Nexa Resources Perú A : Otros Hechos De Importancia

Earnings Release - 4Q22 and 2022

Nexa Resources Perú S.A.A. and Subsidiaries

Nexa Peru Reports Fourth Quarter and Full Year 2022 Results

including Adjusted EBITDA of US$329 Million

Lima, February 15, 2023 - Nexa Resources Peru S.A.A. and subsidiaries ("Nexa Peru", or "Company") announces today its results for the three and twelve months ended December 31, 2022. This Earnings Release should be read in conjunction with the audited consolidated financial statements of Nexa Peru and the notes for the financial year ended December 31, 2022. This document contains forward-looking statements.

4Q22 and 2022 Highlights | Operational and Financial

• Consolidated net revenues reached US$238 million in the fourth quarter compared with US$229 million a year ago due to higher copper, lead and silver sales volumes, partially offset by lower LME metal prices across all metals. Compared to 3Q22, net revenues increased by 56% as a result of higher copper and lead average metal prices and zinc, copper and lead sales volumes, partially offset by lower LME zinc prices. In 2022, net revenues were US$892 million, up 8% over 2021 due to higher LME zinc prices and higher sales volume of copper, lead, and silver.
• Zinc production of 36kt in the quarter decreased by 12% compared to 4Q21, mainly explained by grade reduction in Cerro Lindo and El Porvenir. Compared to 3Q22, zinc production increased by 3%, due to higher zinc average grade in Cerro Lindo. Zinc production totaled 146kt in 2022, compared to 162kt in 2021.
• In December 2022, Nexa revised its Adjusted EBITDA definition to exclude certain items to provide a better understanding of its operational and financial performance. Please refer to page 5 and 23 for more information.
• Adjusted EBITDA was US$81 million in 4Q22 compared with US$84 million in 4Q21 and US$33 million in 3Q22. Adjusted EBITDA for the twelve months ended December 31, 2022, was US$329 million compared with US$331 million in 2021.
• Mining cash cost1 in 4Q22 was negative US$0.35/lb compared with negative US$0.04/lb in 4Q21, mainly driven by higher by-products credits volume due to higher copper grades in Cerro Lindo and lead grades in Atacocha.
• As part of the continuous review of our assets portfolio, Nexa recognized a non-cash US$52 million pre-tax net impairment loss in 4Q22 primarily related to (i) Cerro Pasco (impairment reversal), given the improved results and the potential increase in production due to the proposed optimization of the integration of El Porvenir and Atacocha mines; and (ii) the decision made by the Company and the Board not to move forward with Shalipayco and Pukaqaqa greenfield projects.
• Net loss in 4Q22 was US$5.8 million and totaled a net income of US$95 million in 2022. Net loss attributable to Nexa's shareholders was US$3 million in 4Q22 and a net income of US$95 million in 2022, which resulted in an adjusted loss per share of US$0.003 and an adjusted income per share of US$0.07, respectively.
• Net debt to Adjusted EBITDA for the last twelve months stood negative at 0.73x compared to a negative 0.46x at the end of September 2022 and a negative 0.40x a year ago.
• Total cash increased by US$84 million at December 31, 2022 compared with, September, 2022 due to an increase of receivables mainly explained by higher copper and lead average metal prices

Firmado Digitalmente por:

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

CLAUDIA PATRICIA TORRES

BELTRAN

Fecha: 15/02/2023 11:37:18 p.m.

Earnings Release - 4Q22 and 2022

Nexa Resources Perú S.A.A. and Subsidiaries

and sales volumes compared to 3Q22. Our current available liquidity remains strong at US$244 million.

• We continuously evaluate our capital allocation strategy, our existing project portfolio, and the jurisdictions in which we operate. After a careful assessment and prioritizing our portfolio optimization, we have decided not to move forward with two of our potential greenfield projects, Shalipayco and Pukaqaqa.
• We have continued to make progress with our project to optimize the integration of El Porvenir and Atacocha mines at our Cerro Pasco complex. We plan to increase the capacity of our tailings and shaft and optimize the processing plant, to potentially increase production.

