Nexa Resources S.A. Price & Performance (NEXA)

Inacio, please go ahead.

Thank you, Rodrigo, and good morning, everyone. Thank you for joining us today as we review our fourth quarter and full year 2024 results. Let's move to Slide number three.

Where we highlight our main achievements for the year. As we close out 2024, we are very pleased with our performance. We achieved the second highest adjusted EBITDA in our history and for the first time since initiating the investment cycle in Adipona, generated positive consolidated cash flow. Our financial position also improved with a notable increase in our cash balance a reduction in the gross debt and an improvement in our net leverage ratio from 2.2x in the third quarter to 1.7 times. In the fourth quarter, adjusted EBITDA reached $197,000,000 a 79% increase from the $110,000,000 reported in the same period last year. For the full year, adjusted EBITDA totaled $714,000,000 This strong performance was driven by several key factors. Including higher by product contribution, increased zinc prices, lower environmental liabilities and foreign exchange gains.

On the operational front, four production and cost guidance, while accelerating both revenue growth and margin expansion.

Total consolidated net revenues for the fourth quarter reached $741,000,000 up 18% compared to the fourth quarter of last year and a 4% increase compared to the third quarter of this year. Terms of mining production, zinc output decreased by 11% quarter over quarter, while lead and silver production increased by 21%, respectively. Driven by higher grades. Copper production saw a slight decrease compared to the previous quarter, but was in line with our mine sequencing plan. Regarding a report, I will share more details shortly but I would like to highlight that the operation made a fully positive contribution to our adjusted EBITDA in 2024. Areipona has been a very challenging project to build. And as previously mentioned, we approved a purchase of a fourth tailings filter, which will enhance utilization capacity given that the three filters in place have limited capacity and present operational issues.

With these four filters, the plant will achieve its maximum capacity. In terms of zinc metal and oxide sales, we saw a minor 1% dip quarter over quarter though sales increased by 6% year over year. Throughout 2024, we made significant progress in optimizing our portfolio and successfully executing strategic divestments. Including the sale of the Moravu Complex Pucacaca project and our non operational Chapi mine in Peru. Divestments allow us to concentrate on our high return assets. Line with this strategy, I am proud to announce that the first phase of the Cerro Pascua integration project has been officially approved. This phase includes the implementation of tailings pumping and piping systems and represents an important milestone extending the life of this mining complex. I will provide more details later in this presentation. Now let's move to Slide number four to discuss our operating performance. Turning to the operating performance of our Mining segment, zinc production in the fourth quarter of twenty twenty four reached 74,000 tons, down 19% compared to the fourth quarter of last year. This decrease was primarily driven by lower output at Cerro Lindo, El Porvenir and Basante, as well as the absence of contributions from Boro.

These impacts were partially offset by higher production volumes from Adipona and Atacoch. Compared to the third quarter of twenty twenty four, zinc production decreased by 11% mainly due to lower volume at Cerro Lindo, Basante and Atacocha. However, this was partially offset by increased output from Tin production was 2% lower compared to the full year of 2020 In terms of our guidance, we met our annual production guidance for zinc, lead and silver, while copper production exceeded the upper range of our guidance. Looking at the cash cost in the fourth quarter of our mining cash cost significantly dropped to $0 per pound compared to $0.44 per pound in the same period last year. This sharp reduction was mainly driven by higher by product contribution lower treatment charges and reduced operational costs. Partially offset by lower zinc volumes in the period. Compared to the third quarter, mining cash cost slightly increased by $0.01 per pound Due to lower zinc volumes, which was partially offset by higher product contribution, particularly at Cerro Lindo, due to stronger LME price and lower operational costs. For the full year, our cash costs remain in line with our updated 2024 guidance. Which will revise down by 64% in October 2024.

These results reflect our disciplined cost control measures, operational improvements consistent execution of our mining plants and foreign exchange gains particularly from our Brazilian operations. Our cost per run of mine in the quarter was $44 per tonne a 6% decrease year over year.

