to have stabilized the operations after a volatile first half of 2025.

Ero Copper is a Brazil-focused miner with three main operating hubs: - Caraíba (Bahia): A complex of underground and open-pit copper mines (Pilar, Vermelhos, Surubim). Its flagship initiative is the new Pilar external shaft, set for 2027 completion, which will cut haulage times significantly. - Tucumã (Pará): The new flagship open-pit copper operation. It achieved commercial production on July 1, 2025. It is the primary driver of the company's production growth from 40k to 80k+ tonnes per annum. - Xavantina (Mato Grosso): A high-grade underground gold mine. It is currently being utilized as a "cash cow" through mechanized upgrades and the liquidation of high-grade concentrate stockpiles.