Nexa Resources (NEXA) 29 Jul 222022 Q2 Earnings call transcript

Good morning, everyone, and welcome to the Nexa Resources Second Quarter 2022 Conference Call. [Operator Instructions] This event is being recorded and is also being broadcast via webcast and may be accessed through Nexa's Investor Relations website where the presentation is also available. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference call over to Ms. Roberta Varella, Head of Investor Relations, for opening remarks. ahead. go Please

good second and joining and to welcome today. Good XXXX afternoon, earnings Resources quarter for conference Nexa day everyone, call. us Thanks

During through We encourage company's to follow discussing earnings will this that you the on-screen with per presentation release yesterday. as webcast. the the issued we along call, we the performance be

you statements my we refer statements. just you will as begin, Slide to X, we and disclaimer I'd Before the introduce It's and making to like speakers. about forward-looking the attention ask those business, to that pleasure draw your surrounding our our be conditions to now

Joining us Senior Mrs. our Mining; today Coelho, and Ignacio is Claudia Torres, CEO; CFO. Leonardo President Interim of our Vice our Rosado,

for please ahead. So now I will turn Ignacio comments. go his the to call Ignacio, over

Roberta, very quarter. in Slide we X, Please everyone us for Thank thanks presentation. performance where a operations strong to in to joining this We let's now you, this and had move our will begin morning. our

from As production. mainly the full anticipated, to mining production Vazante mine resumption the first to the due of of year, this quarter increased

was supply Vazante concentrate Vazante disclosed, quarter-over-quarter decrease metal performance operational in Peru the a roaster The and in XX% after heavy the was by performance in temporary and in previously As total smelting business in production of result improved the as of up rainfall. zinc higher also affected Brazil from March. of Cajamarquilla utilization

high mitigate EBITDA our to prices, with performance inflationary pressures operating record solid Our effect combined strong cash and a adjusted efforts on and cost operational generated a a flow. with positive

our production, we are for that track sales the to meet guidance happy to are announce We and investment year. on

mineral the in is resource revised, has however, program and able our Aripuana more we at this will delivered was plan, its at first accordance with Aripuana the of progressing ramp-up will to batch guidance, of and in slides. in believe upcoming to be copper we exploration I end also beginning The and year. July. cost cash the continued explain increase the in in concentrate been Our of progress, the detail

Our the financial previous with strong balance decreasing X.Xx in from sheet continues to to X.Xx be quarter. leverage

ESG, goals our coming finalizing to the strategy, months. to long-term Regarding new close our and we during disclose expect are we updated

Now X, grade next production volume. decreased in that slide. ore In average the moving can and lower X% see treated head to second you because Slide the of zinc year-over-year quarter

by was the However, compared first to of and XX%, and driven increase of by bodies recovered this the higher ore organic although Lindo, higher by our positively challenge. production zinc a increased affected some XX,XXX in from material expected, Cerro grade as remains year, of Average grade. quarter ore production volume Vazante treated in ore tons mainly zinc volume treated at

quarter in second increased Following silver copper, XX%, higher first from and this and lead volume production the XX% treated by the of XX% quarter ore year.

quarters, second and zinc be expect to to For copper lower. lead production the upcoming we should silver quarter, similar while slightly and be the

to the upper metals. guidance However, achieve we are on the to believe the for track range from of production mid all we

per against operating zinc decreased credits the in volume operational appreciation by the were and at run ore was mining and this reflecting year, lower of quarter of to and X, cost TCs pressures mine Slide Mining and volumes returned the due X% by decreased to by In quarter cash of year, in costs, improved costs inflationary cost U.S. slide. cost next costs to Lindo the higher to Brazilian the our mainly by partially mine dollar. Vazante and the by-products on the prior quarter control explained which quarter Compared compared XX% last resumption, initiatives. quarter, run real ton stability ton which now per second offset was $XX to Cerro with higher second the Moving lower cash first to mining in $XX compared throughput. of the

smelting there the at from its temporary In mentioned was Tres Now in to In year-over-year, following in and in production XXX,XXX in quarter-over-quarter the the roaster decrease addition first mine, activities. segment X. in smelter quarter-over-quarter utilization Vazante higher improved end up as Cajamarquilla production performance production moving Brazil. of XX% due but in to a concentrate Brazil, of after totaled because, the in before, Marias in down Slide supply quarter, Slide Peru, the smelter tons, X, X% maintenance. the increased the metal the better the roaster sales zinc quarter, in Peru because second In to increased maintenance a