This improvement was mainly due to lower maintenance and personnel expenses, reductions in energy and material costs, along foreign exchange gains. These benefits were partially offset by lower treated ore volumes following the cessation of mining operation For the full year, cost per run of mine averaged $46 per tonne remaining within within our guidance range. Now let's move to Slide number five.

Turning to our smelting segment, total sales in the fourth quarter reached 152,000 tons and increased by 6% year over year.

This growth was primarily driven by higher production volumes, at Piajamaquilla and a sales backlog from the third quarter which resulted from demand adjustments in our domestic market. Compared to the previous quarter, total sales decreased by 1% mainly due to reduced production at Tres Maria's especially for zinc oxide due to lower demand. In 2024, total sales amounted to 591,000 tons in line with the mid range of our annual guidance and relatively stable compared to 2023. Looking at costs, consolidating smelting cost in the quarter was $1.26 per pound, from $1 per pound in the same period last year. This increase was mainly due to higher raw material costs, driven by increased zinc prices and lower disease, as well as higher operating costs. These effects were partially offset by higher sales volume and favorable foreign exchange variations. Compared to the third quarter, cash costs increased by 8% mainly reflecting higher zinc prices, which impacted concentrate purchases and lower by contribution.

However, these effects were partially offset by lower operational costs and foreign exchange gains.

Our conversion cost for the fourth quarter was $0.3 per pound compared to the $0.29 per pound in the fourth quarter of twenty twenty three. This slight increase was mainly due to higher variable costs, but partially offset by low foreign exchange variations and increased sales volume.

Compared to the third quarter, conversion costs decreased by 6% driven by lower variable costs including energy expenses and maintenance expenses along with foreign exchange gains and lower third party expenses. It is worth highlighting that both conversion costs of $0.3 per pound and cash cost of $1.15 per pound remain within our guidance range for the year. Now let's move to Slide number six, where we will begin discussing Adiporna. In the fourth quarter, Adipuana reported higher production of zinc, lead and silver compared to the third quarter of twenty four, while copper production declined driven by lower grades in the period. Adjusted EBITDA remained positive. Quality of concentrates remained stable within commercial specifications, while metallurgical recoveries performed close to or at target levels. Additionally, the talc related challenges faced in the third quarter were effectively addressed the feed rate remained stable, contributing to the overall performance. In November, we conducted a scheduled five day maintenance shutdown Additionally, above average rainfall during the period led to a 8% reduction in treated ore volumes compared to the previous quarter. During the quarter, we also approved the acquisition of a fourth tailings filter. A critical step in enhancing our filtering capacity and supporting full production.

As previously disclosed, this investment will significantly improve operational efficiency. We expect that filter, to be delivered and installed in 2025, with commissioning plan for the first quarter of twenty twenty six. Looking at the full year 2024, Aripona significantly improved its performance. Annual zinc production increased by 43% compared to 2023, while copper rose by 24%, lead grew 106% and silver production more than double growing 114%. Performance is attributed to the commitment and hard work of our teams. Let's move to Slide number seven to discuss the latest advancements in the Cerro Epasco integration On this slide, I would like to highlight our progress with the Cerro Pasco integration project.

As we have discussed in previous calls, this project has the potential to unlock substantial value for NEX. During the quarter, we made important strides across multiple work fronts including the approval of the tailings pumping system a crucial step in enhancing operational efficiency. This phase involves the construction of a tailings treatment plant at El Porvenir and the building of a six kilometer tailings pipeline to connect El Porrittil plants to the Atacocha tailings storage facility. The detailed engineering has been completed and construction is set to begin in the second quarter of twenty twenty five. Beyond the tailings pumping system, Phase one includes [indiscernible] which is already underway. As well as future investments to increase Atacocha's tailings storage capacity. The ultimate goal of this phase is to significantly extend the operational capacity of the tailings storage facilities ensuring the long term sustainability of operations at the Cerro Pascos Complex. Meanwhile, studies of Phase II, which includes the the underground connection of the mines and the El Porvenir shaft upgrade are progressing well. We expect these studies to be completed by the third quarter of twenty twenty five. Moving to Slide number eight, where I will provide details on our exploration upside.

