Ero Copper (ERO) AI Stock Analysis

Company Guidance

Ero reiterated it is positioned to meet full‑year copper guidance with stronger H2 production and sequentially lower consolidated C1 costs (Q2 copper production 17,315 tonnes at consolidated C1 $2.42/lb); Xavantina is expected to deliver materially higher mining rates, throughput and mine gold production in H2 (≈65% of full‑year mine gold in H2) though mine gold is now expected at the low end of prior guidance, with updated full‑year Xavantina mined gold C1 of $1,100–$1,350/oz and AISC of $2,200–$2,700/oz. Consolidated capex guidance was increased $10M to $285–$330M to include a new power line (potential incremental capex FX/inflation impact ~$20–$25M, largely offset by hedges); the hedge program protects ~70% of consolidated FY BRL exposure at an average floor of BRL 5.54, delivered $13M of realized gains in Q2 ($20M H1) and is expected to add another $20–$25M (full‑year ~$40–$45M) assuming BRL 5.10. Management estimates persistent currency/inflation could add ~ $0.10/lb to consolidated copper C1 and ~ $100/oz to Xavantina mined gold C1. Financially, Q2 cash flow from operations was ≈$138M and adjusted EBITDA $144M (H1 cash flow ≈$231M, H1 adj. EBITDA $269M), net debt was ≈$453M (down ~$38M in Q2 and ≈$100M over 18 months) with net‑debt/adj‑EBITDA ≈0.8x, liquidity ≈$182M (cash ≈$102M + revolver availability ≈$80M), and $60M repaid on the revolver in 2026 with ~$95M remaining.