For quarters, year. this to compared is of the second to expected production quarter smelter the upcoming remain stable

As are to higher capacity, unchanged. sales at guidance our production follow are and volume all sites full operating XXXX remains expected

of the product and trend year. increase Brazilian increased cost is offset cost costs. smelting compared year, quarter the by increase last and the this this prices. smelting a period mainly to in Conversion of by $X.XX of volumes. Our pound by factor and These to second prices mainly zinc following cash per the in costs other same driven quarter first This the appreciation. higher costs, quarter and prices the higher by the second energy real maintenance the was was variable Compared to increased compared quarter by by market cash partially the this per pound year, XX% to in higher lower factors due $X.XX X%, first were in driven operating

in about Slide significant to have prices. And global downward commodities. Now moving had a Growing X. the metals on pressures recession concerns put decrease base

as inflationary cost we consumable by-product $X.XX as also cash guidance primarily have metal costs costs $X.XX to Full mining result, pound our well energy zinc given Full prices. fuel updated revised performance higher prices, that higher year-to-date and for forecasts both segments. driven of from increased smelting per a for year have pound, and been lower $X.XX We year per have as higher half cash to And pound, cash pressures this by prices. second year. cost the costs per in could persist believe

Now to moving our slide next to Aripuana the project.

the remains Aripuana, a is campaigns. of second project fully the plant XX% were approximately the ore XX% commercial are the and six operational million drilling reach of mineral $X reserves quarter rate the end activities June, the which year. effect milling safely at $XX dollar Brazilian stockpiles, quarter, infill to of real of early focused appreciation in and million. we million. production planned, XX% and of underground U.S. to to announced The of for on the concentrate throughput the we at mining cover and the delivered XXX,XXX Furthermore, of and available and are already totaling month. invested rate. this as months a is confirm in are by steadily year, increasing there tons ramp-up As the of capacity started, our we have in of which beginning against batch million is that July, $XX expected period. utilization XX% third of ramp-up progressing happy is first Mine estimated Hence, developing include preparing At fourth expected total areas with in in to is the In ramp-up unchanged The an focused year half average the the quarter. CapEx $XXX mine the on copper was negative new December this in first at the The estimated Aripuana this increasing activities to of enough in

was received that mineralization drilling the infill support increase Aripuana, holes the next to has an completed infill anticipate been confirm were resulted Now the a almost of high-grade our At latest in second at give assay slide. excellent which executed update we mineralization moving a as results, Ambrex of the indicated will exploration program. indicated Babacu to as at I ore XX,XXX mineral to the conversion slide, quarter. the the decided drilling shown should meters confirmed, drilling campaign In Babacu The where body activity Ambrex we zone potentially you on target, on No resources. inferred drill Aripuana's to resources. at we have

complete to at Ambrex For Babacu drilling infill exploratory the ore the of the body we program target. resume and third quarter, the expect

