🧾 What This Document Is

This is a press release filed with the SEC to announce that Ero Copper has officially submitted a detailed Technical Report for its Furnas Copper-Gold Project. Think of this report as the project's comprehensive "master plan" and feasibility study. It supports earlier announcements and is required by Canadian securities rules to ensure all technical and economic claims are verified by independent experts.

👉 Why it matters: For investors, this report is the primary source of truth for the project's potential value, costs, and risks. It's the deep dive that backs up the headline numbers.

🏢 What The Company Does

Ero Copper is a Brazil-focused mining company that digs up copper and gold. They already run two copper mines and one gold mine in different states in Brazil. Furnas is their big new project they're trying to develop, which they don't fully own yet—they're in the process of buying a 60% stake from the mining giant Vale.

👉 In simple terms: They are an established operator in Brazil, looking to add a major new copper-gold mine to their portfolio.

💰 Financial Highlights (The Big Numbers)

The report's economic analysis paints a picture of a large, profitable project over a long timeline. All figures are in U.S. Dollars.

Project Life & Output:

• Mine Life: 24 years
• Total Copper to be produced: ~2.7 billion pounds
• Total Gold to be produced: ~1.9 million ounces

Economic Viability (After-Tax):

• Net Present Value (NPV @ 8%): $2.04 billion (This is the project's value in today's dollars)
• Internal Rate of Return (IRR): 27% (A measure of profitability; anything over 20% is generally considered strong)
• Payback Period: ~3.1 years (Time to recoup the initial investment)

Key Costs:

• Initial Capital Cost (to build it): $1.28 billion
• Total Sustaining & Expansion Capital (over life of mine): $1.44 billion
• Closure Cost Estimate: $74 million
• Cash Cost: $0.30 per pound of copper (A key efficiency metric; lower is better)

🚀 The Project Plan: A Giant New Mine

The plan is to build a massive, combined open-pit and underground mine. It will process 37,000 tonnes of rock per day at full capacity.

• Phase 1: Start with three open pits, beginning production in about 3 years.
• Phase 2: Add two underground mines starting in Year 3 and Year 12 to sustain production.
• Processing: Use a conventional "flotation" method to separate copper, gold, and silver into a concentrate, which will be sold to smelters.

👉 Why it matters: The phased approach manages risk and capital. Starting with open-pit mining gets cash flowing earlier to help fund the more complex underground mining later.

📦 Financial Position & Deal Structure

Ero doesn't own Furnas yet. They have a "definitive earn-in agreement" with Vale. This means Ero must fund all exploration and development costs over 5 years to earn a 60% interest. In return, Vale gets to keep a 40% stake and gets an "11% free carry" on future construction costs (meaning Ero pays 89% of the build-out, and Vale pays 11% for their share).

🔮 What's Next: The Path to Production

The report is a Preliminary Economic Assessment (PEA), which is an early-stage study. The experts recommend a two-phase $35M to $60M program to advance the project to the more detailed Pre-Feasibility Study stage. This next phase will include more drilling, tests, and engineering to reduce risks.

⚖️ Big Picture: Strengths & Risks

👍 Strengths:

• Size & Grade: A very large mineral resource with good copper, gold, and silver grades.
• Location: In the proven Carajás Mineral Province in Brazil, with existing infrastructure and mining expertise.
• Economics: Strong projected returns (27% IRR) and a relatively quick payback period.
• Synergies: Potential to share services and knowledge with Ero's existing nearby operations.

⚠️ Major Risks:

• Geological Complexity: The deposit is structurally tricky, meaning grade and ore boundaries are uncertain.
• Permitting Hasn't Started: The environmental licensing process is in its infancy. Delays could push back the entire project.
• Cost Estimate Accuracy: The capital cost estimate is "Class 5," meaning it has a very wide potential range (from -50% to +100%).
• Market Risks: Future profitability depends heavily on copper price, followed by gold price and operating costs.

🔍 The Details: Metallurgy & Resources

• Metallurgical Recoveries: From lab tests, they expect to recover about 90% of copper, 75% of gold, and 71% of silver from the mined rock.
• Mineral Resource: The project contains an Indicated Resource of 2,277 million tonnes @ 0.59% copper, 0.31 g/t gold, and 1.66 g/t silver. This is the higher-confidence portion used for the mine plan.

🧠 The Analogy

Building the Furnas mine is like constructing a major factory to turn raw ore into valuable metal. The PEA report is the detailed business plan and architectural blueprint. It shows the factory can be very profitable, but it also highlights that the land permits are pending, the construction cost could vary widely, and the final product's price (copper) is out of their control. The next step is to hire more engineers (fund the Pre-Feasibility Study) to refine the blueprints and confirm the building site is solid.

📇 Key Contacts & People

• Farooq Hamed, VP, Investor Relations
  • Email: [email protected]
• Qualified Persons (Authors of the Technical Report):
  • Mr. Cid Monteiro, FAusIMM
  • Dr. Enrique Rubio, PhD
  • Mr. Luis Bernal
  • Mr. Ricardo Miranda
  • Mr. João Estevão Junior, MAIG

🧩 Final Takeaway

Ero Copper's Furnas Project is a large, economically attractive copper-gold mine in a prime location, but it's still in the early "blueprint" phase. The next 1-2 years are critical for de-risking the geology, securing permits, and refining the massive capital cost estimate before a final investment decision can be made.