Guidance & Outlook

Nexa | Guidance 2022-2024

Guidance is based on several assumptions and estimates, including but not limited to metal prices, operational performance, grades, maintenance, input costs, exchange rates, political and social situation, and proactive protocols to mitigate the spread of COVID-19 in all our operations and projects.

Mining segment

Main products

Metal contained
(in concentrate)
2022e 2023e 2024e
Zinc kt 287 318 330 375 331 383
Cerro Lindo 81 86 68 80 75 82
El Porvenir 49 53 54 63 34 42
Atacocha 8.5 9.4 9.2 10 13 19
Vazante 118 127 130 144 131 143
Morro Agudo 16 19 19 21 17 20
Aripuanã 14 23 51 56 60 77
Copper kt 28 35 37 40 35 37
Cerro Lindo 26 33 31 32 30 32
El Porvenir 0.3 0.3 0.4 0.4 0.3 0.4
Aripuanã 1.6 2.3 5.4 6.9 4.2 4.4
Lead kt 46 55 63 71 46 58
Cerro Lindo 11 12 7.6 10 10 11
El Porvenir 15 18 19 22 6.6 10
Atacocha 10 11 11 12 4.7 6.8
Vazante 1.0 1.2 1.3 1.5 1.2 1.6
Morro Agudo 4.3 4.8 5.8 6.4 4.3 5.0
Aripuanã 5.0 7.7 19 20 19 24
Silver  MMoz 8.6 10 10 11 7.8 9.4
Cerro Lindo 3.9 4.1 3.3 3.7 3.9 4.0
El Porvenir 3.1 3.6 3.3 3.9 1.3 2.4
Atacocha 1.0 1.1 1.0 1.1 0.5 0.7
Vazante 0.3 0.4 0.3 0.5 0.3 0.5
Aripuanã 0.3 0.5 1.5 1.7 1.7 1.8

 

Smelting sales   2022e 2023e 2024e
Metal kt 565 590 580 605 580 605
Zinc metal 528 551 542 565 542 565
Zinc oxide 37 39 38 40 38 40

 

2022 Cash costs

Cash costs for 2022 are based on several assumptions, including but not limited to:

  • Production volumes;
  • Commodity prices (Zn: US$1.36/lb, Cu: US$4.22/lb, Pb: US$1.00/lb, Ag: US$25.2/oz, Au: US$1,799/oz);
  • Foreign exchange rates (BRL/USD: 5.50 and Soles/USD: 4.02); and
  • 2022 zinc treatment charges (“TCs”) of US$165/t concentrate.
Cash Cost
(US$/lb)
2022e
Mining Cash Cost ¹ 0.23
Cerro Lindo (0.41)
El Porvenir 0.43
Atacocha (0.03)
Vazante 0.51
Morro Agudo 0.86
Smelting Cash Cost¹ 1.15
Cajamarquilla 1.07
Três Marias 1.22
Juiz de Fora 1.29

¹C1 Weighted Cash cost net of by-products credits is measured with respect to zinc sold per mine.

²C1 Weighted Cash cost net of by-products credits is measured with respect to zinc sold per smelter. 

  • Mining: In 2022, consolidated mining cash cost is expected to increase year-over-year primarily due to inflationary pressures impacting third-party services, logistics, and consumable costs; which should be partially offset by higher by-product credits primarily in our Peruvian mines and costs reductions and operational efficiency initiatives.
  • Smelting: In 2022, consolidated smelting cash costs are expected to increase year-over-year primarily due to inflation and higher energy costs, which should be partially offset by higher by-product credits.

2022 CAPEX

In 2022, CAPEX guidance is US$385 million and reflects inflationary cost pressures on several inputs such as third-party contracts, equipment, and logistics, among others.

The total estimated CAPEX for the Aripuanã project has been revised from US$575-595 million to US$625 million. We estimate a final implementation investment of US$59 million in 2022.

Sustaining investments are expected to total US$256 million, with smelting accounting for approximately US$75 million and mining accounting for US$180 million, including US$42 million from Aripuanã. Health, safety and environmental (“HSE”) expenses are forecasted to US$36 million.

 

CAPEX
(US$ million)
    2022 Guidance
Expansion projects 75
Aripuanã 59
Others¹ 16
Non Expansion  310
Sustaining (2) 256
HSE 36
Others (3) 18
TOTAL 385

¹Including Magistral and Bonsucesso FEL3 studies, Vazante deepening and Aripuanã.

²Investments in tailing dams are included in sustaining expenses.

³Modernization, IT and others.

2022 Exploration & Project Evaluation and Other Expenses

Other operating expenses
(US$ million)
2022 Guidance
Exploration 64
Mineral exploration 43
Mineral rights 8
Sustaining (mine development) 13
Project Evaluation 18
Exploration & Project Evaluation 82
Other 18
Technology 12
Communities 5

Note: Exploration and project evaluation expenses consider several stages of development, from mineral potential definition, R&D, and subsequent scoping and pre-feasibility studies (FEL1 and FEL2).

In 2022, we plan to invest US$64 million in exploration. Our exploration expense guidance of US$43 million relates mainly to greenfield projects on exploration phase and brownfield projects, which are the exploration of orebody targets at our operations. Our project evaluation expense guidance of US$18 million includes projects from both mining and smelting segments, in FEL1 & FEL2 stages. In addition, we expect to invest US$12 million to improve our current operations and US$5 million to continue contributing to the social and economic development of our host communities.