increased XX% in EBITDA increase quarter of were X% increase higher the revenue LME same and factor in $XXX In mainly changes million consolidated first quarter versus year-over-year, year. also period quotation during higher of the show mainly quarter, momentum increased year-over-year. of by-product of the the to the am reached In operating an prices, adjusted this of the XX, XX%. was consolidated totaled of $XX respect mainly this price smelting by reached which the slide, by participation. higher Aripuana in by-products year, revenue the Now EBITDA the Adjusted this segment, half lower strong half year, In in billion delivering market upward In in increased sharing last increase is by increase XX% results. Increases our by segment, volume. appreciation. $XXX and the XX% adjusted prices, increased net Brazilian discuss LME of EBITDA an Compared year, same segments. prices. in adjusted for year, quarter the higher with of million by quarter in $XXX year, versus was decrease period last the $XXX net driven workers' quarter by net EBITDA $X.X second this offset million same of this volumes. billion higher operating of this metal In explained performance first this of was million second the compared first half to year totaled revenues by-products performance will positive period preoperational the the on in partially $X.X driven last prices. EBITDA effect volumes. the were and half while prices first EBITDA LME period, the total compared $XXX sales. EBITDA year-over-year. investments, which quarter by mainly These first $XXX the XXXX, revenues the second of the mainly in moving million, net of financial the trend operating increase real year. net totaled quarter, adjusted financial mining last by year, XX%, profit versus billion segment second This EBITDA next the driven first revenue pressures for offset the factors first project, to upper I a and year, the totaled quarter half million second prices consolidated contribution, costs, of of an also higher costs, by performance increased results. the the supported in driven $XXX $XXX in expenses adjustments positive year of net offset by of last last In to second compared adjusted adjusted million, XX%, of net sound pleased the in exploration This higher higher inflationary a consolidated totaled that volumes financial first of the I an the half in next the slide million the $X.X the higher by follow revenue increase increase $XXX and quarter the average segment second driven Beginning mining and to positive and to by In XX% left, million chart to second XX% volumes. adjusted and for versus million. your of to In smelting report higher the for explained In Slide on year, Compared by the

year. show this amounted quarter million appreciation million of CapEx the remaining In to in the the million and $XX investments. The had million a was second to half impact Now to million, the next of being CapEx. first $X our directly In quarter, Brazilian associated the the invested $XX first CapEx the and six related Aripuana where this related Aripuana sustaining $XXX of million moving to negative $XX we with slide $XX to in months the against in mainly project. real year, U.S. dollar

invested mineral We $XX quarter, our total and that related of are first evaluation, $XX of XXXX this to we in invested unchanged we being and exploration a at mine the exploration regard happy the $XX project to million guidance half CapEx total these to of remains related million to In $XXX announce second million mineral development. With topics. year, million. a

expenditures growth. As Total XXXX. resources, of $XX are maintaining strategy, part project expected are organic million replace long-term mineral to our plant our and and we to efforts evaluation in our exploration reserves supporting increase and be

So guidance remains unchanged.

will the from CapEx. generation and the before working flow cash the cash our period. In sustaining I flow moving million million. cash by was provided XX, invested We $XX in and during next operations Now generated interest in the has of $XXX quarter. expansion the had capital Slide paid million to Therefore, $XXX Nexa where discuss $XX and slide million projects taxes

free Pollarix, equivalents of noncontrolling and of exchange of Our invested $XX million, flow was million quarter $XX $XX and million. energy investment our dividend affected shareholders from of also to effects payments the This $XX was investments, company, free cash million. cash by the positive second in in $X our which million cash million included assets, in to an in loan manages capital flow working foreign cash in $X Tinka Aripuana, related on increase

$XXX next had generation half the year, generated slide, million the was and In of flow provided the half taxes, working $XXX interest of invested first to flow million from the We of will cash I paid million million. and cash sustaining $XXX capital. where expansion the Nexa discuss Therefore, the projects by has in the as our operations $XXX well. first flow before CapEx moving year. cash in Now

has the the first period capital payables, offset a inventories trade XXXX million in capital due also million, by million, in a segment times Our This flow quarter a to variation variation in and in high our $XXX by explained invested Aripuana, dividends positive the of million. also year, of million of included free in logistics trade variation impacted been by, million for higher early of million notes working negative explained working $XX receivables. smelting negative highly by $XXX which of of lead partially cash the was changes our in $XX $XX of of Pollarix negative this redemption $XXX amount million $XX in $XX and

the coming most of We increases in the expect inventories during to reverse months.

healthy which Slide Now that available credit liquidity moving continue liquidity approximately includes second the In a of and XX. strong, sheet was our an see with profile. $XXX balance the to of we revolving our our you facility can XX, Slide million, quarter, $XXX debt By report million. remains extended end current to undrawn

average June XX, of a our was costs. the total maturity As average with debt of X% debt X.X years,

the debt net with a -- leverage X.Xx X.Xx EBITDA first ago. measured Our end quarter adjusted to the of ratio the year and was by to compared X.Xx at

Now Slide moving now next ESG. the slide on to am I on XX.