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Earnings Release - 4Q22 and 2022

Nexa Resources Perú S.A.A. and Subsidiaries

Selected indicators

	US$ million									4Q22									2022
		4Q22		3Q22		4Q21			vs.			2022			2021			vs.
	(except indicated otherwise)
									4Q21									2021
	Treated ore (kt)	2,532.2	2,459.6	2,476.2		2.3%		9,701.7		9,717.7		(0.2%)
	Mining Production | contained in
	concentrate
	Zinc (kt)	35.9	35.0	40.8		(12.0%)		145.5		162.2		(10.3%)
	Copper (kt)	9.1	7.4	7.0		30.0%		33.0		29.6		11.5%
	Lead (kt)	13.5	13.3	10.8		24.6%		50.0		39.3		27.5%
	Silver (kt)	2,391.3	2,442.7	2,179.6		9.7%		9,480.4		8,307.7		14.1%

Zn Eq production (kt)

Cash Cost RoM (US$/t)

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

Consolidated Net Revenue

Adjusted EBITDA(1)

85.7	80.9	83.1	3.1%		333.1		326.3		2.1%
44.7	43.7	43.0	4.0%	44.1	41.3	6.6%
(761.1)	1043.5	(77.2)	885.2%		(172.0)		(101.9)		68.7%
237.7	152.7	229.3	3.6%		892.4		828.6		6.5%
81.4	33.2	84.5	(3.6%)		329.0		331.0		(0.6%)

Adj. EBITDA margin (%)	34.3%	21.8%	36.8%	(2.6p.p.)	36.9%	40.0%	(3.1p.p.)
Sustaining (2)	31.8	19.1	29.9	6.4%	81.4	86.4	(5.8%)
Expansion	0.4	0.5	1.6	(76.3%)	2.4	5.5	(57.0%)
Others (3)(4)	2.3	0.5	1.2	89.7%	3.3	1.9	75.3%
Capital Expenditures	34.4	20.1	32.7	5.4%	87.1	93.8	(7.2%)
Liquidity and Indebtedness
Cash and cash equivalents	243.5	159.2	272.1	(10.5%)	243.5	272.1	(10.5%)
Net debt	(240.3)	(153.9)	(132.6)	81.3%	(240.3)	(132.6)	81.3%
Net debt / LTM Adj. EBITDA (x)	(0.73)	(0.46)	(0.40)	82.4%	(0.73)	(0.40)	82.4%

1. Refer to "Use of Non-IFRS Financial Measures" for further information. The Company revised its Adjusted EBITDA definition to exclude certain items to provide a better understanding of its operational and financial performance. For details on definition and accounting policy, please refer to note 11 (d) - Financial Risk Management: Capital Management in the "Consolidated financial statements at December 31, 2022".
2. Includes HSE and investments in tailings dams.
3. Modernization, IT and others.
4. The negative amount refers mainly to tax credits.

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Earnings Release - 4Q22 and 2022