As explained in the previous slide, the strategic rationale of the Cerro Pasco project includes the importance of the tailings storage capacity, aiming to extend the assets operational life significantly. The connection of the underground mines of Atacocha and El Porvenir and the upgrade of the El Porvenir ore shaft.

The execution of these milestones to a substantial volume of high quality mineral resources from the Atacocha underground mine, significantly enhancing the asset flexibility increasing its mineral base, and extending the life of the mine complex. Furthermore, our exploration focus remains steadfast on the integration target. This area boasts high geological potential and presents a promising and highly attractive upside for the project. We aim to unlock additional value and ensure long term success for the Sierra Pascot Complex. Now let's move to Slide number nine. On this slide, I would like to emphasize the continued progress of our exploration program.

Our 2024 plan has yielded positive results across both brownfield and greenfield activities. At Cerro Lindo, the exploration program remained focused on expanding known or pad is Southeast of Cerro Lindo with drilling targeting the extensions of the mineralized zones in ore bodies 8B and 8C. In Adipona, efforts were concentrated on the Masaranduba target aiming to identify new mineralized areas. [indiscernible] exploration program continues to focus on expanding the mineralized zones near the mine.

Finally, at Cerro De Pasco, as mentioned before, the exploration program delivered notable results, particularly around the integration target. I will turn the call over to Jose Carlos Del Valle, our CFO. Who will walk us through our financial results Jose, please go ahead.

Thank you, Ignacio. Good morning, everyone. I will now continue with Slide number 10. Starting with the chart on the upper left, we can see that total consolidated revenues for the fourth quarter increased by 18% year over year. This was mainly driven by higher metal prices except for lead, and higher smelting sales volumes. These gains were partially offset by lower net premiums. Compared to the third quarter of twenty twenty four, net revenues grew by 4% supported by higher zinc, silver and gold prices. For the full year 2024, consolidated net revenues reached $766,002,000 an 8% increase compared to 2023. This growth was mainly driven by favorable metal prices, higher copper and lead sales, and higher silver and gold payable from our mining operations. Moving on to profitability, our consolidated adjusted EBITDA for the fourth quarter reached $197,000,000 reflecting a strong 79% increase year over year.

This performance was primarily driven by higher Bipro contribution increased metal sales volume, higher zinc prices and foreign exchange gains. Compared to the third quarter of twenty twenty four, adjusted EBITDA also grew by as the impact of higher zinc prices was partially offset by higher variable costs. The full year 2024, consolidated adjusted EBITDA totaled $7,000,000 a significant 76% increase compared to 2023, making it the second highest annual adjusted EBITDA in NEXAS history. This was mainly supported by favorable metal prices foreign exchange benefit, higher by pro contribution, and ongoing improvements in both operational and financial matters. Finally, it is worth noting that our consolidated adjusted EBITDA margin reached 26% in 2024, 10 percentage points better than in the previous year. Now let's move on to Slide number 11. Looking at the top of our left slide, we can see that in 2024, we invested $277,000,000 in CapEx, with nearly all of this amount directed towards sustaining activities. Including mining development and tailing storage facilities. Our total CapEx investment for the year came in below our revised guidance from October 2024, which had already been adjusted downward by $11,000,000 as part of our portfolio optimization efforts. With respect to mineral exploration and project evaluation, we invested a total of $64,000,000 in 2024, Of this amount, dollars 37,000,000 was specific allocated to mineral exploration and mine development fully aligned with our annual plan to support ongoing exploration activities.

