Nexa Resources Perú A : Otros Hechos De Importancia

Earnings Release - 2Q22

Nexa Resources Perú S.A.A. and Subsidiaries

Nexa Peru Reports Second Quarter Results including Adjusted

EBITDA of US$109 Million

Lima, July 28, 2022 - Nexa Resources Peru S.A.A. and subsidiaries ("Nexa Peru", or "Company") announces today its results for the three months ended June 30, 2022. This Earnings Release should be read in conjunction with the audited consolidated financial statements of Nexa Peru and the notes for the financial quarter ended June 30, 2022. This document contains forward- looking statements.

2Q22 Highlights | Operational and Financial

• Consolidated net revenues reached US$260 million in the second quarter compared with US$228 million a year ago due to higher base metals average price. Compared to 1Q22, net revenues increased by 7% following higher volumes and higher zinc prices. In 1H22, net revenues were US$502 million, up 22% over 1H21 also because of higher prices.
• Zinc production of 38kt in the quarter decreased by 13% compared to 2Q21 primarily driven by an expected lower zinc average grade at Cerro Lindo. Compared to 1Q22, zinc production increased by 3%, due to higher treated ore volume. Zinc production totaled 75kt in the first six months of 2022.
• Adjusted EBITDA was US$109 million in 2Q22 compared with US$104 million in 2Q21 and US$109 million in 1Q22. In 1H22, Adjusted EBITDA totaled US$218 million compared to US$172 million a year ago.
• Mining cash cost1 in 2Q22 was negative US$0.31/lb compared with negative US$0.10/lb in 2Q21, mainly driven by higher by-products credits partially offset by higher operating costs, lower sales volume in Cerro Lindo and higher TCs. Compared to 1Q22, cash cost decreased by US$0.09/lb.
• Incremental costs related to COVID-19 in 2Q22 amounted to US$1.2 million in 2Q22 and US$3.2 in 1H22, and we expect them to last at least throughout 2022.
• Net income in 2Q22 was US$58 million and totaled US$113 million in 1H22. Net income attributable to Nexa's shareholders was US$57 million in 2Q22 and US$110 million in 1H22, which resulted in an earnings per share of US$0.04 and US$0.09, respectively.
• Net debt to Adjusted EBITDA for the second quarter stood negative at 0.50x compared to a negative 0.29x at the end of March 2022.
• Total cash increased US$74 million at June 30, 2022, from March, 2022 due to an increase of receivables mainly explained by higher zinc prices and sales volume compared to 1Q22. Our current available liquidity remains strong at US$185 million.

Firmado Digitalmente por:

1 Our cash cost net of by-products credits is measured with respect to zinc sold.

CLAUDIA PATRICIA TORRES

BELTRAN

Fecha: 28/07/2022 05:45:57 p.m.

Earnings Release - 2Q22

Nexa Resources Perú S.A.A. and Subsidiaries

Selected indicators

	US$ million										2Q22								1H22
			2Q22		1Q22		2Q21			vs.			1H22		1H21			vs.
	(except indicated otherwise)
										2Q21								1H21
	Treated ore (kt)	2,507.6	2,202.3	2,532.3		(1.0%)		4,709.9	4,818.1		(2.2%)
	Mining Production | contained in
	concentrate
	Zinc (kt)	37.9	36.7	43.5		(12.8%)		74.6	81.6		(8.6%)
	Copper (kt)	9.6	6.9	6.9		40.0%		16.5	14.8		11.5%
	Lead (kt)	12.4	10.9	10.1		22.7%		23.3	18.8		23.6%
	Silver (kt)	2,478.0	2,168.4	2,120.1		16.9%		4,646.4	4,071.4		14.1%

Zn Eq production (kt)

Cash Cost RoM (US$/t)

Cash Cost Net of By-products (US$/t)

Consolidated Net Revenue

Adjusted EBITDA

101.5	87.9	93.5	8.6%	189.5	181.7	4.3%
42.4	45.6	39.9	6.1%	43.9	40.2	9.2%
(687.4)	(197.6)	(225.6)	204.7%	(443.1)	(136.6)	224.3%
259.9	242.2	228.4	13.8%	502.1	413.0	21.6%
108.6	109.4	104.4	4.1%	218.0	171.5	27.1%

