Nexa | Guidance 2024-2026
Guidance is based on several assumptions and estimates and is subject to the continuous evaluation of several factors, including but not limited to metal prices; operational performance; maintenance and input costs; and exchange rates.
Nexa will continue to monitor risks associated with global supply chain disruptions, which could be exacerbated, among other factors, by the ongoing Russia-Ukraine war, and the Israel-Hamas conflict, unusual weather conditions, the global recession, and its potential impact on the demand for our products, inflationary cost pressure, metal prices, and community protests, and changes to the political situation or regulatory frameworks in the countries in which we operate that could affect our production levels and our costs. Refer to “Risks and Uncertainties” and “Cautionary Statement on Forward-Looking Statements” for further information
Production and Sales
| Metal contained (in concentrate) |
2024e | 2025e | 2026e | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Zinc | kt | 323 | – | 381 | 326 | – | 381 | 330 | – | 378 | |||
| Cerro Lindo | 73 | – | 86 | 78 | – | 86 | 82 | – | 94 | ||||
| El Porvenir | 51 | – | 57 | 59 | – | 72 | 43 | – | 50 | ||||
| Atacocha | 8 | – | 9 | 9 | – | 11 | 17 | – | 20 | ||||
| Vazante | 130 | – | 148 | 122 | – | 139 | 121 | – | 140 | ||||
| Morro Agudo | 18 | – | 23 | – | – | – | – | – | – | ||||
| Aripuanã | 42 | – | 57 | 58 | – | 72 | 67 | – | 75 | ||||
| Copper | kt | 30 | – | 35 | 28 | – | 35 | 24 | – | 29 | |||
| Cerro Lindo | 24 | – | 28 | 24 | – | 28 | 19 | – | 23 | ||||
| El Porvenir | 0.2 | – | 0.3 | 0.4 | – | 0.5 | 0.3 | – | 0.4 | ||||
| Aripuanã | 5.7 | – | 7.3 | 4.1 | – | 5.9 | 4.4 | – | 6.4 | ||||
| Lead | kt | 66 | – | 82 | 67 | – | 78 | 71 | – | 83 | |||
| Cerro Lindo | 11 | – | 13 | 12 | – | 13 | 9.5 | – | 11 | ||||
| El Porvenir | 23 | – | 28 | 23 | – | 24 | 24 | – | 28 | ||||
| Atacocha | 11 | – | 12 | 12 | – | 15 | 15 | – | 17 | ||||
| Vazante | 1.0 | – | 1.4 | 1.0 | – | 1.2 | 1.0 | – | 1.1 | ||||
| Morro Agudo | 4.3 | – | 6.6 | – | – | – | – | – | – | ||||
| Aripuanã (Updated) | 16 | – | 20 | 19 | – | 24 | 22 | – | 25 | ||||
| Silver (Updated) | MMoz | 11 | – | 13 | 11 | – | 13 | 11 | – | 13 | |||
| Cerro Lindo | 4.0 | – | 4.2 | 3.7 | – | 4.0 | 2.6 | – | 3.0 | ||||
| El Porvenir | 4.6 | – | 5.4 | 4.3 | – | 4.7 | 4.8 | – | 5.7 | ||||
| Atacocha | 1.1 | – | 1.2 | 1.2 | – | 1.5 | 1.2 | – | 1.4 | ||||
| Vazante | 0.3 | – | 0.5 | 0.3 | – | 0.4 | 0.4 | – | 0.4 | ||||
| Aripuanã (Updated) | 1.0 | – | 1.5 | 1.5 | – | 1.9 | 1.7 | – | 2.2 | ||||
For the forecasted periods, consolidated average zinc head grade is expected to be in the range of 2.86% and 3.18%, consolidated average copper head grade is expected to be in the range of 0.26% and 0.32%, and consolidated average lead head grade is expected to be in the range of 0.67% and 0.77%.
| Smelting sales | 2024e | 2025e | 2026e | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Metal | kt | 580 | – | 605 | 580 | – | 605 | 580 | – | 605 |
| Zinc metal | 545 | – | 565 | 545 | – | 565 | 545 | – | 565 | |
| Zinc oxide | 35 | – | 40 | 35 | – | 40 | 35 | – | 40 | |
For the forecasted periods, the smelters are expected to operate at normal levels and sales are expected to be similar to production levels, as these estimates do not assume the resale of material from third parties. Metal sales volume at the midpoint of the guidance range in 2024 is estimated to be slightly higher compared to 2023 and remain at similar levels for 2025-2026.