Now let's move on to the next slide where I will discuss our cash flow generation for the quarter. Starting with our $714,000,000 of adjusted EBITDA net of non operational items, we can see that net generated a strong operating cash flow before working capital variations totaling $514,000,000 for the year. From this amount, we paid $175 in interest and taxes and invested $265,000,000 in total CapEx across our operations. As part of our liability management strategy, loans and investments had a positive net impact of $98,000,000 This was mainly driven by our new bond offering at the venture issuance and the BMDS credit line, all executed in the second quarter of twenty twenty four. Included here is also a cash dividend received from Enercare. These cash inflows were partially offset by loans and financing, lease liability payments and premium paid on our bond repurchase program, including cash tenders for a portion of our bonds maturing in 2027 and 2028. Additionally, we paid $60,000,000 in contractual dividends to non controlling interests. Another impact was related to foreign exchange which had a negative effect of $11,000,000 on our cash and cash equivalents. Primarily due to the depreciation of the Brazilian real against the U. S. Dollar.

Finally, working capital had a positive contribution of $18,000,000 as our initiatives to optimize NEXAS working capital cycle throughout 2024 successfully reversed the negative impact seen the first nine months of the year. Combining all these factors, our total free cash flow generation in 2024 reached $163,000,000 Now let's move to Slide number 13. As you can see, our liquidity position strengthened during 2024. Which allows us to continue to maintain a solid balance sheet and improve an extended debt maturity in profile. At the end of 2024, our available liquidity stood at a approximately $960,000,000 including our undrawn $320,000,000 sustainability linked revolving credit Looking at our debt profile, the average maturity in the fourth quarter twenty twenty four was five point six years with an average cost of debt of 6.4%. More importantly, as of December 31, our total cash position was sufficient to cover all obligations maturing over the next five years. In terms of leverage, our net debt to adjusted EBITDA ratio significantly improved quarter over quarter and year over year. Dropping from 2.2 times and 3.3 times to 1.7 times respectively. These improvements were primarily driven by higher adjusted EBITDA and by a reduction in net debt over the last twelve months.

I want to emphasize that we continuously evaluate opportunities to further diversify our funding sources and strengthen our liquidity. As I have mentioned before, maintaining a debt maturity profile that is aligned with the loan life of our assets was a securing the most competitive financing costs is always a priority. In line with this, we always explore strategic initiatives to extend maturities, reduce the average cost of debt and assess financing alternatives. The goal is to further enhance our financial position and long term resilience. Moving now to Slide 14.

Regarding the sync market fundamentals it's important to note that in the fourth quarter, the LME zinc price average $3,050 per ton, a 22% increase year over year and a 10% increase compared to the third Despite macroeconomic and geopolitical uncertainties, including concerns over U. S. Trade protectionism, potential tariff providing positive support for prices. These fundamentals are driven by a steel constrained concentrate supply, which led TCs to remain at very low levels throughout the second half of the year. As a result, global refined metal production decreased by 2% in 2024 compared to 2023. Tightening inventory levels even further. Since the beginning of the fourth quarter, spot TCs in China have slowly started to recover. As illustrated in the lower part of the slide. However, they remain at historically low levels. Continuing to pressure smelter margins due to higher raw material costs. Looking ahead, we believe these market conditions are unlikely to ease in the short leading us to expect continued price support for zinc. Moving now to Slide [indiscernible] During the last quarter, the LME copper price averaged $9,193 per ton, up 13% from the fourth quarter of twenty twenty three but marginally down by 0.2% compared to the third quarter of twenty twenty four.

Despite macroeconomic challenges, copper demand is expected to remain resilient in the short term. Driven by strong activity across the energy, technology and infrastructure [indiscernible] As for silver, LME price averaged $31 per ounce in the fourth and 7% quarter over quarter.

Short term fundamentals for silver are also positive largely driven by concerns over future silver availability. Since the majority of silver is produced as a byproduct of other metals, the industry is dependent on new mine projects to come online. Nexa is a significant global silver producer, producing 12,000,000 ounces in 2024. Looking ahead, copper and silver prices are likely to remain volatile as market react to shifts in U. S. Trade policy and China's economic stimulus measures. Now I will hand the presentation back to Ignacio for his final remarks.

