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Nexa Resources S.A. (NYSE: NEXA) is a prominent player in the global non-ferrous metals market, primarily focusing on zinc production while also generating copper, silver, and gold as byproducts. With over 65 years of expertise in the industry, Nexa operates as a low-cost, integrated producer, maximizing efficiency through its vertically integrated operations.
Nexa's business is divided into two main segments: Mining and Smelting. The Mining segment involves mineral exploration and the production of zinc and copper concentrates. This segment is currently driven by five long-life mines located in the central Andes region of Peru and the state of Minas Gerais in Brazil. Their sixth mine, Aripuanã, is being ramped up in the state of Mato Grosso, Brazil.
The Smelting segment includes the refining and recovery of zinc metal from concentrates and other secondary materials. Nexa operates three smelters: two in the state of Minas Gerais, Brazil, and one in Cajamarquilla, Peru, which boasts the title of the largest smelter in the Americas. This segment generates the majority of the company's revenue.
Nexa Resources continues to make strides in sustainability and innovation. In March 2024, they announced the suspension of operations at the Morro Agudo Complex in Brazil, aligning with their strategy to optimize their portfolio and improve cash flow. This decision underscores their commitment to disciplined capital allocation and long-term value maximization for shareholders.
The company is also focused on enhancing its operational efficiency and safety standards. Despite challenging market conditions and the recent fatalities at the El Porvenir and Vazante mines, Nexa remains committed to achieving zero fatalities and improving safety protocols. Their focus on high performance is propelled by inspirational leadership and significant investment in the development of their talented workforce.
Geographically, Nexa has a diverse presence, operating in countries such as Brazil, Peru, the United States, Switzerland, Japan, Argentina, South Korea, Colombia, Vietnam, and Malaysia, among others. This extensive reach allows them to effectively navigate the complexities of the global metals market.
Nexa's forward-looking strategies include robust mineral exploration programs aimed at identifying new mineralized zones in their existing mines and expansion projects. They plan to conduct over 66,000 meters of drilling in 2024, focusing on both brownfield and greenfield targets, to ensure sustained growth and resource replenishment.
In terms of financial performance, Nexa reported solid operating results for the first quarter of 2024, despite lower global zinc prices and other macroeconomic challenges. Their disciplined approach to capital expenditure and portfolio optimization ensures they continue to deliver value to stakeholders, reinforcing their position as a leading and sustainable investment option in the mining industry.
Nexa Resources announced its first quarter 2022 drilling and assay results, achieving 27,721 meters of drilling across multiple sites. The exploration program, which aims for a total of 123,300 meters in 2022, faced initial challenges due to the rainy season. Key highlights include significant mineral intersections at Cerro Lindo and El Porvenir, with results showing high-grade mineralization. Ongoing efforts at Aripuanã and Morro Agudo aim to upgrade Mineral Resources classification. The company anticipates further production ramp-up starting in the second quarter.
Nexa Resources has announced that its Vazante operations have resumed full capacity after overcoming earlier disruptions caused by heavy rainfall. Production had dipped to 60% but showed gradual recovery, averaging 70% in March. Current throughput stands at 4.6 ktpd, with zinc production guidance for 2022 maintained at 118-127kt. Nexa is a major integrated zinc producer, operating five underground mines and three smelters across Latin America. The company aims to sustain its position as a top global zinc producer.
Nexa Resources has resumed operations at its Atacocha San Gerardo open pit mine in Peru, following the end of protests by the Machcan community. Full operational capacity is expected within two days, with an estimated zinc production loss of 0.3kt anticipated to be recovered in the upcoming months. The company's 2022 production guidance remains unchanged. Nexa emphasizes its commitment to social development and ongoing dialogue with local communities.
Nexa Resources announced its 2021 Year-End Mineral Reserves and Resources, showing a decrease in Proven and Probable Mineral Reserves from 106.1 million tonnes in 2020 to 97.0 million tonnes in 2021, primarily due to mining production depletion. The total for zinc equivalent also dropped from 5,584kt to 5,146kt. Despite limited exploration due to COVID-19 protocols, positive results from targeted drilling at El Porvenir may extend mine life in the medium-term. The company plans to continue its exploration strategy, focusing on brownfield and greenfield projects in 2022.
Nexa Resources has reported a temporary suspension of production at the Atacocha San Gerardo open pit mine due to illegal roadblocks from the Machcan community. Although mine production is currently affected, the company states there has not been a significant impact on overall production, as Atacocha contributes approximately 0.2kt of zinc weekly, which is less than 3% of its total output. Nexa remains focused on community engagement and dialogue to resolve the issue, with 2022 production guidance remaining unchanged.
Nexa Resources has filed its annual report on Form 20-F for the fiscal year ended December 31, 2021, with the U.S. SEC and on SEDAR in Canada. Shareholders can receive the complete audited financial statements upon request. Additionally, Nexa submitted an updated report on Mineral Reserves and Resources estimates as of December 31, 2021. The company, a leading integrated zinc producer, operates five mines in South America and is developing a sixth project. Nexa's mining report aligns with Canadian National Instrument 43-101 standards.
Nexa Resources has announced the early redemption of all outstanding 4.625% Senior Notes due March 28, 2022, with a total principal amount of US$ 128,470,000. The redemption price will be the greater of the principal amount or the discounted value of future payments, plus accrued interest. The company operates in mining and smelting, primarily producing zinc, with assets across Latin America. Nexa is one of the top five global zinc producers as of 2021. This decision is part of Nexa's strategy to manage its debt effectively.
Nexa Resources reported its financial results for Q4 and the full year 2021, achieving record-high adjusted EBITDA of US$704 million.
Fourth-quarter net revenue reached US$678 million, marking a 6.8% increase from the previous year. Zinc production was 81kt, a 12% decrease year-over-year. Full-year net revenue was US$2,622 million, a 34.4% increase from 2020.
Net income for Q4 was US$11 million, with earnings per share at US$0.01. The company expects a 5% decrease in zinc production for 2022 due to lower grades and production capacity reductions.
Nexa Resources has approved a US$50 million distribution, with US$44 million designated as a cash dividend of US$0.331275 per share and US$6 million as a special cash dividend of US$0.046258 per share for shareholders of record by March 11, 2022. Payments are scheduled for March 25, 2022. A 15% Luxembourg withholding tax applies to the cash dividend, but refunds may be possible. Nexa is a leading zinc producer operating in Latin America with significant mining and smelting assets.
Nexa Resources announced its 2021 exploration results, reporting 110,306 meters of exploratory drilling, achieving 99% of its planned operations. Key highlights include significant findings from the Cerro Lindo and Pasco Complex, with high-grade mineralization confirmed at several targets. Notable intersections include 8.7 meters with 4.67% ZnEq and various significant values from the El Porvenir area. The company aims for continuous expansion in resources, particularly at Hilarión and Aripuaná, targeting growth in 2022.
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