progress Here, I program. will are briefly give you ESG an update our making on we the in

to and we to expect months. and final in water disclose to for ESG Several base health, XXXX, related to like process safety sustainable which would we on that long-term to enhancing goals and the and including coming study I strategic reflect our were last social are First, fronts, a capital team natural development. worked Since value held main change, develop year, long-term discussions use, broad legacy, creation ESG are to highlight define well-being hard has in climate people. strategy our our we different commitment the our

our Now of the slide. by to last this close the turning priorities briefly presentation reinforcing like would to for year. our rest I

I Aripuana As ramp-up the mentioned in stage. is earlier,

improving aspects Our we very The are our efforts mineral organic growth and commercial be assessing generation while our and cash We of goal are to in life on in mine. business, extension project reevaluating efficiency continue the exploration remain on competed continues of and now And to mine on the in our exploration addition in With strategy our the to are of growth. project productivity of production, to the focused increasing deliver the pipeline, focuses our an important the market, on to flow all resources the active portfolio. parallel, opportunities. we to of guidance. expansion drive of life operations our regard

Thank attending the that, as presentation. you take I ESG questions. our coming happy will key so mentioned enhancing we in be your for this months. main strategy be our for will With our XXXX Finally, goals to business, communicating all before, to is

your go first ahead Stanley. Spiess our question from Morgan from with Jens And Instructions] Please question. [Operator comes today

Yes, current or maybe the provide you -- quite is given I Could the likely This wanted will executive last portfolio. on any project current changes. Has power be negative on that legislative yes, Yes. Jens. Magistral? any whereas the color if to the you able Peru or changed to that on situation view your point about President not implement there? any And still you're mentioned ask this update just

in Magistral, Magistral of in of with the contract Yes, need is Magistral still advance and we comply have the that case here the process a that we money the yes, because with Sure. to to spending with we're the have government, government. this we phases some in

the good copper, believe, problem to between a XX is, XX question, mine However, it in the to we between very going around sector. to years and where part of is yes. second this Peru, to is invest $XXX the to we that a Peru of want billion life related some mining project. in us Magistral, problem is is $X of million give if It's project is the good your noise context But facing of

reduce is project we're with we assessing. is other a also up outside this we very our project project So so team with important for other partners, what the in we us, are in are we this Magistral are doing if evaluating still but market risks. comparing alternatives Peru. we still And can

to acquiring decide same sort building is other company. the one project the because -- the group Peru and evaluated in the is of value of best countries to opportunity Magistral which another So to or whether stage that we in add in go

in not There have There some same with and some, other So characteristics in are very countries. other that. partners looking on that many. size the assets are also are we in what projects for that's -- we there but more some Magistral and active and are or less

you last expect on where -- be Okay. above your guidance? above were concentrate will And be Perfect. may, purchases And from the existing quarter how third-party the did that much just your impact? benefit you lastly, from to be division. Any Mining higher that to And guidance if smelting expect the in end on mines I from made provisional particular this that pricing you division, your was you mentioned your production cost of quarter?

the why of production stable mines, what their because This guidance. very say, the are the we of guidance projecting Yes. that's I and put main grade and are Lindo and a We in in that of our in we are in And No Vazante Peru. Cerro I community regarding this on we the Porvenir. guess some doesn't problem. guidance is had budgets, and throughput Atacocha in mines the rest issues. But problems outlook the year. the the, pit affect for small would in average

So to quarter. of mines presentation, for most stable, the were why expect of be range the rest production very in we very guidance we the And we the mid our And that's can saying of being performance to the higher second should achieve the yes. year. as similar of

the question, which the was Regarding question -- Yes. second

in some is reactives. And in had yes. increases increases say, that, derivatives yes. influenced smelting case. a cost is, And cost the conversion smelting we increases the problem -- of regarding I gone diesel about to Any has cost, and Brazil, the would cost influenced costs. -- energy any by is in second it's the linked question in conversion inflationary a all because Peru. That up So some of the oil prices real, by smelting The cash of