Thank you, Jose Carlos. As we conclude today's call, I want to highlight the recent adoption of our new dividend policy. This policy is designed to enhance transparency, provide consistent returns to shareholders and maintain the financial flexibility needed to support our growth targets. 2024, both Standard and Poor's and Fitch reaffirm Nexa's investment grade rating with a stable outlook. Additionally, last November, Standard Amports assigned Nexa Recurros Minerales, our Brazilian subsidiary, its first ever rating also investment grade with a stable outlook. This rating underscores the expectation of resilient operations in Brazil in the coming years. Last week, Standard Amporus conducted its annual review and once again reaffirmed Nexa's investment grade rating, maintaining a stable outlook. This recognition highlights our commitment to the financial discipline of the company. I also want to emphasize that in 2025, safety will remain a top priority. Are fully committed to strengthening our safety culture and continuously improving our protocols to ensure our employees well-being. 2024 was a year marked by resilience and innovation. And as we move into 2025, we expect revenue growth supported by positive contributions from pricing and volume [indiscernible] Our DCP approach to capital allocation remains unchanged. We will prioritize CapEx investments in enhancing production capacity, extending the life of our mines and ensuring long term sustainable growth.

Before I close, I want to express my gratitude to our exceptional team of dedicated professionals and our shareholders for their trust and support. Thank you for your attention. We truly appreciate your engagement. And now look forward to your questions. Operator, please open the line for questions.

We will now begin the question and answer session The first question today comes from Camilla Barter with Bradesco. Please go ahead. Hi, good morning. Thank you for the opportunity for making my questions. I have two questions. The first, just some thoughts on Alicuana. You mentioned you expect higher contribution in terms of EBITDA and free cash flow from So I was just wondering if you can share any quantitative estimates on that? And on the tailing filter, do you have an estimate on CapEx for the filter and after it's implemented? Next year, how much potential do you see for a capacity increase in Adipona? And the second question here on Cevo Pass. As you mentioned in the call, the project is moving ahead. First phase was approved and second Phase 30 should be concluded in the second semester. [indiscernible] any additional details on the project, CapEx, if you see any risk for start ups? More details on finance, it would be helpful. Thank you. I believe our speaker lines are muted.

So, I hope if you can listen to me now, I was telling you that total CapEx of PASCO is around $140,000,000 $85,000,000 comprises the implementation of wind pumping system of What happens here is that the life of mine of the tailings dam of El is getting towards the end of his life of mine. So the idea is to pump all these tailings to the Atacocha Dam that has many, many, many years going forward. This is, as I said, a project that costs $85,000,000 the rest of the CapEx comprises the interconnection of the two mines in the underground This is very important because it will allow us to access all these resources Barrera in Atacocha, that we will be able to extract them through that infrastructure of El Porvenir. And for that, not only we need the interconnecting the two miles by ramps, but also upgrading the shaft of El Porvenir to accommodate also the ore of Atacoch. So this project is between two and three years already approved the pumping, as we said, this pumping is going to be for two years. We are starting the civil works in the second quarter.

Of the pumping and we already ordered some equipment. So in the next year, this will finish.

And then in parallel, [indiscernible] upgrade of the shaft and interconnecting the mine will come probably in 2026 depending on how the studies go. That is regarding Cerro Pascos. Regarding the Nippona, it's very difficult to project EBITDA or cash flow yes, because it will depend on prices. I will tell you this. The Aripuana project has been a very difficult one. To implement. I mentioned this many times. There were several factors that involved the some flaws on the implementation of the project COVID an isolated area to develop this project, etcetera.

So The project in 2024 really advanced in terms of operational performance. The problem is that we have a mainly a bottleneck in the tailings filters. Because the capacity of the three filters that we have is not taking us to 100% of the production.

So to give you an idea, we can in the dry season we can have 140,000 to 150,000 tons but the capacity could be 170 to 180. So we you don't know this until you stabilize the operation and we started to see it as only in June 2024. Having said that, in October, we're starting to do all the tests to order a different filter. It's a filter that is from a different provider it's a more automated filter and the capacity of the four filter is much higher than the rest of the three.