Adj. EBITDA margin (%)	41.8%	45.2%	45.7%	(3.9p.p.)	43.4%	41.5%	1.9p.p.
Sustaining (1)	15.7	14.9	21.3	(26.3%)	30.6	36.7	(16.7%)
Expansion	0.6	0.9	1.4	(60.0%)	1.5	2.6	(44.5%)
Others (2)(3)	0.1	0.4	0.3	(80.7%)	0.4	0.3	58.4%
Capital Expenditures	16.3	16.1	23.0	(29.0%)	32.5	39.6	(18.0%)
Liquidity and Indebtedness
Cash and cash equivalents	185.1	111.1	321.5	(42.4%)	185.1	321.5	(42.4%)
Net debt	(176.2)	(100.0)	(67.0)	163.0%	(176.2)	(67.0)	163.0%
Net debt / LTM Adj. EBITDA (x)	(0.50)	(0.29)	(0.23)	115.1%	(0.50)	(0.23)	115.1%

1. Includes HSE and investments in tailings dams.
2. Modernization, IT and others.
3. The negative amount refers mainly to tax credits.

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Earnings Release - 2Q22

Nexa Resources Perú S.A.A. and Subsidiaries

Consolidated Financial Performance

Income Statement

													2Q22									1H22 vs.
	US$ million			2Q22			1Q22			2Q21			vs.			1H22			1H21
															1H21
													2Q21
	Net Revenue	259.9		242.2		228.4		13.8%		502.1		413.0		21.6%
	Cost of sales	(144.3)		(135.7)		(125.6)		14.9%		(279.9)		(244.8)		14.4%
	Selling and administrative	(10.2)		(7.9)		(6.7)		51.3%		(18.1)		(14.0)		29.2%
	expenses
	Mineral exploration and project	(12.4)		(6.6)		(10.6)		17.4%		(19.0)		(18.8)		1.0%
	evaluation
	Expenses on temporary suspension	(0.2)		(0.9)		(0.5)		(62.7%)		(1.1)		(0.9)		18.2%
	of underground mine
	Other income and expenses,	(3.8)		(0.8)		0.3		-		(4.6)		(0.3)		1,497.2%
	net
	Net Financial Result	(2.3)		(12.6)		(1.9)		19.8%		(14.9)		(1.0)		1,358.8%
	Financial income	2.7		2.5		2.7		0.5%		5.2		5.6		(6.4%)
	Financial expenses	(5.3)		(8.8)		(5.6)		(5.45%)		(14.1)		(11.4)		24.0%
	Other financial items, net	0.3		(6.3)		1.0		(73.0%)		(6.0)		4.8		-
	Depreciation and amortization	19.6		19.0		19.1		2.8%		38.6		37.2		3.8%
	Adjusted EBITDA	108.6		109.4		104.4		4.1%		218.0		171.5		27.1%
	Adj. EBITDA Margin	41.8%		45.2%		45.7%			(3.9pp)	43.4%		41.5%			1.9pp
	Income Tax	(28.6)		(23.4)		(26.8)		6.4%		(52.0)		(38.2)		36.3%
	Net Income (Loss)	58.2		54.4		56.5		2.9%		112.6		95.1		18.4%
	Attributable to owners of the	57.1		53.3		54.7		4.4%		110.4		94.0		17.4%
	Controlling entity
	Attributable to non-controlling	1.0		1.1		1.8		(43.9%)		2.1		1.0		104.5%
	interests
	Avg # of shares (in '000)	1,272,108		1,272,108		1,272,108		-		1,272,108		1,272,108		-
	EPS attributable to Nexa	0.04		0.04		0.04		4.4%		0.09		0.07		17.4%
	shareholders (in US$)

Net Revenues

In 2Q22, net revenues were US$260 million, 14% higher year-over-year, primarily due to higher average prices. The LME average prices for zinc and lead were up by 34% and 3%, respectively, while copper prices were down by 2%, compared to the same period of 2021.

Compared to 1Q22, net revenues increased by 7% primarily due to higher volumes and zinc price. The LME average prices for zinc were up by 4%, while copper and lead prices were down by 5% and 6%, respectively - for more information, refer to the "Market Scenario" section.