Nexa Resources Perú S.A.A. and Subsidiaries

Consolidated Financial Performance

Income Statement

	US$ million		4Q22		3Q22		4Q21			4Q22 vs.			2022			2021			2022 vs.
						4Q21							2021
	Net Revenue	237.7	152.7	229.3		3.6%		892.4		828.6		7.7%
	Cost of sales	(149.2)	(128.7)	(130.5)		14.4%		(557.8)		(507.8)		9.9%
	Selling and administrative	(8.5)	(6.7)	(9.1)		(6.9%)		(33.2)		(30.2)		10.2%
	expenses
	Mineral exploration and project	(12.1)	(11.2)	(16.0)		(24.1%)		(42.3)		(44.1)		(3.9%)
	evaluation
	Impairment of non-current assets	(51.9)	0.0	0.0		-		(51.9)		0.0		-
	Expenses on temporary suspension	(1.8)	(0.4)	(0.6)		(200.0%)		(3.3)		(3.6)		(8.3%)
	of underground mine
	Other income and expenses,	(20.7)	0.8	(17.6)		16.9%		(24.4)		(17.6)		38.6%
	net
	Net Financial Result	2.2	(5.3)	(0.9)		-		(17.9)		5.5		-
	Financial income	4.6	4.1	3.1		47.6%		14.0		11.6		20.8%
	Financial expenses	(4.7)	(8.4)	(4.2)		10.47%		(27.1)		(21.2)		27.6%
	Other financial items, net	2.2	(1.1)	0.2		890.6%		(4.8)		15.1		-
	Depreciation and amortization	21.2	21.1	21.0		0.5%		80.9		80.5		0.5%
	Adjusted EBITDA	81.4	33.2	84.5		(3.6%)		329.0		331.0		(0.6%)
	Adj. EBITDA Margin	34.3%	21.8%	36.8%			(2.6pp)	36.9%		40.0%			(3.1pp)
	Income Tax	(1.5)	(12.7)	(21.6)		(93.2%)		(66.1)		(94.5)		(30.0%)
	Net Income (Loss)	(5.8)	(11.5)	33.0		-		95.3		136.4		(30.1%)
	Attributable to owners of the	(3.4)	(12.2)	36.4		-		94.8		136.7		(30.6%)
	Controlling entity
	Attributable to non-controlling	(2.4)	0.7	(3.4)		(29.0%)		0.4		(0.3)		-
	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	(0.003)	(0.01)	0.029		-		0.07		0.11		(30.6%)
	shareholders (in US$)

Net Revenues

In 4Q22, net revenues were US$238 million, 4% higher year-over-year, mainly driven by higher copper, lead and silver sales volumes, partially offset by lower LME metal prices across all metals. The LME average price for zinc, copper and lead were down by 11%, 18%, 10%, respectively, compared to the same period of 2021 - for more information, refer to the "Market Scenario" section.

Compared to 3Q22, net revenues increased by 56% primarily due to higher copper and lead average metal prices and zinc, copper and lead sales volumes, partially offset by lower LME zinc prices. The LME average price for zinc decreased by 8%, while cooper and lead increased by 3% and 6%, respectively.

In 2022, net revenues of US$892 million were up 8% compared to 2021, primarily driven by higher LME zinc prices. During the period, the LME average zinc price increased by 16%, while copper and lead prices decreased by 6% and 3%, respectively, compared to 2021. Higher sales volume of copper, lead, and silver also positively affected the year-over-year performance.

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Earnings Release - 4Q22 and 2022

Nexa Resources Perú S.A.A. and Subsidiaries

COVID-19 expenses

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 4Q22, COVID-19 related costs totaled US$0.5 million and are included in the cost of sales and in operating expenses. In 2022, COVID-19 expenses amounted US$4.5 million.

SG&A

In 4Q22, selling, general and administrative ("SG&A") expenses amounted to US$9 million, down 7% compared to 4Q21, mainly driven by lower selling expenses; and up 26% compared to 3Q22 due to higher third-party services and higher employee benefit expenses.

In 2022, SG&A expenses amounted to US$33 million, up 10% from the same period of 2021 driven by higher employee benefit expenses and third-party services.

Adjusted EBITDA

In December 2022, Nexa revised its Adjusted EBITDA definition and decided to exclude certain items to provide a better understanding of its operational and financial performance.

In 4Q22, Adjusted EBITDA was US$81 million compared to US$84 million in the same period for the prior year. The decrease was primarily due to (i) the negative US$8 million net price effect related to lower metal prices; (ii) the negative US$4 million related to higher operating costs due to higher expenses in maintenance parts and services in the period. These factors were partially offset by (iii) the positive by-products impact of US$3 million mainly related to higher sales volume due to higher silver and gold contained in lead; (iv) the positive impact of US$4 million related to lower investment in mineral exploration and (v) the positive impact of US$2 million related to lower contingencies' expenses.

Compared to 3Q22, Adjusted EBITDA increased by US$48 million. The increase was primarily due to

1. the positive US$6 million volume effect related to higher sales volume of zinc and copper in Cerro Lindo and lead in El Porvenir; (ii) the positive US$49 million net price effect related to higher metal prices (copper and lead); (iii) the positive US$8 million by-product impact related to higher sales volume due to higher silver and gold contained in lead concentrates. These factors were partially offset by (iv) the negative impact of US$9 million mainly related to higher expenses in underground services,

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