Ero Copper signs earn-in agreement for 60% interest in Furnas Copper Project

Ero Copper has entered into a binding term sheet with Salobo Metais, part of the Vale Base Metals business, to advance its Furnas copper project in the Carajas Mineral Province in Para State, Brazil. The Term Sheet contemplates Ero Copper earning a 60% interest in the Project upon completion of several exploration, engineering and development milestones over a period of five years from the execution of a definitive earn-in agreement. In exchange for its 60% interest, Ero will solely fund a phased exploration and engineering work program during the earn-in period and grant VBM up to an 11.0% free carry on future Project construction capital expenditures. The Furnas Project covers 2,400 hectares within fifteen kilometers of regional infrastructure. To earn a 60% interest in the Project, the Term Sheet requires Ero to complete three phases of work: Ero to conduct a minimum of 28,000 meters of exploration drilling and produce a scoping study within 18 months of signing a definitive earn-in agreement, an additional minimum of 17,000 meters of exploration drilling and produce a pre-feasibility study within 18 months of completing Phase 1, and an additional minimum of 45,000 meters of exploration drilling, unless otherwise mutually agreed, and produce a definitive feasibility study within 24 months of completing Phase 2. Following the completion of a DFS, subject to customary technical review periods, and with Ero positive investment approval, the parties will enter into a joint venture agreement whereby VBM will transfer 60% of the equity interest in the Project to Ero, and Ero will grant VBM a “free carry” on certain capital expenditures related to Project development.