the was When why costs so so the to So -- up effect quarter much And year, first would Having concentrate higher, quarter. certain -- are on But sometimes have from the this the price. I okay? second cash was on -- positive, based it was are say said the this up, the the that's why higher, conversion from we we went that, a that you and was of you was concentrate, above, sometimes price prices, pay are price part a is when inventory, and much month of sort that this amount the hits because yes, buy the when up. the before cost we prices were value financial. spot is the hedge or the or effect a higher the hedge hedge or has that's on negative that these

given you this all So the price when in X. positives, is these be which everything But or that hedge this what of you say, reality that offset price a this let's the happened at year, realize the negative you in month because quarter, you -- that gain, realize should lower, is month end when the okay? is sell

higher in that's we dropping -- to some term why have you stock in on quarter, -- related goes price. had So fixed very Prices the was a in have gain price this much the, with negative quarter. with as know, higher that down, dropped, get because higher a when we with it you have And fixed you fixed the was prices. last is it a the

sell X other, in we of why have offset produce we is know end But year, that's that at of will don't we have this you the see to day, in these would the and negative was towards we are this positive $XX recorded close to this when gain. quarter effects. and of that end going reverse. And quarter and each the the there. if to So the we this million going of I

clear. Very Perfect.

So million not prices effect sustainable positive pending this quarter, might or housing might be which $XX Perfect. above.

Exactly. No, no problem.

of question go ahead Please America. from question. Lawson your Bank next our And with Winder from comes

to quite What Hello, bit Nexa? point for about are attractive a Ignacio. at would mean Peru. you it's this that like review. the update of this jurisdictions is a to Thank part morning. ask project hesitancy with -- Good clear The today. the I of exposure for review also I

where enters area a right our we new it's in exploration question. very of of in DPO charge This -- good Yes, a now. created February it

in active been very have We market, the yes.

Americas. focused I So would are the say we in that

active Mexico U.S. have in and Canada. in in the know, in looking Peru, not been not have to created available, because, you we you say, in there many projects the It's are But the projects very and projects on easy assessments Chile, that that to some do. as find and some value in We and we would Americas. Brazil I be enough that sometimes are,

Americas. country this in would for mining the is looking been easy and a opportunities are But has in forever, I within We And situation of yes, the case not Peru, today. say Peru Peru, you find better you meaning much that to can that alternatives communities, are than towns mining. that others, don't that don't much that to difficult in have are exposure you exposure have

So arise we are relations it Europe. your could say, the some question, of community to mean, I also of this acquired Americas, to I difficult six because, mainly programs. location In by Magistral would company. because that build assessing some Magistral, situation project the opportunities. of eight Spain a difficult another case this still is makes evaluate a was months opportunities project in answer But We ago to in the

So in on. focus trying and are Europe, mainly that's Americas, to we where opportunistically,

Morro out near stands is list Agudo. Bonsucesso from that thing the One

in So one, it's Brazil.

reason one out. So that stands

kind is Bonsucesso, it thought of it Morro Morro forward? going mean, key of other complex. asset imply does Agudo, being What status Or I the I The for is for Agudo? you guys noncore? a that, of that I of the future mean is the

guess strategy of been all And good the and yes. companies. a very the we happens evolution talking I the group, with is about in that It's question, this it have

that in to relative look up. or are Lindo Nexa Aripuana for us you the now or ramp the Vazante So at assets Cerro assets is and us big of

and that of today is all smaller perspective have drill and assets. new these asset, [Bonsucesso] a good. Lindo] good is are deposit that. return, could holes Atacocha, [Cerro you these this go we to a and derivative we that good really So are of have a Porvenir assessing this we But have really, all then project

Agudo minerals I Agudo from being is the On breakeven. plant, that All breakeven Morro the mean, now. right Morro it's mine these

that out So we projects of might be portfolio. something to will we our that see get smaller try

we say So we size are and next. -- I we the of that allocate transformational Aripuana Vazante, time and for for opportunities the size that have you Cerro have, same more match constraints that profitability the given something the because would for time are and we to looking looking have the of given you of now Lindo,

So It's will one. market It's a Bonsucesso resources. that that what this is the prospect. mineral adopted, This on XX,XXX but we by back assessing Agudo a Morro communicate more to in later of the of going cost and to lot of potential are small is very question, But the going plant won't [Indiscernible] terms much. but we detail. have. tons be has zinc now, we is to status in of good is a Agudo it your more Morro

no. could Aripuana. project. it size So is Lindo, answer ones is for be Cerro for a to question good Vazante And is The and of the the focus this project is, answer a similar today want. the But today the we of that let's on projects