So the idea is we ordered already that filter. It's not an easy implementation because it's a new area and that has lot of civil works and infrastructure. So towards the end of the year, we will have the filter in the area and then the commission, as we said, is going to be during the first quarter of next year. With this additional filter, we will achieve the capacity. So when we tell the market that let's say, the projection on production on Areipuana has delayed a year This is mainly because of this. And I mean, it's difficult for us to digest this because these were filters that were ordered many years ago. These were filters that don't have a capacity and didn't perform. [indiscernible] [indiscernible] the good part is that in 2026, we will be at full capacity And having all this upside on exploration on the reserves that we have today, This new mine is going to be very profitable going forward. So we have to look forward at Epona. As I said, it was a difficult project to build. [indiscernible] we are towards the end of these stages. And 2026 is going to be much better than this year.

What I can say in this year is that we will have positive cash flow and the EBITDA is going to be positive as well. And we believe that it's going to be higher in 2024.

As a reminder, The next question comes from Carlos Sialba with Morgan Stanley, please go ahead.

Yes. Thank you very much. Good morning. I guess, I just Just to confirm what you just said at the end of the last answer, do you expect Alicuana to have positive EBITDA in 2025 and be higher than 2024? Did I get that right?

Yes, yes. And this is a I would say simple mathematics. We will have a higher production that costs are still high because we are not diluting fixed cost in this throughput limitation of the throughput. But the costs are going to be lower than in 2024. The production is going to be higher. CapEx should be similar.

The new filter is costing us $14,000,000 more or less.

Yes. But yes, with these prices, and the we have and with the CapEx, yes, we believe that EBITDA and cash flow should be higher than in 2024. All right, makes sense. My second question is regarding the dividend policy. I just want to make sure that I get what it means basically is to a minimum of 20% so not a minimum, but a 20% of free cash with a minimum payment of $0.08 per common share. And so basically, if I just look at our forecast of cash from operations minus CapEx, that amount of free cash flow times 20% is what you will pay.

Is that right?

Yes. I'm going to turn to Jose Carlos so he can explain better this Sure. Hi Carlos. Good morning.

Yes, the minimum is $0.08 per share So what we wanted to do is well, first of all, as you know, we have this new policy that we have already approved and it's $0.08 per share so that we put a floor on the dividend payment, but in a way that is transparent and more And the idea will be to pay 20% based on the cash flow that we generate each year.

Which is basically after sustaining CapEx. [indiscernible] So we paid 20% on that free cash flow that internally we call pre event that you would have a more predictable and consistent dividend flow over the years and this is effective as of 2024 results. Okay. So basically, it's the cash from operations minus your sustaining CapEx. 20% of that. Right.

Okay. And what is the CapEx the sustaining CapEx that you're expecting for 2025? This year, we are about €270,000,000 in 2025. Is that plus what we have on Cerro El Paso because at the end of the day that payment system is part of the sustaining CapEx. If I remember correctly, it's about 03:30 So that will be a slight change compared to the CapEx that we have in 2024. And obviously, what we have to take into consideration is that is that we don't know what prices are going to be in 2025. But assuming that We have prices that are similar to 2024 and based on the improved performance that we expect from Adipana and the continuous improvement from our operations, we we expect a positive trend in our cash flow generation going forward. So therefore that should benefit the areas that we're going to Fair enough. So the total sustaining CapEx expected in 2025 is around €330,000,000 Right. I can confirm that number. But yes, it's around that number. All right.

So, Carlos, sorry, this is Rodrigo here. Just confirming the sustaining CapEx for 2025 is going to be $316,000,000 right. So This is the number that we released in our guidance on the February. 36316. Okay. 316316 Okay, 316. Okay, good. All right, excellent. And then my last question is on working capital. Obviously, [indiscernible] throughout the year How should we think about working capital in Q1, Q2, Q3, Q4, just given how significant volatility is?

Yes. I can comment on that Carlos.

We don't expect a different trend from what we saw in 2024 and 2023.

There is is a seasonality in how our working capital behaves throughout the year. But on average, going forward, I would say that it will be safe to assume that working capital effects should be close to neutral on an annual basis. However, we would still see that volatility quarter to quarter as we have seen in the last Okay. Yes, that's clear. Thank you very much Ignacio, Carlos San Rodrigo.

