Nexa Resources cuts its zinc production guidance by 10,000mt due to suspension of mining at Extremo Norte and lower output from Atacocha in the first quarter (Q1, January-March), according to the company’s earnings release. Production guidance for copper and lead remains changed, along with the guidance for sales, cash cost and investments.
Increasing COVID-19 cases in Brazil and Peru are a cause of concern amid low vaccination rates, stated CEO Tito Martins in the release. The company is complying with safety protocols to curb the spread of the virus in their facilities.
In Q1, zinc production was 77,000mt, up marginally by 0.7pc from the prior-year quarter, which was marred by COVID-19-related operating restrictions in Peru. Zinc production rose due to higher output in Cerro Lindo and El Porvenir compared to the prior year.
The company’s metal sales rose to 148,000mt, up by 2pc from a year ago supported by strong demand in domestic markets.
| Nexa’s consolidated mine production in Q1 | |||||
|---|---|---|---|---|---|
| Unit: mt | Q12021 | Q22021 | Change YoY | Q42021 | Change QoQ |
| Zinc | 77.4 | 76.9 | 0.7% | 91.9 | -15.8% |
| Copper | 7.9 | 7.0 | 12.6% | 8.5 | -7.1% |
| Lead | 10.4 | 9.4 | 10.5% | 12.5 | -17.5% |
Highlights
* Nexa’s consolidated net revenue rose to $603mn in Q1 from $442mn a year ago on higher metal prices and an increase in sales volumes. Net income was $32mn in Q1.
* Adjusted EBITDA increased to $180mn from $44mn a year ago and $167mn in Q4
* Mining cash cost was $0.24/lbs from $0.52/lbs in Q1 2020, aided by lower operating costs and increased byproducts credits. Compared to the prior quarter, mining cash cost fell by 27pc.
*Smelting cash C1 in Q1 was US$1.00/lbs from $0.80/lbs in Q1 2020 on higher zinc prices and an increase in operating costs due to higher production. From Q4, smelting cash cost rose by 8pc on higher zinc prices and lower byproducts credits.
* In Q1, incremental costs related to the pandemic rose to $4.2mn but was partially offset by other costs cuts.