-- mean of Morro Agudo risk closed sort that, would in that next the few is there's follow-up on just a Would that years?

money little, of terms It the I some Agudo always Morro benefits we Tres that Juiz make the it the we de it's of the three mean, five And project. terms smelters, much But be CapEx could -- is in very assessing. are compared and small in of now. has putting Morro in very to Fora. be assessing VP honest, in next the Agudo and Operations Marias CapEx assessing to of going we how different team are this to a to are years in is we allocate

market. will and still that proper case Morro the decide in coming we to communicate a the way be it say I the Agudo. in years, to assessing, the and might is are is close So advance that we would we something will in answer But this

this Have shares? Nexa's a discussions regarding projects and on for those just then any that And Shalipayco maybe Two partners. purchase review. potential final one transaction been there the Florida have on partners project of list, question Canyon preliminary with

we new believe, No, in new now. right is near Pasco, it's a will But permits. plant, we are good this need this Shalipayco, Yes. very process and a early very stage. project,

plant, I new Shalipayco a would opportunity to lower our than strategy. and projects cost straight and category buying put a So of advanced say, more more to the is in leaving other it

So case we early in also is we stage. what that doing the are assessing in are Florida Shalipayco Canyon, and

and We we we partners some are projects make you on more them Aripuana, tell with these say, I as have want that transformation still, in to something coming more is, create to if that assessing, and okay? months, try still and similar So would again, focus that are concrete to might stage and are to try that back and be projects do the can and we specific in Lindo Nexa will the and operations well. Cerro Vazante get to early that actions I on we these to

Our your comes question. Please Orest from go with Wowkodaw next Scotiabank. from question ahead

cost Hi, does costs? the guidance I please wanted guess, I does so year? current -- that's operating reflect inflationary key you for reporting rest the what for input And cost current costs, Or pressures touch updated this the And spot good you've season. new the it I your on last too. exactly of been, guidance, and pricing spot the guess for theme assume? energy to just effectively assumed morning. Can one pricing

go example cost to cash has to I us. the using for this. like three that presented, XX we clarify from going The mining XX and would I'm components that to is

the $XX I is much we last one is in for the what cost in ton run-off first or was had and that quarter cash ton year second mines, in that is the almost cash mine So per $XX which was said that's the $XX. we costs And the operating per cash cost quarter, invest this how mine. first the $XX the in the year it or

two first was year throughput, the in inflation. that the for reason reasons. One second one in in last So the increase increased. year. from in last quarter it estimates this was quarter year, -- we incorporated was We this to for said inflation and The call our

that's it to quarter okay. So in this the why year, first went $XX of

-- we that quarters be The second quarter $XX. is $XX, similar to is the and to going the rest following believe

et in mainly our the cetera. So to is stable, to beginning, cash at the mines inflation is cost to plant diesel from the this and ton inflation being cement, to some per related high energy, some reactives

So things. bigger in item are that One is a you that with mine. the items is mitigate two volume. specific How

Cerro our Vazante volume, increased mine. Lindo we especially initiatives USA the in with in So and

example, is how in the all mitigate So grid rock have because short to optimize or underground. for we of mines. we're We the these mine the Again, a is grid. lot this short support mitigating inflation

with other have the don't of -- we and we contractors. process inside renegotiate disposal all mine to contractors. conditions targets renegotiated We with treat. We need be some We to the changed water

is flat. that are So actions per that we make to the inflation our activities many and took to ton offset there or sure cost

the control. So have top we items other of costs. this what that that, goes cash you is to two On

charges. first The one is the treatment

So treatment charges, flat would I sort of for the of say, year. the rest are

benchmark follow last mean up it's but year I if flat. We the you yes, benchmark, year, from the sort have of contracts. for gone has the

on all have So it down. total your shouldn't changes the be you is have are income change is happens the by-products prices price on because TCs a is cash going that the the to costs because the selling cost. you lower are really by-products going that what that cash cost What

why of that's is the now these and cost up. is lower, So discount by-products cash your this going on costs

that comes that So we're why the that's dynamic is mines, and following this it XX, in yes. to the from saying XX we are

this don't So you that know clear was if that's -- to I in explanation.