Will now take questions from the webcast. I'd like to hand the call back over to Rodrigo. Thank you, operator.

We have some follow-up questions from the audience here in the web. So I would start with the one well, Inacio already mentioned about the fourth in 90.9%. So there's one question from Henrique from Morgan Stanley. So terms of adding more color on why the developing the fourth filter now, so I believe that this was already answered. So and there is another question, one question from Heronan. Kjuszlik from MetLife.

So what should we expect in terms of cash flow generation for 2025?

And what are your plans for capital allocation? Jose, can you address this one?

Yes, yes. Mean, we have somehow already addressed the cash flow question. I mean, without knowing exactly what prices are going to be, our expectation is that our performance is going to continue to improve. 2025, even though we won't have the Alipana filter in place yet, there is an expectation that the performance there will be better. We always have this constant initiative to control our costs.

That's you remember from 2024, we were within guidance. So on those aspects that we control, we [indiscernible] prices are better obviously that will translate into better cash flow generation. So the expectation is positive. In terms of capital allocation, I think we have mentioned before that we have a very clear strategy of obviously, first, focusing on extending the life of mine of our mines. Secondly, I would say the reduction of gross debt is not just a matter of reusing leverage or net debt.

But also reducing gross debt so that we can also reuse our interest expense obligations. And then we also have this newly approved dividend policy so that we can also provide a consistent return to shareholders over time. So I would say that those are the pillars.

Okay. Thank you, Jose. We have one question from Omar. From Compass Group. So actually the there are three questions. The first one is, there any other asset you are willing to sell? The second question is regarding Adipuana. What is the cost of the additional filter? And when do you expect the plant to work at the nameplate capacity sorry, the plant to work at nameplate capacity. And the last question is to comment on the status of our Magistral project.

Yes. So as we said we sold mostly all the assets that we wanted to get rid of because there were no transformational assets. There were small assets for us. And that part of the strategy is to make sure that we the four mines that we have get developed increase the life of the mine and we operational executed them in the best way possible. But the growth will come from a new project that we have to look for in terms of M and A. Has to be a brownfield advanced brownfield project or a producing mine As we said before, mainly copper and zinc. So we are not willing to sell any other.

Regarding the Aguana, I already said that the the additional cost is $14,000,000 The full capacity will will come in the second quarter of next year. And regarding Magistral, as we know, the the MEA was disapproved, environmental impact study was disapproved. It wasn't was disapproved because the community we had problems with the community especially in the pandemic. That blocked all these roads and all these areas and there were some clauses not allocated to Nexa Nexa. Now we are negotiating with Proimberion that is the entity from the government what are our next steps Having said that, we are still very interested in Majestral. But Majestral, as we already said also in other calls, is a project that has to compete with other projects that we might have in our radar because we want to make sure that we build the most profitable mine. So Magistral has to compete in that regard. We will update the market in these conversations and negotiations with the authorities. And we believe, as I said, that will come in the next months.

Thank you, Inacio. We have one question from Rodrigo Murietta from AFP Integra. So based on the guidance provided at the February, El Pollo Virira and Atacocha for the midterm. Are including part of the Pasco integration project mineralization in the guidance. Rodrigo, thank you for the question.

We are not considering [indiscernible] the mineralization of the integration area the guidance considers only the reserve base that we have currently. And we expect to publish some resources by this year and to convert into reserve by next year. And then then you can assume a part of it in our plan.

Okay.

This concludes our question and answer session. Now, we will hand the call over to John Chiu for his final remarks.

Thank you. Thank you very much all for attending this call. We appreciate very much your interest in the company. We had a very good twenty twenty four year regardless of the problems in Areipona. I still we still believe Aripona is going to be a fantastic mine going forward. We are very committed to our challenges to achieve our challenges for 2025. 2025 is going to be still a challenging year, but we have a very important group of people committed and clear in the strategies that we have to follow. Thank you very much, and we look forward to speak to you in the next in the closing of the first quarter of twenty twenty The conference has now concluded. Thank you for attending today's presentation.