In the first six months of 2022, net revenues of US$502 million were up 22% compared to 1H21, primarily driven by higher metal prices. During the period, the LME average zinc, copper and lead prices increased by 35%, 7% and 9% respectively, compared to 1H21.

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Earnings Release - 2Q22

Nexa Resources Perú S.A.A. and Subsidiaries

COVID-19 expenses

Following the best market practices, protocols to mitigate the spread of COVID-19 were implemented during 2020 in all our operations and remain in place. We continue working on three main fronts: Health, Safety and People; Business Continuity; and Stakeholders.

In 2Q22, COVID-19 related costs totaled US$1.2 million and are included in the cost of sales and in operating expenses. In 1H22, COVID-19 expenses amounted US$3.2 million.

SG&A

In 2Q22, selling, general and administrative ("SG&A") expenses amounted to US$10 million, up 51% compared to 2Q21, mainly driven by sales expenses, consulting services and employee benefits; and 30% up compared to 1Q22 due to higher expenses in third party services.

In 1H22, SG&A expenses amounted to US$18 million, up 29% from the same period of 2021 driven by higher third-party services and employee benefits.

Adjusted EBITDA

In 2Q22, Adjusted EBITDA was US$109 million compared to US$104 million in the same period for the prior year. The main factors that contributed to this performance were (i) the positive US$18 million volume effect related to higher sales volume of lead and copper in Cerro Lindo, and zinc and lead in El Porvenir and Atacocha, respectively; (ii) the positive US$0.3 million net price effect related to higher metal prices (zinc and lead); and (iii) the positive US$10 million by-product effect associated to higher silver and gold contained in lead concentrates due to higher sales volume. These factors were partially offset by (iv) higher operating costs due to higher royalties in Cerro Lindo, higher workers' participation in all 3 units, higher expenses in maintenance services and higher investment in exploration for a total aggregate amount of US$19 million; (vi) and the negative impact of US$5 million mainly related to higher communities' expenses.

Compared to 1Q22, Adjusted EBITDA decreased by 0.7% to US$109 million. The main factors that contributed to this were (i) the negative US$21 million price net effect associated to lower metal prices (lead and copper); (ii) higher fixed and variable costs amounted US$4 million mainly related to higher workers' participation in Cerro Lindo and El Porvenir; (iii) the negative variation of US$4 million due to higher mineral exploration; and (iv) the negative impact of US$3 million mainly related to higher communities' expenses. These factors were partially offset by (v) the positive impact of US$21 million in volume related to higher sales volume of lead and copper in Cerro Lindo and higher sales volume

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Earnings Release - 2Q22

Nexa Resources Perú S.A.A. and Subsidiaries

of zinc in El Porvenir; and (vi) the positive impact of US$11 million in by-products related to higher silver contained in lead and copper.

Cash Cost Net of By-products2

					2Q22			1H22
Cash Cost Net of By-products	2Q22	1Q22	2Q21	vs.	1H22	1H21	vs.
					2Q21			1H21
Consolidated	US$/lb	(0.31)	(0.09)	(0.10)	204.7%	(0.20)	(0.06)	224.3%
Consolidated	US$/t	(687.4)	(197.6)	(225.6)	204.7%	(443.1)	(136.6)	224.3%
Cerro Lindo	US$/t	(1,311.1)	(745.5)	(648.2)	102.3%	(1,025.4)	(587.6)	74.5%
El Porvenir	US$/t	687.2	821.9	933.6	(26.4%)	753.4	1,126.8	(33.1%)
Atacocha	US$/t	(2,828.0)	(655.0)	(1,469.0)	92.5%	(1,792.4)	(2,108.6)	(15.0%)

Cash cost net of by-products in 2Q22 was negative by US$0.31/lb (or US$687/t) compared to a negative US$0.10/lb (or US$226/t) in 2Q21. This decrease was primarily driven by (i) higher byproducts credits due to higher copper volumes in Cerro Lindo and lead volumes in El Porvenir and Atacocha; partially offset by (ii) higher operating costs; (iii) lower zinc sales volume; (iv) and higher TCs.

Compared to 1Q22, cash cost decreased by US$0.22/lb primarily driven by (i) higher by-products credits; (ii) lower operating costs positively affected by higher volumes; partially offset by (iv) higher TCs.

2 Our cash cost net of by-products credits is measured with respect to zinc sold.

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