you Maybe just the at power work operations. contribution how is. us contracts the your given those remind energy you the just It smelters. of energy of and to could power magnitude -- And could

energy. in would in Yes. I say, self-sufficient are Brazil, we

and holding not influenced called that smelters cost factor Brazil, the that are Brazil the assets company the conversion Pollarix And in in generate energy. say market sort the some our a in in own real, the we exposed was main or have we why cost regard. the would I to We that depreciation. real that that's of the

So lot Cajamarquilla have this energy, a in going that we this contract Peru, And this was to and that up. And -- as a is inflation of linked well. In factors synergy some consumes control. our is are contract.

actually the have inflation especially inflation and other Peru. on smelters why in but related energy, that's So to

And on Sorry. Cajamarquilla. just the

then, fairly is regularly? power So that was that is that -- contract updated

way energy they the and it's terms have provide you this energy, for is that you -- is And mean, the with will is of and say, hydroelectric like because energy the contract. -- I our formula that good renew there us that is X-year [indiscernible]. the But good No, a works to -- you have X- let's formula. Yes. like it you have have in a is it's that you energy contracts,

they your let's external -- to factors. you is to up goes the costs one it but like to more the so goes year, it And going you, the cost went provide for So year of is second oil. have is grid some One price this say, this That so up. updated price last is grid two factors, by the up.

goes cost of up. they cost your that charge So on the have the you

on case the Cajamarquilla. energy in was would might Cajamarquilla it case how well. more in inflation it of year, the as rest moves this that And this depending in So be have in the might case the be the we

And at this proceed will for ladies gentlemen, we point, off-line and questions.

the Maria for question BCG a like Jose So to of should know, XXXX Aripuana? we good we contribution assumptions, here results. expect from given EBITDA what from the received Congrats from currently by in kind updated We'd Cloud.

Yes.

of Okay. is the a end to the call, XX% the XX% as be up at be going at capacity The progressing No, well. to are in to December, between ramp really is Then September. we was of are should And XX% to of the going capacity. in ramp-up be XX% between saying of reached end good. saying activities it's Aripuana, in small I is as

mineral a grades. when is mineral the to and good and a the but is in running is produced adjust with start ramp-up -- mineral to be feed going make up that that plant way, will low recoveries you So the the you that use plant sure to

that ramp-up profitability So is that regard, say are I we would getting the this in from of minerals the lower.

So the EBITDA this very going low is to in be year.

going However, become quarter year. capacity of XXX% first in next the to of is

year So much Aripuana next contribution better. EBITDA be going is to for

Dementia]. economic guidance? investments weaker given through Can comes and leverage Bank the cycle from investment-grade. cash you The cost remain revised tend your of clarify please your to from net What's question [Joanna second Feliz prospects assuming you that

Yes. Well, I cost clarified as was we cash already guidance, the explaining.

very important, the question. So it's leverage

day, company. the a with operations CapEx at invested in that of we profile have to a cash and our our the needs company breakeven the mining like debt end the cost of So

stress you then -- your where leverage the you or and that go make evaluate leverage company if So sure does to your you investment-grade not. are

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of and probably the then you company is to have terms stress the you bringing more debt. finding need that leverage more company, in more to will in growth So

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you Can of views major the in outlook freight both costs for you your logistics. your energy, break terms Also, into can down comment and segments?

follow I'm don't can up sorry. We have Well, I that very detail. that you have.

Yes.

question. that on go can you Roberta, so Yes,

Yes.

on cost And in X% MetLife. about cost, deducted from about is we Usually, goods next is sold to gross consolidated question from logistics, of have basis, say In considering cost Hernan the freight a XX%. of terms revenue. energy the let's our is from of terms the X%. And

done. Now Aripuana expect we that in for mostly are investments What capital allocation? should

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against assessing other was I are one -- that is As the in we Magistral towards Magistral them, are projects saying, and looking of we market.

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Ladies and call. conference gentlemen, today's attending We do thank this concludes presentation. for today's you

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