2024 Cash costs
Cash costs for 2024 are based on several assumptions, including but not limited to:
- Zinc and other metals production volumes;
- Commodity prices (Zn: US$1.13/lb, Cu: US$3.76/lb, Pb: US$0.95/lb, Ag: US$23.5/oz, Au: US$1,945/oz);
- Foreign exchange rates (BRL/USD: 4.90 and Soles/USD: 3.67); and
- 2024 zinc treatment charges (“TCs”) of US$174/t concentrate.
| Mining operating costs | Cost ROM (US$/t) 2024e |
Cash Cost (US$/lb) 2024e |
|||||
|---|---|---|---|---|---|---|---|
| Mining Cash Cost¹ | 44.0 | – | 51.4 | 0.23 | – | 0.42 | |
| Cerro Lindo | 41.0 | – | 45.0 | (0.22) | – | 0.03 | |
| El Porvenir | 58.4 | – | 71.6 | (0.02) | – | 0.25 | |
| Atacocha | 34.3 | – | 43.2 | (0.27) | – | (0.02) | |
| Vazante | 55.8 | – | 63.6 | 0.52 | – | 0.60 | |
| Morro Agudo | 27.9 | – | 40.0 | 0.80 | – | 1.24 | |
¹C1 Weighted Cash cost net of by-products credits is measured with respect to zinc sold per mine.
Note: Consolidated cash costs do not include Aripuanã. Given we are expecting Aripuanã’s ramp-up to be completed in mid-2024, we are not providing guidance at this time.
- Mining: In 2024, consolidated run-of-mine mining costs at mid-range of the guidance are expected to increase 5% year-over-year, primarily driven by Cerro Lindo and Cerro Pasco, partially offset by Morro Agudo.
| Smelting operating costs | Conversion Cost (US$/lb) 2024e |
Cash Cost (US$/lb) 2024e |
|||||
|---|---|---|---|---|---|---|---|
| Smelting Cash Cost2 | 0.29 | – | 0.32 | 1.07 | – | 1.18 | |
| Cajamarquilla | 0.29 | – | 0.32 | 1.02 | – | 1.13 | |
| Três Marias | 0.25 | – | 0.27 | 1.12 | – | 1.23 | |
| Juiz de Fora | 0.38 | – | 0.42 | 1.17 | – | 1.28 | |
²C1 Weighted Cash cost net of by-products credits is measured with respect to zinc sold per smelter.
- Smelting: In 2024, conversion costs are expected to be similar to 2023, mainly driven by slightly higher production and sales volumes, partially offset by higher variable costs in Cajamarquilla, driven mainly by higher expected energy cost. Consolidated smelting cash costs in 2024 are expected to increase year-over-year, primarily due to lower TCs.
2024 CAPEX
In 2024, CAPEX guidance is US$311 million. Sustaining investments are expected to total US$261 million, with mining accounting for US$200 million, including US$39 million at Aripuanã and smelting accounting for US$61 million.
In the mining segment, the majority of sustaining capital expenditures are US$103 million for underground mine development, US$20 million for El Porvenir’s Dam elevation project, US$19 million for overall maintenance, US$18 million for tailings storage facility (“TSF”), US$6 million for maintenance of heavy mobile equipment (“HME”), and US$3 million for improvement of Cerro Pasco’s dam pumping system.
In the smelting segment, the majority of sustaining capital expenditures are US$36 million for overall maintenance, US$14 million for roaster maintenance, US$7 million for assets improvement and US$4 million for TSF.
Health, safety and environmental (“HS&E”) capital expenses are forecasted to be US$24 million.
Other non-expansion capital expenses are forecasted to be US$21 million, including non-recurring IT expenses related to the Enterprise Resource Planning (“ERP”) modernization program of US$7.5 million in 2024.
| CAPEX (US$ million) |
2024 Guidance | |
|---|---|---|
| Expansion projects (1) | 4 | |
| Non Expansion | 307 | |
| Sustaining (2) | 261 | |
| HSE | 24 | |
| Others (3) | 21 | |
| TOTAL | 311 |
(¹) Includes Vazante deepening (US$2.4 million), among other several projects to improve operational performance.
(²) Investments in tailing dams are included in sustaining expenses.
(³) Modernization, IT and others.
2024 Exploration & Project Evaluation and Other Expenses
As part of our long-term strategy, we continued to maintain our efforts to replace and increase mineral reserves and resources. We expect in the future to continue advancing our exploration activities, primarily focusing on identifying new ore bodies and upgrading resources classification through infill drilling campaigns.
In 2024, we plan to invest US$58 million in exploration. Our mineral exploration expense guidance of US$42 million relates mainly to greenfield and brownfield projects.
Our project evaluation expense guidance of US$14 million includes the project to extend the life of the disposal facility of Três Marias smelter. The remaining expenses are for corporate IT, potential growth projects and various projects across our business units.
In addition, we expect to invest US$4 million in technology, related to projects to improve our current operations and US$17 million to continue contributing to the social and economic development of our host communities.
| Other operating expenses (US$ million) |
2024 Guidance |
||||||
|---|---|---|---|---|---|---|---|
| Exploration | 58 | ||||||
| Mineral exploration | 42 | ||||||
| Mineral rights | 6 | ||||||
| Sustaining (mine development) | 10 | ||||||
| Project Evaluation | 14 | ||||||
| Exploration & Project Evaluation | 72 | ||||||
| Other | 21 | ||||||
| Technology | 4 | ||||||
| Communities | 17 | ||||||
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).